As we build Databook, we often find inspiration from outside the world of enterprise sales. One recent example came as I was reading Black Edge, a gripping account by Sheelah Kolhatkar of the largest insider trading investigation in history.
The ‘black edge’ of the book’s title refers to the insider information that was being illegally used by certain hedge funds to generate highly profitable trades. As I read, it set me thinking about the (legal) ‘edge’ that all top investors, traders and poker players have, and how this concept provides a useful framework for explaining how we are designing Databook to help enterprise sellers be successful.
Finding an Edge
The world’s most successful fund managers will tell you that they will only make an investment if they can identify an edge that provides them with an advantage over the party on the other side of the deal. Here are just three examples of renowned investors emphasizing the importance of having an edge:
“First answer the question, ‘What’s your edge?’” - Seth Klarman, hedge fund manager with $27 billion under management
“Both poker and investing are games of incomplete information. You have a certain set of facts and you are looking for situations where you have an edge.” - David Einhorn, hedge fund billionaire and World Series of Poker player
“What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don’t get a big edge often.” - Charlie Munger, vice chairman of Berkshire Hathaway
Investors will tell you that having an edge is important, but what is it? Traders often talk about three types of edge in particular:
Informational. If you’re planning to invest in a stock, knowing more about the company (or knowing it more quickly) gives you an edge over other investors.
Analytical. Having superior analytical techniques (maybe enhanced with AI) or the discipline to follow a rigorous analytical process gives you an advantage.
Behavioral. Holding your nerve when a big investment fails to bring a profit quickly or having the discipline not to invest unless you can identify a clear edge can also be advantageous.
Finding an Edge in Enterprise Sales
These three categories resonated with me, because they chime with the types of problem that our customers in enterprise sales come to us with again and again. For instance:
“We struggle to get high-quality external data about what really matters to our customers and their business.” (Informational)
“Our information about leads is often out of date, especially the data about their financials.” (Informational)
“Our system for prioritizing accounts in a territory doesn’t correlate to actual propensity to buy.” (Analytical)
“I worry that I’m targeting the wrong opportunities and leaving money on the table.” (Analytical)
“The account executives in my team struggle to present a point of view on sales calls that focuses on the customer and their problems.” (Behavioral)
“Some of my reps just rely on relationship selling too low down in the organization and are unable to bring in the big deals.” (Behavioral)
As buyers get better informed through the wealth of information that is available online, enterprise sellers are in an arms race to become smarter themselves. The concept of informational, analytical and behavioral edges strikes me as a useful framework for understanding how sales technology can support sales organizations in that goal.
In the three posts that follow, I’ll be taking a look at each edge in turn and at the innovations that help individuals or organizations sell faster, bigger and better.
Next time: From carrier pigeons to machine learning: how to develop an informational edge.
Alex @ Databook