Growth is stalled…is Sales or Product the problem?

When revenue or customer growth is less than stellar, I frequently get asked who’s responsible: the sales team or the product team. The short answer is that if these two functions are so disconnected that they cannot figure it out together, there are bigger problems afoot, but the question is still a great one because diagnosing the answer requires a precision understanding of what’s working in the market. Understanding that diagnosis is the key to unlocking growth regardless of whose responsibility it is to fix it.

Here is a summary of how I think about this. Product is the problem if the value the product provides does not solve the customer’s pain, or if that problem isn’t valuable enough to warrant the solution. Sales is the problem if the product solves the pain but the customer still doesn’t buy. Marketing is the problem if sales isn’t talking to the would-be buyers.

Let’s break each of these failure modes down in more detail with examples. Evernote is a helpful tool for organizing notes, tasks, and schedules. That’s a problem I have a need to solve, and one that’s large enough for me to spend $9.99/month to not worry about anymore. It’s the reason that I initially became an Evernote customer, but once Quip and Notion and Coda came to market, I quickly abandoned Evernote. The reason I dropped the product was simple — Evernote’s syncing feature across devices constantly led to errors, notes overwritten, and strange user behaviors in which duplicate text would get inserted into documents due to version mismatches. One of the core value propositions is that I should have been able to “work anywhere,” but the truth is, I couldn’t. Evernote had a serious product problem because its offering didn’t live up to the expectations around the problem it was attempting to solve. It didn’t deliver enough value in an area that mattered. So what if I could connect my Google Calendar and create recurring tasks if I couldn’t keep my notes synced across devices. This was a product problem.

The challenge migrates into sales’ territory when the product solves the customer’s problem but customers won’t buy or won’t buy fast enough or in sufficient numbers. In the early days at Palantir, we were able to be very honest with ourselves about sales challenges because for years we did not hire people with sales backgrounds, so there were no bruised egos when we would reflect on deal progress. The numbers easily told us the story. Some deals would close rapidly while others might take years. The customer types were roughly the same, the product deployed to them was the same, and the customer problems were the same — the difference was in how the sales were executed and the environments surrounding the sales. Deals moved faster when there was a strategic risk to an organization, when the organization adopted technology more readily, when a great champion existed inside the organization, and when end-users doing the work got an opportunity to try the product and see what sorts of wins they could produce in advance of a full engagement. Identifying and cultivating these factors was the job is sales, or in Palantir’s case, any of us who regularly engaged with customers. The difference between deals that moved quickly and closed and ones that didn’t, in essence, was any one individual’s ability to pattern match on these environmental variables and create these facts on the ground, something the product itself couldn’t directly impact (note: there are exceptions here for product-led growth strategies and viral adoption across businesses). Unlocking higher velocity deals fundamentally was a sales challenge, namely finding the right people to do that job and figuring out who should not.

For the marketing challenge, I’ll critique my newest venture, NetworkNerd, an app that tracks context from your relationships and reminds you to stay in touch. NetworkNerd has identified a real problem for people — namely our inability to remember to keep in touch and our lossy memories which deprive us of information like our friend’s kid’s names and other hard to remember context. The app solves this problem for the subset of the population willing to type these notes into an app, and we have sold successfully to those users. However, out of an ocean of people who might care, we have struggled to discover how to reach the set of people who do, and often we need to invest more time into explaining what the app really does. These are marketing challenges.

Certainly none of these categories are pure, and plenty of cross-over exists, which is why our first piece of advice is to make sure these disciplines are collaborating at a deep level. For example, NetworkNerd could also accelerate growth by adding more automation to alleviate the user pain of not wanting to manually enter notes — but crucially, this would unlock a new part of the market, not solve the problem of selling into the piece that is willing to tolerate manual data entry. Evernote might be able to paper over the syncing challenges by reducing the emphasis on seamless syncing across devices, and Palantir could have (and did) continued to invest in the product to tackle a broader set of use cases that ultimately shortened sales cycles greatly for all players, not just the sales Top Gun’s.

As with any startup challenge, a crisp understanding of exactly what isn’t working makes all the difference in finding the solution.

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