Be direct, Sell direct

Israelis are known to be direct, so why not sell that way?

One of the first things I noticed since moving back to Israel is that many of the early stage startups we meet have a similar GTM strategy: Sell via channels or OEMs (in addition to some direct sales). This is one of the more noticeable differences from companies we worked with in the US which mostly started by selling direct.

While it may seem difficult and even scary to build a large sales force for a company based in Israel, there are a lot of benefits to selling direct. First, this is the only way to stay close to your customers, get direct customer feedback and understand what your competition is doing. you will get this info in a delayed fashion if you sell first through channels. Second, convincing an enterprise to pay for your product is not easy, and if you are not going to do it – there is little chance that some sales rep in a channel that sells multiple products will be able to do it for you. Third, when you sell direct you are in charge of your destiny and not someone else, which is crucial for a startup that has to move very fast. Finally, while I understand why you may think that a large channel that has tons of sales reps and relationships with many customers will do a better job than you in selling you product- this simply isn’t true. In order to jumpstart a channel you have to drive enough volume to satisfy the channel partner, or cause the channel to lose enough deals to you so that it will start taking you seriously. Even if you get promises from the most senior people in the channel, the truth is that the sales rep on the ground will sell whatever is easiest for him to sell to hit his quota. Most likely, this is not your product.

This doesn’t mean that you have to completely abandon channels. Channels can be a great and efficient way to expand. But in most cases they should come much later after you have already proved you can sell your product directly. 

Another answer we keep hearing when challenging local startups about the channel-based GTM model is: “How else am I going to be able to sell in Germany/Japan/China/Brazil?” The answer here is very simple. Just don’t. There is only one market that matters for the first few years of your company- the US. If you make it there you can make in anywhere. Don’t waste your time and precious resources chasing customers all over the globe. Focus only on the most important and most competitive market. The rest of the world will just follow in time.There are many successful startups that started by winning the US market first and then expanding internationally, there are very few big companies that did it in the reverse order (Alibaba and Whatsapp come to mind). Selling in the US is how you attract strategic interest and venture dollars. It is harder for both groups to diligence you when your sales are in in France or Japan.

 

DISCLAIMER

The thoughts and opinions expressed herein belong to the author and do not necessarily reflect those of Bessemer Venture Partners or any of its affiliates (“Bessemer”).  The material here is written on the author’s own time for his own reasons and Bessemer has not reviewed or approved the information herein. Any discussion of topics related to Bessemer or its investment activities should not be construed as an official comment of Bessemer.

2 thoughts on “Be direct, Sell direct

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s