From Instinct to Insight: Crafting an Intentional Sales Strategy

Full Transcript

Note: Transcripts are generated by machine and lightly edited by humans. They may contain errors.

(00:01)
Zia Yusuf: Not every dollar of revenue is the same. I think when you are at an early stage as a company, you feel that every dollar that comes in is fantastic.

(00:11)
Darius Teter: Of course, it’s not just about the dollars and cents, it’s about the time and energy you invest to secure the sale.

(00:18)
Zia Yusuf: It may have taken 60 percent of the company working for three weeks to respond to an RFP, which leads to a small dollar amount of revenue. You want it so you’re excited, but should you have spent those three weeks and 60 percent of your team pursuing a different opportunity in a different way?

(00:38)
Darius Teter: Today we’re joined by two leaders with deep experience in design and technology across Africa, and we’re going to focus on a topic that we’ve not yet covered this season: your sales strategy. Welcome to Grit & Growth from Stanford Graduate School of Business, the podcast where Africa and Asia’s intrepid entrepreneurs share their trials and triumphs with insights from Stanford faculty and global experts on how to tackle challenges and grow your business. I’m your host, Darius Teter, the executive director of Stanford Seed.

(01:17)
Yann Le Beux: My name is Yann.

(01:18)
Darius Teter: That’s Yann Le Beux, founder and CEO of YUX, a research and design firm in Senegal. Yann started YUX in response to a critical gap in the African market: the need for software and user experience design specifically for the cultural and technological nuances of African clients and markets. After initial success, Yann realized he needed help to grow his business, and that’s where Zia comes in.

(01:43)
Zia Yusuf: So my name is Zia Yusuf. I am a senior advisor at the Boston Consulting Group.

(01:48)
Darius Teter: Zia Yusuf’s career spans big tech, venture capital, and traditional economic development. His experience ranges from leading roles at companies like VMware to teaching at Stanford’s renowned Hasso Plattner School of Design. Zia’s passion for innovation and design thinking has led him to work on transformative projects across the globe. It also led him to volunteer as a consultant for Stanford Seed. In today’s episode, we’ll hear about their partnership to review YUX’s product-market fit along their three verticals to build a go-to-market strategy, including the development of a sales function and funnel to review pricing and to track performance all along the way. These are crucial elements that startups need to adopt to go from organic, almost accidental, growth to intentional, scalable growth. Yann applied to Stanford Seed for support as he faced these challenges in growing his business. And for listeners who are not familiar, Stanford Seed is a program from Stanford Graduate School of Business that partners with entrepreneurs in emerging markets, offering them the training and resources they need to grow their companies and drive economic growth in their regions. So, Yann, you decided to apply for a Stanford Seed consultant to support your business. What was the problem you were trying to solve?

(03:05)
Yann Le Beux: Probably the wrong one, and this is why I love, in the conversation I had with Zia, sitting down in fancy Palo Alto, and it was actually one of the first business development trips. I’m there, and I’m thinking, when I applied, my problem is in marketing because I always felt, oh, you have these big design brands and they’re going to come over to Africa and easily conquer the continent because they’re so good at marketing, and they have beautiful photos and all this stuff. So I believe my problem is marketing. After five minutes, he asked me a different question. That is, “Yann, how many people are in the company?” At the time, maybe we were like 35 or 40 full-time employees in the company. ”And, say, how many salespeople do you have?” Like zero. And we actually had no one except for me doing sales.

(03:52)
And then after I talked a little bit about marketing, he looked online, and actually we are pretty good SEO and if you type “design, Africa, UX, Africa,” you’re probably going to find us. So it’s not too much of a marketing problem, but it’s actually we have no one then to pursue a sales process. And we didn’t have any sales pipeline, sales process, not barely a CRM. And Zia was — his experience was like, but guy, no, no, no, you need to reframe your problem. It’s not a marketing problem, it’s a sales problem. Naturally the two link to each other. But I had never seen that in that perspective because for us we always have been kind of spoiled because we never grew too fast because we had talent issues. So every time we needed to grow a little bit, I think we had more demand than talent capable of realizing the work. But as soon as you start growing, you realize you have to feed all these people ready to work and you need to be much more consistent in the way you approach business development and stop behaving like a small child where clients come to you naturally.

(04:55)
Darius Teter: With so many early stage companies, the first clients seem to arrive almost accidentally or effortlessly. And the initial excitement of those first sales can create a sense of complacency, as if organic growth is somehow ordained or it’s just going to happen. And so hiring investment follows, but that means more pressure to grow sales and maintain revenue. And it’s in that critical phase where many founders realize that what got them here isn’t going to get them to the next level. So Zia, when you first met Yann, did you understand what their business even was?

