I started my first business back in 1986 when I was in my early-twenties. It was a typical software start-up. We didn’t have any money, so had to go about business the old-fashioned way – making profits from the outset. When I say ‘we’ I use that in the royal sense. Really there was only me for the first six months or so. I was CEO, VP Sales, CTO, CFO, Director of Customer Services and everything else at the same time. I was single, didn’t have a lot of commitments or overheads – so at least if I had a tough month, I was the only one who starved. During the day I would meet with prospects or customers, and at night I’d develop the software application that I had sold or write a press release that I’d send to anyone who would publish it – because that was the only marketing I could afford. In those days, a good sale was perhaps $5k, and I could survive if I got one of those a month.
After a few months I had a bit of rhythm going, but I’d had no idea about how I would grow the business. Then lady luck visited me. I met the General Manager of a new life assurance company who asked me to quote for a new business system he wanted to implement to help his sales team. I took a look at the requirements, priced the work (it happened to come in at $5k!), but then realized that I was fully booked, and if I got the business, I didn’t know how I could do it. On the other had, this was my opportunity to get my first marquee customer.
As serendipity would have it, I was at a family gathering around that time, and I related my dilemma to my brother (who at 30 years old was waaay more experienced that I was). In the knowing way of an older brother, he paused to consider, and then turned to me and said “Quote them $20k”. “Are you out of your mind?” was my immediate response, “I will lose the deal at that price.” He smiled and said “But why do you care? I thought you couldn’t take it on anyway. But if you get it at $20k, you’ll figure out a way to get it done.”
So, with utter certainty that I was wasting my time, I took my proposal, and multiplied all the cost elements by four, and there it was, a proposal for 20k. I knew I was wasting my time.
But I was wrong.
On reflection, this was one of the defining moments in my career. I began to understand something about why people buy, and the value that I could bring with the products, services and passion that I coupled with whatever inherent skills I had. My customer, the GM of the life assurance company, was one of those rare individuals you meet when you’re very fortunate. He was visionary, innovative, and prepared to take a chance on a young, small (very young and very small) company. He was also more than fair. Not only did he accept the $20k price, but he advised me that I had possibly underestimated the effort involved in a few areas and that we should build in an additional 25% contingency.
Many years and more than a million dollars in business later, we had built a very strong relationship. I learned that he had bought from me because (perhaps in my innocence) I had taken a very innovative approach to solving his business problem. Not dragged down by the weight of experience, I didn’t know how to over-complicate it, and the resulting clarity of my vision for his solution, matched where he wanted to go. Culturally we were very aligned.
The system I designed and developed (with a lot of input from my customer) helped his sales organization compete in a market that was new to them, and the life assurance company took a full 16% of their market in their first year.
I learned the difference between price and value. I learned that the full solution the customer wanted was a combination of my products and services and my passion for their success. I learned that an opening trusting relationship could deliver tremendous mutual value. And, while I learned that sometimes it’s better to be lucky than good, I knew that, with structure, you could replicate good, but you couldn’t count on replicating lucky. So, I took to time to understand the value that I could bring, and practiced how to explain that. And that has served us well at Altify as we focus first on the value that can be delivered to the customer – and then worry about coming up with a fair price.
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Donal Daly is Executive Chairman of Altify having founded the company in 2005. He is author of numerous books and ebooks including the Amazon #1 Best-sellers Account Planning in Salesforce and Tomorrow | Today: How AI Impacts How We Work, Live, and Think. Altify is Donal’s fifth global business enterprise.