Lenny's Podcast: Product | Career | Growth
00:56:42 · Lenny Rachitsky, Rob Snyder
[00:56:42] S1: Okay. So the way you've kind of written about this closing step, there's kinda like two parts. There's the fit of just like, is this a fit? And then it's just a bunch of project management to get the deal closed. So we've spent a lot of time, I think, on the FIT. The project management, is there anything there important to talk about? [00:56:58] S0: Yeah. So this is... You did a great episode with Jen... Of great couple episodes with Jen on the, like, sales process. And so in bigger deals, enterprise deals, there's like the champion has pull and decides, yes. I want this. And then you have to do a set of 17 demos. You have to genuflect in front of four committees. There's all of these things that you have to do. For smaller deals, you, like, don't have to do that kind of stuff. It might just be the CEO who's like, yeah. Cool. Next step is you send me the Stripe link, and we schedule an onboarding call. And so the project management step will depend. My typical recommendation for project management in larger organizations is to have a conversation with the buyer, with champion to say kind of, okay, cool. This is the project on your to do list. When does this need to be showing results by? They'll say, oh, definitely Q1 next year. Okay. Cool. That's a forcing function. You work backwards from there to say, okay. Given that we need [00:57:59] S1: to be
00:57:59 · Lenny Rachitsky, Rob Snyder
[00:57:59] S1: to be [00:57:59] S0: live, Q1, what are the set of steps that need to happen between now and then so we can be deployed and showing results by them. And that is a forcing function for all of the prop steps in the sales process. [00:58:12] S1: Awesome. So basically asking when do we need to show success for this to be a thing that you all roll out and then working backwards from that. Okay. At this point, a lot of people would create basically design partnership arrangements where they're like, okay, cool. We'll build this with you. We'll figure it out as we go. We won't charge you. Per your earlier point, you are not into design partnerships. I imagine your advice here, just like sell it directly. Don't try to give them to... For free. Don't set up some kind of partnership thing. Yeah. Yeah. Why... Well Okay. [00:58:41] S0: Why shoot yourself in the foot? [00:58:43] S1: And again, the reason not to is because it just... You find that doesn't lead to the best to stuff that actually sells and works building this kind of design partnership relationship. [00:58:52] S0: Yeah. If they're like... It it basically takes something from, I need to to solve this right now. So, like, okay. Now I'm helping you build your product. Like, where... What are we doing here? So it... It's a negative signal to the most... To people with... Who actually have pull, and it's a positive signal to people who don't. [00:59:10] S1: Awesome. Okay. And that totally makes sense. Like, if there's pull, just go with it. Yeah. I need to
00:59:10 · Lenny Rachitsky, Rob Snyder
[00:59:10] S1: Awesome. Okay. And that totally makes sense. Like, if there's pull, just go with it. Yeah. I need to [00:59:16] S0: yeah. Yeah. And you can sell us something that's like... You know, you might not have a full platform ready. You can sell something that's more service shaped early on. I've seen a bunch of startups do that where they sell, you know, okay. We're gonna have an AI product manager who can do x, y, z kind of thing. For now, it's delivered by us while this thing is working behind the scenes. And so you can frame it so they're not expecting a full platform, that enterprise grade platform ready next week. They expect something more service shaped, you kind of validate that there's real pull there, and you figure out what the actual thing to build is while delivering it a mix of manually and automated. [00:59:55] S1: Okay. That's really interesting. That's come up a lot on the podcast, especially with go to market sales conversations. This idea of services being a great place to start, which historically has been a terrible idea because the fear is you never actually get to a place where you can automate it and you're just definitely running your consulting business forever with terrible margins. So you've seen this work, this idea of starting with basically humans doing the thing and then slowly building product around it that increases margins. [01:00:21] S0: Yeah. It it definitely has downsides. Right? You definitely can get stuck in a kind of service businesses kind of thing, but everything has downsides.
01:00:21 · Rob Snyder, Lenny Rachitsky
[01:00:21] S0: Yeah. It it definitely has downsides. Right? You definitely can get stuck in a kind of service businesses kind of thing, but everything has downsides. [01:00:31] S1: Awesome. Yeah. And ideas AI kind of does more and more of this stuff. And part of it is you learn more and more of what what the problem opportunities are and things like that with people doing the work. Okay. Going back to price real quick. Classically, founders are afraid to ask for big numbers and throw out, you know, high prices. Knowing that the stuff changes and you learn as you go, any advice for that first price pitch of what number to throw out?
01:00:57 · Rob Snyder
[01:00:57] S0: Yeah. So early on I'm really more testing willingness to transact versus willingness to pay. And so I don't care about pricing a ton in the early couple of customers. That said, I was just working with a company that's... Their first deal is Enterprise, and they've got a big demo day coming up. And so they're like, How do we get the most possible revenue out of this so we can look like that for demo day? Totally valid thing to do. In that case, what you do is you throw out a number in a way that doesn't get you slapped. And the specific approach that I'd recommend for that is almost like using a case study as a, hey, react to this kind of case study. And so you'd say, when we talk to others, the way they've... Everyone's kind of done pricing differently. Some of them have been... Sometimes it's been a small project for $80,000 Other times, it's been up to a million dollars in terms of, right, and these are kind of the levers here. And some people... A lot of people wind up in the middle. You tell me, how are you thinking about this? And so what you're doing is you're not like me on this side proposing pricing to you on this side. It's both of us looking at, like, an example, a kind of semi real example of what you've heard from others as how they think about this and letting them throw up on that.
01:02:16 · Lenny Rachitsky, Rob Snyder
[01:02:16] S1: Throw up on that. I like that. I know this case study concept is actually an important part of this whole framework. I'm gonna come back to it. But okay, so let's talk about the next steps. So say you have the sales call in BF2, what kind of comes next after this first batch of sales calls that you're doing? [01:02:31] S0: Yeah, this is where the paths might diverge. So hopefully you're right. These people have pull. Great, you now have customers. Time to deliver and start repeating this and start figuring out how to automate things and just systematize this. You're on the right path. A lot of the times you get kind of a weird set of responses. You learn that the people you thought were weird not to buy are actually weird to buy. It'd be weird if they did buy. They're not behaving in a way where they have pull. And in that case, what I tend to recommend is you just analyze, you go back and review the calls, and you say, okay. Did one actually have pull? Did zero? Like, what have we learned here? And then you craft a new hypothesis and run it again. [01:03:19] S1: Got it. And imagine most of the time, it's not it's not there. And is that your experience, or what's kind of the pie chart of yes, success versus not at this stage?