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How to sell a B2B product
- brenden2 6y agoStep 1: Get tons of VC money. Step 2: Hire a big sales team. Step 3: Be really good at marketing.
- danieltillett 6y agoThe process really goes 3, 1, 2.
- seneca 6y agoDue to person experience, this strikes me as pretty ironic. My company had a very bad experience with Segment, so much so that we changed product roadmaps to move away from them. In my mind they're an example of how not to sell a product. Very much not a company I would want to partner with again.
- deleted 6y ago[deleted]
- qnsi 6y agoWhy is the CTO talking about selling? Dont mean to be harsh just curious
- bgilly 6y agoA good CTO is at least involved in the pre-sales process if not the entire sales process of large deals. Especially when the product being sold was built by the CTO’s team. That’s been my experience anyways.
- qnsi 6y agoThank you for explaining! Makes a lot of sense
- rdli 6y agoEvery executive in a company at a minimum should have a general understanding of other functions. If the CTO knows what selling looks like, then the CTO can better assist the sales team. Likewise, if the sales team understands how software engineering works (at a very high level), they'll generally understand that "getting a very complicated feature RIGHT NOW for one deal" is ... not realistic. etc.
- nickpinkston 6y agoI don't know, but I want more of them.
- goatherders 6y agoThe CTO should start every program or problem by thinking "how does this generate more revenue for the business?" And that means thinking through a sales lens. I would want to work with a CTO that DOESNT think about sales.
- neeleshs 6y agoI'm a CTO and I work closely with our CRO. In my experience, being involved in the sales process is an eye opener for a CTO. In early stage startups (heck, even in a billion dollar company), a CTO cannot be disconnected from sales. This allows help bridge gaps in product and how engineers think about product features. It also makes the CTO leave their ivory tower of technology and be more grounded to reality. I'll probably do a blog post on my experience some day
- 6y ago
- psaux 6y agoKnow your customer, works well for me. I focus on Fortune 500 at my job, and people forget to ask what the customer wants and go straight into a sale. Meta: not sure about this blog, it is in itself a sales page.
- thinkingkong 6y agoNot sure why the negativity here. This is actually a great post that sets up a high level framework for thinking about the problem. Regardless of your personal experiences with Segment its good advice.
- aloknnikhil 6y agoThanks for sharing this. For me, this was the biggest takeaway. > In every case, a viable option for the customer will be to “do nothing”. They don’t have to buy your product, or any product for that matter. The best way to prove the case for your product is with your metrics. Doing nothing should be a very expensive option. That fundamentally speaks for having a problem to solve and not a solution looking for a problem. I think this key distinction is a good sieve to filter out potential ideas especially if you're in the business of SaaS.
- bob33212 6y agoIn enterprises there are plenty of problems that are just not important enough to spend money on. For example there may be a yearly reporting process which takes 30 days for an accountant to complete, which could be automated by a SaaS product. That is less than $20k a year of cost. The CFO may be perfectly fine with the manual process. Just because someone could save money with your product doesn't mean that they will want to.
- yoshyosh 6y agoAssuming I'm paying that accountant less than 20k for those 30 days, it doesn't make much business sense to switch when presented that way. Businesses don't always optimized for saved time even if it's obvious, it has to make business sense on an ROI level aka that solution only costs me 2k rather than the $20K I spent on the accountant. Also like you said they just may have bigger fish to fry since 20k is nothing compared to their other issues
- goatherders 6y agoThat's not how you sell that product. You sell it by saying that once a decade the accountant is going to make an error that costs your company a billion dollars during due diligence before an IPO or sale. In the enterprise 20k isnt cost savings at all and, agreed, not going to result in many sales.
- JumpCrisscross 6y ago
- xwdv 6y agoI wish I could even start a B2B startup, but I have zero experience in any other industry beyond software, which pretty much limits my possibilities to just making software tools. God I wish I had knowledge in more domains.
- pault 6y agoIsn't this the reason that non-technical founders are a thing?
- dreamer7 6y agoHaving experience in other domains would be great. But it is by no means the only way to build successful companies. You only need to have passion for a particular domain to then engage with people who share your passion and also have more experience in that field.
- thestepafter 6y agoJust start, you can read about starting all day long and doubt yourself or you can start, today. Decide on your first step and complete it, then choose your next step. You will have sleepless nights and tearful days but once you start, you learn. You don’t have to have it all figured out or a plan, just start in the general direction.
