The Sales Playbook for Founders | Startup School

The B2B Sales Journey

Tom Blomfield from Y Combinator observes that most founders navigating B2B sales for the first time make common, easily avoidable mistakes. The typical progression moves from poorly defined, overly long unpaid design partnerships all the way through to rapid, well-defined, tightly-run sales processes that result in contractually recurring revenue straight off the bat.

The Reality Check:

• 90% of founders get stuck in very early stages with long unpaid design partnerships
• Only 5-10% of founders try to speedrun the entire process (jumping straight to selling before product maturity)
• Most founders are too slow to progress through the sales stages

Critical Success Factors:

1. Progress rapidly through the sales sequence to close new ARR every week
2. Avoid getting stuck in endless unpaid partnerships
3. Build social proof with happy customers who will vouch for you
4. Match product maturity with your sales approach

The goal is to move through these stages as quickly as possible while ensuring your product is ready for each level of commitment from customers.

Timestamp: [00:21-01:38]

The Design Partnership Trap

Design partnerships sound great in theory: you spend time with a customer (often one with a big fancy logo), observe how they work, and co-design a product alongside them to meet their needs. But there's a massive gap between theory and reality.

Common Design Partnership Pitfalls:

• Timeline disasters: Partnerships drag on for 3-6 months without clear outcomes
• Poorly defined scope: No specific deliverables or success metrics
• Low customer engagement: Since they're not paying, customers don't prioritize your time
• Vague and meandering progress: Everything feels fuzzy and directionless
• Logo trophy syndrome: That fancy logo on your website feels like progress, but you're not getting closer to real revenue

When Design Partnerships Actually Work:

1. Sit next to the customer in their office for just a few days (not months!)
2. Observe their actual workflow - watch them at their keyboard
3. Ask the right questions:

• "What's the part of your job you hate the most?"
• "If you could wave a magic wand, what part of your work would you get rid of?"

4. Do the work yourself manually to truly understand what's involved

The Pro Move:

Some of the best founders go undercover - getting qualified to work as an auditor, real estate agent, or accountant, and actually doing the job for a couple of months to deeply understand the problem domain.

Timestamp: [01:38-02:56]

The Power of the Narrow Wedge

The goal of customer observation is to identify a really narrow burning problem that you can solve with a wedge product built in as little as 48 hours - not months of platform development.

The Wedge Product Strategy:

1. Identify narrow pieces of work that can be automated
2. Build a solution in 48 hours (not 48 days!)
3. Bring it back immediately to the customer for testing
4. Iterate rapidly over different problem/solution sets
5. Find the initial wedge that customers absolutely love

The Critical Next Step:

• If customers are happy to pay and use your wedge product, DON'T build more features
• Instead, take that wedge product and sell it to 10 similar customers
• Validate that the problem is widespread before expanding

Why Founders Overbuild (And Why It's a Mistake):

• Resource waste: Small startups don't have resources for broad platforms
• No real signal: Building without validation that customers want what you're creating
• Feature parity trap: Trying to match existing software is nearly impossible for small teams
• The one-more-feature fallacy: Customers keep suggesting features to be helpful, not because they'll actually buy

Instead of building something broad, focus on doing one narrow thing really, really well.

Timestamp: [02:56-04:18]

The Abusive Relationship Dynamic

Many founders find themselves trapped in what essentially becomes an abusive business relationship - acting as an unpaid development shop for their "design partner."

Warning Signs You're Being Used:

• Extremely detailed requirements that only apply to one customer's business
• The list keeps growing with no commitment to pay
• Bespoke work for free because you want to make your first customer happy
• Too meek to ask for money despite doing significant development work

The Psychology Behind the Trap:

1. Founders want validation: Making the first customer really happy feels like progress
2. Customers avoid confrontation: Rather than saying "this sucks, I wouldn't use it," they suggest "just one more feature"
3. Helpful becomes harmful: Customers think they're being helpful by giving feedback, but they're actually leading you astray
4. Hurt feelings avoidance: Nobody wants to be the bad guy who crushes your dreams

How to Break Free:

• Set clear boundaries: Define what you will and won't build
• Ask for money early: If they won't pay, their feedback isn't valuable
• Time-box experiments: Give yourself 2 weeks to sell a wedge, not 6 months to build a platform
• Pick different wedges: If one doesn't work after aggressive selling for a couple weeks, try another approach

Remember: More features are rarely the answer. A narrow solution that solves a real problem is worth more than a broad platform that sort of helps with everything.

