In today’s episode of The Startup Chat, Steli and Hiten talk about how to create a successful pilot program for your startup.

In the startup world, running a pilot program for your startup is a great way to fine-tune your solution and get in some early customers. Sadly, many pilots end up failing due to mistakes made during them, and this is something that Steli and Hiten explore in this episode.  

In this episode, Steli and Hiten talk about how to do pilot programs correctly, why you need to be clear about KPIs, why you need to be as hands-on as possible during the pilot and much more.

Time Stamped Show Notes:

00:00 About today’s topic.

00:46 Why this topic was chosen.

02:36 Why you need to be clear about KPIs.

04:46 Why clarity is super important.

04:16 Why you need to be as hands-on as possible during the pilot.

05:13 How you need to babysit the pilot.

06:36 How to get more advice about your pilot.

06:41 How to handle contracts and timelines.

06:50 Why want to learn from your customers past.

06:33 A question you can ask your customer during a pilot.

3 Key Points:

  • Find out from your customer what you’d need to do to get them to purchase your product.
  • You need to babysit the pilot.
  • You wanna learn from your customer’s past.


Steli Efti: Hey everybody, this is Steli Efti


Hiten Shah: And this is Hiten Shah and today we’re going to talk about sales but what we’re going to talk about sales is how to do pilots correctly so that they lead to successful outcomes and basically close deals.


Steli Efti: Yeah, this is one of the biggest heartbreakers. Whenever I talk to startups that have A, pilot or multiple pilots going on usually with either larger customers or maybe if it’s very early in their development phase where the product maybe doesn’t work yet or is very rudimentary. Startups like to do pilots, right? It’s these agreed upon times where a potential customer in a startup will come together and they’ll agree that they’re going to run a certain amount of tests. They’re going to try to use the product or implement it or integrate it and if it goes well the idea is at the end of pilot, once we’ve tested this out, we would buy. The company would become a customer. The heartbreaker is that a lot, the vast majority of the time, especially startups that are not super experienced in sales, they’ll put these pilots together in a way that’s destined to fail and they will work so hard and have such high hopes. Then at the end of a one month or three month period when they were hell bent on needing this pilot to turn into a successful customer relationship, it doesn’t, right, and it doesn’t just crush the morale. It doesn’t just deplete the funds and the money but it’s also wasting the biggest resource the startups have which is time. So let’s unpack a little bit of the mistakes that startups do, how to do avoid them and how to do this well in order to save some people a lot of trouble and a lot of wasted time.


Hiten Shah: Yeah, pilots are so key, especially to get the kind of deals that you’re looking for. They also help companies get really comfortable with your product and your technology and help you actually sort out how to make something that actually provides something that they actually need and want and help them get ramped up on something. I’m going to let you lead the way because I’m sure you have more tips than I do on this.


Steli Efti: I have a million of them. All right.


Hiten Shah: Go for it.


Steli Efti: After all, a few simple things and I know you’ll pepper and salt it with your wisdom around it. One of the most important things when you set up a pilot is to create clarity on what the key KPIs are that will indicate that this is going well. What do we need to do and what do we need to accomplish during the pilot for you to then purchase the product?


Hiten Shah: You would ask them that directly, correct?


Steli Efti: Oh, absolutely, absolutely, yes.


Hiten Shah: Okay.


Steli Efti: Yes, and to me it’s mind blowing that startups start pilots and don’t have the answer to the most fundamental question of the pilot, “What is our goal here?” What does, “this went well” mean? Who’s defining this? Who’s going to decide and how, when are we going to decide? Startups don’t know this. They go into these pilots with their own definitions of what successful look like hoping that’s the same definition as the client or the customer and their own definition when they would decide. “Oh the pilot is over next week, Steli Efti. That’s when they’re going to decide.” Then the week is over and they realize, no, no, no. The pilot is over but the company might need another two months to make a decision if it was a success or not or what to do about it. The most important thing is to have clarity and alignment with your client and to define on a piece of paper, in some written way, what we’re trying to accomplish during the pilot, who is going to do what in order to help accomplish that goal, hit those KPIs, hit those goals. Then, how we’re going to decide to purchase and buy, when, right? Like creating clarity on the KPIs, on the goals, on the outcomes we’re trying to generate that they will trigger a purchase decision from the client. That’s the most important thing. The next thing that I’ll say is that startups are too hands off during pilots. A lot of times you think, especially you know, if you’re a startup you’re probably going to be selling to somebody. It’s a bigger company than you’re three person team or five person team or whatever it is. You think, “Well, these are serious people. These are adults. We’re going to give them the software, the technology, whatever we told them and they’re going to use it or they’re going to introduce it to their employees or they’re going to train their people. They’re going to project manage this on their own and then they’re going to see success with it.” Nothing could be further from the truth. You need to quote unquote babysit the pilot. You need to be the adult, the champion, the CEO of the pilot within their company. You need to make sure that you’re involved in every single step from the e-mail they sent to employees to introduce this new tool, like make sure that you are writing this e-mail or co-writing it or at least editing it. Don’t just let them do it. Make sure that you are part of the training sessions. Make sure that you actually put together a plan week by week of what needs to even happen. You should have a plan that you give them, a template that they can follow in order to get success during the pilot. You cannot just ship software or give them a login access to something and then assume that the client will do all the heavy lifting and all the work and then see success. You really need to be as hands on as possible. I’ve given this advice to many startups, too. Even, if possible, set up shop in their office, right? Make sure you visit them once a week. You have meetings. You shake hands. You kiss babies. You meet people. You hear rumors. You see maybe physically a problem or you spot an opportunity that you would miss otherwise. The biggest mistake that I see startups, especially those that aren’t that experienced is sales, is that they think that the pilot basically means, “I’m giving you access for free to my software. You are going to use it and then at the end you give me feedback and money.” That would be beautiful but that’s just not the way it pans out usually.


