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Rocket GTM 🚀 - The Art of Losing
The Art of Losing
One of the greatest myths in life is that you need to win all the time.
If you're building a sales team, this mindset can be disastrous.
A lesson from hedge funds
Prior to working in startups I sold trading technology to banks and hedge funds.
It was here that I learned the art of losing.
Smart hedge fund managers know that the goal is to execute a winning strategy, not to win every trade.
Executing a winning strategy over the long term means you must accept losses in the short term.
All hedge funds claim they have an "edge".
It's this edge that helps them execute a winning strategy.
For example, when Bitcoin rises by 10% but Ethereum only rises 5% then Ethereum may be more likely to rally. (made up hypothesis)
It's these kinds of observations that give funds an edge.
Even with an edge however, these hedge funds don't need to win every trade. Hell, they don't even need to win fifty percent of the time!
How is it possible to lose more than fifty percent of the time and still get rich?
Well, let's say you make 10 trades.
You win 3, but lose 7.
As long as you cut your losses short and let your winners ride you can make a healthy profit.
Let's say each losing trade costs you $10, but each winning trade earns you $100, then:
(7 * -$10) = - $70
(3 * $100) = $300
$300 - $70 = $230 profit 🚀
You've just made $230 despite losing 70% of the time.
Those who master the art of losing cut their losses short and let their winners ride.
The same concept is used in poker.
You don't see professionals play every hand. They fold bad hands, and invest in the good ones.
If you want to be the best sales person then you need to apply the same concept to sales.
Sales leaders who push their reps to win every deal should be fired.
They should instead help reps identify winners and invest in them.
Then spend time to identify losers and ruthlessly cut them out of their pipeline.
Did you know?
Best in class sales teams close between 30-60% of the time.
That means 40-70% of all sales conversations die.
Top reps know that the best use of their time is to ruthlessly cut out deals from their pipeline that won't convert, so they can spend more time on the deals that will.
Not all deals are made equal.
So stop treating them that way.
🚫 No more discounts
Discounts are used heavily when sales leaders want every deal won.
But discounts done badly can ruin your reputation and attract bad fit customers.
Using a discount to close a high fit, high likelihood of closing deal is a good idea. Using a discount to close a low fit, low likelihood of closing deal is a bad idea.
Don't bend over backwards to close every deal. Bend over backwards to identify which deals you want to get out of your pipe.
The Navy Seals of Sales
My goal has always been to build "The Navy Seals of Sales".
But what does that look like?
For me, it means leaving nothing to chance.
We accept losing. We embrace it.
But we don't lose because of mistakes.
We lose because it's a cost of doing business.
When we lose, we lose fast.
We are ruthless with our time and energy.
Every deal that could be won, should be won.
Every deal that shouldn't be won, should be cut.
Never over invest in deals that will inevitably fail.
Spend half your time identifying where to spend your time.
Spend the other half winning, not protecting losers.