Startup founders should develop their own sales capabilities first

11.11.2014

Founders of new business startups are better off developing their selling and commercial capabilities in the very early stages of the company.

This is the result of a new study. The study makes evident that a lack of sales competency in the founding team cannot be substituted by marketing or further product development capabilities.

- Our findings suggest that founding teams who possess both strong commercial and entrepreneurial capabilities engage considerably more in proactive sales practices, said researcher Ilona Pitkänen. This is in contrast with those founders that only possess one of these attributes.

- Proactive selling and value-based sales communication have proven to bring results over the long term and have an impact in the first significant sale, continued Pitkänen.

In the very initial stages of the company founders should concentrate on not only developing the product or company but also on developing their own selling capabilities actively with customers. In addition, according to Pitkänen, hiring more experienced sales people and utilizing the know-how of experienced entrepreneurs could also increase proactive selling.

The study of 113 startup companies from various industries began in 2011 in conjunction with the Aalto University Startup Center and Aalto Entrepreneurship Society. The research concentrated on the first significant sale of a startup company. The result was that, along with focusing on the development of the business, the first significant sale has a very influential impact on future sales growth over the long term. From this it was determined that the commercial and entrepreneurial capabilities of the founding team are crucial in determining the nature of the first major sale.

- Although entrepreneurs understand the importance of commercial skills, these are too often neglected in the initial stages of starting the business, said Pitkänen. This is particularly the case for founders of high-tech startups. Our research suggests that ignoring the initial commercial side of the operations would be to the detriment of the long-term future of the business.

 The Aalto University Startup Center, an accelerator that aims to speed up the growth of young companies, intends to make use of the findings of the study. “The results of the study are important because we believe an active sales start is one of the main priorities of the startup company, says Marika Paakkala, Project Director of the Aalto University Startup Center.

These findings also have significance for start-up incubators and investors.

- Of course the product has to be interesting, work well, and add value to the customer. Yet, founding teams should combine an entrepreneurial mindset with a commercial spirit and the potential to develop their commercial capabilities, added Pitkänen.

The Significance of the New Venture’s First Sale: The Impact of Founders’ Capabilities and Proactive Sales Orientation, by PhD candidate Ilona Pitkänen, Professor Petri Parvinen, and PhD Pekka Töytäri has been published in the highly regarded Journal of Product Innovation Management.

The full article can be found here: http://onlinelibrary.wiley.com/doi/10.1111/jpim.12160/abstract

Further information:
Phd student Ilona Pitkänen
Tel: + 358 40 549 1170
Email: ilona.pitkanen@aalto.fi; Twitter: @startupc