An Indecent Proposal – Why pure Commission Based Remuneration won’t work

Time and again we come across start-ups that expect us to do their business development and sales on a pure commission basis. Here is why this won’t work.

There are literally thousands of high-tech starts ups all over the world. But how many of them manage to survive and become successful? In the US, 90% of high-tech start-ups are failures, and it is fair to assume that this figure also applies to other countries. The reasons for failure are manifold: wrong product, wrong target group, wrong business model, wrong timing, wrong team, or a combination of all these.

Everybody seems to be aware of these statistics – except start-ups. Now, it is of course understandable that a founder believes in his own innovation and its success. Otherwise he wouldn’t get started in the first place.

But start-ups need to take a step back and look at things from an external perspective. And from that perspective, there is a 90% chance that the start-up will fail – even if everybody involved believes in the concept of that particular innovation.

Therefore, expecting someone else, who has no stake in the start-up, to do business development and sales purely on commission basis, is expecting someone to work for free with a likelihood of 90%. I call that an indecent proposal.

It seems amazing that in the year 2015 it is still necessary to explain the importance of a professional and structured market development – and that it doesn’t come for free. But I could give numerous examples of start-ups that failed because of exactly this misconception. And that is not only a pity – it is totally unnecessary!

Involving a professional business development specialist will cost money – but it will drastically increase the start-up’s chance of survival and success.