(05:28)
Zia Yusuf: I understood, I think, two pieces of it. They’ve got three different businesses. One I didn’t understand was there was a nascent software business and that there was not much online where I could play around with it and so on. But I understood basically the design consulting piece of it. The piece that also was not clear was: Who are the market segments? I kept that classic “why,” I just kept asking the question, “Why?” The questions are so much more important than answers in these situations because you can kind of go down on this joint discovery journey. I kid with my daughters, “God gave you two ears and one mouth for a reason. Try and listen twice as much as you talk.” And we went down over our few months of engagement on several different paths. Marketing leads to sales. So even if you have a marketing issue, how do you know you have a marketing issue? I mean SEO is just people clicking on your website or the number of people coming to an event. You expected 30 people and 48 people showed up, so your marketing is really good. But if not a single person converted that into interest and then into a sale… So marketing and sales, as Yann said, does come together, but it was interesting how their entire, what they laid out in their application for a coach was very different than where we spent the bulk of our time.

(06:51)
Darius Teter: For Yann and his team, that pressure to grow forced them to rethink their approach to marketing and sales and to reevaluate their customers.

(06:59)
Yann Le Beux: When you’re not that big and you have a constant discussion with your team, you get a sense who’s a good client. So that’s fine. But when you start scanning it up and when you try to teach some of your team members to go out there and to understand for them who is the good client for us, that becomes where the challenge was, and this is where all the work we’ve done with Zia… but putting on paper those segments, defining the persona, defining the right approach and the right products for these guys and each of the segments, was very crucial. And I think we had a sense of who were our clients, but the fit between the segments of clients, the profile exactly that they have, and the offers that we can provide — that was not really clear.

(07:43)
Zia Yusuf: What we focused on was your go-to-market strategy, which includes sales. It had a marketing component, it had a product-market fit component, because, as you said, there were the three market segments and the three kinds of products, if you will. And we had a series of discussions around which one fits where and so on. We talked a little bit about alternatives and competitors and what choices your customers had and so on. So it was kind of that go-to-market strategy and how do you get at it. And the final thing there is — you don’t sell to companies, you sell to human beings. And I think, Yann, that was an interesting conversation with all three of you. Who is the individual? You are selling to very large organizations, but they’re not your client, and it’s not even the business unit that’s your client. It’s not even the head of that business unit that’s your client. There could be actually two, three different roles, and understanding how to sell to those people and individuals was kind of a little bit of a breakthrough as well.

(08:54)
Darius Teter: Through this process, Yann and the team began to clearly identify who their clients were and broke them down into distinct segments. They outlined personas to better understand these clients’ needs and that helped them fine-tune their approach. They made sure that their marketing and sales strategies were directly aligned with the specific needs of each customer segment. In other words, product-market fit. Without that you don’t have a business. But their other mind shift was to focus on the human because sales aren’t just about targeting companies but about connecting with the key decision makers within. As Yann and his team began to scale, they got a breakthrough opportunity: the chance to work with Google, a completely different kind of customer. Unlike some of the slow-moving international development organizations and NGOs that they had worked with in the past, Google demanded immediate results. So I asked Yann to share with us the story of how they secured this partnership and the strategies they used to meet the rigorous demands of the tech giant.

(09:56)
Yann Le Beux: Funny enough, they found out a study that we do because we do a lot of public reports. Even if we are very small, we believe it’s our goal and duty to talk about the design industry and the research industry in Africa. So we published the “State of User research in Africa” and actually people from Google just read and randomly found that, because they were doing research about the design ecosystem in Africa. And they wrote to us like that, saying, “Hey, we’ve seen the great report.” And so I think we already have one first level of validation because of the quality of that report and the fact that we show genuine interest in a very specific niche. And so when you talk to a UX researcher or head of UX research at Google and you specialize yourself on UX research wherever you are, there is this conversation that becomes between two very passionate people about one field and this is how it happened.

(10:47)
And we started a different project with them, but most of the time it’s understanding how Google can position their future project or current products for the main markets on the African continent. What they actually really like about us is that we have team members in the main markets. So if you want to do research in Nigeria, in Kenya, in Ghana, we can have people doing quantitative, qualitative research, usability testing on different Google products, and we specialize on that. We are not just a market research agency that does reports and all this type of thing, we’re very technology-centric. And the things we do with them varies a lot, so we can run diary studies with thousands of people and using AI to analyze all the data, or last week organizing an immersion for their product team in Lagos because they’ve never been to Lagos and they wanted just to understand the hustling economy, the small business economy in Lagos.

