How to close your first big deal
The first big win is a pivotal moment in an entrepreneur’s journey. It’s that deal that takes your startup from small fry to major player, while infusing the team with newfound confidence and energy.
I remember Okta’s first big win like it was (February 24, 2019). It was the opposite of smooth. I was traveling to Tulsa, Oklahoma, for the pitch, and on the way to the airport, I realized that I had scheduled my flight for the wrong day. I had to book a last-minute red-eye to make it. After a connection in Chicago the next morning, I landed in Tulsa in the middle of a snowstorm, and had to walk along the side of a state highway from my hotel to the prospect’s office to make the meeting. When I arrived, they gave me a towel from their onsite gym to dry off before I made my pitch. Believe it or not, we won the business.
There’s an expression in sales that applies here perfectly: “Earthquakes don’t matter.” As entrepreneurs, we often have to face circumstances out of our control. At the end of the day, you have to power through. For us, securing that big customer required us to persevere and be flexible. This week on Zero to IPO, Epic magazine’s Joshua Davis and I spoke with five entrepreneurs about the approaches that helped them secure big wins. Here are the lessons they shared:
1. If someone says “no,” figure out why
Rejection is huge part of entrepreneurship. Sequoia Capital’s Carl Eschenbach, formerly president of VMware, recalled how VMware’s first big win started out as a clear “no.” After hours of negotiation, a multimillion-dollar deal fell apart. But instead of leaving the prospect’s conference room, Eschenbach pressed the executive he was working with on what was holding them back. In the end, once he and his team better understood the customer’s perspective, they were able to make a deal.
2. Connect with everyone
Every entrepreneur should know how to network with customers, investors, and fellow founders. But these aren’t the only people that can impact your career. Alex Asseily, the cofounder of Jawbone, experienced this firsthand when he was on the verge of closing his first big deal with AT&T. Production had been delayed multiple times, and by the time Jawbone’s product shipment made it to the warehouse on the night of their holiday season delivery deadline, the facility was already closed for the weekend.
But then Asseily remembered a connection he had made at a factory visit two months earlier halfway around the globe: the owner of the warehouse. He reached out and was able to reopen the facility. Because Asseily forged relationships with all sorts of people–not just other tech executives–his vast network made it possible to deliver Jawbone’s first major win.
3. Be transparent
Sometimes, plain-old good business practices will help you secure a big fish. That’s what Fred Luddy, the founder of ServiceNow, learned from his first major deal.
In the early days of ServiceNow, Deutsche Bank expressed interest in what the company had to offer, but they also requested functionality that ServiceNow wasn’t ready to deliver. Luddy considered agreeing to Deutsche Bank’s initial proposal–after all, it would have meant a 50% increase in ServiceNow’s revenue. Instead, he admitted that ServiceNow didn’t have the capacity to deliver all of the functionality that the company needed at that time. As a result, he developed an honest and open bond with Deutsche Bank, which ultimately turned into a trusted customer relationship.
4. Never let go of a key customer
Maggie Wilderotter, the former CEO of Frontier Communications, has always believed that every single customer is a key account and should be treated as such. One of Frontier’s large customers wasn’t pleased with their service, and even though the organization wasn’t a marquee-name brand, Wilderotter went the extra mile. She flew to Denver to meet with the key stakeholders in person to discuss their concerns. And as if that wasn’t enough, she then took a road trip with the customer to visit the general managers in several locations where they were having trouble with Frontier’s service. In the end, the customer appreciated her direct, hands-on service–and it ultimately turned into a long-standing win for the company.
5. Get your hands dirty
Your competitors won’t always play fair. Josh James, the founder and CEO of Domo and the cofounder and former CEO of Omniture, knows that from experience. Once, after Omniture acquired another company (and a number of new customers), a competitor launched a targeted and negative ad campaign in an attempt to poach those new customers. The acquisition had been a big win for the company, and James didn’t want to lose any ground, so Omniture offered discounts to the new customers. They also fought fire with fire–sending rolling billboards to the competitor’s parking lot, accompanied by people dressed in ape costumes handing out banana chips and recruiting the competitor’s employees to “join the winner.” For James, this strategy was successful–at the very least because he now gets to make “guerilla marketing” puns whenever he tells the story.
While the big win is always important, entrepreneurs have different approaches to securing it. However you get there, perseverance is key. Remember: This moment sets the stage for what the company will become. Years after Okta’s first big win (and my fateful trip to Oklahoma to close it), my main customer contact called me from a new company to see if we could work together again. When I asked him why he reached out, he told me, “I will never forget the sight of you walking into the conference room with a towel in your hand, drying off your pants from walking to the pitch in that snowstorm.”
Frederic Kerrest is the COO and cofounder of Okta. You can listen to the full episode, “The First Big Win,” wherever you get your podcasts. Tune into Zero to IPO every Tuesday, and check back here each week to read about the discussion on each episode.