How startups feeling the heat to prove profitability can close more deals

With interest rates climbing to unseen heights since 2001, VCs are doubling down on startups having a track record of profitability — rather than investing in those that are torching cash in the name of growth.

SaaS startups have been especially feeling the heat, given that selling is becoming harder and taking longer. At the same time, there remains a sales talent shortage across the country — which research links to holding back companies from scaling.

So, how can startups use the resources they have to get out of a sales slump? We turned to sales veteran and former Slack and Zoom executive Theo Yeung — who’s driven ARR from $500K to $9.6M — for a pulse on what no longer works and what does. 

Drawing on data from his tech sales consulting firm, The Bullpen, Yeung revealed the short answer is that while email is forever, it’s killing sales and cold-calling is making a comeback.

Yeung sat with the Vancouver Tech Journal to dive into the data, what started the shift, and insights and tips for startups looking to close more deals and, ultimately, their next financing round.

For those who aren’t familiar, tell us the origin story behind The Bullpen mastering the art and science of sales.

The Bullpen started while I was working at a startup in an office filled with other startups. The common denominator seemed to be that everyone needed more meetings, more sales, and a better product-market fit. 

We take out all the heavy lifting from the founder by first verifying whether or not their product market fit is sound. If it isn’t, we help them test and validate other verticals. Once we have a good sample size, we validate product-market fit by booking meetings in that vertical where startups can pitch their product themselves. 

From this point forward, some of our clients want us to run the entire sales cycle and be their account executive, while others have their team take over the discovery and demo. I have customers who just want 70 sales-qualified leads a month. Others want us to take over their entire sales and only give an update on the forecast every week — given the last thing they want to do is manage a bunch of salespeople. 

Since implementing a cold-calling heavy approach in the past year, we haven’t missed any meeting or revenue targets. I believe our biggest differentiator is that we all have extensive experience in tech, particularly SaaS, whereas many fractional salespeople don’t. I've taken what I learned from working with SAP and then startups to high-growth companies like Slack and Zoom to apply proven processes to the over 60 startups we work with. 

In a tangible sense, we have a North American-based team that understands how to communicate effectively to uncover clients’ customers’ pain points and tie them back to their product for higher close rates — which has helped past clients raise over $83M collectively.

Tell us how you came across this data on cold calling. What kind of companies are you working with? What metrics are you keeping track of across each one?

We started seeing a shift to cold-calling once Google and Microsoft implemented a limit on outbound emails. 

I had a rush of founders emailing me early in the morning complaining that their emails now land in the SPAM filters for their investors or their domains were shut down completely for violating the new spam restrictions. Email providers set the limit to 35 emails per day for every email account, limiting our scalability and ability to hit our meeting and revenue goals. 

We pivoted from 50 per cent cold calling, 25 per cent email, and 25 per cent social to 90 per cent cold calling, five per cent email, and five per cent social. Our business grew even more because cold-calling is a lost art. 

On the surface, it seems invasive and annoying, but it's been magic for us. We get incredible feedback from our prospects, whether they’re interested or not because we find out the reasons behind both. 

We can then give this feedback to our clients and adjust our pitch accordingly. Many people complain that when it comes to fractional sales, their product isn’t understood, or the meetings aren’t qualified. When we call prospects, we can better qualify them before booking a meeting with our client — whereas, with email, it’s way harder. 

We’re working with various companies now, but I would say most of our customers are in proptech, healthtech, AI, and any B2B SaaS. We also have bigger clients with over 250 employees who want us to fill their account executives with leads. With these companies, we book around 50 meetings monthly. As for early-stage companies, some are just looking for a signal and want 12-15 meetings monthly.

The constant metric across all clients is that 98 per cent of our meetings are from calls. Crazy, right? We book around 200 meetings a month, and less than five come from emails. I’m not saying emails don’t work entirely, but two years ago, I could do an email campaign, throw in 300 contacts every week, and consistently book three meetings a week. 

Now, it’s more about building out a company's sphere of influence and calling relevant stakeholders until we can gather enough information to get the prospect interested enough to take a meeting. Some customers with a very targeted persona will take us 80 dials to book a meeting, and some will take us around 200 dials. It really depends on how big and who their target customers are. 

At a time when more companies are shifting from live interactions to digital options, why is it that cold calling is making a comeback? 

That’s a great question. I think cold-calling is making a comeback because this form of outreach requires the most time and effort, so few people do it.

They’re also making a comeback because, in today's world, most decision-makers receive hundreds of emails crafted by AI and get lost in the noise. Although products like Clay can make your emails more targeted, I find they also fall short after receiving 10-15 of them in my inbox a week.

