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Dalton + MichaelDalton + Michael

How Great Founders Approach Sales

What does being great at sales look like in practice? In this episode of Dalton + Michael, the two dive deep into the topic of startup sales. It's a big topic, and there are lots of misconceptions out there, and so D+M talk through some of the common misconceptions as well as encouraging founders to see some sales advice they already know through fresh eyes. Dalton + Michael is brought to you by ‪ @Standard_Cap Dalton Caldwell on X: https://x.com/daltonc Michael Seibel on X: https://x.com/mwseibel

Dalton CaldwellhostMichael Seibelhost
Feb 2, 202621mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 0:55

    Why discounting can backfire (the “burrito you don’t want” problem)

    1. DC

      If I'm trying to sell you a burrito you don't want-

    2. MS

      Yeah, yeah

    3. DC

      ... trying to keep cutting the price doesn't make you want the burrito.

    4. MS

      No.

    5. DC

      If anything, it make, it makes it kinda worse if you keep discounting it-

    6. MS

      100% worse

    7. DC

      ... 'cause you're like, "What's wrong with this burrito?"

    8. MS

      Yes. [laughs] [upbeat music] All right. Welcome to Dalton + Michael. Today we're gonna talk about startup sales, and specifically mess-ups, screw-ups, misconceptions. Like, I think that, uh, instead of trying to make a sales 101 style video, we wanna make it more entertaining by talking-

    9. DC

      [laughs]

    10. MS

      ... about when people screw up. And, uh, that's always the most fun stuff. So when you're in office hours with a founder and you're just sitting here, you know, you're hearing kind of, kind of a, a ho-hum story, something didn't work, and then, like, you just hear something that makes you cringe.

    11. DC

      [laughs]

    12. MS

      You're just like, "Eh." [laughs] Like, tell an example of that, like where you're just like, "Oh."

  2. 0:55 – 1:34

    Founders’ distorted mental model of sales (used-car-salesman fear)

    1. DC

      Look-

    2. MS

      [laughs]

    3. DC

      ... I certainly was the type of founder who wasn't excited about the concept of sales, and I had a lot of cartoonish ideas-

    4. MS

      Fair

    5. DC

      ... about what sales looks like, right? You picture, like, a used car salesman or an insurance salesman or just, like, a high-pressure, um-

    6. MS

      Yeah

    7. DC

      ... timeshare salesman. Oh, you love those, right? And so I'm like, "Man, I never wanna do that. That's bad."

    8. MS

      Yes.

    9. DC

      I think that founders may resolve themselves they need to do sales, like it's a nec- necessary thing.

    10. MS

      Yeah.

    11. DC

      But they deep down are still thinking about the used car salesman-

    12. MS

      Yeah

    13. DC

      ... somewhere.

    14. MS

      It's like they never had a canonical example of good sales.

  3. 1:34 – 2:37

    What “good sales” actually feels like: responsive problem-solving

    1. DC

      It's like this. It's that good sales is so good it doesn't feel like sales.

    2. MS

      Yeah. Yes.

    3. DC

      Like, think about service providers.

    4. MS

      Yeah.

    5. DC

      You know, I've, I've had good service providers.

    6. MS

      Yes.

    7. DC

      You just kinda email them with a problem, and they're like, "Yeah."

    8. MS

      Yeah.

    9. DC

      "You have a problem? Like, let's fix it. Let's do the thing that you wanna do."

    10. MS

      Yes.

    11. DC

      And they're super responsive, and they're really nice, and they understand where you're coming from.

    12. MS

      Yeah.

    13. DC

      And those people are totally making money off me. [laughs]

    14. MS

      [laughs]

    15. DC

      Those people are selling me a product. But when I'm interacting with these people, it feels like, they're not a friend, but it feels like someone-

    16. MS

      A colleague

    17. DC

      ... that knows me. They understand me.

    18. MS

      Yeah, a partner.

    19. DC

      I present a problem to them, and they're in a position to help me with a good or service.

    20. MS

      Yes.

    21. DC

      And we both walk away feeling really good about the-

    22. MS

      Yes

    23. DC

      ... the transaction.