- AndrewKemendo 6y ago> At the end of the day, selling well means that you are helping the customer actually understand their problem, and the path to evaluate a solution. Lipstick on a pig in 99% of cases. I've been a CEO, CDO, a consultant, a middle manager and an IC. Well functioning high output teams (in any sector of business) almost never need a new tool/service to provide value. On the flip side, poorly functioning teams are constantly chasing new tools and processes as fixes to their broken organizations. So the vast majority of sales are convincing broken organizations to buy organizational nudges. The single place where I am consistently happy to spend money is on things that our organization cannot internally build that we need to scale immediately. In the long run though, I want to eliminate as many outside dependencies as possible, so my goal is to either absorb you or build processes and systems that replace your service.
- deleted 6y ago[deleted]
- tomnipotent 6y ago> Well functioning high output teams (in any sector of business) almost never need a new tool/service to provide value High output teams benefit as much, if not more, from new tools/services than anyone else. - Accounting is much more effective with an ERP - Sales is much more effective with a CRM - Engineering is much more effective with CI/CD None of these things are necessary, but they make good people even better.
- ramraj07 6y agoERP like peoplesoft and SAP? If anything a previous discussion in HN suggested to me that Tesla's decision to build their own ERP probably saved time and money compared to going with an archaic monolith.
- thinkingkong 6y agoThat advice only applies to a narrow set of functionality within the organization though. It's usually not cost effective or wise to write custom marketing systems if you can get one off the shelf. Your teams turnover rate, documentation, support, and feature creep all contribute to the maintenance of that system. No way it makes sense in the short or long term for non-core business functions.
- orasis 6y agoBeautiful. Thank you.
- raghava 6y ago> The infrastructure used to run our Salesforce instance probably costs somewhere on the order of $100 per month. Yet, they charge us tens of thousands of dollars per month… how? Not really. Unless the subscription is in tens of hundreds, that benefit-of-volume is not possible. Even more so when the solution involves bleeding edge stuff (AI/ML/real-time analytics etc). Easy to say, very very very hard to even achieve decent margins on such infrastructural cost. It's always a tradeoff between { feature-richness, time-to-market } and cost-efficient SaaS. Only the players who got a solid customer base would ever get to enjoy that privilege. > Though it’s far down in the acronym, the identified pain is really where you should start with the customer. You should be able to answer in great detail why their life is currently painful, and how they handle the problems you solve today. There's a slippery slope. Any "solution" won't help, in the era of "disruptive solutions". During the initial stages of industrial revolution, cities were scared of all the horseshit they thought they'd have to deal with. A 'con'sultant would've typically come up with an efficient way to dispose off all that manure into the sea. Only a mad scientist working on an automobile somewhere ended up solving that poop of a problem really. And in hindsight, every mildly lucky person would consider themselves "disruptive" without actually having to be one though. Such is our world! :D [edit] just noticed that all comments in this thread that are critical of the narrative are voted down. one is fine, all of them?
- ec109685 6y agoThe author was talking about the marginal cost of Salesforce running their instance. If they stopped being a customer, it would save Salesforce $100 in server costs, but Salesforce would lose $10k’s. That means, Salesforce needs to deliver that much value to the customer in order to keep them. In addition, they need to deliver that much value over any lower cost competitors.
- raghava 6y agoThat's what am saying as well. Such thing works for SFDC. Not for any ordinary B2B firm that's struggling to gain their 10th/100th customer.
- troquerre 6y agoGreat post from Calvin. Every founder, even if they're the CTO, should learn at least the basics of selling. Having the whole team aligned on what moves the needle makes a huge difference. It's not enough to offload thinking about selling to the CEO just because it's not the CTO's primary responsibility.
- ryanSrich 6y agoAnd if possible this is a great lesson for early employees, up to maybe 50. Having an engineer or PdM take 1 hour per week to jump on sales calls and just listen is one of the best things they could be doing early on.
- dhruvsodumb 6y agoCalvin is a monkey man
- jjguy 6y agoI frequently recommend https://openviewpartners.com/blog/founder-led-selling/ https://openviewpartners.com/blog/founder-led-selling/ as a good early stage enterprise sales framework. It is addressing a different, but complementary, set of questions to this post. If you're at a stage to need this kind of feedback, you should read it too.
