This doesn’t happen very often, but our entire family spent much of this weekend reading and making plans; plans for getting back into the studying groove now that Spring Break is over, plans for summer vacation (can father and kids still do the annual canoe trip to Algonquin?) and for me, plans to test a second social enterprise idea. It was this idea that led to me doing some intensive reading, and while doing this reading I noticed an interesting pattern. We talk about a lot of things in the social enterprise space, but one thing we don’t talk about is selling.
I did a scan of the SEE Change archives, going all the way back to January 2011 and it’s just not there. A quick Google search turns up an October 2012 article in The Guardian, which talks about how to build an SE that makes money (sort of related). A scan of the MaRS DD website turns up two possible workshops, The B2B Sales Process and Pitching to Investors. I’ve taken the second one and it’s excellent if you’re at a point where you might be considering investors. But, what I see missing from our SE dialogue is a discussion on the fundamentals of selling.
My pitch in this blog post is for us to remedy this situation, as selling skills are fundamental for any entrepreneur, social or otherwise. Reading Mike McGlade’s recent post, “Lesson’s From a Failed Social Entrepreneur,” in HBR Online, only served to hammer home this point for me. After investing two years and several pivots on his venture, Mike had to pull the plug on his failing SE. What he learned from this, he said, was the need to a) put aside his ego and b) address some key skills he was missing to be successful.
So, what skills do SEs need to succeed?
I’m currently reading Ready Fire Aim, by serial entrepreneur and business coach, Michael Masterson, and I’m going to suggest that selling might be one of them. Masterson lists five skills that every entrepreneur should develop. Selling skills sit at the #2 spot on his list, after #1: coming up with ideas, and followed by #3: managing systems, #4 developing superstars and #5: taking action. To illustrate the importance of selling skills, Masterson tells the story of how Jim Koch, the founder and CEO of The Boston Beer Company and maker of Samuel Adams beer landed his first sale (or almost didn’t).
Jim comes from a beer-making family. His father, grandfather and three generations of Koch men before them were all brewmasters. Determined to leverage his beer-making expertise and passion, Jim borrowed money from family and friends to launch his own business. With the first batch of Sam Adams in the aging tanks, he was heading out to buy a computer system for the new business when his uncle, a partner in Goldman Sachs, and one of his initial backers, called to see how things were going. When Jim mentioned that he was off to buy computers, in order to be ready for his first round of sales, his uncle asked how sales were going. When Jim replied that there weren’t any yet, his uncle’s response was blunt: “So what the hell are you doing buying computer(s)?” His uncle went on to make two points. First, he’d seen more businesses go broke from lack of sales than from lack of computers. Second, that a business really isn’t a business until you have sales.
Despite his lack of sales experience and his fear, Jim summoned up his courage and headed for a bar near his office with six cold bottles of Sam Adams in his briefcase. He stumbled a bit through his pitch, but as soon as the bar owner tasted his beer, Jim got an order for 25 cases. Today, the Boston Beer Company is an award-winner, with more wins in international tasting competitions than any other brewery in the world, and a multi-million dollar business.
Spend most of your time on sales
What Masterson suggests we need to learn from the Jim Koch story is the 80/20 rule when it comes to selling. In other words, 80% of our time should be spent on sales efforts and only 20% on everything else. From a personal perspective, I grew up with parents who were in the food business, and while it wasn’t always obvious to us kids that selling was a top priority, now that I think back on my younger years, it’s pretty clear that my father took a Masterson approach. And not just behind the counter in the family stores. At home when we entertained, he was always introducing family and friends to new products and recipes, and as community volunteers my parents donated products and services to every school bake sale and local fundraiser.
As a social entrepreneur, I wonder if we might want to borrow a page here from guys like my dad, Jim Koch and Masterson. It’s important to think double and triple bottom line. But, if you can’t, don’t or won’t sell, it doesn’t matter how good your social mission is, nor does it really matter how great your product might be. You need customers to sustain the business.
As I’ve been working on my second social enterprise idea, I stumbled upon the story of Alex Tew, the 21-year-old who launched www.milliondollarhomepage.com. Alex started the business as a way to pay his university tuition, selling web advertising 1 pixel at a time. But in the end his minimal viable product (MVP), built in 48 hours, launched a million dollar business. Thinking about Alex’s story, let me close with Masterson’s advice around selling, particularly at the early stage of any venture. He says that we should focus on three priorities in the following order:
• Develop an MVP – that is, we’ve got a product or service ready to sell, but we aren’t obsessed with perfecting it (we need customers first).
• Sell the product or service.
• If it sells – improve it. (If it doesn’t sell – – read McGlade’s blog post)
The plan for the social enterprise I’m currently working on has us launching in the early fall. So while we’re still building the product, now’s the perfect time to do some pre-selling to ensure that we’re not solving a problem that nobody cares about. Now’s also the right time to continue the hunt for ideas and advice on selling in the social space. If we’re going to grow successful social enterprises, I think we can all benefit from more dialogue here.
Verity Dimock is currently working with Robert Patterson (www.earthbox.mx) on the launch of a Canadian social enterprise focused on local, sustainable food. Before shifting her career focus to social enterprise, Verity was the executive director of Smart Serve Ontario. She holds a Master’s degree from Boise State University (Instructional and Performance Technology) and a Bachelor’s degree from Trent University (Politics and Economics).
In addition to her social enterprise work, Verity teaches career development workshops and is an employment coach for students in the HVAC and Sustainable Energy Programs at Humber College. She tweets about her experience as a new social entrepreneur @SocentGirl.