Timestamp: [04:18-06:10]

Essential Insights:

1. 90% of B2B founders get stuck in lengthy unpaid design partnerships that go nowhere - the goal is to progress rapidly through sales stages to close new ARR weekly
2. Build narrow wedge products in 48 hours, not broad platforms over months - then validate with 10 customers before adding features
3. Avoid the unpaid dev shop trap by setting clear boundaries, asking for money early, and time-boxing experiments to 2 weeks maximum

Actionable Insights:

• Ask customers: "What part of your job do you hate most?" to identify real problems worth solving
• Go undercover in your target industry (become an accountant, auditor, etc.) to deeply understand the domain
• If a wedge product doesn't sell after 2 weeks of aggressive effort, pick a different wedge - don't add more features
• Look for customers who will pay immediately for your narrow solution rather than design partners who string you along

Timestamp: [00:21-06:10]

People Mentioned:

• Tom Blomfield - Y Combinator Group Partner, founder of Monzo and GoCardless, sharing his B2B sales playbook

Companies & Products:

• Y Combinator - Startup accelerator where Tom works with founders navigating B2B sales
• Monzo - Digital bank founded by Tom Blomfield, referenced as part of his experience
• GoCardless - Payment processing company co-founded by Tom Blomfield

Technologies & Tools:

• Figma - Design tool mentioned for creating mock-ups in early product development

Concepts & Frameworks:

• Design Partnerships - Collaborative arrangement where customers help shape product development, often unpaid and poorly defined
• Wedge Product - Narrow, focused solution that solves one specific problem extremely well before expanding
• ARR (Annual Recurring Revenue) - Key metric for B2B SaaS companies that measures predictable revenue

Timestamp: [00:21-06:10]

The Free Trial Trap

After founders realize design partnerships can be a waste of time, they move to free trials, pilots, or proof of concepts - which are really all the same thing. You might have an initial wedge product that people can use, but you lack the social proof from other customers that it really works. Naturally, early customers want to try before they commit financially.

The Commitment Spectrum:

• Proof of Concept - Standard trial to prove your solution works
• Pre-Proof of Concept - A hilariously low-commitment request from a customer in France (even Tom doesn't know what this means!)
• Pilot - Testing in a limited, controlled environment
• Free Trial - Full access without payment

The Same Old Problems:

1. Too long again - 2-3 month trials that drag on
2. Low commitment disease - No skin in the game means low engagement
3. No target or end goal - Success isn't defined
4. Customer isn't committed - Neither to the product nor the process

The Critical Question:

If you're doing a proof of concept, you need to understand: What exactly are you trying to prove? Without clear success metrics, you're just wasting everyone's time.

Timestamp: [06:11-07:11]

The Value Equation Framework

The key to successful pilots is defining clear success metrics upfront - what Tom calls the "value equation" with the customer. This becomes your proof point for why they should buy.

Building Your Value Equation:

Example: Customer Service AI

• Claim: Your product solves 20% of inbound customer queries
• Impact: Customer reduces team from 100 to 80 people
• Savings: $1 million in salaries annually
• Your Price: $200,000 for the software
• ROI: 5x return on investment

How to Prove Your Value:

1. Get specific test data: "Give us a sample of 1,000 queries"
2. Measure actual performance: Is it really 20%, or 15%, or maybe even 25%?
3. Document the results: Create proof your champion can take to leadership
4. Present the business case: Your champion shows the CFO/CEO why it's a great investment

The Power Dynamic:

Once you've proven the value equation, your internal champion can confidently explain: "If we pay $200,000, we get $1 million in benefit - it's a win-win." This transforms the conversation from "maybe we should try this" to "we'd be foolish not to buy this."

Timestamp: [07:11-08:38]

Risk Mitigation Strategies

Pilots can be powerful tools to convince cautious buyers and overcome objections - but only if you structure them correctly to minimize perceived risk.