(11:38)
And so we organized this immersion organizing visit in the markets, interviews, usability testing. And so that’s fascinating because we just signed recently an ongoing contract with Google that enables us to do research projects very, very fast. So that’s a big achievement for us because we are one of the few agencies in the world that have — especially on the continent — that have this type of contract. It pushes us to some new level of research and analysis, collaboration, project management that we didn’t have before. And not only — when you mentioned some of the large NGOs, that takes so much time and that’s okay, but then you have the Google project and then you have two weeks to do something that is very profitable if you do it well, but also very risky if you don’t do it well.

(12:29)
Darius Teter: Technology-centric isn’t an understatement. YUX uses technology to make sense of their proprietary data and I found Yann’s process fascinating. They use research to develop their products. They sell research as a product and they publish research to establish their own thought leadership.

(12:49)
Zia Yusuf: I must say I think Yann and his colleagues have done an amazing job of creating this content and putting it out there because, I mean, I don’t know if there’s any other similar — maybe in South Africa — but any other similar kind of companies on the continent that are leading this. And that will certainly attract people to take notice and it can also lead to deals. I think the question then becomes: How do you scale this up? How do you make it repeatable? You can’t be reactive and just wait for somebody to read a great article or attend an event. You also want predictability. And I think this was one of the challenges because one quarter out, two quarters out, hoping that somebody will give you a call or send you an email is a very tricky situation to be in. So how do you get that predictability? How you build that pipeline becomes critical.

(13:44)
Yann Le Beux: On very emerging markets where you’d never know how often a Google or Meta are going to have projects on this continent, because for them it’s still not the core of their business, not where the big chunk of money is. So we recently did a lot of projects with the U.N., with the Gates Foundation, which is interesting because you have more and more donors actually having those kinds of private sector mentality and processes but still being a foundation. And we did a lot of projects recently with the Gates Foundation on health and technology, and we found that the timeframe that they give you, it’s long to get, but once you have them it’s also maybe a two years contract, which is super helpful because then it allows you to nurture your team, grow your team, make sure you have a bit of stability, and in the meantime have some of the Googles and Meta and Wikipedia projects that can come and go while you build your research pipeline and sales process and everything.

(14:37)
Darius Teter: I want to talk a little bit about — with advice from Zia, what changes did you make within the business to go from sales as an activity to sales more as a process?

(14:46)
Yann Le Beux: We had long discussions with Zia about who’s the ideal team formation on the sales side to match those different segments. True, we have someone just for the big clients — or should we have someone specialize on NGO, another one on tech startups? Just that thinking about — you need to have team members that really know those markets and actually understand it’s probably not the best way just to hire a random salesperson, but ideally someone who knows those markets or ideally comes from your team that you can train on each of the specific segments.

(15:18)
Zia Yusuf: Yeah, we had actually a pretty robust discussion about geography as well, right? Because I think YUX is active in multiple countries and by active you may have one person hired there, etc., and that would lead into a pretty high cost of sales and cost of engagement and so on. So there was geography, there was market segment, and then there was their products. We should at some point talk about the skills issue as well because there’s this kind of constant challenge of retaining people and hiring people, if you will. I think there is — to your question on how do you think about the segments in the sales thing, obviously revenue potential and your addressable market and some of those normal metrics that you think of are important, but it’s also important to look at the cost of sales, not in a manufacturing sense, but the effort required to go get something. Not every dollar of revenue is the same. And I think when you are at an early stage as a company, you feel that every dollar that comes in is fantastic, but it may have taken 60 percent of the company working for three weeks to respond to an RFP, which leads to a small dollar amount of revenue. You want it so you’re excited, but should you have spent those three weeks and 60 percent of your team pursuing a different opportunity in a different way?

(16:44)
Darius Teter: How should I think about aligning my sales team, whether it’s by product line or by my customer segment?

(16:50)
Zia Yusuf: That’s what I mean by cost of sales and impact. And so understanding the buyers, understanding that product-market fit, and being intellectually honest with yourselves… sometimes people get wrapped up in their own kind of belief system, but listening to the market and listening to that in that additional — really, the dynamic of you and your co-founders, that was an interesting thread and journey. We often got on the call, all four of us, and they had different perspectives. There was a perspective of, hey, the revenue is only one piece of it. We really need to create capacity in Africa and we really need to do the right thing and so on and so forth. And there was another perspective, but we also need to pay our people and so on. So how did that evolve and especially, once you got off the calls with me, I asked probing questions which required all three of you to think a little bit. How did that dynamic evolve?

