5 Biggest Enterprise Sales Mistakes in Climate Tech
Climate tech founders often come from non-operator backgrounds– nonprofits, academia, or research, to name a few. While their engineering skills might be world-class, transitioning into a sales role, particularly with enterprise clients, can present a unique challenge.
We sat down with Josh Felser for some insight on what NOT to do when navigating enterprise relationships. Josh is the Co-Founder of Climactic, ClimateX, and Freestyle Capital, and has spent much of his career in the world of enterprise.
Mistake #1: trying to sell the expansion product first
If you think of your products/features as a meal, you want to start out by selling the most desirable, easy-to-digest part – i.e. the “dessert.” This is called the “land” product, i.e. an easy to integrate, high value, simple product that builds your foundation with an enterprise customer. Once you have the customer sold on the dessert, you can expand to additional features and products that will accomplish your (and their) ultimate goals – i.e. the “vegetables”, otherwise known as the “expansion” product. Many founders in climate tech make the mistake of attempting to market and sell the expansion product first versus the land products.
This is not just a sales question, but also a key element of designing a successful product roadmap. First, focus on building a product that is desirable, usable, and most critically, easy to adopt. If your MVP enterprise SaaS platform requires 5 decision-makers to sign off and 3 teams to support integration, you’re going to struggle to land customers. Utilizing product-led growth (PLG) is a great strategy in enterprise sales– and in your early days, the key is simplicity and immediacy of value. If you need to provide a tutorial with your technology, it’s probably overcomplicated. You want your land product to be intuitive enough that anyone can have a great experience using it – think of platforms like Slack and Airtable. Once you have that sellable “dessert”, you can upsize contracts, value add, and sell your “vegetables” from there.
Mistake #2: thinking customer success = sales
Early stage companies will often have the same team handle sales, support and customer success– in many cases, people think that these roles are similar enough that the same people will handle these tasks. In reality, sales and customer success require dramatically different skill sets, goals, and methods.
Typically, you want your salespeople to have great transactional skills. Ultimately, their goal is to make the sale and move on; it’s not usually in their domain to maintain ongoing relationships with the customer. Customer success, on the other hand, is an entire role centered around managing relationships as the consumer transitions from a potential buyer to a user of your product. Their interpersonal skills must be a bit softer: there isn’t the same persistence required as a salesperson. Rather, the focus is on being available, communicative and patient. Support can lie within the realm of customer success (as it, too, involves relationship maintenance), but it’s typically more granular, tactical, often technical and provides vital feedback for product.
Keep in mind that, not only will your team underperform if these roles are merged, but there may be other adverse impacts. For example, investors will look at your org chart to see how you plan to spend their capital on talent. If you’re far enough along that you have the capacity to separate these roles, having them merged can cause concerns in the mind of investors. Remember this: retention ≠ sales. Once you start treating customer success as a continuation of sales, the culture surrounding the role will morph and lose its value. More importantly, if you approach customer success really well and focus on product-led growth, you won’t need to put as much emphasis on sales to begin with. Your product will start to sell itself.
Mistake #3: prioritizing climate background over tech background
Climate is a fairly young industry– there are plenty of talented people within it, but remember that your sales people don’t need to understand climate to be effective at closing deals. Instead, consider recruiting from the general tech world, with a focus on high performers who have a consistent track record of closing transactions, meeting quotas, etc.
Climate expertise is great, but it’s not necessarily a key requisite to selling a product. It’s also something that can be picked up along the way, which is more challenging with sales/customer success skills. Branch out and find talent who are willing to pivot to climate– you may be surprised at how much value they can bring to the table. Plus, you get to bring in top talent from the outside, and further expand the pool of people tackling the climate crisis.
Mistake #4: designing your product for robots
Startups who are not selling direct to consumers often make the mistake of neglecting the UX of their product. People think that because you’re building an enterprise product, it doesn’t have to be exciting or user-friendly. Don’t fall into this trap– remember that no matter who you’re selling to, there’s a human at the other end. Every product is a consumer product, and creating engagement allows it to essentially market itself through user experience.
Ditch the monochromatic color schemes and complex user interface, and instead focus some of your energy on making your product pleasant to look at and use. You can even enlist help for this– Designer Fund, for example, invests in early stage startups with a focus on improving design and usability. Providing a great experience and appearance in using your service will keep your buyers on board, as well as allow you to make better impressions with those scoping out your product for the first time.
Mistake #5: focusing on selling to big tech
Many climate startups will start out setting their gaze too high, attempting to sell to the sustainability teams of big name companies like Microsoft or Apple out the gate. While it’s great to have goals of signing with these large enterprise logos, the likelihood that you’ll get a response, especially as an early-stage startup, is not worth the effort you’ll likely put into chasing them. The competition is immense when it comes to these companies, so set your sights on potential buyers who may not have as big of a name. Fortune 1000 companies could be great to aim for initially– they’ll still have a desirable level of stability and ability to invest in new technologies, but don’t necessarily hold the well-known name that brings an avalanche of competition with it.
Once you have several successful initial customers, and a potential connection to someone on the team at a Meta or Netflix, then you can consider pitching to a big tech company. Otherwise, don’t make this your initial focus. Instead, develop a roadmap of how you’ll work up to larger customers, recognizing that while it may not be possible right out of the gate, you can always make an effort with these companies down the line.
Josh Felser is the co-founder of Climactic and ClimateX, which function at the intersection of tech and sustainability, as well as Freestyle Capital, an early-stage tech VC. He has been a Board Member of Duke University’s Center for Entrepreneurship and Innovation since 2010. He was also previously the CEO of Crackle, a VOD streaming platform. Josh served as Vice President of AOL and President of Spinner Networks, the first internet music service. He holds a BA in Political Science and an MBA in Marketing from Duke University.
Photo credits: Chris Michel