Proven Techniques for Risk-Averse Customers:

1. Back Testing on Historical Data

• Use their past data to prove what would have happened
• No risk to current operations
• Clear before/after comparison

2. Side-by-Side Trials

• Your solution runs alongside existing processes
• Compare outputs without affecting real customers
• Example: Customer service AI produces answers alongside human agents for comparison

3. The 1% Test

• Take on just 1% of their total volume
• Minimal risk if things go wrong
• Easy to scale up when successful

4. Geographic Rollout

• Start in a smaller, less critical geography
• Prove success before expanding to larger markets
• Your champion won't get fired if issues arise

The Psychology Behind It:

These approaches all serve the same purpose - showing that your product works in a lower-risk environment so your champion feels safe advocating for you internally. It's about making them look good, not just making your product look good.

Timestamp: [08:38-10:01]

Breaking Through the Payment Barrier

The problem with free pilots is they still suffer from low engagement, and founders are often terrified to have the willingness-to-pay conversation. They think bringing up money will scare customers away - but that's almost always not true.

The Conversation You Must Have:

"If I can solve this problem for you and deliver these metrics we've talked about, how much would that be worth to you?"

Why This Matters:

• Disqualify time-wasters - Some customers aren't ready, able, or willing to buy
• Avoid endless free work - Stop being an unpaid consultant
• Test real commitment - Money talks, everything else walks
• Save everyone's time - Better to know early if they'll never pay

The Fear vs. Reality:

• Fear: "Talking about money will scare them away"
• Reality: Serious buyers expect to discuss pricing
• Truth: If money talk scares them, they were never going to buy anyway

You need to be willing to walk away from customers who just want free stuff forever. Your time is valuable, and real customers understand that.

Timestamp: [09:28-10:01]

The Paid Trial Revolution

When founders really get into the groove and start ramping up sales, they figure out the secret: make pilots much shorter and get paid commitment upfront. This changes everything.

Why Payment Changes the Game:

1. Customers take it seriously - They're paying for your time
2. No wasted money - Financial skin in the game drives engagement
3. Real validation - Payment proves they value your solution
4. Better prioritization - Paid projects get internal resources

Smart Payment Strategies:

The Procurement Shortcut:

• Ask: "What amount can you personally approve?"
• Target their corporate credit card limit ($10K-$20K)
• Take less money to avoid lengthy approval processes
• Skip the CFO, legal, and procurement departments

The Full Commitment Play:

• Ask upfront about willingness to pay for the full product
• Get the annual fee and price point early
• Know if they'll never pay before investing time
• Avoid surprises after successful pilots

Beyond Financial Commitments:

• Wait for the right moment: "Let's start next month when you have that important new client project"
• Ensure data readiness: Insist on having real client data ready to go
• Require dedicated resources: Make sure they assign team members to the pilot
• Set clear timelines: Define start and end dates with specific milestones

Timestamp: [10:01-11:30]

Essential Insights:

1. Free trials fail for the same reasons as design partnerships - they're too long (2-3 months) with low commitment and no clear success metrics
2. Define the value equation upfront - prove exactly how much money you'll save or revenue you'll generate to justify your price
3. Always have the money conversation early - asking "how much would this be worth to you?" disqualifies time-wasters and validates real buyers

Actionable Insights:

• Use risk mitigation techniques like 1% tests, geographic rollouts, or side-by-side trials to overcome cautious buyer objections
• Ask champions what amount they can personally approve on their credit card to skip lengthy procurement processes
• Wait for the right project timing and ensure customer has data ready before starting any pilot
• Transform free pilots into paid commitments to ensure customers take the engagement seriously

Timestamp: [06:11-11:30]

People Mentioned:

• Tom Blomfield - Y Combinator Group Partner continuing his B2B sales playbook

Concepts & Frameworks:

• Value Equation - Framework for defining and proving ROI to justify product pricing
• Proof of Concept (POC) - Trial period to demonstrate product effectiveness
• Pre-Proof of Concept - Humorous example of extremely low commitment from a French customer
• Pilot Programs - Controlled tests of products in limited environments
• Back Testing - Using historical data to prove product effectiveness
• Side-by-Side Trials - Running new solution alongside existing processes for comparison
• Geographic Rollout - Starting in smaller markets before expanding to reduce risk

Business Metrics:

• ROI (Return on Investment) - Key metric for justifying B2B purchases
• Willingness to Pay - Critical conversation about customer's budget for solving their problem
• Procurement Process - Corporate approval workflow that can be bypassed with smaller amounts

Timestamp: [06:11-11:30]

The High-Engagement Pilot Formula

Getting financial commitment is just the start - you need to ensure the pilot succeeds by creating conditions for maximum engagement and rapid value delivery.

