Hey there.
I'm Dan Martell, serial entrepreneur, investor,
and creator of SaaS Academy.
In this episode, I'm going to share with you
how to pre-sell your software.
The exact script, flow, and even a little bit of a filter you
need to add on who you talk to so that you
can pre-sell your next software product
and use that money to actually build it.
And be sure to stay to the end where
I'm going to share with you how to get access to my free mini
course called Idea to Exit.
It's literally not only how I go deeper
in building a clickable prototype and pre-selling,
et cetera, but even going into how
to raise capital and exit your business at some point
if you choose.
I'll share more about that at the end.
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So here's the deal, selling your software
before you build it is a very attractive idea.
I mean, if you think about it, no money out of pocket,
I get people to pre-commit, I take that money,
I build the software, and then I launch.
And I kind of go from there.
I first heard of this concept back by Steve Blank.
So he wrote a book called The Four Steps to the Epiphany.
It used to be kind of like, mandatory reading
in the valley.
I feel like people have now moved on to like,
The Lean Startup and many other books.
But The Four Steps to Epiphany, it's a bit of a hard read.
Steve literally-- I think he sat down and just dumped it out
of his mind, no editing and then just
published it, self-publish.
Get the book.
Everything I'm going to share with you today
is from that book.
In my experience-- so like, when we
were selling Flowtown, or trying to pre-sell Flowtown,
like, we stumbled.
We thought we were doing customer development.
We're actually just selling.
OK.
We were just really good salespeople.
We made a ton of mistakes.
And what do I share with you is the lessons learned from that.
How to think about the two parts of the conversation
so that you not only learn, but you also
get a commitment so that you don't end up
in a scenario worse where you can't get anybody to commit,
or I think even worse than that is you take money
from people that were never going
to be great customers for you and ask
you to change your priorities.
So let's get into it.
Number one, early adopters only.
So the way you need to think about this is in a market,
there are people that are early adopters.
I'm not going to get into the technology adoption curve
where this comes from.
But there's a chasm.
Before that, there's kind of like, your early majority
and your early adopters and your innovators.
The early adopters are people that are willing to wait.
These are people that are looking for innovation.
They're looking for an edge.
So if I'm trying to pre-sell my technology, my innovation,
my software, I can't be talking to people that are not
early adopters, or I'm going to end up
making concessions for my vision of the product
to meet them specifically if they're
late adopters, laggards.
Then I'm going to get a false signal from the market.
How do you filter for those people?
Think about what are the characteristics
of an early adopter?
What's true about the person's life, their environment,
other tools they might use that might give you
any inclination that they're an early adopter?
So one example I used a lot back in the day-- now
I use Snapchat-- is if they had Instagram account
on their business profile, that might tell you
a little bit about their early adopters.
If they're a corporation and they
have a corporate social responsibility
program in their organization, CSR,
that tells you that from a cultural point of view,
they're really trying to be progressive
and they're trying to be involved in the community.
So you want to look for what's true about the business.
So here's where I see all the mistakes people
make as if I would sell restaurant innovation software,
and I live in a town of 100,000 people which is where I grew
up, I'm pretty sure nobody in my town at a restaurant level
is winning awards for being the most
innovative progressive restaurant in all of Canada.
If that's the case, then trying to pre-sell my software
to those restaurants is going to be not only frustrating, it's
going to fail, because they're not
going to be a true indication of what's possible in the market
because these are not early adopters.
So that's step one.
Add that filter.
It will save you so much time.
Number two, offer value.
So one of the things holding people back
from reaching out to potential companies is they're like,
why would this person get on a call with me?
Well, here's the way I've always framed
it, again, from Four Steps to the Epiphany,
is if I was building a marketing platform that helped people run
better Facebook ads, I would say to a potential target,
I would say--
target's such a bad word.
Let's call them like, opportunity or prospect
or a client.
Just feels better.
So if I was trying to reach out to a potential client,
I would say that I've been talking
to a dozen of other companies and people in your role
and other organizations just like you.
I've learned a lot about what's worked for them.
I would love your advice on how you're dealing with this today
and how you see this potential as a solution.
And as a gift, as a reward, I'm going
to share with you the top three lessons
I've learned from talking to other people in your industry.
All I need is about eight minutes.
How does next Tuesday at 2:00 PM sound?
That's the ask.
That's the email.
That's the conversation.
