Don’t celebrate until the cash is in the bank
Recently I wrote a blog post about how I hated losing, but I embrace it as a way to learn, improve and increase my win rates.
One of the things I learned from my âpost-game analysisâ is that youâre most vulnerable right after youâve won the deal. I know it sounds counter-intuitive, but my experience tells me itâs true. At the moment you pop the champagne cork and let down your guard is when youâre easiest to attack.
In my blog post I told the story about how when I was running my first company in the UK, I competed and won a major contract with the largest water company, Thames Water, that would have been worth millions of dollars.
I won, that is, until I lost.
An external consultant helping the Thames Water procurement team overturned the decision to use my company and got them to select a small software company. Funny thing â that consultant just happened to own the small software company that Thames Water selected. Itâs been more than 5 years and I still think about that sales campaign and get pissed off at how much I took for granted.
Here was my biggest take away from the loss: I naively thought that when somebody told you that you had won the deal that it was so. I had been told I won by the lady in charge of procurement for the project so it seemed to have an air of inevitability to it.
And the reverse lesson is also true. Often when it has been announced that I have lost a deal I have just graciously accepted defeat. I fought really hard before the decision was reached but for some reason when the results were announced I have had the mindset of a soccer game where the final clock had gone off and it was time to be a good sport and give high-fives to the opposing team.
I recently repeated this mistake with a company in which I wanted to invest. Iâve added it to my list of 2010 lessons learned as a VC and Iâm a bit pissed off with myself for not fighting harder, especially because I was convinced I would make a better investor than the âbrand nameâ they had selected who was thousands of miles away. My bad for wanting to be gracious â the âniceâ guy. What would Leo the Lip think of me?
But back on the winning side of the equation, I think many people get lulled into the âyouâve wonâ sense of security until they get screwed on their first deal. If you can learn this lesson from me rather than by losing after youâve won that would be a great outcome.
In every sales campaign of any substance (e.g. youâre really competing for something big) you will almost certainly have fierce competitors and you have to assume that there are people inside your customerâs organization that are against you even while others have selected you. There is rarely unanimity. Itâs probably nothing personal. The people who favor your competitors may have been using the competitorâs product at a previous company, they may think that using your competitors product is better for their career or they may even be friends with a senior member of your competitorâs team. Or frankly, maybe they just believe that your competitor has a better product.
For simplicity, letâs call this person inside your new potential customer âthe enemy.â
Many times the enemy just accepts their loss and gets behind the initiative that has been selected â yours. But some enemies live to fight another day. They are hell bent on getting their way. They believe that the fight is not lost. They may question the decision-making process. They may solicit the support of people more senior in the buying organization. Quite honestly they may even resort to feeding your competitor information about your proposal or your product to help them better fight you.
I know it sounds ugly, but it happens. And it’s not even that rare in my experience.
When itâs announced that youâve won internally sometimes the enemies feel that they have nothing to lose if they try to torpedo the decision.
And if anybody has nothing to lose itâs your competitor. Theyâve just been told theyâre out. If it involved a lot of money or a lot of prestige donât assume that theyâll just walk away. Especially if itâs their existing client and youâre unseating them. The fiercest competitors will work the refs. You see it happen in sports all the time; donât assume it isnât happening behind the scenes in business.
Youâre goal is to get to the finish line as quickly as you can. So when youâve been told that youâve won a deal make sure that you keep your sales campaign up. In fact, ramp up your efforts. Go into overdrive to get the contract completed. Continue to meet with senior executives at the buying organization. Donât take anything for granted. And make sure you spend as much time with your âenemiesâ at the buying organizations as you do with your friends there who selected you. You need to neutralize the enemies through both competence and charm. Itâs much harder for them to fight you when they canât dehumanize you.
When you first âwinâ the deal assume itâs the â2-minute warningâ and the opposing team still has the ball. Itâs when the desperate throws start coming, but itâs often when your defense is the most tired. Donât let that be you. Play all 60 minutes and be prepared mentally for overtime.
As I always tell my wife: never celebrate until the ink is dry on the contract and the cash is in the bank.