    24. MS

      Yes.

    25. DC

      That's good sales.

    26. MS

      Yes.

    27. DC

      And it's so good that it would never register in my brain as that's a salesperson selling me something.

    28. MS

      Which is so weird, 'cause I'm like, well, is, there isn't another word for that. [laughs] Like, there isn't, like, another word, it's just... It's almost like, oh, this was all my idea. Like, this was all... Like, it was just like-

    29. DC

      Right? [laughs]

    30. MS

      [laughs]

  4. 2:37 – 4:08

    The cringe moment: selling when you’re not sure you can help

    1. MS

      I think for me, the thing that makes me cringe, when the founder basically is like, "You know, I think I figured out a little bit of what the customer's problem is. It's gonna be really hard to solve. And, like, I don't think I can solve it, but I still need to sell them something." They're kinda talking to, "Well, like, maybe we can help them with this thing," or they, you know, "I know what their problem is, but they're asking for this. I'm not gonna help them with the thing that's screwing them up. I'm gonna help them with this other thing. I'm trying to figure out how to get outta here with doing the least amount of work possible and get paid."

    2. DC

      I'm not trying to do this, like, trade. Right? Like, like, the very concept of trade, where sales comes from, is like, by trading goods, we both end up better. [laughs]

    3. MS

      [laughs]

    4. DC

      Like, I'm not actually engaging in trade.

    5. MS

      Yeah.

    6. DC

      I don't wanna say I'm engaging in theft, but, like, if we were to look at the utility, if you sell something to somebody that doesn't produce any benefit to them, but you make money, in the end-

    7. MS

      I don't think-

    8. DC

      ... I don't think the word for that is trade.

    9. MS

      No. [laughs]

    10. DC

      I think, I think it's a different word from that.

    11. MS

      [laughs]

    12. DC

      I, I have to think about what that word is.

    13. MS

      It's a different word. [laughs]

    14. DC

      I think it's a different word.

    15. MS

      But it's, like, so common. I think that's the thing that really gets me is just this like, oh, we're n- I'm not being selfless. I'm not trying... You, you described this great. Like, oh, I emailed someone. They tried to help me. They did help me. I paid them. Great, yeah.

    16. DC

      [laughs]

    17. MS

      But so often it's the exact opposite. It's like, oh, like, I'm trying to get paid, and I don't know if I can help.

  5. 4:08 – 4:50

    Monologue demos and feature dumps vs. listening-based sales

    1. DC

      My mental model for someone just starting out doing sales is you have this, you wanna just go talk at someone and cram it down their throats and get them to say yes.

    2. MS

      Yes.

    3. DC

      And so it's usually a monologue.

    4. MS

      Yes.

    5. DC

      And you say a bunch of stuff, and you list the features. Another thing is, like, often founders will think that discounting is the most powerful weapon they have. They'll be like, "Well, I offered them a huge discount, and if they bought now, they get a discount." And again, when you think about it, if you don't want something, like, if I'm trying to sell you a burrito you don't want-

    6. MS

      Yeah, yeah

    7. DC

      ... trying to keep cutting the price doesn't make you want the burrito.

    8. MS

      No. No.

    9. DC

      If anything, it make, it makes it kinda worse if you keep discounting it-

    10. MS

      100% worse

    11. DC

      ... 'cause you're like, "What's wrong with this burrito?"

    12. MS

      Yes.

    13. DC

      [laughs]

  6. 4:50 – 5:22

    Why pricing discussions are pointless before value is understood

    1. MS

      Well, and especially in those situations, it's so clear the customer doesn't realize that they can get any value out of the product that, like, why are we talking about pricing? It's almost-

    2. DC

      Right? I don't even know what you do.

    3. MS

      Exactly.

    4. DC

      [laughs]

    5. MS

      Like, I don't even know why this would help me. And it's almost like I'm trying to speed run. It's weird to me that, like, the process of helping someone has been turned into this torturous process.

    6. DC

      Yep.

    7. MS

      It shouldn't feel like torture. You should be trying... Why else are you doing this business if you're not trying to help people? [laughs]

    8. DC

      Yeah.