- ThePhysicist 6y agoA rule I gave myself after running a company for several years is that I never reply to incoming offers or sales pitches. In my opinion it’s very rare that someone really offers something that my company needs at that exact moment, so most interactions resulting from such offers will be a waste of my time. In the past I reacted to such incoming offers, but I always regretted it and usually burned some money and time as well. Now they only way I pick suppliers is by sourcing them myself exactly when I need something. I think many executives / entrepreneurs have developed a similar adversity towards incoming offers, and my own experience with cold outbound selling seems to confirm this. I’ve contacted hundreds of companies myself trying to sell our service, but the only deals we closed so far were either with companies we already knew via our network or ones that did actively seek out our services themselves. It’s of course possible that an experienced sales person would be able to generate outbound interest, but as a founder without much sales experience it is very tough. I therefore think inbound sales is the future, at least in B2B.
- stingraycharles 6y agoC-levels and other executives of large enterprises typically approach companies like Gartner for this. As a SaaS startup, we’ve been quite successful partnering with Gartner which opened doors to us we otherwise would never be able to. In general, I think it’s better for a technology provider to partner with organizations to handle this tough enterprise sales process than to do it yourselves, but it depends upon your market and organization (we’re a database provider).
- ramraj07 6y agoHow do you partner up with Gartner?
- ganeshkrishnan 6y agoI can see that it costs anywhere between $40k to $80k. And the starting price is only for research.
- kristianc 6y ago
- abtom 6y ago> my #1 rule for this is teach people something they didn’t already know. You just went full meta
- coderintherye 6y agoHaving been on both sides of this, I think this is great advice, but misses something key. If you are selling a relatively high-cost product (>$10k min spend), then there needs to be some acknowledgement of that up front. It's a waste of everyone's time if I'm running a startup that can easily spend $100s/month on a product, but simply have no way to invest tens of thousands in a product. Whereas, when I'm leading an established company that can easily afford tens of thousands of dollars, then I care about the value. In short, know your customer should include, know when your customer is a 2-3 person seed stage startup and either offer some version of the product at a price that they can afford and growth into/with you on, or just be upfront that it's out of range right now. A great example of this would be Looker. Great product (in my opinion) and provided a ton of value to Kiva, but it's a significant investment. I'd love to use it at my small startup but the price is out of range so for now we use Google Data Studio instead. And yet the sales agents come knocking anyways. Understand your customer, know when something would provide value they can afford vs. is way out of current range for current budget/scale.
- polote 6y agoWell, in enterprise Saas usually the pricing is not shown on the website without contacting a sales rep, so it usually eliminates companies which don't have a lot of money. But even if a small company is reaching to you, as a salesperson, this is your job to qualify the lead, and to not loose your time on a lead that has low chance of signing
- sebslomski 6y agoWhat’s the reasoning behind not putting the prices up? For me that’s always a huge downer and means „that’s going to be quite expensive“.
- polote 6y agoIn enterprise sales, the price is not the main decision maker, you will usually only disclose the price at the end of the sales cycle. Not showing the price on the website is one way to push people to contact you. You don't want people to decide on their own if they should buy your product, you have a big sales team to help them do that. I've wrote about it here, if you are interested : https://blog.luap.info/why-most-saas-companies-cant-be-successful-with-both-enterprise-and-smb-customers.html https://blog.luap.info/why-most-saas-companies-cant-be-succe...
- nojito 6y agoSegment is backed by a ginormous sales operation from its multiple successful funding rounds. This article is very fluff heavy and contains almost no actionable insights.
- ricardobeat 6y agoAs someone who has been on the other side of the table as a buyer, I'm not particularly fond of this advice. Especially when the customer is the one who reached out. Time is valuable and it's not feasible to have a close relationship with every vendor; I'm buying a product because a need has been identified, your product fits that need. Most likely I am not looking for: - consulting - running a brainstorming session with a third-party - learning something I don't already know about x/y/z - sharing sensitive info such as success metrics Sometimes you really want a hands-off, transactional relationship, where the partner simply delivers what you paid for, no more, no less. I understand this approach might be very valuable for a certain kind, or stage, of company, but it won't be ideal for every enterprise.
