One of the issues I’ve encountered time and again in cleantech software startups is the difficulty in building the right sales teams. Getting the right mix of experience and domain expertise in a sales team is always a critical, which is one of the reasons firms use domain-focused, technical team members such as product managers, presales, and overlays as a way to support salespeople in the field. Software companies have been doing this for decades, but many cleantech firms have a lot of trouble getting this mix right. Is Cleantech so different from other markets?
In a word, yes. And it’s a real problem for today’s cleantech firms and their investors.
First, there’s often product issues that are difficult to overcome. Cleantech is still a fragmented and complex market, and customers often see their problems as a single, massive problem rather than a set of smaller ones. In this case, salespeople often find themselves playing product manager to find the right fit for their product in the client’s set of problems. If you’re selling, say, carbon software and the client is looking for water management, many salespeople will simply add it to the list of enhancements because it’s all under the sustainability umbrella. I’ve seen few markets with as much of a problem with scope creep than cleantech software, mostly driven by the customers lack of clarity around the actual problems they’re trying to solve. It’s one of the reasons services do so well in this market, where experts can help dissect the larger problem into more manageable chunks.
There is also a common assumption that software sales is, well, software sales. And this is a good assumption - great enterprise software salespeople are worth their weight in gold. I often recommend hiring seasoned enterprise sales teams over domain-focused ones to the companies I advise. But the problem is finding the right client, otherwise you’re going shotgun. Sending in your expensive deal-closer into a vague deal is only going to end badly. Get enough of these deals and you’ll lose your rainmaker and frustrate you and your investors. Believe me, I know because I’ve done it - and now I see a lot of cleantech software firms doing the same thing.
Even at an early stage company, your sales teams need a lot of support from domain experts who shouldn’t be doing the selling. A successful Cleantech software sales strategy relies on enterprise sales expertise to close the deal, not domain expertise - but without domain expertise to shape the deal, everything starts looking like a nail. You’ll find your sales teams trying to fit your products into bad deals, or worse, dropping the price so low it no longer makes economic sense to keep selling them. This was precisely the problem in the early stage carbon management market, where the price of solutions became so low it didn’t make sense to stay in that business for many companies.
But this is just one side of the coin. It’s very difficult to find salespeople with an appropriate level of cleantech domain expertise, it’s just as tough to find a domain expert with a sales focus. In my experience, domain experts can be highly valuable to the organization, but aren’t the best at selling. Putting domain experts in sales roles is a troubling trend in cleantech that hasn’t resulted in favorable results for most companies. As an emerging market matures, domain experts begin to migrate into sales and vice-versa, but in my view, in Cleantech it’s still too early. Utilizing domain experts as your front-line sales team will pad your pipeline but result in limited success.
Building successful sales teams in cleantech takes both sides of the same coin, which a particular emphasis on domain experts leading in the sales group in order to sell, and staying in until the deal closes. More so than most markets, the level of engagement for the domain expert must be high throughout the process, otherwise there is increased risk of the deal going sideways due to lack of focus.
Michael is the former CEO of the Global Reporting Initiative, Carbonetworks, and other sustainability organizations. He has been an advisor and CEO in sustainability for almost 20 years, and writes about technology, sustainability, and social innovation.