(17:58)
Yann Le Beux: Really good point. And I think that even touches on why we didn’t push sales and even marketing to some extent. I mean just doing interviews, podcast communications, not something that we were big on because we always felt that quality of the work will always speak, and we are always afraid to go too fast, depending on the quality of our work. Not only because we didn’t have an amazing talent pool available — there is no design school, and so we learned the hard way to train and to hire people little by little. So we kind of were afraid, probably, to scale.

(18:37)
Darius Teter: Scaling is great until it isn’t. When you can’t keep up with your customers and quality starts to suffer, your company reputation will quickly follow. So Yann faced the classic challenge of building the plane while flying it. But there’s another key challenge for growing companies: keeping track of what’s working and what isn’t.

(18:57)
Yann Le Beux: I think the work we did together, even with me as an engineer, was a lot about demystifying the sales process and the sales role. And now we have team members asking us a lot of questions about: How do we sell? Who is our best customer segment?

(19:11)
Zia Yusuf: And Darius, if I could just emphasize one topic which is on metrics, super, super important, right? All the way from at the highest level: How do you measure success of the company and then how do you cascade that down, right? At one point I think, Yann, you and the colleagues had way too many OKRs and the response — I don’t remember who said it — was like, well, we kind of need to have it because if we don’t have somebody’s success metrics, that team member will get upset that their work doesn’t matter. Then you have 10, 15 things that you’re measuring and you don’t have that robust conversation on which two or three really matter.

(19:55)
Yann Le Beux: We were really poor at measuring how many offers we sent here and there, how much time it takes to us. We didn’t have a CRM because we didn’t have many clients per year. When you deal with 15, 20 clients per year, maybe 40 demands, you have them top of your mind and you always think, okay, when’s it ready to come back? But I just actually realized… last week I sent an email — because I had it on my agenda to be very disciplined — I sent an email to some of my past clients and, “No, I did that with a guy from Meta and actually proposed a new project,” and we were not top of his mind. So if I hadn’t written this email, I would’ve forgot about that. So just setting up a CRM with reminders and having this discipline for me is also something that we learned. And having those kind of regular meetings when you have to sit down and do the sales things — just don’t do it like we did it before, waiting to have a bit of time here and there, or waiting for travels maybe, so that you do this biz dev and sales effort. I think that’s really what I learned: to have the discipline and the structure to organize the process and to find the right people to build our team.

(21:03)
Darius Teter: I’m thinking about this typical sales funnel. At the top end are people who have awareness of your product and at the bottom are actual sales, and those metrics probably look different for these very different market segments. Help me think about that. How am I managing the metrics and measures of success for a sales funnel?

(21:24)
Zia Yusuf: One of the good things we did together was we used one PowerPoint deck that we iterated on over and over again. That deck was around sales and go-to-market, and it had different sections. So there was one section around “what are the stages of the pipeline?” And so on day one, when we met, they had defined certain stages and we had a fun conversation on, well, how do you actually get from stage one to stage two, what does this actually mean, right? And if something is at stage three and the words say they’re a prospect, are they really a prospect or is it that they reply to an email? We completely redid the stages so that they actually aligned with the sales activities. We actually talked about pricing and how do you price the different products, the land-and-expand piece of it.

(22:22)
It had a section around the actual target customers and where they were, it had a section around sales compensation, but the advantage of this deck was that it was kind of the record of our work together every couple of weeks. But in between those sessions I think Yann and the team worked on it, reviewed it, and it had allowed us to structurally think about all pieces of the sales process. Otherwise you kind of get on a call and you’re like, Hey, let’s talk about sales compensation and we’ll have a two-hour conversation on that, and you kind of forget where it fits into all the other things. And it’s amazing how words matter. We spent a lot of time on language where I would challenge the team: “This is what the language says on the page. Is that what you actually mean?” And if there’s confusion there, then you’re not going to communicate that appropriately back to your teams or to your customers and so on. So a lot of time where I was nitpicking the language, not because I’m an English professor, but because it forces a level of clarity on: What do you actually mean by that?

(23:37)
Yann Le Beux: I mean, at some point, if you want to grow to an international standard of the way you work, you need to also have this kind of language, and we discuss about marketing qualify lead, sales qualify lead, and for us we have different ways to call these guys. But I think at some point you need to have that, and that was very useful. The truth is that we wanted — at the beginning — Zia to give us those answers. We’re expecting, Hey, Mr. Zia, he knows everything, he is going to give us the exact number of people we need to have at each stage. And Zia was smart enough to realize that it’s all about us, because we’re in such a new market that the only thing we can actually learn from is ourselves, and are we happy every quarter, every six months, about the results that we have and the trajectory that the company is taking with the numbers that we have at each stage.

