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 â€śpost-game analysisâ€ť is that youâ€™re most vulnerable right after youâ€™ve won the deal. I know it sounds counter-intuitive, but my experience tells me itâ€™s true. At the moment you pop the champagne cork and let down your guard is when youâ€™re 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. Itâ€™s 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. Iâ€™ve added it to my list of 2010 lessons learned as a VC and Iâ€™m a bit pissed off with myself for not fighting harder, especially because I was convinced I would make a better investor than the â€śbrand nameâ€ť they had selected who was thousands of miles away. My bad for wanting to be gracious â€“ the â€śniceâ€ť 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 â€śyouâ€™ve wonâ€ť sense of security until they get screwed on their first deal. If you can learn this lesson from me rather than by losing after youâ€™ve won that would be a great outcome.
In every sales campaign of any substance (e.g. youâ€™re really competing for something big) you will almost certainly have fierce competitors and you have to assume that there are people inside your customerâ€™s organization that are against you even while others have selected you. There is rarely unanimity. Itâ€™s probably nothing personal. The people who favor your competitors may have been using the competitorâ€™s 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 competitorâ€™s team. Or frankly, maybe they just believe that your competitor has a better product.
For simplicity, letâ€™s call this person inside your new potential customer â€śthe enemy.â€ť
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 itâ€™s announced that youâ€™ve 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 itâ€™s your competitor. Theyâ€™ve just been told theyâ€™re out. If it involved a lot of money or a lot of prestige donâ€™t assume that theyâ€™ll just walk away. Especially if itâ€™s their existing client and youâ€™re unseating them. The fiercest competitors will work the refs. You see it happen in sports all the time; donâ€™t assume it isnâ€™t happening behind the scenes in business.
Youâ€™re goal is to get to the finish line as quickly as you can. So when youâ€™ve been told that youâ€™ve 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. Donâ€™t take anything for granted. And make sure you spend as much time with your â€śenemiesâ€ť 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. Itâ€™s much harder for them to fight you when they canâ€™t dehumanize you.
When you first â€świnâ€ť the deal assume itâ€™s the â€ś2-minute warningâ€ť and the opposing team still has the ball. Itâ€™s when the desperate throws start coming, but itâ€™s often when your defense is the most tired. Donâ€™t 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.