GE Ep 78: Close.io CEO Steli Efti Reveals the 80/20 Principle for Building a 7-figure SaaS Business With Steli Efti

Steli Efti photoHey everyone, today we’re talking with Steli Efti, founder of Close.io – a sales software platform that has communication at its core.

He’s got an inspiring story that started out with buying a one-way plane ticket from Europe to Silicon Valley, and his insights on sheer hustle and fighting to make things happen are definitely worth listening to.

How a High School Dropout Made it Big in Silicon Valley

Originally from Greece, Steli Efti claims he has zero credentials and is totally unemployable. He dropped out of high school to become an entrepreneur, and never returned to formal education again.

He started a few small businesses in Europe that did well, but he heard the call of tech-based Silicon Valley loud and clear. Then, eight years ago, he decided to sell everything and buy a one-way ticket to San Francisco to build a tech startup.

His first business totally flopped. But with a few pivots, the second business is what eventually morphed into Close.io, which is incredibly successful.

Where Close.io Came From

Originally, Steli started a company called Elastic Sales (the first version of his second company), which was an outsourced sales business for venture-backed startups in Silicon Valley.  They did B2B sales for around 200 companies, but didn’t have any sales software they felt they could rely on to do their jobs as efficiently as possible.

So, with a true entrepreneurial spirit, they built their own software and never intended for it to be anything public. Eventually though, their sales people showed the software to other sales people. The sales people who saw it wanted it so badly that they started calling and emailing Elastic Sales to figure out how they could buy the product.

In January 2013, they released Close.io, which works as a CRM, but has communication (calls and emailing) at the core of the application, empowering sales people to communicate more and better.

If You Want to Outsource Your Sales, Make Sure You Can Sell First

Steli says that outsourcing sales can work really well, but most companies do it way too early and/or they outsource things they can’t figure out how to do on their own.

He says before you outsource your sales, you need to know the process and that it more or less works. You don’t have to have a perfect or fully documented process, but you do need to be able to verbally tell someone what to do.

Otherwise, if you expect a sales outsourcing company to solve all your sales problems for you, it’s like hiring an app development company to develop a hot social app for you, without giving them any of the background or know-how to do so. They only know how to physically build an app, not how to make something viral.

To be successful in outsourcing your sales, Steli has two pieces of advice:

  • One, be as hands-on as possible. When Elastic Sales was alive and well, Steli said it was the most hands-on clients that performed the best.
  • Two, see your outsourced sales team as an extension of your in-house team. With that view, it’s part of your responsibility to be involved and help fix problems immediately.

How is Close.io Different from Salesforce and Other Tools?

According to Steli, Close.io is the only CRM built with communication in mind in that it doesn’t require any manual data entry after you’ve sent an email or done a call – it all gets recorded directly within the app.

It also lets a sales person do insanely detailed searches based on potential customers and the types of communications they’ve had with them – essentially a search engine merged with a sales tool.

Why Close.io Hasn’t Bothered with Outbound Sales Yet

Close.io was initially launched as an experiment, but soon after it launched, its organic growth took off because there was so much demand for it.

As sales professionals, the Close.io team decided that they would improve and perfect their inbound funnel before they started doing outbound sales, but the growth has been so good from inbound leads, they haven’t even gotten around to trying outbound yet.

And even without trying so hard in sales, they’ve got beyond seven figures in revenue, and are in the top 5% to 10% of all SaaS businesses – and they’re only a six-person team.

What It’s Like to Be So Bent on Success that You Only Buy a One-Way Ticket

“I was fairly clueless, to be honest,” said Steli about his decision to sell everything and come to San Francisco with hopes of starting a tech company.

He had confidence that he would be able to figure things out along the way, and even though he eventually did, it was much harder than he initially imagined.

For example, he spent two years raising money for his first startup and only managed $100,000.

But as he caught onto things, life and business got easier. A few years later, it only took him a few weeks to raise $1.5 million.

Training Sales Reps to be Effective From Day One

When Steli was running elastic sales, he said he saw a constant objection to the idea that sales people could be quickly trained to sell a highly complex products to specialized audiences.

But to have reps making effective calls from day one, Steli said he focused their training around the 20% of the knowledge that was needed 80% of the time. It usually didn’t take up more than two pages with 10 to 20 questions.

If a sales rep got a question he didn’t know the answer to during a call, all he had to do was say something like “That’s a good question, and I want to make sure I find you the right answer. I’ll get it from the internal expert and let you know.”

Another important question he had sales reps use to expedite their training and make them more effective was “Why?”

Asking why, even when they knew the answer, was a great way for sales reps to get a better, deeper understanding of their prospects and target audience, empowering them to get ramped up and productive really quickly.

Boosting a Sales Teams’ Morale

Steli says that when a sales teams’ morale dips, they’ll start believing that the product they’re selling doesn’t work, and their results will become a self-fulfilling prophecy.

And when that happens, there’s not any amount of script changes, new tactics or strategy approaches that will change their performance. Instead, he says, you need to continually expose them to success to see a difference.

In one company in Berlin that had language-based localized sales teams, the French market was under-perfoming, and the French sales people became convinced that it was because the product didn’t work for the French market.

So instead of trying to convince them otherwise, the company put the best sales guy from the UK market on the French sales team. He still spent his days calling companies in the UK and speaking English, but after the French team saw him crushing it day after day, they started closing more and more deals until their performance was on par with the other teams.

80% of the Hustle (and Reward) is in The Follow-Up

“In business, follow up is truly where winning happens,” said Steli – mostly because true follow-up is so rare.

“Stop making up stories” is Steli’s blunt advice for people that don’t hustle in their follow-up.

He says that most people who initially have a good interaction with a prospect but don’t hear back from them after one or two follow-up attempts make up a story in their mind that the prospect isn’t interested anymore or that they don’t like them for some reason.

Instead, he says, you should just make the assumption that someone who doesn’t respond to you right away is just really busy, so it’s your responsibility to keep staying in touch to give your prospects the power to respond at a time that works well for them.

If they say no, it’s important to respect that, but as Steli says, “You’re not in the business of being liked.”

Besides using Close.io to help with follow-up, Steli suggests a tool called Followup.cc that’s a simple, light-weight tool that lives within your email threads and will help you take your follow-up to the next level. And it’s simple enough that anyone can use it.

Advice to His 25-Year-Old Self

At 25, Steli said he wished he was worrying less about overly-ambitious goals and was more focused on process and breaking things down into simple things he could do every day to develop habits that would allow him to reach success.

He said he lacked consistency at that age, which is one of the key things required to reach greatness in life.

One Must-Read Book

Besides his own books that are sales guides for startups (links below), Steli suggests PayPal Wars by Eric M. Jackson – it’s a book they used to buy for every new hire their company had.

Rather than being written by a journalist or a founder, the book was written by an early employee of PayPal and gives an employee’s perspective of what it’s like to work for a hot new startup.

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