(24:27)
For most people from emerging markets, it’s really hard, because you’re trying to position yourself and you actually don’t know if you do a good job or not, and even the upsell rate that you may have on your client, you don’t know if it’s good because you’re good at upselling or you’re just bad at new customers. So you always have this kind of doubt about: Am I doing the right thing? And this is also what I found exciting about all this work in building companies in emerging markets is that you also get to redefine what it means to be a good business and always try to align that to, okay, does it fit to what we want to do? Does it fit to our mission?

(25:11)
Darius Teter: What about one of the more critical, yet often underestimated, challenges: Setting your prices. Toward the end of our conversation, Yann, Zia, and I discussed strategic pricing and how it could be a powerful lever for success, but also how a misstep can quickly turn into a costly lesson.

(25:33)
Zia Yusuf: It may feel like a pretty boring topic, and I’m not talking about price levels, whether it’s $24.99 or $69.99. That’s not the question. But thinking about how do you price your products strategically? It is an incredible, incredible lever that in many cases — even for companies in the U.S. and Europe, in developed markets — is underappreciated. And I think I encourage — the people that listen to this — just sit back and think about how you’re pricing your products, by what metrics. And it’s not the price level, the land-and-expand piece of it, the competitive piece of it is so super important. And we had a fun discussion on that as well, especially because of the three segments. There’s a training piece, there’s the consulting piece, there’s a software piece. Do you cross-subsidize or do you have one of them kind of really carry the burden and use a penetration strategy for the other one to go in, and so on and so forth? It’s a topic that is far more important than people realize.

(26:39)
Yann Le Beux: And just to add on that… actually, one of the biggest mistakes we made in recent years is not understanding how important the global recession was and the impact it will have on our potential customers, and we actually just increased our prices. I guess it was in 2022 because we had a lot of demands and we are flying high, and you want to keep your brand high, and so that was perfect — and it worked for six months. But then after a recession hits and you are losing clients because you’re too expensive and people tell you you’re too expensive. And so it does two things. You lose a client, but you also let a potential competitor come in because they break the prices and those guys have nothing to lose. Sometimes you’re talking to big companies, a consulting firm, that to enter a difficult market and to get a client over one or two years, they’re able to cut their prices and we were like, whoa. And so we lost clients for that. And so we had a great pricing strategy on the general side of things when everything’s going well, but we didn’t adapt this strategy in a bad time. And this is something that we learned, that we shouldn’t cut our prices directly, but do specific offers or be able to negotiate. Still show the value that you provide and maybe show that you have a specific offer for a time of crisis or reduced budget and things like that.

(27:55)
Darius Teter: I’d like to go a bit deeper on this because business schools always tell you that you can compete as the value business and undercut everyone else on your quality, in which case price is part of the signal of your quality in the design space. I’m assuming your focus is on the latter. You bring your unique knowledge of the multiple African contexts, using that plural, and that’s your value proposition. It’s not that you can undercut everyone else because you have cheap labor.

(28:25)
Yann Le Beux: No, absolutely, and this is always the position we wanted to have. We don’t do outsourcing. All the project that we do is for services and product for the African continent. So we always say we may be high priced, but it is just because we are one of the only providers that can bring you this quality of research and design on the continent. But at the same time, sometimes we fail to recognize that the budget that these companies have for emerging markets, especially in time of recession, is really cut. You’re not core for most of them. It’s very interesting when you grow as a company because there is something that you need to understand. You need to understand different dynamics that play in your market, and there is always a component that you don’t understand, right? But I think we are at the stage right now that we understand a bit better and are able to adapt a bit better to our market.

(29:17)
Darius Teter: Yann Le Beux originally reached out to Stanford Seed to get expert help on marketing across his Senegalese company’s three verticals. But it didn’t take long for that expert to conclude that what Yann really needed was a more professional sales process. It sounds simple, but as your business grows in reach and complexity, the sales function has to evolve from serendipitous to strategic. For Yann, that meant better understanding and segmenting a diverse set of customers, reviewing their product-market fit, adapting prices to external conditions in creating a set of metrics and incentives to manage a better defined sales funnel. I hope these lessons will be useful to you, but before you blow up your existing sales process, take the time to truly understand what’s working, what isn’t, and how small tweaks might lead to big improvements. I want to extend a big thank you to Zia Yusuf and Yann Le Beux for sharing their insights and experience with us today. Erika Amoako-Agyei and VeAnne Virgin researched and developed content for this episode. Kendra Gladych is our production coordinator, and our executive producer is Tiffany Steeves, with writing and production from Nathan Tower and sound design and mixing by Ben Crannell at Lower Street Media. I’m Darius Teter. This has been Grit & Growth. Thank you for joining us.