Peter Reinhardt, founder of Segment, says most startup founders skip qualification and don't dig deep enough into customer problems. He walks through Medic Meddic, a sales methodology that forces you to understand what you're actually solving before you try to close.
Chapters
The sort of typical founder motion with running a sales process is they come in and they say, okay, I'm going to give you a demo and I'm going to give this like really shiny, polished pitch. And then the customer decides at the end of that pitch whether they're interested or not. That's not actually how good sales works at all. The way good sales works is you do qualification upfront, so you have some method of understanding the customer's problem better than they understand it themselves. And then you do the computation in your head as to whether your product is a fit for their problem. And there's a lot of methodologies for this. The methodology that we use at segment is one called Medic Meddic. It's literally just a list of sales qualification criteria. And this is what sales reps do. If a sales rep comes back and they're like, we're going to close this deal, the sales manager says, okay, well let's go through metrics. What are the metrics by which this company is going to judge whether or not the product works for them? And if the sales rep can't answer metrics, economic buyer decision, maker decision process, the identified pain and doesn't have a champion. If they can't have all six of those things, yeah, there's no deal. And so when you're searching for product market fit, you can just go through all of those things by asking the customer a ton of questions and then you can grade whether or not you're actually going to build a product that will solve their problem. You just have to understand the market and the ecosystem and the customers upside down, backwards better than they do themselves. Like as an example, we, we recently were testing product market fit for a product that we're going to announce at our user conference in Sept. September. But the initial way that we were sort of testing fit there, we would go in and say like, oh, hey, do you have a problem with data cleanliness? And the person would be like, oh yeah, yeah, totally. That's one of our big problems. Be like, okay, cool, cool, cool, Check data cleanliness. And we might ask like two or three more questions. But like, that was sort of the depth. But the actual level of question needs to be like, okay, well like, what do you mean data? Like, how do you. Do you currently invest in data cleanliness at all? And they're like, oh, well, yeah, we actually, you know, we have a team of like six people who do data QA all the time. We're like, oh, well, those data QA people, like, where are they based or they're based in la. Oh, interesting. So they have, like, real salaries and they're not just, like, overseas. They're like, real, like, US salaries? Like, yeah, yeah. Okay, so what, like 80k a year? 100k a year? Yeah, that's about right. It's like, okay, so you're spending like 750k a year for this data QA team. And, like, tell me more about their process. Like, what are they qaing exactly? Oh, well, they're clicking this button in the app and they're like, well, wait, which button? What do they do when they find a bug? And so we would ask like, literally 45 minutes of questions like this. And now we actually understand their problem and we understand what they're doing, we understand where their cost centers are, we understand how they're. And then we're like, oh, well, what if we did a product that did X? Which is exactly what they just explained to us for the previous 45 minutes. And they're like, that would be amazing. So, like, okay, now we. Now this is. That was both sales qualification and discovery, which is a standard sales process, but now it's being used for product development. The best salespeople at segment ask why, to the point of uncomfortableness from everyone else on the team, including myself.
