Question from a reader --
"Hello, you don't know me of course, but I've been reading your posts for a while and it kinda makes me do greater things than I usually do (well mostly it makes me "wanna" do greater things but there has been noticeable improvement). But let me cut to the chase. I'm a relatively decent economics student from Croatia, but my problem is the college isn't really teaching me anything practical so when I leave the said institution in two years I'll be left with no definitive skill with real application in the current economic state, or any economic state I'm afraid. With this as my base http://sebastianmarshall.com/my-best-guess-as-to-what-an-aspiring-artist-should-do (as I'm also a photographer), and my usual voracious reading appetite, is there anything more you can recommend to someone who would like to one day start his own business, like books ,specific areas and skill sets to develop? The stuff I'm already working on is programming, social skills and developing a hard-working mindset (or maybe its smart-working) that my current social group/peers/family lack. Thanks, M"
Seems like you're on the right track with the learning. Here's two recommendations --
First, accounting is the most useful course to take at university if you want to run your own company.
Well, it's only learnable through consistent rote practice and repetition. It's dreadfully boring to learn on your own without instruction, and most people wouldn't be disciplined enough to do it. And it's perfect for conveying in the professor/student relationship. Any remotely adequate professor teaching you accounting would mean you'd learn the skill to a reasonably high level.
So yes, take an accounting course or two. It's probably the most useful course taught in university.
Second, sales. You need sales because it's what gets you money.
Sales also lays the foundation for understanding people, their needs, and collaborating with them. Training in sales gets you better at everything. Sales makes you a better manager and instructor of future staff, a better recruiter, a better negotiator, and a better communicator. It probably even makes you a better conversationalist and more likable.
Most people don't understand sales and don't understand what it's really about. As a starting point, I'd recommend Jeffrey Gitomer's The Sales Bible, which is extremely comprehensive and should get you going. The shortest version of understanding goes --
1. Ask lots of questions and don't talk too much.
2. Be likable, enjoyable, and trustworthy to spend time with.
3. Have credibility, expertise, referrals, and case studies.
4. Know how to craft good offers, particularly risk-reversing offers that lead to future business and ongoing engagements.
Gitomer covers all that pretty well.
What else? Rackham's SPIN Selling is excellent, and it's the only book I've read on sales that comes very a very thorough, empirical, research-oriented methodology that's also quite actionable.
Chet Holmes's The Ultimate Sales Machine is very good, though it's more like 70% about marketing, 20% about executive skills and business development, and only 10% about actual sales skills. Still, a great read and a classic.
I'd recommend you stay away from any book on sales before, say, 1990 until you've learned some and gotten a strong foundation. A lot of earlier books on sales relied on lots of little tricks, verbal sleights-of-hand, and other such nonsense that doesn't work well in the modern environment. Most books on sales from the immediately-post-WWII era were about consumer sales, whereas there's a very good chance your initial pitches and sales will be directed business-to-business towards owners, executives, and independent practitioners. If you're solo yourself and not getting a full-time job, you basically don't have the time, resources, and scale to sell consumer goods as profitably as you could do business engagements. (Well, never say never, but B2B is probably easier and more time-effective.)
Oh, I also started Alan Weiss's Million Dollar Consulting recently, and I wish I'd heard of it much earlier. It'll probably overlap with other points you'll come across, but the clearness and directness about making compelling value propositions and staying out of traps is very good. I'm only newly into it, so we'll see how it carries through. But so far, it seems very good and it came highly recommended to me.
After that? Get out there and sell. You might consider asking someone more experienced than you in a particular domain what their needs are, what solutions they'd buy, and then get out there and trial-by-fire it (and crash and burn repeatedly). The first time I did extensive cold-calling was in hospitality a few years ago, and I found it surprisingly easy to get meetings with the heads of Sales/Marketing and General Managers of Hotels. As I started calling cold other professionals, executives, and business owners (and later, government officials and people in the nonprofit world), I was repeatedly surprised by how receptive they'd be if you're prepared.
When you do reach out to people, start by doing relatively a lot of research upfront and look to get directly in contact with whoever is in charge if possible. Emphasize you did your research, be respectful, say you've identified something that could be valuable, and ask if you can meet and talk sometime. Saying you're a student will probably help by making it seem low-risk and kind to meet you, so definitely play card. You've got few advantages when you're just starting out, so use all of them that you've got!
When you get meetings, try not to talk too much. Ask lots of questions.
Frequently, from very busy people you'll get something like, "Okay, so what do you want?" Or, "Okay, so what do you have for me?"
