Lesson 5: Sales $0-1m

Sales From $0 to $1 Million

Sales are the lifeblood of your business: the machine that keeps your company running. Sales bring in cash, revenue, and the necessary topline to keep on the lights and pay salaries. Every successful entrepreneur knows this, and yet so many struggles with it. Very few companies will ever reach $1 million in total sales, making it an exceptional achievement but still attainable. To achieve this milestone (or your personal sales-figure goal), you must demonstrate a long-term focus and a commitment towards real value creation.

Build and Test Your Idea — Quickly

In the earlier sections of the course, we discussed the Lean Canvas model and other basic principles from Eric Ries’s the Lean Start-up. We learn that the first thing you need to do is determine a big problem to solve, or alternatively, a high-value benefit to provide. From there, test a basic hypothesis of how your product/service can provide value to a clearly defined target customer. Then, test the idea with a minimum viable product (MVP): something you can sell to prove your business model has potential. 

Once established, rapidly test, starting with small control groups and rapid feedback loops, such as regularly reviewing sales or deploying customer surveys that help you make product and marketing corrections early on. This is a powerful method simply because you spend less money, time and energy creating and refining a product/service that you can sell before it’s mass market ready. Finding a validated and growing market will position you well for future revenue growth.

Start in First Gear and Shift Up From There

When first building and testing your MVP, start small and slow so you can work out all the major hiccups before scaling. In other words, you need to manually, personally execute and closely measure most of the core functions of your business. This is the only way to learn, adjust, and quickly iterate what you and your team are doing. Think of it as learning how to ride a bike before pedalling as fast as you can to the finish line. You don’t want to go as fast as you can only to end up crashing.

Consistently improving the product while acquiring more sales (and customers) is key to building momentum. But of course, to take this transition from manual to high speed, you also need to build a company that supports speed. Many entrepreneurs forget this crucial step and end up building beautiful castles over sand, only to lose everything once the first current arrives. 

Build an Infrastructure and Culture That Can Scale

Early on as you’re testing your MVP and getting some initial sales traction, make sure you have the proper framework established in your model, organizational chart, and culture that will incubate growth. Growth can be broadly defined as rapid product development, customer acquisition, and the overall scale of your company. Counterintuitive as it may seem, you achieve growth by keeping it simple. Start with only one product or service with up to three variations that you can test across two to three sales channels at a time. Once you discover what works and what doesn’t, double down on what’s working.

This approach should be also applied to your sales strategy. During this time, you should clearly identify a traction channel that is a leading source of leads or sales that provides a solid ROI for your company. For example, if you find that Google ads are very effective at driving traffic and sales to your site, then that is a traction channel. Make sure at least one traction channel is well-established before you try and expand into others.

For your internal company infrastructure, keep your teams nimble and accountable. Your team members should have autonomy as well as solid communication channels between everyone. Create a consistent cadence of rapid new product/service developments while experimenting with sales channels and applying the feedback you get from the market (i.e., your customers). With regular feedback, you can improve your offering and business model so that it is firmly supported by your company’s structure and culture.

Treat Your Customers Like Gold

You should be 100% invested in your first few customers. They will be the foundation that your company is built upon. As you gain each customer, work hard to earn their trust and treasure it. When clients feel an authentic partnership from one of their vendors or product providers, they get attached to you. When they’re attached to you, they’ll stick with you through tough times. But most of all, they’ll also vouch for you, which is critical. To really achieve scale, your company needs to receive customer referrals and word-of-mouth traffic. Those are two channels that don’t cost you a penny, and they often bring you your best customers.

Keep the Momentum Going and Your End Goal Clear

Once you start building serious traction and momentum, you want to be prepared to keep it going non-stop for the next few years—not months. The goal is to move into a scaling mode with a clear goal in mind (i.e., IPO, acquisition, high level of impact for customers/society, etc.).

Figure out your big “why” as a founder and make that the driving force behind your relentless mission. This will, of course, inspire your employees, customers, investors, and everyone else supporting your vision. It’s crucial to make sure you have the right leadership and people in your company to make all these things work. Once you embody and execute these principles, you increase your odds of surviving and thriving in the Wild West of start-ups. It really is possible for your company to hit $1 million in sales—all it takes is focus, grit, process, and the drive to rapidly adapt.