    9. MS

      Like s-

  7. 5:22 – 5:59

    Great founder-sellers: empathy, quiet listening, and real relief

    1. DC

      Well, and I, and I think at its core-

    2. MS

      It's just silly

    3. DC

      ... a lot of people are better at sales than they realize, and it's getting them to, like, put the car salesman thing out of their mind-

    4. MS

      Yes, yes

    5. DC

      ... and think about it-

    6. MS

      Yes

    7. DC

      ... to, to picture what their best sales experiences were of someone helping them with a problem, and to just emulate that. And I think often people have an aha moment when you say it that way, the way we're talking about it.

    8. MS

      Yes.

    9. DC

      And that's what you need to be. Like, the f- the founders I know that are best at sales are good at listening-

    10. MS

      Yes

    11. DC

      ... and not saying much-

    12. MS

      Yes

    13. DC

      ... and being really empathetic, and then truly solving the problem so that it feels like a relief to the customer.

  8. 5:59 – 7:08

    Customers can’t always specify the solution—don’t just take orders

    1. MS

      I think you said it best. Good sales is good problem-solving, and any good founder is solving how many problems in their company every week?And if they took that exact same feeling into the sales conversation, they'd be so... You know, it's like, "Are your employees having a problem with productivity?" And yada, yada, yada. And you're like, "Hmm," like, "Let me figure out how to get this guy to, like, get out of my face without helping him at all." [laughs] Like, that's not how you're thinking, but it's like, "Oh, maybe be more flexible at this. Maybe we can help you here." I think that, like, if you take the core assumption that oftentimes the customer doesn't know how to solve their problem. So the other thing that I see people try to do in sales is like, "Great, Dalton, give me a list of things you want me to do. I'll do them. That will obviously make your business better because you gave me the list."

    2. DC

      Yep.

    3. MS

      "And then we will both profit." And it's like, how often are you selling a customer, the customer's like, "Well, I wanna make more revenue, but I don't really know how"? Or a customer even worse, I'm talking to somebody who doesn't really understand the whole business they're in, and like, "Hey, can you help me do X, Y, and Z?" But you realize it's not gonna really help the business that they're operating. That's a problem-solving situation-

    4. DC

      Yeah

    5. MS

      ... if you treat it that way.

  9. 7:08 – 7:57

    Actually do the empathy exercise: method-actor level customer context

    1. DC

      I mean, this is, like, trite advice, but like a lot of trite advice, if you pretend like you're hearing it for the first time-

    2. MS

      Yeah

    3. DC

      ... it might hit differently.

    4. MS

      Yeah.

    5. DC

      So this is one of those things, which is put yourself in the shoes of a customer.

    6. MS

      Yeah.

    7. DC

      Again, you're usually like, "Yeah, yeah, yeah. Put myself in the shoe." No, but really, pretend like you've, you've never heard that before.

    8. MS

      Yes. [laughs]

    9. DC

      Pretend like this is the first time someone's ever said that.

    10. MS

      Yes.

    11. DC

      Actually take a minute, and i- it's almost like a method actor.

    12. MS

      Yeah, yeah, yeah.

    13. DC

      Like, like pretend you're that person walking into the room.

    14. MS

      Yeah.

    15. DC

      Pretend you can see their email inbox.

    16. MS

      Yep.

    17. DC

      Pretend you can imagine what their boss is telling them they should be worrying about.

    18. MS

      What their next meeting's gonna be. [laughs]

    19. DC

      Yeah. Like, actually take a moment-

    20. MS

      Yes

    21. DC

      ... and sit with that advice.

    22. MS

      Yeah.

    23. DC

      A lot of people aren't doing that is where I'm going with this. Like, they, they're like, "Yeah, yeah, yeah," you know, "Put yourself in the shoes of a customer," but they, they actually have never done that exercise.

  10. 7:57 – 9:52

    Know your customer’s business—or you’ll never truly win

    1. MS

      My version of that is imagine you were the CEO of the company that's buying your product. What would you think? And it's so interesting when I have that conversation with people, 'cause first of all they're just like... 'Cause then I'm like, "Okay, tell me about the business of your customer," right? 'Cause, like, you're selling this product to them, it's gonna help their business. Tell me about their business. They're like, "I don't know anything about their business."