Don't start singing and dancing at that point, it's a road to nowhere. You can almost always say, "I've got some ideas, but first I need to figure out what you're already doing and what your goals are so I can tailor what I've got. Can I ask a couple questions I prepared?" You'll almost always get yes. Do make sure you've prepared questions in advance. (Gitomer and Holmes both cover how to ask good questions.)
It's not rocket surgery, but you will likely screw it up about 10,000 times more often than you'd like when you're starting. But even with that, you can get pretty good at it in a year or so of dedicated effort if you keep at it.
If jumping right into selling is a little too intense-seeming for you, you don't need to do "hard" selling of particular products or services to gain experience in selling. At some point, you'll want to get comfortable particularly with asking for orders and getting checks written to you, because that can unnerve some otherwise skilled people and it's important if you want to own your own business. But as a training ground, "selling" educational initiatives, student initiatives, connecting with your professors or local government, promoting worthy causes, or otherwise trying to employ sales skills to accomplish things in the world will build you a good foundation. Again -- you'll need to get comfortable handling and asking for money sooner or later, and it's absolutely crucial to do so -- but you can start in something lower-intensity and with a higher success rate if you think it'll help your learning curve.
Godspeed and stay in touch. I've heard Croatia is beautiful -- maybe I'll drop you a line if I visit sometime.
Sebastian, I couldn't agree more.
The vast majority of my "business knowledge" is either directly attributable or derived from my accounting classes (as well as macroeconomics & microeconomics) and my years rising through the sales ranks and treating is as a craft that required practice as well as research.
Four classes, 12 credit hours, and still being extensively used 20 years later.
I would add a third track of study in University, writing classes.
The ability to write effectively not only is an important skill in marketing and the basis of most communication, but it forces (teaches) you how to use critical reasoning skills, the importance of structure, and how to impact another human-being through the written word.
I love the 37signals company views on writing as a critical test element in the hiring process for EVERY position from code-jockey to CFO.
This is a very nice blog! If you like business it is good that you also have backgrounds regards it. It is nice if you have business adminstration courses and proceed to accounting course for you to have a good foundation. Knowledge also needs to be upgraded so that you won't give antiquated information to your clients.
You know how you have role models for strategy like Ieyasu? Do you have any role models for sales like him?
Hey Sebastian thanks for suggesting Million Dollar Consulting. Already about 1/3 of the way through, finding it exceptionally relevant and valuable. I'll be incorporating several of his ideas as I execute my next pivot into big data consulting.
I love the part about sales making you a better conversationalist. While in college, I took up an internship in a Groupon-clone in Munich. The company was going nowhere, as the market was flooded with better-financed companies. But that wasn't why I was there. The real reason was that I got intense, hands-on experience cold-calling and negotiating with companies all over Europe, together with feedback from experienced sales people. In three weeks, I went from terrible to OK, and I used that experience many times over in new ventures.
I can't help but disagree.... those seem like two of the worst courses to take IMO. There is so much information about those topics online and in books -- the real learning for those topics happens out in the field, not in a lecture. I'd suggest taking engineering or CS courses, team up with friends, build something, and learn 'em "on the job" as necessary. But I suppose... YMMV.
Do courses on sales at university even exist? I probably wouldn't recommend it, I'd do sales live and learn from books.
Accounting though, it's perfect for the university setting. Most people wouldn't be disciplined enough to learn it in to a high level "in the wild." Engineering and CS both make sense too though.
I must defend my university-level sales class. It was a hybrid business and psychology course taught by a veteran of Procter & Gamble, who was worth the tuition for her stories and ability to cut an idea in one sentence. One of the things we did was to sell to each other with the camera running and then to critique ourselves using the recording in addition to receiving critiques from classmates and the professor. Another was to document literally every every sales encounter over the course of the semester and analyze several aspects of it. This was exhausting but the repetition was valuable.
That said, if I taught a university sales course (or any university business course) I would absolutely require a project in addition to the classwork to sell something.
These might not be the best classes, but not for your reason of too much information already out there.
That can be said of EVERYTHING now, including engineering & CS. There is no shortage of information readily available on ANY subject.
As Sebastian discusses, it is the formal nature of the accounting classes and the real sales field work where you will truly hone the skills. The same could be said for your build something and learn on the job, the knowledge comes from the doing, I wholeheartedly agree with you there.
Question from a reader --
However, I'd say this -- Why are you cold calling, anyways?
Below is a great post by Dharmesh Shah on building a startup sales team. You can read the full post here.
"Your sales force if your company's lifeblood. No matter how good your product is, it won't sell itself, no matter how much you believe otherwise. Establishing a competent, effective team to draw customers is often challenging for entrepreneurs, though, who would rather focus on research and development or chase VCs.
