"I failed miserably at this for two simple reasons: I hate rejection"
Rejection is tough on everyone. Good sales people do a few things to mitigate this that I've noticed and practiced. One thing is to think of it as a game to expect a certain amount of rejection as part of what you do in advance.
I mean if I told you right now to pick up the phone and call someone and pitch them and there was no outcome and I paid you $20 to do it you probably wouldn't have a fear of doing that. If I told you that I would pay you if they hang up on you $20 but $0 if they don't you probably would all the sudden not be afraid of the hangup, right? It's all a psychological game. Same thing with approaching a girl in a bar.
Second thing though is that some good sales people don't pick up on social cues as well as others. So they don't feel the rejection as much as sensitive people do. If you are cold calling the same micro expressions that might turn a sensitive person into jelly completely escapes many good salespeople. Same with just a voice. It takes time to get over this automatic reaction but it can be done with practice just like anything else. (Although you don't want to turn it off because the same skill is really good for negotiating.)
There's a game called Rejection Therapy[1] that's designed to reframe rejection as success. It also gives players the permission to fail and experiment with personal boundaries.
My experience with sales people is that they pick up on social cues much better than average. The good ones just don't take rejection poorly. It's part of success and often you can learn to prepare or target better from the experience.
those could be good hindsight characteristics to mitigate the emotion of rejection, but in taking on a sale I think it is better to be warm and aware of the social cues your potential client is providing. The best salesman are able to close by adapting to the various physical and social cues people provide.
6 customers at $199 a month is almost $1200 per month. Sure, it's not a fortune, but I wonder why it wasn't enough for "leave it running, work on something else, cash the checks, see what happens" to at least be one of the options.
I wish more entrepreneurs would be honest about how they're actually doing with other entrepreneurs, so that they could reveal options that haven't been thought of. Forget amongst fellow entrepreneurs though. Even within business partnerships honesty is hard to come by, lest one partner be accused of being a cynic and not having the faith. Still, I think every entrepreneur should have his or her own personal set of trusted advisors just for discussing topics like this.
Gotta keep up that bravado. It's in the same vein as HN's steadily inflating estimate of "what salaries do most half-decent new college grads get". I think I heard 120k most recently.
The other thing is this. This article is one more illustration of something I tell people when they ask my advice on going into business: "Most businesses that succeed fail first. Be prepared to see failure as a stage on the road to success."
At $1200/month, that ought to be enough to cover basic expenses. If you are interested in making this work, you can always get another job somewhere and kick this back to part-time work, or go after investors, or whatever other options you have. Is the basic income enough to keep it running? Probably.
But even in the end, even here, failure was a stage on the road to success was it not? I guess that shows how many paths there are given perseverance and inspiration.
I think you're underestimating the time suck this would've been. Those customers needed invoicing and collecting (it was automated credit card billing) and hand-holding. Sure, this was fixable, but only with a lot of dev time, which I wasn't sure would move the product forward.
It's often better to admit defeat and do something new.
I suspect it was because he also needed to make a living, in addition to covering expenses for the business. $24,000/year in revenue is tight for any business - even a single employee business.
The grandparent said: "leave it running, work on something else, cash the checks, see what happens"
worst case you go back to your 'day job' and grease the wheels/deal with occasional support in the evening or on week-ends. Given that the original batch of customers where personal contacts re-entering the fray to continue to rub shoulders with these kind of people and evangelize the product when you can and makes sense seems like a great idea. Maybe Ryan is more of a go-big-or-go-home guy, but this is probably what I would have done.
We, as ever, need some idea of the costs to consider if this is viable.
It looks pretty low cost, but we're looking back so bandwidth costs and such might have been high. Still if 80% of it is available as wages that's going to net (I'm guessing after tax+NICs) about £600 per month. A £1200 per month mortgage means he's living in the South East or in a massive mansion (for 2!) in some other part of the country.
I cant see why you couldnt pay a salesperson on results, was the product somehow really low margin??
We'd been running EventVue for 3 years, were exhausted and at the end of our runway when Brad Feld (one of our investors) asked us one question: "Are you still having fun?" When we couldn't honestly answer "yes", his advice was "Then quit! Life's too short." We announced we were shutting down the company the next day and I've never felt more relieved.
And to think that shortly after you unplugged and went to New Zealand to shake it all off before jumping back into your next awesome new venture (which seems to be going really well).
I bet you would've burnt out if you hadn't and Torbit wouldn't have happened, even if you had the idea or bandwidth for it. I've flirted with the crispy edge of burnout a bunch of times since moving to SF. You haven't really been working hard unless you've at least once seriously considered chucking it all to become a forest ranger, surf instructor or dog walker.
I agree with it 100%. It's hard to tell when to quit and when to stick with your startup/product, but not having fun for too long is a sure sign you should be doing something else. I currently have the same problem, not having fun anymore doing it. Part of it not being fun is the market I chose, selling software to people I have a hard time relating to (small business owners in France, not familiar with the Internet and web apps).
For my next product, if it's B2B, I'll make sure to first find an audience, people I'd like to do business with, and then find a product to make (incidentally, that's also the approach advised by Rob Walling and Amy Hoy among others, and it makes lots of sense to me now).
That's the thing. And that's why inspiration (which largely means the ability to have fun while working harder than just about anyone else!) is so important.
I'm working on a book that helps entrepreneurs pick up the phone. It has been something I've had success with and I think it is tremendously under developed in our circles. Good preparation, targeting, and some experience can help you handle rejection and increase your rate of success. Link in my profile.
I remember hearing once (possible on Marco Arment's Build and Analyze) that million dollar ideas aren't created overnight. Companies like Rovio (creators of Angry Birds) had to suffer through tons of failed products before they struck gold. I think this article shows the value of perseverance and poses a very important question: when do you quit and try something new.
Excellent post Ryan. Working in enterprise software our sales guys here No a hell of a lot more than Yes.
When I hired the last two new guys, I said .2 is a great batting average in baseball. You'll never be close to that in enterprise software. It's a numbers game. Heard those types of speaches all the time in grad school regarding startups and sales.
Rejection is tough on everyone. Good sales people do a few things to mitigate this that I've noticed and practiced. One thing is to think of it as a game to expect a certain amount of rejection as part of what you do in advance.
I mean if I told you right now to pick up the phone and call someone and pitch them and there was no outcome and I paid you $20 to do it you probably wouldn't have a fear of doing that. If I told you that I would pay you if they hang up on you $20 but $0 if they don't you probably would all the sudden not be afraid of the hangup, right? It's all a psychological game. Same thing with approaching a girl in a bar.
Second thing though is that some good sales people don't pick up on social cues as well as others. So they don't feel the rejection as much as sensitive people do. If you are cold calling the same micro expressions that might turn a sensitive person into jelly completely escapes many good salespeople. Same with just a voice. It takes time to get over this automatic reaction but it can be done with practice just like anything else. (Although you don't want to turn it off because the same skill is really good for negotiating.)