    2. DC

      [laughs]

    3. MS

      And like, okay, like, well, if you were the CEO of this business, like, what do you think your top three problems would be? They're like, "I have no idea." And it's like, would your product be a solution to any of the problems of the business? Like, I'm just trying to sell them marketing software, Michael. Like, why are you making this more complicated than it has to be? [laughs] And I'm like, are you trying to help your customer, or are you just trying to accomplish your goals, and your customer's goals are incidental? You can certainly get somewhere with that mentality. You can, you can probably raise your seed round, you can probably hire people, you could probably raise your Series A, right? Like, like, there's a whole set of milestones you can have with that, but you'll never win.

    4. DC

      Unless one day you, you, like, wake up from this slumber.

    5. MS

      Yeah.

    6. DC

      Basically you fix this.

    7. MS

      Yeah.

    8. DC

      Like, this is like a-

    9. MS

      Yes, yes. [laughs]

    10. DC

      You might get pretty far never figuring this out.

    11. MS

      Yes.

    12. DC

      But one day you probably need to figure it out.

    13. MS

      Yeah. I think that's the thing that confuses a lot of startup founders is, like, they see these products. I mean, I've had this conversation with founders, it's like, "We use the product, it sucks."

    14. DC

      Yeah.

    15. MS

      "We don't like it, but they're doing well. Maybe we should do what they do."

    16. DC

      Yep.

    17. MS

      'Cause, like, if you can only see two or three steps ahead of you, you might be following or copying a company with a bad product and thinking that's how you win, and it's like-

    18. DC

      Yep

    19. MS

      ... no. Oh, and the other side of that is if a company is winning, you might not understand the value they create for their customers, but don't dismiss it to zero.

    20. DC

      Well, that's the classic thing of, um, dismissing a product 'cause the design is bad.

    21. MS

      Yeah, yeah. [laughs]

    22. DC

      [laughs] Yeah.

    23. MS

      Man, this CHRS looks like crap. [laughs]

    24. DC

      [laughs] You're like, "I don't know, I don't know if that's the higher bit here." Um-

  11. 9:52 – 13:55

    The VP Sales misconception and why CEOs stay deeply involved

    1. MS

      No, I totally agree with that. Here's another fun one. I'll, I'll give you a scenario. Great, I'm doing my company. I've raised a little bit of money. I've done some sales. Now it's time to hire a VP sales, right? Because, like, that's a whole thing. That's not my specialty. I'm just a founder. Like, I can hire someone, and they'll build a sales team, and they'll do it.

    2. DC

      It's just that easy.

    3. MS

      Isn't that how company building works? [laughs]

    4. DC

      Yeah, you just hire someone, and they do a perfect job-

    5. MS

      [laughs]

    6. DC

      ... and you, you ride off into the sunset.

    7. MS

      Right, right. They're like, the, the title is VP sales, it seems like they'd be good at sales, right?

    8. DC

      Yeah.

    9. MS

      What do you think actually happens? Like, when a company does well, what is actually going on?

    10. DC

      The deal with executives, and we talked about this in other videos, you want them to function at a, at a high level, and they've probably had a similar role in the past.

    11. MS

      Yeah.

    12. DC

      And what it actually means in practice is running a team and hiring other people and managing those people.

    13. MS

      Yeah.

    14. DC

      But it usually doesn't mean figuring out from first principles how to do sales. The most common source of problems is that the founder just expects a new VP of sales to come in and just do as good of a job as the founder was doing.

    15. MS

      Or better.

    16. DC

      That or-

    17. MS

      Not doing a good job, right? [laughs]

    18. DC

      [laughs] Yeah.

    19. MS

      Yeah.

    20. DC

      And just, like, know what to do.

    21. MS

      Yeah.

    22. DC

      And, like, that's not at all what they're really prepared for. Like, imagine someone was a former VP of sales at, at Google or something like that.

    23. MS

      Yeah.

