Is a Strong Rolodex Important in Technology Businesses?

I always get this comment: “We’re looking for a VP-Sales/VP-Business Development/Sales Manager/Sales Rep with a strong Rolodex in the (pick your market segment) market”. I’m using “Rolodex” as a generic term for “contacts” since the advent of CRM software. But how important is a strong Rolodex really in the IT business? In my opinion, it’s not quite as important as many people seem to think…..

I realize this is a very contrarian viewpoint among most folks in the technology business.  Some may even view it as a “stupid” opinion! However, it’s not a spontaneous, knee-jerk comment. It’s an opinion I’ve developed over a long time. I’m sure I’ll get a lot of pushback on this topic since it flies in the face of conventional wisdom. Here’s my argument, so hear me out:

What your Rolodex does for you in the technology business

First, a strong Rolodex in a specific market segment is good. Obviously! To say otherwise is silly. But how much does it do for you and how important is it in being successful, relative to other factors? It may get a phone call returned or a meeting set up faster than it otherwise would. This is helpful, but far from critical in my mind. Especially compared to other factors I’ll explore below. I should point out that some market segments are so closed that they appear almost tribal. In those cases, including one example mentioned later in this article, a strong Rolodex may move near the top of the list of critical success factors. But in my experience, these situations are rare and far from normal.

Many other tech business value chain items must line up first

Let’s first talk specifically about sales. As I mentioned, that is the most obvious place where people look for an existing Rolodex. I’ve always maintained that sales reps get too much blame when they fail. And too much credit (and often out-sized monetary rewards) when they’re successful. So many things need to be done competently upstream in a company, for a rep to have a chance at a sale. The executive managers must first secure funds to capitalize the company adequately, or usually nothing works very well. Product Marketing/Management must properly define a market opportunity that matches well with the company’s intellectual property and technical capabilities. The R&D folks must build/code a product that makes a real contribution to the marketplace, offering a differential advantage over competitive offerings.

Maybe all of this seems obvious, but none of it is easy. A lot can go wrong. These activities are all more difficult and important than having a pre-existing Rolodex in a market segment. Even if this wasn’t true, attracting the right sales reps (with or without a strong Rolodex in your segment!) is difficult without evidence that the above-referenced activities are done well.

The most important attributes of a technology sales rep

Smart

This may seem obvious. However, all too often people looking for a “quick hit” underrate its importance. Or don’t adequately investigate the intellect of their potential sales hires.

Technology acumen

There are many good sales reps in the world. But regardless of whether we’re talking about hardware, semiconductors, traditional software, or SaaS. Far fewer have the education, training, and ability to quickly absorb complex and fast-moving technology that is fundamental to our business.

Work ethic

While intellect and technical competence are important, selling isn’t brain surgery. But it’s a difficult job that takes persistence, hard work, and the self-confidence to keep going in the face of a lot of rejection. There is no substitute for a strong work ethic in a consistently high-performing sales rep.

Ability to read people & build relationships

This is key, and shouldn’t be confused with having a large Rolodex of names and phone numbers. Just because someone “knows” many people doesn’t mean those prospects necessarily want to hear from them. Or trust them enough to buy from them. In many cases, it’s just the opposite. And without extreme due diligence in the hiring process, it isn’t easy to ascertain just how good those Rolodex relationships are. Also, the old “bull in a china shop” caricature of a rep who aggressively charges forward, regardless of cues from the prospect, usually doesn’t work very well in the technology business.

That is still contrary to popular belief. The ability to build strong relationships counts far more than aggressiveness in tech sales effectiveness. With strong relationship-building skills, you can do it successfully and repeatedly across any market segment. I say give me a strong relationship-builder with no existing contacts in ANY particular market segment. Over a weaker relationship-builder who knows everyone in that segment. Any day of the week.

Market segment experience and Rolodex

These are beneficial qualities, there is no doubt. But I believe they are down this list in importance relative to those attributes listed above.

An example of where your technology Rolodex IS CRITICAL

I don’t think a strong Rolodex generally leads the list of the most important attributes of software or hardware sales. But that doesn’t mean I feel that way in every aspect of the technology business. The best example of its importance is raising capital from institutional sources, such as venture capitalists. It is important to personally know them (or get an introduction from someone who knows them well) before a fund-raising approach. It’s critical to a bizarre degree.

While it’s not 100% universal, if you approach many (if not most) VCs without leveraging an existing relationship they have, you may have blown any chance with them in the future. That’s no matter how impressive the value proposition of your business is. As ridiculous as it sounds, it’s true. So this is a case where having a strong network and Rolodex in place is paramount. But the details of this are better left to another article.

That’s what I think about the importance of having a strong Rolodex in the technology marketplace. I’ve moved among many market segments in my career and don’t consider it all that difficult. The most difficult part is often convincing someone it isn’t all that difficult! Don’t get me wrong, business is ALWAYS Hard. This just isn’t one of the hardest parts if you know what you’re doing. While it can be helpful to have a strong Rolodex, I believe it is placed way too high in many folk’s priorities.  If you disagree, post a comment below and tell us why. Or just provide us with the wisdom of your own Rolodex-related experiences.

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