Lessons learned: Getting the first B2B customer
It took Forestpin almost 2 years to get its first big customer. Making the first sale is always hard. It was a tough ride; talking to a lot of potential customers, changing product strategy from time to time, taking up classes on pitching and of course a lot of programming. We learned a lot during the process.
We started off in March 2012, with a meeting of a few of guys. Some of whom believed that there is a lack of tools to find fraud and irregularities in financial transactions.
The idea was to develop financial data analytics software to highlight anomalies.
First couple of months were spent on research. We talked to auditors, accountants and managers to see if they had the problem we were trying to solve. We also discussed solutions they were using to solve it.
Before starting on the product, we implemented a bunch of analyses to highlight anomalies in payments data; ran it on a large dataset and sent out compiled reports to those we talked before. We wanted to make sure that they wanted what we were building. It was quite useful since we also got feedback about other analyses they were using.
It was around May when we first started working on the product, and it was ready by mid October, 2012. Sales agents were approached, documentation and legal documents were prepared and every thing was ready; all we needed was customers. We wanted to get first few customers in Sri Lanka before selling in US. It was easier to support clients in Sri Lanka since our developers based in Sri Lanka.
[Duplicates Analysis - October 2012](//vpj.github.io/images/posts/forestpin-enterprise-redesign/2013-duplicates.png)
Seeking customers #
We decided to get sales through sales agents. It took us a lot of time to realize that it wouldn’t work out with sales agents unless we get the first few sales ourselves. Losing a few months due to a bad decision is one of the terrible things that could happen to a start up - the finances drain away, founders get demotivated, and competition increases. Luckily, we managed to get a small manufacturing company in Sri Lanka through a contact. But we needed a few big Sri Lankan customers.
We pitched to companies through contacts, but it was hard - mostly because we were programmers and not marketers. Also we sometimes didn’t get to pitch to decision makers. Then it takes a really long time before anything happens. Pitching without customer references made it even harder.
We didn’t know how hard to push for sales; how often to call them? should we send a reminder? Pushing too much could be annoying, whilst waiting for long could reduce interest.
Meetings getting canceled and postponed (sometimes after you leave for the meeting) were very discouraging; perhaps because we don’t come from a marketing background.
Forestpin Lite #
One of the biggest difficulties in sales was proving that Forestpin could benefit companies. Trials weren’t much useful since it needs hardware and connectors to their current databases.
Around May - June, 2013, we developed Forestpin Lite as a standalone application to analyze small datasets. Potential customers could scan a dataset with Forestpin Lite on a laptop and get an idea of how Forestpin works. It had a limited set of features, but gave a pretty good idea of what we had to offer. This was quite useful in getting the first big sale.
With Forestpin Lite, we approached the companies we had pitched earlier. We offered to analyze their data and give an overview. And it worked. The first company we approached (Hemas Holdings) liked it when they saw Forestpin Lite’s analysis of their data. It pointed out areas that required attention.
After doing a trial in August - September 2013, we offered a product training to Hemas Holdings risk team before they decided to purchase Forestpin. We believed it would help gain traction within their organization. We had to make the training useful for them even if they didn’t purchase Forestpin.
Me and Chethiya had no experience in training. We were lucky that Sifaan (a professional trainer we’ve known for a long time) helped us prepare and deliver the training. I believe the training was one of the key factors in getting our first sale.
Next version of the software #
Training was in late November 2013, and we had the second version of Forestpin ready when we did the training. They seemed quite impressed with the progress we had made from the first version they saw about 9 months back.
[Timeseries Analysis - Redesign](//vpj.github.io/images/posts/forestpin-enterprise-redesign/2014-timeseries-correlation.png)
All these factors helped us get the first big sale. Now it’s up to us to make the existing customers really happy and look for referrals. Having a couple of reference customers helps tremendously in B2B sales.
What we should have done differently #
1. Develop Forestpin Lite at the beginning #
We should have started with Forestpin Lite. It would have much easier to validate the idea and find a product market fit. We spent a lot of time rewriting the entire system when we moved from first version to second. We would have saved all that time and gained traction faster if we had Forestpin Lite early on.
Not approach sales agents before the first few sales #
Pitching to sales agents is harder than pitching to customers when you don’t have reference customers. We lost at least 6 months while we were pitching to agents. If we had more discussions with potential customers and users instead of agents we would have at least got a lot of feedback to improve the product.
2. Get in touch with user communities #
Although we contacted a few potential customers and users at the beginning, we didn’t try to get in touch with the communities of these users. We should have got involved in their communities in social media; for example, Linkedin groups for auditors, accountants and finance managers. You can definitely get good insights by discussing with these groups.
3. Talk to a lot of companies in parallel #
We initiated discussions with a lot of companies. But we tried to engage with only one company at a time from trial stage. It is a trade off between focusing on a company or dividing our limited resources among a few companies. But waiting till you finish the engagement with one company before moving on to next can be disastrous. Also there were so many gaps and delays during the engagement which would have let us work with at least 5 companies in parallel.
However, it wasn’t that bad in our case since the first company we gave a trial decided to purchase Forestpin.
Things we learned #
1. Lot of people can influence the buying decision #
Unlike in consumer sales, in B2B sales a lot of people influence the buying decision. They have different requirements and responsibilities. So in order to make a sale happen smoothly all these parties should be kept satisfied. I think this is more relevant when the vendor doesn’t have large portfolio.
In our case, the finance team, internal auditors or risk team, IT team and the top management were all involved in the decision making. All though it was the top management that made the final decision, it was based on inputs of other parties.
If the finance team looks at our product as something that will put more controls on them they are not going to like it. Similarly if the auditors or IT team sees it as something that is going to increase their work load they are not going to like it either.
So the pitch needs to show that the product will benefit the organization as well as individual teams.
2. Sales take a long time #
It takes a really long time. Sometimes more than an year. The organizations are busy with loads of work. And different teams become available at different times.
The implementation and adaptation can also take a lot of time. We still don’t have much experience at this stage, but almost all the organizations we spoke to had ongoing software implementation project that had spanned for more than 6 months.
3. Urgency #
Sales are going to take forever if there is no sense of urgency. We haven’t figured how to tackle this.
At a relatively smaller company, the sale happened within a couple of weeks, because they wanted their data analyze their data quickly. Perhaps they lost money due to a fraud or an inefficiency in the recent past, and wanted to make sure everything else is clean. And they wanted to do it quickly before losing any more money.
Having a this sort of a reason to make things happen fast can be very helpful in sales. This article by HubSpot illustrates how you can create urgency.