First off, a few disclaimers: I've never been a sales person. I've never even played a sales person on TV. All the points below have been pulled from startup sales teams that I think work pretty well (including the team at my marketing software startup).
1. Don't hire sales people too early. In the early days, the founders should be able to sell (and should be selling).
2. You don't need sales people, you need sales. Don't think VP of Sales - think "Revenue Engineer". (Not the greatest analogy, but just like you won't hire a development "manager" as one of the first 5 people in a startup, you shouldn't hire a sales "manager" either). Don't get caught up in fancy titles - focus on dollars in the door.
Below is a great post by Dharmesh Shah on building a startup sales team. You can read the full post here. "Your sales force if your company's lifeblood. No matter how good your product is, it won't sell itself, no matter how much you believe otherwise. Establishing a competent, effective team to draw customers is often challenging for entrepreneurs, though, who would rather focus on research and development or chase VCs. First off, a few disclaimers: I've never been a sales person. I've never even played a sales person on TV. All the points below have been pulled from startup sales teams that I think work pretty well (including the team at my marketing software startup). 1. Don't hire sales people too early. In the early days, the founders should be able to sell (and should be selling). 2. You don't need sales people, you need sales. Don't think VP of Sales - think "Revenue Engineer". (Not the greatest analogy, but just like you won't hire a development "manager" as one of the first 5 people in a startup, you shouldn't hire a sales "manager" either). Don't get caught up in fancy titles - focus on dollars in the door. 3. Don't hire several sales people at once. Your goal is to figure out the "pattern" of what kinds of people are best based on what you're selling and who you're selling it to. You need some feedback from the system so you can continue to iterate on your hires. 4. If you've never hired or been around sales people before, be prepared for a bit of a shock to the system. They're not bad people, they're just different. If you're an introverted geek like me, it's helpful to remember that your startup needs to sell stuff. 5. Resist the temptation to create complicated compensation plans. If it requires a spreadsheet to figure out the commission, it's too hard. You'll have plenty of time to confuse sales people later - start simple. 6. Agile methodologies can work in sales as well. Iterate! Refine your demo script, your slides, and any other collateral information. Capture the lessons learned by the best-performing people and spread it to the rest. 7. Sales people will generally act in mostly rational (but often surprising) ways based on incentives. The rules of the game define the behavior of the players. You were warned. 8. Always connect incentives somehow to ultimate customer happiness. If you reward just "deals getting done", you'll get deals - but at too high a price. You might get push-back that sales people don't control/influence customer happiness, but they do. They "pick" customers. They set expectations. And they control the degree of "convincing" applied. 9. Make sure you understand the economics of your business. Figure out your total COCA (Cost of Customer Acquisition). This includes sales people, marketing people and marketing campaigns. Quick example: Lets say you paid a sales person $10k, a marketing person $10k and you spent $5k on Google AdWords (for a total of $25k) last month. If you sold 10 customers last month, your COCA is about $2,500. Different businesses have different needs in terms of sales vs. marketing spend. Make sure neither is too far out of whack. 10. Your life-time-value (how much revenue you expect to generate per customer) should be higher than your COCA. (No, I did not need a degree from MIT to figure that out.) Once your LTV is a multiple of your COCA, you're ready to start turning the knob and scaling the business a bit (hiring more sales people). But, if your LTV is way lower than your COCA, proceed with caution. If there is no hope for LTV getting higher than COCA, you've got a problem. Don't try to hire additional sales people until the economics sort of make sense. If the car is pointed towards a brick wall, hitting the accelerator is not a good idea. 11. Track data maniacally (even if it's just in a spreadsheet). Information you will want includes: What was sold, who sold it, when, for how much, etc. This data will be invaluable later as you start to scale. For example, you should be able to answer the question: We had 14 customers cancel last month - who sold those customers? Is there a pattern? In the early days, you likely won't have the volume (or the time) to analyze the data - but you should at least capture it for future use. 12. Your pricing should be in line with your sales structure. For example, you can't expect to have an outside sales force (that meets with customers in person) if your average deal size is only $10,000. The math won't work. 13. Once you get beyond three or so people, running your sales in a spreadsheet will become painful. Start looking at CRM systems (like Salesforce.com). 14. Start watching the shape of your "funnel" as early as possible. How many leads are you getting a month? How many turn into opportunities? How many of those convert into paying customers? Once you understand your funnel, you can slowly start tweaking your system to fix the "leaks". That's all I've got for now. For those of you that have built early-stage sales teams, what are your ideas and insights?"