You can cold call.
You can send an email.
You can go to an event.
But that to me is really saying look,
I know that you probably have this problem.
So that A, they have to be problem aware.
If they're not, you're doing a double sale.
You're selling them on the problem
and you're selling them on even evaluating your call.
So you don't want to double sales.
So are they problem aware?
Are they somebody that wants to learn
from other people in the industry?
That kind of filters them out as an early adopter,
because early adopters want to learn.
And that's the give.
So eight minutes on a call, you ask them
about their situation, their structure,
I'm going to walk you through that next.
But that to me, is you've got to offer value
to actually get them to engage.
Number three, part one--
so there's two parts to the call.
So when I say a script, it's kind of like talk tracks.
It's not necessarily a script, because I want you to use it
for your specific product, your customer segment,
your language.
But here's the idea, part one is all about understanding
their problem.
If you've ever done any sales, it's very similar to that,
where you want to ask them-- it says well,
what do you currently--
So you want to kind of like, audit.
Like, what are you currently spending on Facebook ads?
How many leads are you generating per month?
What's your current conversion rate
from those leads to opportunities?
What's your return on ad spend?
You want to be sophisticated enough
to ask them questions that they should know
the answer to so you can understand the context of where
they're at.
Then you say well, what are some of the challenges
that you're facing as you manage that?
So you want to understand the problem space.
What are they facing as they manage ad
spend and lead gen, et cetera?
You want to surface those challenges
and you want to learn.
So part one is all about learning.
It's customer development.
It's not about selling at all.
It's literally, I'm having a conversation
with a potential client to teach me
even more about the space I'm in.
Other questions I'll ask is do you
know of any other products in the market that
solve the problems that you're facing?
I want to get some competitive understanding.
They might say yeah.
There's actually these other products.
And we didn't decide to move forward
because they're very expensive.
Perfect.
Well what would your budget be to solve those problems?
Again, you're trying to learn.
And then the last question through
that series of kind of customer development questions
is asking them to--
I call it-- well, Steve Blank calls it the IPO question.
It's waving the magic wand.
If you could wave a magic wand and have this problem solved,
how would that look?
And hopefully, hopefully-- and this is why it's such
an important call--
they describe the product that you want to build.
Because if they describe a totally different solution,
you might be in trouble.
But it's good to know.
I want to know.
I want to learn.
So you ask them if you wave a magic wand,
the problem is solved et cetera.
And the reason why it's called an IPO question
is because if you could actually deliver
that magical experience, you're going to be on the right track
to IPO.
If it's truly a big pain point and enough companies have it.
That's part one of the call, is you're there just
to learn by really going deep on where they're at today, what
problems they're having around that thing,
then asking them about the competitors,
and also asking them the IPO question.
Part two, the sell.
Now if you did part one and you learn everything
about their organization, the problems faced, et cetera,
and you feel like, you know, they
could be a potential customer for your product,
meaning that they're connected to the pain and all
this other stuff, then you just ask them.
It's like, hey, we've actually been
working on a prototype product that we're
thinking to bring to market.
Would you like to learn more?
And if you do your job right and they feel understood
and they feel like you really understand the problem,
they'll probably say yes.
That's the bridge to the next call which is the sell.
So the sell is really about just doing the demo.
So when you're asking them about their challenges-- well,
this frustrates me, this frustrated, this frustrates me.
When you present your product, you say well,
we built it because of this, the origin story.
Real quick, you know, we had this problem.
We solved it.
The way it works is you mentioned this problem.
We also experienced that.
And here's the way our product is going to solve that.
You mentioned this problem.
Here's how our product is going to solve it.
You mentioned that problem.
Here's our product is going to solve it.
And so what do you think about our approach to solving
that problem?
And then you're looking for feedback.
And they give you the feedback.
Here's the key-- this is when you
know you have a client that's going to be involved is when
they start giving you advice.
When somebody starts giving you advice
on how to improve your product, your solution, your service,
then it tells you that they're committed
to you and your outcome.
If they don't care about you, if they
don't think that it could ever work with you,
they're not going to give you the advice.
Why?
Because there's no reason to.
There's no upside.
But if they do, it's means that they want the product,
they're interested in, they like you,
and they want to support you.
So if they start giving you feedback about like, what
do you think we could do better, and da, da, da, da, da,
and they start giving you that advice,
that's when you go for the offer.
