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🌊 The Challenger Sale: Blueprint for Startups
👋 Hello! I’m Ivan. Join 7K entrepreneurs surfing startup waves.
🌊 The Challenger Sale: the most effective salesperson.
💡 Thinking: Curiosity-as-a-Service.
💵 Iberian Deals: 16 startup deals in Spain (>€70M).
🌊 The Challenger Sale
“The best salespeople don't just build relationships with customers. They challenge them.” — Matthew Dixon
When it comes to implementing a sales function in a startup - there are only a handful of truly important books to cover.
Here’s a quick breakdown of the most important ideas:
The history of sales in 4 Eras:
Early 1900s - The Split: Insurance companies split the role into Producers (selling the policy) & Collectors (collecting the premiums).
1925 - The Psychology of Selling: the books publication kicks-off the sales training industry. Introduces the idea of sales techniques (i.e. features, benefits, objection handling, closing, and open and closed questioning).
1970 - Consultative Selling: researchers figure out small and large teams need different selling approaches. SPIN selling is born (a framework) introducing more sophisticated models on how to sell complex products and services.
1980s - Purchasing Revolution & Solution selling: the purchasing side became armed with new purchasing methodologies. Which forced sales to think different, hence the rise of solution selling - moving from sales of individual products to a broad-based consultative sales of “bundles” of products and services.
There’s 5 types of salespeople, and 1 Clear Winner
This move to Solution Selling translated into more complex sales.
BUT, the more complex the sale, the wider the gap between core and star performers:
When segmenting out high-performers, they found 5 sub-categories:
And interestingly - but also counter-intuitively - the “relationship builder” did not come on top.
In contrast, the Challengers, who are typically awkward to manage and assertive both with customers and their own managers, won by a km.
Ok, but what are these “Challenger Traits”?
These winners share some commonalities - which you can hire and train for:
Offers the customer unique perspectives
Has strong two-way communication skills
Knows the individual customer’s value drivers
Can identify economic drivers of the customer’s business
Is comfortable discussing money
Can pressure the customer
And what do Challengers actually do?
They teach, tailor and take control
TEACH: the salesperson (deeply!) understands the customer’s business and is able to teach for differentiation / impact.
TAILOR: the challenger has a great sense of a customer’s economic and value drivers, and is are able to tailor and deliver the right message to the right person.
TAKE CONTROL: the challenger is comfortable discussing money and can, when needed, press the customer a bit (therefore taking control).
The last point on control is the one that most resonates, and the one I’ve seen set apart good from great salespeople in the past.
Here are a few other traits that can help you spot them in interviews:
Their interactions are focused on customer value, not customer convenience.
They are great teachers, knowing a customer’s world better than the customer.
They are able to create constructive tension— challenging the way a customer sees their world and pushing back constructively during negotiations.
Where do they start?
The Challenger rejects the old model of “attacking” decision makers directly.
Instead they aproach decision-makers indirectly through stakeholders who are able to establish more widespread support for the solution.
Interestingly, turns out that the biggest drivers of loyalty are shared among both customer stakeholders AND decision makers:
Supplier has widespread support across my org and is easy to buy from
Offers unique, valuable perspectives on the market
Educates me on new issues and outcomes
Helps me navigate alternatives and potential land mines
I’m in. How do I transform my sales team into Challengers?
Firstly, this methodology is not a one-size-fits-all solution.
It tends to work best in complext B2B sales environments, and requires you to have hired a sales force with the potential to become great teachers (with great business acumen and an ability to learn domain knowledge fast).
And most importantly, it tends to require a big shift in mindset.
If this is something your company can stomach - then lets dive into the steps:
The Warmer: share relevant information to prove to your customer that you know what they are experiencing. Share a problem that their competition or a similar business might be experiencing, and ask about its impact. Make it very clear, at the very start of every conversation - that everything is focused on the customer (not your solution). Here’s a great example:
The Reframe: connect the problems uncovered with a relevant insight, whenever possible with an even bigger problem or different angle which they hadn’t considered, setting the stage for a new thinking approach.
Rational Drowning: do your homework and back it up with data. Pull resources from your own organization to help you with this (lots of gems in product and marketing departments that are hidden in plain sight at startups).
Emotional Impact: “humanize” the different angle / bigger problem by linking it to pain points that your customers face running day to day operations.
A New Way: you’ve taken the customer on a roller-coaster ride, from a dark place into a brighter one - at this stage you share what capabilities would be needed to solve their “bigger problem”.
Your Solution: explain, tailoring the message to different decision-makers across the company, how your solution solves the dilemma.
💡 Thinking: Curiosity-as-a-Service
Putting your curiosity in the driver seat of your “career” path is underrated.
Most of us feel anxiety when asked “what’s your career plan” because too much emphasis is put in the future.
People tend to feel overwhelmed because it is hard to know “for sure” what to do next.
deciding what to study
deciding where to work
if you have multiple strong interests
Instead, bringing attention to the immediacy of “what are you most curious about right now?” + a good dose of bias to action, gets you going.
This way, you move fast, iterate, and maximize the probability of finding intersection between market <> skill <> interest. A few more frameworks here:
💵 Iberian Deals
You love startups and want to enjoy a Spanish lifestyle? Come join the Spanish startup ecosystem. Here’s a list of recently funded startups:
Erudit (SaaS) raised 10M
LuzIA (GenAI) raised 9.5M
Flanks (fintech) raised 8M - a JME Venture Capital portfolio company
Incapto (Subscription Coffee) raised 6M - a JME Venture Capital portfolio company
Mundimoto (marketplace) raised 6M
Divilo (fintech) raised 6M
Apartool (prpotech/marketplace) raised 5.5M
Barkibu (insurance for pets) raised 5M
Lifelength (telomere biology) raised 4M
Vivla (real estate) raised 2.7M
Webel (marketplace) raised 2M
Auona (chatbots) raised 1.2M
Workfully (marketplace) raised 1.2M
Recovo (circular economy) raised 1M
Genie (web dev framework) raised 1M
Nominis (edtech) rasied 350K.
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