With cold calling, we get to refine the pain points and the product's value and then rebuttal accordingly. Our conversion rates improve month by month, resulting in making less and less calls to get a more targeted and qualified meeting. 

What are some common misconceptions people have about cold calling that could potentially be hurting their business?

A common concern with cold calling is annoying potential customers with an invasive call. People think they'll sound like a telemarketing company trying to sell upgraded home security, or they'll end up cheapening their brand or offending others. 

I totally get it. What I encourage is to shift your mindset. It’s not about convincing people who have no interest in your product to jump on a demo with you. It’s about convincing the people who are on the fence about your product or didn’t know it existed to give it a shot. 

What are some examples you can share on how cold calling has helped your clients? What was being done before and why wasn’t it as effective?

We had one client who was convinced their customer was a specific persona. Their product, marketing, and conference shows were all built around this persona. They hired us to throw more fuel to the fire by setting up meetings with their prospects before a conference and filling their sales teams' funnels. We got nothing for two months. 

Obviously, the customer wasn’t happy, so I noted their persona might not be a fit with their vertical. We pivoted and cold called three other personas to see if there was a fit and found two completely different from the client's original buyer. We now book meetings to those new personas and keep refining the value propositions as we close more deals. 

Another client that's an AI clinician tool was just starting their outbound process. They had three personas they thought could be their target and then subpersonas within them. They thought it would be primary care clinics, direct primary care clinics, telehealth clinics, and specialty care clinics. 

When cold calling, we would test each one with a decent sample size and gather feedback to see their existing workflows, how we can improve them, and if there was an appetite for an AI clinician tool. We found that specific integrations with electronic medical records (EMRs) were table stakes and that leveraging the gatekeeper to get the meeting with the clinicians was paramount. We now continue to test other clinics while booking primary care clinics for them.

Another client is a larger digital newsprint company with over 500 employees. They just wanted more leads since they have a great account executive and growth team and a validated customer persona. Traditionally, they relied on emails and LinkedIn for outreach. When we started cold calling, we mainly communicated their value proposition to book demos. It took only a month to ramp up from 10 to 50 meetings per month.

The commonality of all three clients is that our approach saved them a lot of time and money. 

For early-stage companies, they’ve been able to get customer feedback fast, which made it easier for them to get proper discovery done and create and iterate their product roadmap. 

For other companies, they were provided a de-risked way of testing new markets and increasing their pipeline. This is because much of our compensation is based on delivering qualified meetings, so if we aren’t, clients don’t pay.

What are some tips and insights you can share for founders who are ready to pick up the phone and start cold calling?  

Practice a rough script, but don’t read verbatim: The prospect will know, and it'll wreck the flow. No one call ever goes the same, so be prepared for some rebuttals. Take a deep breath, pause, and think. You don’t need to answer right away. 

Set up a block every day to call: Our most successful reps set two call blocks per day. I understand that founders might not have that luxury of time, but at least set one and try to do at least 50 calls. I recommend this because, with your first 10, you'll be hoping they don’t answer, then with the next 10, you've practiced enough that you'll be in a flow of state after that.

Plus, only about 11 per cent of people pick up and that's dependent on if you have the tools to get their direct line. So set a dedicated time with no distractions and get that volume up. Through gathering data, you’ll also start to see trends. 

For example, with the clinicians we call, before work, lunch and 4 p.m. are the best times to reach them. Those are the times when their office admin is away and we get transferred directly to them.

Don’t get discouraged if the prospect is rude: It’s usually something going on in their day. For every 50 calls, we typically get a sour response. But that just makes hearing "Yes, let me pull my calendar up" even sweeter. 

What are some of the biggest reasons why cold calling could remain more impactful compared to email or any other tools in the future? 

The human element that’s involved with calling. You get so much more feedback. If the person isn't interested in an email, they just don’t reply. You have no idea why they aren't interested. It could be the price, integrations with an existing tool stack, that they're leveraging a competitor, or that your UI/UX needs improvements. 

You'll never get to the bottom of these questions through passive outreach like emails and LinkedIn. Cold calling doesn’t just drive sales; it leads to better-targeted marketing and better product features.

Is there anything else you want to share that’s important for people to know about closing more deals?

Be consistent. Sales is like a roller coaster. There will be some weeks where you get a ton of meetings and others when you get nothing. 

There will also be quarters where you work on all these cool deals and close them, but forget to prospect and have a cold quarter the next one after. 

One thing that I consistently tell my reps is that we have the data behind it; just be consistent and listen to the prospect, and the results will come.