When launching a startup, there are an incredible amount of decisions to be made. It’s up to the founders to prioritize what will help drive user acquisition and customer satisfaction. These decisions could make or break the startup’s success, especially in a competitive marketplace. We sat down with Taz Patel, co-founder of influencer marketing platform, Captiv8, to talk about how he maximized bootstrapped funding through investing in sales tools that would lead to product growth, efficient operations, and smart hiring.
RampUp: What has been your smartest decision at Captiv8?
Taz: The best decision we made was investing in sales tools when it came time to prioritize where to spend a substantial percentage of capital we had available to us, both via early beta customer revenue and a seed venture round. Without making and agreeing to this decision, we would have lost the ability to track and make actionable decisions off of real customer feedback and improve our platform to align with the maturing influencer marketing space.
RampUp: Was that a risk-taking decision?
Taz: Yes. At the time, we didn’t have the revenue to justify spending money on a robust CRM, lead generation, and various revenue tools. And, since I was the only dedicated co-founder focused on sales, we didn’t have initial consensus due to lack of familiarity with the sales tools desired. So, to help minimize the perceived risk, I included my co-founders on various vendor calls. Luckily, after this ongoing process, my co-founders, who are more technical and product focused, realized my reasoning was derived after evaluating data versus gut instinct.
RampUp: What other investment decisions were on the table that you delayed or passed on as a result of investing in sales tools?
Taz: The most obvious one was our inability to hire additional sales team members in the near term. However, we felt that even though this decision cost us upfront capital, it would pay dividends in enabling our existing team to effectively onboard and scale the sales department as we grew.
RampUp: How did data guide that decision?
Taz: It’s interesting because as a sales professional, I always felt that I had enough data or even an excess amount of data at my disposal. That may have been the case when I first began my career in AdTech back in 2004. But to close a deal in today’s construct of SaaS and marketplace business models, there are multiple attributes over a period of time that need to be tracked and acted upon. The tools we invested in helped us do just that. We analyzed all these factors to refine the sales process as we scaled.
RampUp: Did you already know which sales tools you wanted to invest in? Or did you have to sell your co-founders on the time it would take to evaluate and choose a vendor?
Taz: I personally had an idea and created a short list of vendors and did the initial round of vetting. However, I realized during this process there was a slew of new tools available, and luckily my co-founders suggested a few additional ones they heard about, making our decision a collaborative effort. Eventually, we ended up subscribing to a couple more noncore email marketing and lead generation platforms.
RampUp: What were the results of this decision?
Taz: The results of investing in Salesforce, LeadIQ, Hubspot, and other sales tools were critical, as they allowed us to achieve momentum on two fronts: operations and hiring. We all know that each business unit works in conjunction with one another. But as a lean early-stage team, we were able to map out requirements on how best to achieve balance successfully. We were able to prioritize putting a strong sales operations team in place to support early demand.
RampUp: What was the feedback from the key stakeholders at Captiv8 and beyond?
Taz: Both our founding team and investors were happy to see this early sales momentum. They were supportive and kept challenging us to continue doing so with the correct balance. This is very difficult, even with enough customer data and a forecasted pipeline. If the demand isn’t there, you can’t build out operations, and if you don’t have the proper operations structure in place, the customer will notice.
RampUp: How did that affect the bottom line and company goals?
Taz: This sales data affected how we enhanced our product to meet the future goals of paying customers. What started as a very sales-focused approach shifted to a customer-focused approach over time. It’s a nuanced mindset but generally yields higher revenue and lowers attrition across customers.
RampUp: Do you wish you had made this decision earlier?
Taz: No, I think the decision to put the sales process in place with the investment in various tools was on par with our needs at the time. However, one can always argue that with a strong product you should always be selling, even without a process in place, because you are likely leaving revenue on the table.
RampUp: What advice do you have for other founders who focus on sales in the early stage?
Taz: If you have enough data, then it’s better to make a decision than to wait too long. Engage colleagues so they understand the process and reasoning behind any decision. At the early stage, you can often quickly correct any bad choices. Dragging out a wrong decision can be detrimental.
What’s the smartest business decision you’ve made? Tell us by tweeting us @RampUp or emailing us at firstname.lastname@example.org.