Essential Pre-Pilot Requirements:

• Dedicated team or person on the client side for testing
• Real project timing - Wait for a live project that's suitable for testing
• Client data ready - Ensure they have actual data to work with
• Post-pilot meeting booked - Schedule the review meeting before you even start

The Engagement Acceleration Strategy:

1. Schedule check-ins every couple of days - Not weekly, not monthly - every 48 hours
2. Fix bugs overnight - When they report issues, solve them immediately and bring back solutions
3. Impress enterprise customers - This rapid response time blows their minds
4. Delay start if needed - Wait a few weeks for the right project rather than starting with low engagement

Time Frame Reality Check:

• Keep it SHORT: 7-14 days if your product is dialed in
• Just long enough to experience the full benefit
• Not a moment longer - Extended pilots kill momentum

What You're Really Selling:

You're never selling a complete, bug-free experience. You're selling:

• The founders and early team's dedication
• The promise that YOU personally will solve their problem
• Your personal cell phone number for 24/7 response
• The guarantee that if anything goes wrong, you'll fix it immediately

Timestamp: [11:30-12:36]

Time to First Value: Your North Star Metric

Reducing time to first value from weeks to hours is often the single biggest lever for higher pilot-to-paid conversion. This means doing whatever it takes to get your product live ASAP.

The Janky Playbook (That Actually Works):

NEVER do during pilots:

• Full API integrations requiring customer engineering time
• Complex technical setups that delay by months
• Perfect, polished implementations

ALWAYS do instead:

• Excel imports and exports - Quick and dirty data transfer
• Email the data back and forth - Customer emails you data, you email back completed work
• Manual processes - Do things by hand behind the scenes if needed
• Whatever gets them to value fastest - Polish can come later

The Booking Power Move:

Book the post-pilot meeting BEFORE the pilot starts:

• Creates accountability and urgency
• Forces you to deliver results by a specific date
• Gives you a forum to show hard ROI numbers
• Makes it crystal clear whether they want to continue

The Success Formula:

1. Track time to first value religiously
2. Reduce it from weeks to hours through any means necessary
3. Show ROI metrics at the pre-scheduled post-pilot meeting
4. Make the buying decision obvious through clear value demonstration

Timestamp: [12:36-13:47]

The Recurring Revenue Contract with Opt-Out Period

The downside of paid pilots? You still need to negotiate the full contract afterwards - it's like a whole second sales process just when you thought you had a customer ready to buy. The solution? Pure magic.

The Pro Move Structure:

• Monthly or annual recurring contract from day one
• 30 or 60-day money-back guarantee or opt-out period
• Automatic conversion - If customer does nothing, it becomes a full contract
• No additional sales process needed after the opt-out period

Why This Works Like Magic:

1. Default to success - Inertia works in your favor
2. One sales process - No renegotiation needed
3. Customer psychology - They're already committed
4. Simplified operations - Less back-and-forth negotiation

The Confidence Play:

In sales meetings, you can confidently say: "This is how customers buy our product. We offer annual contracts with a 30-day grace period, and customers X, Y, and Z all signed on these terms."

The Progression Reality:

• Can't always start here - Your sales process might not be good enough yet
• Social proof matters - You need other customers first
• Product readiness - Must deliver value to avoid opt-outs
• Start with free pilots for first 1-2 customers if needed
• Then progress rapidly to this model

Important investor communication note: Be super clear about which customers are still in opt-out periods when reporting MRR/ARR.

Timestamp: [13:47-15:33]

The Customer Success Crisis

After signing contracts, you need to dedicate as much (or even more) effort to onboarding customers and ensuring they get value. Without this, signed contracts become worthless paper.

