Tuesday, January 13, 2009

Free consulting

Often in the early stages of selling a prospect they will want you to do a lot of the design and architecting of a solution for free. It is a delicate subject to bring up, but you can't do work for free. The sooner you bring that up and agree that you should be paid for your work - but not proposal writing, sales and marketing - the better off you'll be. The most effective method is to make them want your expertise. If you do the positioning right and create a perception of value the prospect will be more likely to agree to pay earlier. If you have not created an impression of value then putting your foot down in this area carries the risk of losing the business to a competitor or just getting a flat no. But done right this will earn you the respect of the client. So think positioning rather than closing. Ideally, the closing is a formality, a logical conclusion reached based on your prior positioning and needs discovery. It is also helpful to explain at the outset of the conversation what is paid work and what is not.

Monday, January 12, 2009

Contract Negotiation

When you are in the fortunate position to have arrived at the contract negotiation stage it's often useful to remember that the different parties value different aspects of the contract unequally. In other words, one party might value getting a good price very highly while the other party values keeping control of intellectual property. Here are some common points of negotiation.
  1. Scope of services
  2. Specific resources to perform work
  3. Change in staff terms
  4. Price
  5. Termination notice and penalty
  6. Late payment penalties
  7. Payment terms (net 30 etc)
  8. Revenue sharing
  9. Equity sharing
  10. Intellectual property control
  11. Indemnification
  12. Etc.
This difference in valuing different aspects can be useful for reaching a mutually satisfactory outcome and getting past a deadlock. There can be give and take in different areas.

Sunday, January 11, 2009

About this blog

Founding, growing and running a company brings a fairly diverse set of challenges and experiences. It has been very humbling to realize the value of experience (without ignoring raw talent). Going forward I hope to share some insights as they occur and apply and explain how I handle them through the lens of my experience. My hope is that reader can learn from my mistakes and successes and boost their trajectory.