Describing startups with billion dollar valuations as “Unicorns” is getting to be a tired practice. Frankly, it’s outlasted the original novelty of the term. Which is why we at The Harris Consulting Group have decided to reclaim the word and apply it to something more meaningful and useful.
In mythology, a unicorn is a rare, horse-like creature with a single horn sticking out of its forehead. Stories give that horn magical powers and in many cases, people think the unicorns even bleed rainbow colors.
But how does this relate to business?
No matter what size your organization is, you will always contend with the demand for doing things Better, Faster, and Cheaper. Unfortunately, not many understand — or if they do, they won’t admit it — that you can usually only meet two of those three demands. Only in the rarest of instances have we seen an organization accomplish all three conditions. That organization, in our eyes, is atrue unicorn.
- Better – Improving on, or surpassing an existing or previous level or achievement
- Faster – Performing a particular type of action quickly
- Cheaper – Low in price; worth more than its cost
Let’s look at the four possible combinations below:
A. Faster and Cheaper
We see this all the time in the startup world. In many startup sales environments, this is often mistaken for achieving scale. It occurs when a startup has a strong product/market fit and a few good and happy customers, at which point they then think that just hiring more salespeople can multiply the current success.
Unfortunately, what startup CEOs fail to understand is that in many cases, these initial customers are: early adopters, have a lead source of friends and family, and most often are buying the founder as much as they are buying the product or service. At this stage, hiring a sales rep to start selling is not always the right call.
B. Better and Cheaper
Unless you have a truly self-service model where absolutely zero human touch is required, this condition is difficult to achieve. Don’t get us wrong, it does exist. In fact, a huge part of the B2C app economy is built using the Better and Cheaper mindset.
While today’s B2B SaaS sales are drifting towards a B2C feel, once the deal crosses a certain threshold, it is going to require some level of human dialogue. This is when things become more expensive because skilled sales reps become necessary.
C. Better and Faster
We firmly believe that people should always focus on Better and Faster first.It may not be cheaper in relation to short-term cash flow but it will allow you to fail faster, improve more quickly, and thereby offset any short-term costs with long-term gains.
D. Better, Faster, and Cheaper
Better, Faster, and Cheaper is the sibling to Better and Faster. Just keep in mind that “cheaper” is defined as “worth more than its costs” and not “least expensive.”
We believe that Faster and Better is actually the same thing as Better, Faster, and Cheaper. What it means is that the goals of the organization are such that any short-term monetary expenditure will be heavily outweighed by the long-term benefits.
Better: Improve from a Baseline
The goal of any sales organization is to improve upon their previous level. No matter what you do in life you can only get better when you know what your baseline starting point is. From there, you’ll need to start giving yourself a reasonable and fair goal for improvement.
The challenge in most startup and early stage companies with SDRs and Inside Sales teams is that better is often thrust upon them like an albatross that is synonymous with our next word: faster. Remember, going faster will not make you better.
Faster: But in Shorter Sprints
Similar to the quality of better, you must first establish a baseline to know what you are being measured against. In sales, faster is often referred to as velocity and more specifically the velocity of a deal through the sales funnel.
One of the biggest mistakes we see sales teams make is when they focus on the overall velocity of the deal, measuring from the date a lead enters the funnel until the moment the deal closes. Yes, this is important, but trying to examine it under such a large microscope makes it difficult to improve.
What we’ve seen work best is breaking the process down into smaller, more manageable pieces. If you think about most athletes, while the overall performance is great they actually spend a ton of time focusing on very small parts of the overall process.
For example: Say you are given 300 leads from 100 companies, 3 people to target per company. These days, you now have tools that allow you to contact all 300 in less than 5 days if you wanted. That would certainly be faster and — depending on who you ask — it may even be considered better than your previous method. In fact, others might argue that this method would even be cheaper than a longer, more structured process.
Cheaper: Worth More Than its Price Tag
Far too often, companies focus on Cheaper as it relates to the outlay of cash. They will ignore the long-term benefits and overall reduction of costs at scale. This is the real definition of “cheaper” and really, the only definition that matters.
In the end, companies that we call unicorns are rare (and magical) precisely because they are able to strike the perfect balance between those three conditions in order to build their business and sales organization with the requisite amounts of speed, value, and quality.
Do you agree with our definition of what a unicorn company is? Hit the comments button below and tell us.
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This post was actually several months in the making. A few special acknowledgements to Trish Bertuzzi of The Bridge Group, Inc. and Steve Richardof ExecVision.io who helped inspire many of these thoughts.
Richard Harris on Twitter: @rharris415
Trish Bertutzzi on Twitter: @bridgegroupinc
Steve Richard on Twitter: @srichardv