Amos Schwartzfarb, managing director of Techstars Austin, didn’t set out to write a book.
He originally sat down to create some materials for
Techstars companies focused on sales with answers to the most commonly asked questions.
The project evolved into his book: Sell More, Faster: The Ultimate Sales Playbook for Startups, which is on pre-sale now and debuts in early September.
Schwartzfarb has spent decades working with startups. In his
latest role, he took over the managing director job of Techstars Austin from
Jason Seats in 2015 and he has graduated three classes of startups under his
Before joining Techstars, Schwartzfarb served as head of
customer development at Joust. Previously, he was vice president of customer
development at BlackLocus, which was acquired by The Home Depot in 2012. And he
was co-founder and served as Chief Operating Officer of mySpoonful, which was
acquired in 2011. He also served as an executive with Business.com, which was acquired
by RH Donnelly in 2007. And he spent five years at HotJobs.com.
In this latest edition of the Ideas to Invoices podcast, Schwartzfarb talks about what he sees as the big mistakes entrepreneurs make when it comes to sales, sales strategy, what he looks for in choosing startups to participate in Techstars Austin, some of the breakout Techstar Austin companies and the phenomenal growth of Austin’s startup ecosystem.
One of the biggest sales mistakes entrepreneurs make is “thinking that they have a clear idea of who their customer is, what they are buying and why they are buying it before they really do and just going with gut rather than using data,” Schwartzfarb said.
The next mistake is starting with sales, before doing the
“Starting with sales versus starting with customer
development and customer exploration and thinking that they need to get into
repeatable sales before they have any idea about what can be repeatable in what
they have done,” he said.
Traction is a big focal point when it comes to startups, but
traction can have a lot of different definitions, depending on who you talk to,
“But it generally means that the entrepreneur has hit some
kind of repeatability with customers, or they show that they can do that,” he
In his book, Schwartzfarb focuses on customer development
“Up until Series A, startups are still figuring out who
their customer is and what they can learn from them,” he said.
The goal is to get to
that hockey stick effect where sales just take off, but that requires a lot of work
on the entrepreneur’s part in defining and catering to the ideal customer set,
“It’s akin to doing consultative sales,” he said. “You go in
with a theory that you are filling a void that exists. You might have a strong
conviction about it. But you’ve got to get customer data to support it.”
Entrepreneur do that by listening to prospective customers
and validating that the problem they believe exists is in fact there and that they
can solve it with their product, he said.
“And that it can be repeatable for a specific customer set,”
Schwartzfarb is a very strong advocate for the entrepreneur
to be the one facing the customer in the early days and trying to figure out
whether their assumptions are right by validating the data.
He would also like to see founders working on their company without
other distractions, but he realizes that isn’t always possible when some
founders need a job to pay rent.
“A founder that can’t dedicate 100 percent of their time to
the thing they are trying to create is setting up additional roadblocks for
themselves,” he said.
Still, some entrepreneurs can be scrappy at making it all
work with a job and developing their startups. That can show the ability to
make things happen despite difficult circumstances, he said.
Schwartzfarb evaluates thousands of companies each time
Techstars Austin brings on a new class. He ultimately selects ten to
participate in the accelerator program.
To select those startups, Schwartzfarb has a checklist that entrepreneurs
must meet to become a finalist.
First, he needs to be convinced the CEO can build a
meaningful company and attract great talent, Schwartzfarb said.
“I’m not talking about the product or the market yet, it’s
all about the person,” he said.
Next, is the team cohesive and are they the ones that have
the skillset to accomplish what they want to do, he said.
“And lastly, do I believe that there is an interesting market
that has a big opportunity,” Schwartzfarb said. “The product is interesting to
me, but a lot less important. “
That can still leave Schwartzfarb with more startups than he
has space for and so then he focuses on “who are the people we think we are
going to have the most fun working with,” he said.
Techstars Austin has startups from varied industries in its
portfolio including consumer packaged goods.
A couple of years ago, the Techstars program expanded in
Austin with the addition of the Techstars Impact accelerator which Zoe Schlag
heads up. She previously founded and ran
the Unlimited impact accelerator in Austin before joining Techstars.
“What we saw in Techstars was a large percentage of our
companies were impact companies,” Schwartzfarb said. And Techstars data showed
impact companies outperform non-impact companies, he said.
About a third of the Techstars Austin companies are
impact-driven companies, Schwartzfarb said. In addition to Techstars Impact Austin,
Techstars has expanded its impact accelerators to Denver and Atlanta.
It’s not a hard sell to convince companies to locate to
Austin to participate in the Techstars Austin program, Schwartzfarb said.
Austin is increasingly becoming a hotbed of startup activity
and more and more companies are moving here because of the quality of life, lower
cost of doing business and abundance of talent, Schwartzfarb said.
Austin is looked at as one of the best places in the country
to build an early-stage company, Schwartzfarb said.
In the last Techstars class, six companies came from out of
state and three have moved to Austin permanently and two more are in the
process, Schwartzfarb said.
The venture capital availability has improved in Austin, but
it is still lacking in early-stage funding.
Austin has more capital than a few years back, but the city still needs more seed-stage capital, he said. Investors in Austin tend to invest with more of a Series A mindset, he said.
And the top companies to come out of Techstars Austin have
raised their later stage funding outside of Austin, Schwartzfarb said.
For example, ScaleFactor has raised more than $100 million
in the last 14 months. Its investors include Coatue Management, Bessemer
Venture Partners, Canaan, Broadhaven Ventures and Firebrand Ventures.
Other Techstars Austin startups that are expanding quickly include Chowbotics, which has created robots that make food and deliver it to people via vending machines, Storyfit in Austin, Skipper, and SkillPop out of Charlotte, North Carolina, Schwartzfarb said.
Applications close on August 25th for the next Techstars Austin accelerator. The program kicks off this year on De5c. 2nd so the Techstars companies will be ready to go to South by Southwest and pitch their ventures.
For more about Techstars, the startup ecosystem in Austin and cycling around Austin, tune in to the entire podcast.
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