Sales Masterclass 3: Early Stage Outreach - Strategies for Engaging Your First Clients

Learn how to tap into your existing networks for warm introductions before mastering the art of cold outreach. Also: Why you shouldn't rush to hire SDRs

Watch the video here:

Episode highlights:

"How can I establish trust with potential clients for my new and unproven startup?" This is a common challenge faced by early-stage entrepreneurs. It's a catch-22 situation: You need to earn clients' trust to get started, but you require that trust to secure clients in the first place.

In this masterclass, we'll explore two key strategies to help you overcome the trust barrier: tapping into your existing networks for warm introductions and mastering the art of cold outreach.

What you’ll learn:

• How to tap into your existing networks for warm introductions

• How to streamline your warm introduction process

• How to master cold outreach techniques

• How to max out LinkedIn Sales Navigator

Meet the expert:

Alex Shandrovsky mentors and coaches early-stage startups in business development. 

Start With Warm Outreach to your Network or Tribe 

One way to build trust is to start your outreach in the communities you're already a part of. This is the low hanging fruit that you should look at before trying to approach Fortune 500 CEOs who have never heard of you. These close-knit groups already have a strong foundation of trust, which is sustained by the consequences of breaking it. As a founder, you can benefit from this trust by tapping into these "tribes" and getting warm introductions to your desired contacts.

Step 1: Identifying your tribe

It may seem challenging to find ways to connect with potential customers  outside of your immediate circle, but there are a few avenues you can consider:

• Army service: this is an obvious choice for 8200 alumni, but even if you weren’t in an elite unit, you’ll often find the people you served with in various positions that can open doors for you..

• Professional networks: your lawyer, accountant, and other professionals you interact with are often linked with relevant contacts at companies you can sell to.

• Social circles: your religious community, hobby groups, or other social networks can have lead you to surprising places.

• Family and friends - well, obviously, they will try their best to help you, right?

• Israel Economic Missions: these entities have personnel specifically tasked with facilitating business connections and meetings for Israeli companies abroad

Step 2: Get Meetings

When you tap into someone's network, you leverage their social credibility, so you have to treat it carefully. To succeed, you need to recognise what the other party stands to gain. It could be fulfilling their professional role (which is often the case with investors);  when you’re asking for feedback, you’re offering them   the intrinsic satisfaction the prospect gets from helping someone, and the ego-boost of being considered an expert whose feedback is requested. Never underestimate people's willingness to meet you because you asked politely..

Prepare a concise, 7-line introduction about your company to make this process efficient. This should include your problem, solution, traction/team credentials, and what you're looking for. Provide this to your contact, allowing them to personalize it when making the introduction. 

Pro Tip: Look for Advisory Board Members 

To break into targeted companies, consider leveraging advisory board members from these companies. These individuals are often retired C-suite executives or decision-makers who hold a lot of respect in the industry. Approach them directly: introduce your early-stage company, mention your recent funding, and express your need for design partners and initial customers. Emphasize that you're in the process of assembling a top-notch advisory board yourself and invite them for a conversation.

If they accept, you already gained an opportunity to receive valuable insights. They might even become ambassadors for your company if you convince them of your vision. The typical compensation for such roles includes a monthly retainer of around $2,000 and equity ranging from 0.25% to 0.75%. What do you get in return? One to two hours of coaching weekly and direct introductions to potential customers, with the added advantage of them accompanying you in these meetings.

Use Sales Navigator To Find Warm Leads

LinkedIn is where most outbound B2B happens in 2024. Here’s how you can effectively use LinkedIn Sales Navigator in your effort to break the trust barrier:.

Target prospects with past company connections: identify prospects from your target companies who worked at companies you already have a relationship with. This will help them recognize your current clients faster and help you use your successful projects as a trust-building factor.

Identify Israelis abroad: it’s inevitable that Israelis and former Israelis will be more receptive to your message. Use Israeli universities as filters to find Israelis working abroad, focusing on alumni from institutions like Tel Aviv University, Reichman University, or Ben Gurion. The same goes for universities with a big Jewish community abroad. 

Leverage existing connections: search through the first-degree connections of your first-degree connections to get a better sense of possible warm introduction. You can also tap into broader networks or affiliations, such as alumni of programs like 8200.

Progressing to Cold Outreach: A Practical Breakdown

At some points, you’ll have tapped out your warm intro possibilities and will need to go cold. You’ll encounter many people trying to tell you there’s a single way to ‘hack’ this process; most of these tricks are not likely to work. Instead, you should focus on a few fundamentals, which we detail below.

Cold outreach can deliver results if you put in the necessary groundwork to show that you've done your homework and understand the recipient's needs and priorities. A typical outreach effort might yield a 2-4% response rate, but Alex says he’s achieved an impressive 15-25% average (with an investor audience) by following these techniques:

The use of buzzwords: Buzzwords get a bad rep, but they help your ICP understand that you’re offering what they’re searching for. For example, if you’re a healthtech startup, you want to make sure your message includes keywords like 'diagnostics', 'AI', 'impact', 'pre-seed', 'early-stage', 'Israel', and 'mental health'. Start by scouring customer websites for these terms or use tools like clay.com to extract them. This allows you to tailor your communication.

Highlighting the problem:If you’re looking for investors, this is relatively easy. VCs are problem solvers at scale, interested in major issues. When attracting VCs, it's advisable to use big numbers like the "$6B/year costs associated with late diagnoses in underserved communities." When you’re trying to find customers, you want to shine a light on the current inefficiency or gap that your company is solving, and the potential benefits this solution would create for them.

Building credibility: Highlight your team's unique qualifications and early successes - e.g., completing a clinical trial with over 90% sensitivity and specificity, to demonstrate market readiness.

The ask: Instead of requesting a full solution demo upfront, gauge their interest first. Ask if they’re willing to provide feedback on your product direction. This minimizes the commitment and opens a line of communication.

Following Up

Wait seven days and then follow up with another email. Sending a gentle reminder is nothing to be ashamed of: You are less important to them than they are for you. . When you follow up:

Avoid generic messages: don't just check in; add value. Share an article or report that's relevant to them. Tell them something that they might not know. This not only shows you're informed but also that you respect their time and interests.

When should you hire SDRs?

Sales development representatives (SDRs) are a staple of enterprise software sales. While there are different opinions about the role of SDRs in modern sales, Alex advises most founders NOT to hire an SDR team:

• Different outreach needs: warm outreach strategies used with the founder’s personal networks don't translate well to cold outreach, which SDRs typically handle.

• SDR lifecycle challenges: SDRs require about two months for onboarding, and peak productivity lasts around six months, followed by expectations for career progression. This cycle often leads to high turnover and makes it difficult to formulate a scalable process.

• Better to start with outsourcing: instead of hiring an SDR, opt for a short-term engagement with a specialized agency. This allows you to dip your toes in the water, gauge how successful your SDR motion is, and can be a more cost-effective way (around 20,000 NIS for three months) to build a solid outreach process.

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 Whether relying on warm introductions or executing a cold outreach strategy, the key to building trust in your early-stage startup is a blend of personalization, relevance, and consistency. You maximize your startup's chances of signing a customer by approaching each interaction thoughtfully and genuinely understanding your audience's needs and interests.