And the offer essentially, is saying hey,
here's what we're doing.
We're looking for a dozen early adopter clients.
So I called it the EAP program, the early adopter program.
And that program essentially gets
you 50% of the annual price in perpetuity.
So essentially, you get that half price.
The product be launching on this date.
And what we're also looking for is companies
to be part of our CAB, our Customer
Advisory Board to give us product feedback.
So not only are we going to be launching this on this date,
but we have a roadmap that we're looking at.
And we want to make sure that we have clients like yourself that
can support that and get on calls and give us some feedback
and review some of our product designs.
We would love to have you.
It sounds like you really understand the problem.
You understood the market and kind of where it's going.
And we're really committed to solving this.
Do you want to be part of that early adopter program?
And you go for the ask.
And then you stop talking and you wait.
Now they're going to have objections.
This is we're salesmanship is into place where
they're going to say well, what happens if I don't get a built?
Or what's the investment?
Blah, blah, blah, blah, blah.
You're going to have to be able to deal with that.
So write them down.
Have really good answers to those questions.
But that is how it works.
Part one is all about learning.
Part two is all about essentially, enrolling.
That's what I like to use is enrolling them into your Early
Adopter Program.
Number five, take the money.
I can't tell you how often--
I was just on a coaching call the other day
with my growth accelerator clients.
These are people that are kind of pre-revenue, pre-product
market fit, and I have one client John say to me,
he's like, yeah.
We did the customer development calls and it's validated.
People think it's a great idea.
And I was like, how many calls did you make?
He said three.
A, that's not enough.
10 is the minimum.
And you know, one of my clients Max, pre-sold 37 clients
into his SEO product and was able to not only fund
the development, but have even more left over for advertising.
So you want to at least have 10 conversations
to try to get three or four that's
a part of your EAP program.
That being said, if somebody says they're interested,
you want to take the money.
If somebody does not invest-- when
I did Flowtown and I did Clarity,
it was all about getting paid upfront.
If you truly believe there's value here,
I want to see your financial commitment.
So the way it works is they're going to pay for the whole year
upfront.
But it's 50% off.
So if you're going to charge $100 a month, that's $1,200.
They get it for $600, but they're
going to give you the whole $600 to be part of that program.
OK.
So that is how it works.
If you're not taking the money--
I mean, I'm talking PayPal, wire transfers,
I'll show up at your office.
You can write me a check.
Get paid, because as soon as somebody
gives you money, all of a sudden the conversation changes.
All of sudden they're going to ask real questions.
They're going to ask questions about does this integrate
with our security system?
Does this integrate with Salesforce?
Does this allow for multi-user accounts?
What's the reporting going to look like?
And those are really important questions
that they might have otherwise not asked or suggested or even
talked about when you were learning, doing customer
development, because the mental model changes
from dollar in to all of a sudden OK,
now I really need this thing to work.
So they're going to ask really good questions.
And that's when it all comes together.
So get paid.
Take the money.
So, quick recap on the exact script
to use to pre-sell your B2B software,
first, you've got to filter out early adopters only.
Number two, you need to offer value to get them on the call.
So you're essentially going to tell them
what you've been learning.
Number three, it's part one.
The whole conversation is about understanding where they're at,
what they've tried, what they're frustrated
with, what are competitors out there, et cetera.
So we're learning.
Part two is the pre-sell.
That's where we really go into the demo of the prototype we're
building.
And this is we're clickable prototypes come into play.
And then going for the offer.
And then number five is you've gotta take the money
or doesn't count.
As I mentioned, at the beginning of this episode
I want to share with you my Idea to Exit mini course.
I talked about clickable prototypes and MVPs
and pre-selling EAP programs.
I go even deeper in the whole setup in that free mini course.
I even talk about how to scale your marketing,
how to get your customers to prepay and use
that to hire key employees like your developers,
and also talk about the exit strategy
so that you understand that there's
only 21 people in the world that would
have an incredible meaningful impact on your life.
You can click the link below to get access to that training.
And if you like this video, I would
love for you to smash the Like button,
subscribe to my channel, and let me know in the comments
below what insights you've taken away from this episode.
And if you are still watching, I want
to encourage you, as per usual, to live a bigger
life and a bigger business.
And I'll see you next Monday.
Oh my God, I gotta stretch!
Oh!
Fudge pickle stuff.