November 2001

I did not realize at first that I was a lousy sales manager. As founder of Moreover Technologies, I was a concept salesman myself. I persuaded analysts, press, investors, and even some early customers that Moreover was a clever and useful idea. Sales is all about persuasion, sales people are persuaders just like me, I told myself.

Nonsense. I have discovered, painfully, that hardcore sales people are a breed apart, and I cannot easily related to them. “You have to understand,” advised one of our investors, a lacrosse-playing Ivy League venture capitalist, “that sales guys are not like you and me.”

The only consolation has been in learning that I am not alone. In many technology companies, there is a class war. On the one hand, highly educated engineers and marketers, from whose ranks emerge the management of most new ventures. On the other hand, the sales team, the poor bloody infantry of the business: brave, dim, and ultimately expendable.

At Moreover in San Francisco, we had a sales group that retreated off the main floor into a side office, which they dubbed the Boiler Room. They complained about cold calling in front of colleagues, but also said the atmosphere in the office was uncomfortable. One assumes sales people are always up for a drink, but there was little social mixing after work.

There has always been a divide, of course. In Europe, in particular, sales is grubby, too close to the money. Even on the West Coast of the US, where business is less apologetic, few sales people become chief executives. Larry Ellison, chairman and CEO of Oracle, was the company’s chief salesman in its early years. But Bill Gates, an engineer by background, is more typical of technology industry leaders.

However, the gap is particularly wide in the latest generation of technology ventures. For a start, the internet was less about underlying technology, and more about its application; the boom attracted, not just engineers, but recent business school graduates, former investment bankers, and journalists, among others. Few of them have any experience of technology sales.

And they have only had a few months to learn. So many of the late 1990s companies were neat ideas, which only sought markets once venture capital flows had dried up. Initially, they hired business development staff to establish revenueless partnerships; and only later appointed sales people who could actually part customers from their money. That is where the problems start.

The truth is that most executives, unless they come up through sales themselves, are uncertain judges of sales talent. Education is less of a guide. And sales people are usually proficient enough at presentation to make it hard to judge an interviewee’s calibre. Says one San Francisco friend: “The ones I liked most at interview are the ones I now dislike the most.”

Once the sales team is in, it does not get any easier. Of the sales neophytes that I know among the executive class of 1998, most swing wildly from overindulgence to brutality in management of their sales teams. I certainly accepted a degree of expense account padding from sales people. I am sure that is just what sales people do, I told myself.

When indulgence of sales people does not work, some executives go to the other extreme. “Sales people are like a pack of dogs,” says one UK CEO. “You have to take out a couple and shoot them every now and then to set an example to the others.”

None of this tension mattered so much when revenues were flowing in the technology sector. But since information technology departments of major corporations slowed down their spending, vendors have been missing their revenue targets. Since both executives and salespeople are rewarded according to their ability to meet these numbers, disappointment often turns to mutual blame. A friend works at a company which has been the subject of much criticism on online discussion boards such as Fucked Company. “It was just a bunch of immature sales people,” she says.

So what is to be done? For a start, one can try to hire a VP of sales who acts as a bridge between the sales force and management. Someone who can relate to backslapping sales people, and hold his or her own in a discussion over strategy. Second, a board can put aside its prejudices and appoint former sales people to more senior positions.

At Moreover, we have just hired a senior sales executive previously at Oracle and DoubleClick as the company’s new chief executive officer. There is definitely a trend here. We ruled out executives who had come up through product or engineering; in fact, pretty much anyone who had not delivered on $10m plus of annual sales at some point in their career.

Of course, there is the danger that engineering under a sales executive is as alienated as sales under an engineering executive. One sales executive, who has recently taken over a geek-dominated search engine business, told me he had deliberately shocked his engineers recently by saying: “I don’t care whether this is a technologically interesting problem or not. As far as I’m concerned, it’s interesting if a customer finds it interesting.”

But, ultimately, the problem may solve itself. Most technology companies are changing the way they sell. Gone is the schmoozy sale, in which the buyer is wined and dined, and charmed into signing a cheque. In its place, an obsession with demonstrating ROI – or return on investment – to prospective customers. A sales process decided by analysis rather than lap dancing tours. Now that is something I think I can manage.

Earlier Management Today columns
Oct 2001: Europe: did anything happen?
Sep 2001: It is all about timing
Aug 2001: Stop calling me a visionary
Jul 2001: Not so much a recession as an extended vacation
Jun 2001: Fucked company
May 2001: The mighty are fallen
Apr 2001: Wireless, finally, I believe
Mar 2001: Lessons from the last time round
Feb 2001: Silicon Valley comes down to earth
Jan 2001: Enterprise software, fashionable again
Dec 2000: Jaded, saved by DivX
Nov 2000: Reality, distorted
Oct 2000: Maybe there is no new new thing
Sep 2000: The tricks of raising venture capital

Back to nickdenton.org