The Forlorn Server; or, Don’t Mistake Unrequited Love for an Actual Deal

7/24/12Follow @sgblank

If there’s only one passionate party in a relationship it’s unrequited love.

Here’s how I learned it the hard way.

The Dartmouth Football Team

After Rocket Science I took some time off and consulted for the very VCs who lost lots of money on the company. The VCs suggested I should spend a day at Onyx Software, an early pioneer in sales automation in Seattle.

In my first meeting with Onyx I was a bit nonplussed when the management team started trickling into their boardroom. Their VP of sales was about 6’3″ and seemed to be almost as wide. Next two more of their execs walked in each looking about 6’ 5” and it seemed they had to turn sideways to get through the door. They all looked like they could have gotten jobs as bouncers at a nightclub. I remember thinking, there’s no way their CEO can be any taller—he’s probably 5’2″. Wrong. Brent Frei, the Onyx CEO, walks in and he looked about 6’8″ and something told me he could tear telephone books in half. I jokingly said, “If the software business doesn’t work out you guys got a pretty good football team here.” Without missing a beat Brent said, “Nah, we already did that. We were the Dartmouth football team front defensive three.” Oh.

But that wasn’t the only surprise of the day. While I thought I was consulting, Onyx was actually trying to recruit me as their VP of marketing. At the end of the day I came away thinking it was smart and aggressive team, thought the world of Brent Frei as a CEO and knew Onyx was going to succeed—despite their Microsoft monoculture. With an unexpected job offer in hand I spent the plane flight home concluding that our family had already planted roots too deep to move to Seattle.

But in that one day I had learned a lot about sales automation that would shape my thinking when we founded Epiphany.

I Know A Great Customer

A year later my co-founders and I had formed Epiphany. As other startups were quickly automating all the departments of large corporations (SAP in manufacturing, Oracle in finance, Siebel and Onyx in sales) our first thought was that our company was going to automate enterprise-marketing departments. And along with that first customer hypothesis I had the brilliant hypothesis that my channel partner should be Onyx. I thought, “If they already selling to the sales department Epiphany’s products could easily be cross-sold to the marketing department.”

So I called on my friends at Onyx and got on a plane to Seattle. They were growing quickly and doing all they could to keep up with their own sales but they were kind enough to hear me out. I outlined how our two products could be technically integrated together, how they could make much more money selling both and why it was a great deal for both companies. They had lots of objections but I turned on the sales charm and by the end of the meeting had “convinced them” to let us integrate both our systems to see what the result was. I made the deal painless by telling them that we would do the work for free because when they saw the result they’d love it and agree to resell our product. I left with enough code so our engineers could get started immediately.

Bad idea. But I didn’t realize that at the time.

It’s Only a Month of Work

Back at Epiphany I convinced my co-founders that integrating the two systems was worth the effort and they dove in. Onyx gave us an engineering contact and he helped our team make sense of their system. One of the Onyx product managers got engaged and became an enthusiastic earlyvanglist. The integration effort probably used up a calendar month of our engineering time and a few hours of theirs. But when it was done … Next Page »

Steve Blank is the co-author of The Startup Owner's Manual and author of the Four Steps to the Epiphany, which details his Customer Development process for minimizing risk and optimizing chances for startup success. A retired serial entrepreneur, Steve teaches at Stanford University Engineering School and at U.C. Berkeley's Haas Business School. He blogs at www.steveblank.com. Follow @sgblank

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