The Shocking Reality:

Tom spoke to a company that:

• Signed $4 million worth of contracts
• Only implemented less than $2 million of those contracts
• Were simply missing a customer success function

Critical Customer Success Elements:

1. Dedicated onboarding resources - Can't just throw customers the product
2. Active value delivery - Ensure they're actually using and benefiting
3. Implementation tracking - Monitor who's live vs. who's stuck
4. Success metrics - Define and measure what success looks like

The Implementation Gap:

Closing the sale is just the beginning - if customers don't successfully implement, you'll face:

• High churn rates
• Poor word-of-mouth
• Difficulty getting references
• Lower lifetime value

Timestamp: [15:33-16:00]

The YC Company Playbook

Tom shares battle-tested tips from years of working with successful YC companies on their B2B sales.

Security & Compliance Fast-Track:

Start SOC 2 immediately - Plus any other certifications like:

• HIPAA for healthcare
• ISO 27001 for international
• Industry-specific requirements

These can delay you by months, so start TODAY. YC companies like Vanta can help.

The Champion Strategy:

Treat your internal champion like a co-founder:

• They sell for you when you're not in the room
• They fight budget battles on your behalf
• Give them everything they need to succeed
• Make them look like heroes internally

The Process Mapping Technique:

Ask your champion: "Describe the last time you bought software like this. Who internally had to approve it? What was the process?"

Then map out:

• Economic buyer - Who controls the budget
• Technical approver - Who validates the solution
• Security gatekeeper - Who ensures compliance
• Legal team - Who reviews contracts
• Day-to-day users - Who will actually use it

Devise a plan to win over each stakeholder explicitly.

The Urgency Creators:

The Houston Gambit: Email: "Hey, I'm going to be in Houston next week. What do you say about getting lunch?" If they say yes → Book your flight to Houston immediately

The Scarcity Play: ::QUOTE_START::We're talking with 7-8 potential customers, but only have capacity for 2 enterprise customers this quarter. If interested, we need commitment. Otherwise, let's talk in 6 months.::QUOTE_END::

The Contract Acceleration Hacks:

1. Never leave a meeting without the next touchpoint scheduled
2. Don't get caught in legal ping-pong - Be flexible on terms unless they're company-ending
3. Ask yourself: "Is this clause company-ending or just annoying?"
4. Accept annoyances to maintain momentum
5. Watch for dealbreakers: Unlimited liability or IP transfer clauses

Timestamp: [16:00-18:38]

Essential Insights:

1. Time to first value is your north star - Reducing it from weeks to hours is the single biggest lever for pilot-to-paid conversion
2. Recurring contracts with opt-out periods are magic - One sales process that automatically converts to full contracts without renegotiation
3. Customer success is make-or-break - Companies can sign millions in contracts but only implement half without proper onboarding

Actionable Insights:

• Schedule check-ins every 48 hours during pilots and fix bugs overnight to impress enterprise customers
• Use Excel imports/exports and email data transfer instead of waiting months for API integrations
• Start SOC 2 and security certifications TODAY - they'll delay you by months if you wait
• Treat your internal champion like a co-founder and map the entire organization's buying process
• Book post-pilot meetings before pilots start to create accountability and urgency
• Get on a plane to visit customers - physical presence works wonders for closing deals
• Use scarcity strategically: "We only have capacity for 2 enterprise customers this quarter"

Timestamp: [11:30-18:38]

People Mentioned:

• Tom Blomfield - Y Combinator Group Partner sharing YC company insights

Companies & Products:

• Vanta - YC company that helps with SOC 2 compliance and security certifications
• Y Combinator Companies - Referenced as source of B2B sales best practices

Technologies & Tools:

• Excel - Recommended for quick data import/export during pilots instead of complex integrations
• API Integrations - Advised against during pilots due to time delays

Concepts & Frameworks:

• Time to First Value - North star metric for pilot success
• Recurring Revenue Contract with Opt-Out - Sales structure that auto-converts to full contract
• Customer Success Function - Critical post-sale implementation and onboarding
• Internal Champion - Key stakeholder who advocates for your solution internally
• Organization Mapping - Understanding all stakeholders in the buying process

Certifications & Compliance:

• SOC 2 - Security certification critical for enterprise sales
• HIPAA - Healthcare industry compliance requirement
• ISO 27001 - International security standard

Business Metrics:

• MRR/ARR - Monthly/Annual Recurring Revenue (with opt-out period considerations)
• Pilot to Paid Conversion - Key metric for sales effectiveness
• Implementation Rate - Percentage of signed contracts actually deployed

Timestamp: [11:30-18:38]