Sales as a Science: Using the Scientific Method to Grow Sales
Clint Yoo : Co-Founder & Head of Business at Business Canvas
Business Canvas is a company that develops software that solves problems faced by B2B companies. We are best known for our document collaboration tool 'Typed', but we also offer 're:catch' for sales modeling and the 'Typed Finance' B2B service to help startups with financial modeling."
Q1. Could you start by introducing yourself and shedding some light on Business Canvas?
Certainly. I'm a Co-Founder & Head of Business at Business Canvas. Our company is dedicated to developing software solutions that address the challenges faced by B2B companies. Among our notable offerings, we have 'Typed', a collaborative document tool, 're:catch', which aids in sales modeling, and 'Typed Finance', a B2B service catering to startups by simplifying financial modeling.
Q2. Could you share a bit about your journey and the driving force behind your company's endeavors?
Of course. Business Canvas has been operational for over three years, during which our focus has been on crafting software that enhances efficiency and convenience. As a startup, resource limitations have been a constant challenge. Today, I'm excited to delve into how we managed to generate an impressive $400 million in Annual Recurring Revenue (ARR) within a mere three months of launching a new service.
Q3. Exploring your global strategy, could you shed light on your approach?
When it comes to growth strategies, many startups stress the importance of meticulously crafted plans. However, I believe the true essence of expansion lies in having the willpower to break through. This mindset can be a more significant determinant of success than a rigid strategy.
Q4. You achieved an astounding $400 million in ARR within three months of launching your new service. Could you provide more details about this accomplishment?
Certainly. Our journey began with 'Typed', a SaaS product for document collaboration. Subsequently, we introduced 'Re:catch', a sales automation product, and 'Typed Finance', designed to simplify fundraising through financial modeling. While 'Typed' caters to B2C, 'Re:catch' and 'Typed Finance' are targeted at B2B. Interestingly, the bulk of our revenue streams from 'Re:catch' and 'Typed Finance'.
Q5. Could you elaborate on the pivotal decision that steered your revenue maximization efforts?
Our foremost decision was choosing the B2B path when faced with the choice between B2C and B2B. Revenue is essentially the product of unit price and quantity. To illustrate, achieving $50,000 in revenue differs vastly when selling a $5 product to 10,000 customers compared to selling a $500 product to 100 customers. Despite the challenges of crafting products at either price point, the decision boiled down to selling a higher-priced product for the enhanced value it offers. This strategic choice, guided by the B2B market's financial capacity, significantly impacted our revenue growth.
Q6. Pricing is often a challenge for many companies. What insights can you share on this aspect?
Pricing is a puzzle most startups grapple with. A pivotal point is that once a startup crosses the $1 million ARR milestone, the journey doesn't end; it's followed by the endeavor to scale to $10 million ARR. Sales math highlights that achieving $1 million ARR at $100 requires 833 customers, while achieving the same at $2,000 necessitates only 42 customers. This led us to opt for higher pricing for scalability. An investor once told us, "When setting the price, start high." We embraced this advice and allowed the customers to validate the product's value.
Q7. After confirming the right product and pricing, where did your focus shift?
Post-validation, our focus shifted to sales. Our approach shifted to a science-based one, where sales were treated as a predictable outcome of specific input metrics. For example, connecting input metrics like sales meetings to the outcome metric of ARR enabled us to exert control over the process. We emphasized input metrics more than outcome metrics and built strategies around them. This approach necessitated a shared understanding among our team of how these inputs impact outcomes, fostering collaboration and driving sales growth.
Q8. Could you delve deeper into the concept of treating sales as a science?
Absolutely. Sales science involves applying quantifiable methods to enhance results. An interesting statistic reveals that responding to a lead within five minutes yields an 80% conversion rate, while a one-minute response boosts it to an impressive 391%. Strategically determining the right time to engage with customers can significantly influence sales. Through such measures, we amplified our lead response rate by 20 times and increased conversion rates by 2.5 times, leading to remarkable revenue growth.
Q9. Is more always better when it comes to customers?
A common mistake startups make is overextending their offerings to attract more customers. My advice is to keep offerings simple and focus on delivering value, even if it's to a single customer. Simplicity often leads to better outcomes.
Interviewer: Your company is expanding globally. What prompted this decision?
Clint Yoo: While we enjoyed substantial sales growth in Korea, we projected to exhaust the local market's potential sooner than anticipated. This realization and the understanding that not all international markets align with our offerings drove us to research global markets with ample opportunities meticulously.
Q10. Any advice for startups planning to go global?
Going global is more about adopting an entrepreneurial mindset than rigid strategies. While navigating international markets can be daunting, synergy with other startups sharing the global mindset can pave the way for a successful global playbook.
In this insightful conversation, Clint Yoo reveals the intricacies of Business Canvas's growth journey, spotlighting the significance of mindset, scientific sales techniques, and informed decision-making in achieving remarkable success.
Today's Speech Insight
1. Sales is a science. If you look at the inputs (i.e. what resources are put in and how they affect sales), you can grow sales.
2. When you get an initial customer, it's better to have a simple product pipeline to satisfy that customer than to have a lot of products to attract more customers.
3. When going global, a challenging mindset is more important than a meticulous strategy. Collaborating with other like-minded startups will help you overcome this challenge.