    24. DC

      That's a successful product-

    25. MS

      Yeah

    26. DC

      ... with a successful machine, and they were trained. And so they were super effective at, like, running a team and hitting their quota.

    27. MS

      Yeah.

    28. DC

      But if you're, like, a new startup and that hasn't been around for a while, without an established playbook, it's not obvious those skills transfer over one-to-one.

    29. MS

      I, can I state that more strongly? It is obvious those skills do not translate. [laughs]

    30. DC

      Oh. [laughs] Those skills definitely do not translate. I mean, they could, like-

  12. 13:55 – 19:50

    “Don’t do consulting” vs. the real danger: dead-end one-off revenue

    1. DC

      Yeah. [laughs] Maybe the last one that I wanna talk about is consulting, so I'll bring up still my favorite company, YC never funded, Palantir. I have been surprised at how many founders will say some version of, "Well, we don't wanna do this for the company because that's gonna be consulting."

    2. MS

      Yeah.

    3. DC

      "Well, you know, that integration's gonna take too long. It feels a little too one-off-y. It feels like consulting." It seems like consulting is the weird boogeyman in the room, almost as if you would assume that YC has, like, thousands of companies that have died because they did too much consulting, yet, like, I have, have not seen that. So what's going on?

    4. MS

      Yeah.

    5. DC

      [laughs] So this is one of those, um, phrases that you're- gets repeated so much-

    6. MS

      Yeah

    7. DC

      ... that it feels like-

    8. MS

      Conventional wisdom? [laughs]

    9. DC

      Uh, yeah. It's like being like, you know, love thy neighbor. You know, you just said it.

    10. MS

      Yeah, yeah.

    11. DC

      Consulting is bad.

    12. MS

      Don't do consulting.

    13. DC

      Don't do consulting.

    14. MS

      Yeah, yeah.

    15. DC

      Let's pretend like we're hearing it for the first time.

    16. MS

      Yes.

    17. DC

      Let's examine this with fresh eyes.

    18. MS

      Yes.

    19. DC

      I remember in my first startup, um, when we were not succeeding, getting a meeting with Disney-

    20. MS

      Yes

    21. DC

      ... because to, to cut through a bunch of bullshit, it took many meetings to get to this, but like-

    22. MS

      Yes

    23. DC

      ... at the heart of the matter, they wanted my startup to build a white label social network so that big fans of the Disney parks could network and share tips with each other so they could sell more tickets to-

    24. MS

      Yeah

    25. DC

      ... Disney. And they had to control the whole thing, and, like, there's... They gave us a spec of all the stuff they wanted us to build-

    26. MS

      Yes

    27. DC

      ... to, like, control what people could say. Like, it's... We said no, even though it would've been for millions of dollars-

    28. MS

      Sure

    29. DC

      ... because that was consulting.

    30. MS

      Yes, yes. [laughs]

  13. 19:50 – 21:00

    Closing principles: sales as problem-solving and fair trade

    1. MS

      I agree. So anyways, the big takeaway here, I, I wanna steal two things to kinda summarize. I think one is this concept that, like, great sales feels like s- problem-solving. You should be in the business of solving your customer's problems, otherwise you shouldn't be doing this. And you won't win. If you wanna win, you should seek to-

    2. DC

      Solve their problems

    3. MS

      ... [laughs] consistently solve your customer's problems. Um, and then two, the very underpinning of business trade is both sides have to end up better at the end of a deal. Please structure things in that way. [laughs] Um, uh, please don't, "Oh, well we hit our 15% month over month goal, so I won."

    4. DC

      [laughs]

    5. MS

      I don't know if you won. You, you-

    6. DC

      Let's not worry about that

    7. MS

      ... figure it out.

    8. DC

      That's a winning problem.

    9. MS

      It's your problem to figure out-

    10. DC

      We have a retention-

    11. MS

      ... whether you won

    12. DC

      ... problem, Michael. Uh-

    13. MS

      [laughs] Yeah

    14. DC

      ... we'll solve that later.

    15. MS

      Yes. Understand that core principle. Like, do right by your customers. All right? Good chat.

    16. DC

      All right. Thanks, Michael. [outro music]

Episode duration: 21:00

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