Hiten Shah: Yeah, that makes a lot of sense. Is there a way you would think about the contracts or the timelines or anything like that?


Steli Efti: Yeah, so I’ll give you … And maybe this is going to be the … Let’s do this as the last tip of this episode because we want to keep it super short. If people right now that are listening are about to do a pilot, in the middle of one and they’re like, “Wait, wait, wait, I need more help about X, Y and Z.” Send us an e-mail, [inaudible]. We’ll give you specific pilot advice for the pilot that you’re running. So, yes, Hiten Shah, that’s a beautiful question, a good one to end on. Here’s my biggest tip when it comes to contracts, timelines, details. What you want to do is you want to learn from success and failure. That means you want to learn from your customer’s past. What I will always ask a customer before doing a pilot is I will ask them, “Hey, when was the last time you did a pilot like this, where pilot testing software, if it’s software or testing a marketing tool like ours or a marketing tool in general? When was the last time you’ve done a pilot period, right, in the company or in this department on this team?” Then I would ask them a bunch of questions about how did that pilot go? How long was it? What was good? What was bad? What would you do differently? I want to learn from other company’s mistakes. And I want to learn from this company’s past mistakes and successes. What worked particularly well? Did you buy it at the end of the pilot? If not, why? If the company has never done … You’ll uncover all kinds of incredible things. Sometimes they’ll tell you, “Oh, we’ve never done a pilot in our company history.” That is somewhat of a red flag, right? Maybe you should just sell them the software or maybe you should be just aware that they might need a lot more help because they’re not used to buying software or they’re not used to running an internal pilot for a product that they’re testing. Or maybe they tell you on the last three or four pilots we never purchased anything. Now, that’s important to know. Why? What is the pattern? What needs to be different with our pilot to make sure it will be a success? You want to always ask about successes and failures when it came to pilots in the past and learn from it. Related to that is the question that you asked about contract, timelines. A lot of the details of the successful pilots or the failed ones should be part of the way that you design yours. Many times what you can do, and this is a hack to get faster through procurement and through legal, is ask if they had a successful pilot, ask them if they have documentation that they would be willing to share with you. Ask them if they are willing to share that contract, right. Go, “Hey, instead of us sending you and your legal department our brand new contract and having to go through it, can you send us the contract you used with the last vendor that worked out successfully and we’ll have our legal team go over it and try to use that as a template so we can go quicker through legal and get it approved, since that was a contract that was already approved by your legal team before, right?” Often times you can tap into the contracts they used in the past and use them and edit them as templates to use something that will work and they will agree to faster rather than sending them something they’ve never seen and their legal team will take apart and take their sweet time around. That would be my biggest tip, a generic tip around how to make your pilot successful. Learn from their past failures and successes but also specific to what kind of a contract to put together. Whenever possible try to get a contract that they used before and use that as a template to speak up the process. All right, I think, Hiten Shah, that is it for us in terms of the biggest mistakes and kind of the framework that if you follow what we just discussed and what I shared on this episode, you’ll avoid some massive, massive mistakes. Then again, Hiten Shah and I can’t wait to hear about your current pilots, your failed ones, your successful ones, the struggles with the one that you’re trying to set up and help you specifically if we can. Don’t forget to give us a five star rating on iTunes and we’ll be here very soon.


Hiten Shah: See ya.


Steli Efti: Bye bye.