How ConstructTech start-ups can break through the sales barrier

Always try to start from a problem, rather than trying to be a solution in search of one.

We work with Construction Technology (“ConstructTech”) start-ups. Many are bright, energised teams. Many have great technology that undoubtedly makes a difference to design, engineering or construction. But, all too often they struggle to sell to ‘old world’ companies, be they contractors, consultants, developers or asset owners.

Time and again we hear the same type of story. The start-ups will demonstrate to the construction manager, the Head of BIM or similar that their sensor, software or system can save them a huge proportion of their costs or speed up their processes. And yet, the clients still don’t buy. How can this be? Didn’t they understand? What’s wrong with them? The start-ups become increasingly disillusioned and frustrated.

The language here does not help. Be it FinTech, PropTech or ConstructTech, these portmanteau words feature “technology” as if it were an end in itself. In doing so, they fail to recognise one of the great lessons of selling. That is, don’t be a solution in search of a problem. Rather, find someone with a problem and be their best solution.

ConstructTech start-ups can be like a nail searching for a hammer – that is, a solution looking for a problem.

We use a checklist of five conditions that need to be met if you have any possibility of securing a sale. If any of these do not hold, then forget it. Direct your scarce business development time on talking with someone else.

5 conditions for selling

First, find someone who actually has a problem that they want solving. And make sure it’s one of the top few that are keeping them awake at night. Ask them what their worries are; what they need to do to make their bonus; what the top challenges are to them delivering their project on time and on budget.

Secondly, be frank with yourself as to whether you have enough of a relationship with the person with the problem for them to trust you to help them solve it. Cold calls (or the modern equivalent – cold LinkedIn messages) are only going to lead to a sale very, very rarely. Almost certainly you will have a personal relationship with the person you are going to sell to, or there will be a mutual acquaintance who can vouch for you and create that trust.

Thirdly, be realistic as to whether your solution is genuinely better at solving the problem than those available from your competitors. Not will be better in a year. Or might be better when we’ve developed it further. Better now. Because your client will want his or her problem solved now and, unless they’re prepared to co-create the technology with you, they will not want to be your guinea pig. This is particularly challenging for ConstructTech start-ups who are in the process of developing their products. But if your tech is not ready, be clear about this. Talk to your client about the approach and build the relationship. But don’t try to sell.

Fourthly, check out early on whether the potential client has a budget to spend (externally) on solving the problem. I once had a very wise boss who taught us that we come to work to make money. Everything else is a hobby, and we do our hobbies at the weekend. So if your potential client does not have the money to spend, then your conversation is little more than a hobby. Move on to someone who does have the funding.

Fifthly and finally, does your client contact have the authority to enter into a contract with you? By this, we mean the ‘soft’ authority of company politics and the ‘hard’ authority of procurement rules and delegated authorities. Ask “who the key decision-maker is for the project to go ahead?” Ask “who else do we have to convince to allow us to get a contract in place?” Always assume that the position is more complicated than your client contact may be letting on. And recognise that company politics changes, sometimes by the day!

One of the principles of Eric Ries’ book The Lean Start-up is that while existing companies execute a business model, start-ups have to look for one. A key way they do this is to use a “get out of the building” approach called customer development to test their hypotheses. They go out and ask potential users, purchasers, and partners for feedback on all elements of the product, features, pricing, distribution channels etc. That’s great in the development phase, but it is hopeless when you are trying to sell.

When you are trying to sell, concentrate on talking to the people who are likely to buy. And stop talking to those who can’t or won’t.

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