- golemiprague 6y agoThis is basic stuff that everybody are doing, the most important thing is to have people who are connected in the industry and are likeable. People that your clients will want to go to a strip club with, play golf or share a booth in a sporting event, depends on their preferences. In the B2B world, if you are doing anything valuable, there is always some competition so you need to build good connection with people so they pick you out of the many other options or give you a chance if you are the first to do something, which is rare. This is true also for software development, at the end of the day it is not the methodology, if you have a good team of people they will find the way.
- airnomad 6y agoI was on a call with their sales rep and he was awful. Even if I told him what kind of volume we're looking at, the guy didn't want to talk costs, over two meetings. Very poor experience. Seems like they're designing pricing around how much money you have.
- OlgaAgility 6y agoI love these drawing!
- harrisonjackson 6y agoMy brother and I cofounded a company together. We're both engineers and by far the hardest part has been learning sales. We're not full-on nerd stereotype engineers who can't talk to customers or network but a master's in comp-sci covers exactly zero sales or marketing. We finally embraced that we are not going to be the best at sales or "always be closing" but the things we are really good at are automation, experimenting, and iterating which has enabled us to talk with more prospects and slowly improve conversion rates. In non-sales speak that means we have more customers having more success on our platform which is awesome. We honestly believe we are offering something powerful to our customers to change their lives. That belief doesn't put food on the table though and shameless sales tactics like cold emailing, LinkedIn messaging, Instagram DMing, etc DO. (though we are super respectful and won't hound anyone that isn't interested) I have a friend who works for transamerica selling financial packages and recruiting other people to transamerica. His ability to talk to anyone anywhere is constantly amazing and embarrassing.
- goatherders 6y agoI think there is some slant against "shameless sales tactics" here because many HN'ers aren't in a position to recognize exactly how valuable sales is. There are some well known and well loved "tech companies" that grow to be 90% sales and marketing and 10% engineering after they put their funding to use. And for those here that arent familiar, quite often VC money is meant for growth via sales and marketing, not via hiring more engineers. What's interesting is that if you do think what you are providing is actually useful or meaningful, then there is nothing shameless about promoting it directly to those that might get use from it. And you promote it to people where they are: in their inbox, DMs, LinkedIn, etc. (We actually get tremendous results by supplementing cold email with phone simply because people are so surprised that we went through the trouble to call. But that's a discussion for another time.) All that is to say that reaching out to people that might benefit from what you offer isnt sleazy in the slightest and is a practice as old as time itself. They will let you know if they arent interested, usually by ignoring you. Doesnt mean you should stop or feel bad about it. Best of luck to you.
- harrisonjackson 6y ago
- panorama 6y agoVery helpful post, actually included a lot of interesting tidbits that I hadn't read before with other b2b sales material. One question that occasionally pops into my mind is, what is the legality behind charging BigCo A $x and BigCo B $x + y? Surely one wouldn't be able to do this with products (I'll sell this burger to you for $5 but this other person must pay $10 for it), so how is it justified in b2b especially if the feature sets are the same?
- gbasin 6y agoPerfectly legal, afaik. For software, and hamburgers
- aaronchall 6y agoThat's right - that's how coupons work - price discrimination. https://www.investopedia.com/terms/p/price_discrimination.asp https://www.investopedia.com/terms/p/price_discrimination.as...
- panorama 6y agoGot it, seems like the only illegal aspect of it would be price discriminating solely on the basis of religion, race, and so on.
- nojvek 6y agoThe biggest change I’ll make in my life after reading this article. I’ll ask the question “what does success look like?” more often.
- gk1 6y agoI'm late to the comment thread but want to add something based on my seven years selling and marketing B2B software: 1. The user is not always the buyer. Many founders know who their users are, but may not know who really made the yes/no decision. The sales and marketing need to communicate value to the buyer just as much as (if not more than) to the user. 2. Buyers need to be convinced that your product will solve their most important business needs--their desired outcomes. Things such as lowering overhead or meeting compliance requirements. (Similar idea to "Job to Be Done.") That’s what your sales and marketing should primarily be about, with benefits, social proof, and other selling points as backup. Simple in principle but it takes months of research, customer/prospect interviews, and experimentation to figure out your buyers' desired outcomes and how to talk about your product in a way that directly aligns with those. (Slightly longer version of this: https://www.gkogan.co/blog/buyers/. https://www.gkogan.co/blog/buyers/.)