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Sounds more like certain purchasing departments need to modernize, not the other way around. IMHO. Not being able to use the right tools for the job, because s

Sounds more like certain purchasing departments need to modernize, not the other way around. IMHO. Not being able to use the right tools for the job, because some bean counters don't like complexity, is silly and shortsighted.

hobs 6y ago
Yeah, telling your customers that they should modernize is a great way to let someone else sell to them.
- cwp 6y ago
  OTOH, telling an entire industry to reorganize to accommodate your internal processes is also a fools errand. Just imagine the dilemma this puts on the growth team: "Hmm, spend 1000x effort to land this one customer or fix an obscure bug in the signup page and get an extra 1000 self-serve customers this month. Golly, I don't know..."
  - npsimons 6y ago
    Seriously, though, GP is correct. Small companies that can adapt and snag these contracts won't push for change because they have a "competitive" advantage, and the businesses they sell to won't change because it's too painful for them. The whole industry isn't being asked to change, small B2B software houses will just keep ticking along, navigating the maze of purchasing to live high on the hog.
  - MattGaiser 6y ago
    The industry has the choice of changing or ever racing ahead of AWS, who can take their potential customers merely by already being in the purchasing database.
- mtnGoat 6y ago
  If the means don't justify the ends, let my competition sell to them... Then it will be adding to their failure, not mine. I do agree with your sentiment though, asking the customer to change is an uphill battle. I have customers with lots of custom billing situations, I loathe then all.
- slake 6y ago
  This is true, but truly the customer's own benefits are being compromised here. They can obtain better effectiveness at lower prices and push their margins, but procurement policy is not something companies want to mess with too much. It's also how they apply the same procurement policies to equipment purchases and software subscriptions. Some of those forms I don't even have a clue how to answer since it's so irrelevant.
alangibson 6y ago
I've never heard a better plan for failure. "Hey $10B company, I'm gonna need you to modernize your purchasing department before we go any further."
- quanticle 6y ago
  I don't think it's a plan for failure at all. I think it's entirely within Atlassian's rights to consider these customers to be more trouble than they're worth and pursue customers who don't have such braindead internal processes.
  - dbbk 6y ago
    I guess it's intentional failure. I agree you don't have to accept every customer.
- slake 6y ago
  Imagine that the company is paying 25% extra because of these policies.
GordonS 6y ago
As someone who works in the enterprise space, I fully agree with you. In every enterprise I've ever worked at, the purchasing process is a nightmare - it invariably takes months at best to purchase anything, and the bureaucracy, meetings and wasted time will cost you your soul. When you add up all the wasted man-hours it takes to purchase a $100 app, it will easily run to an order of magnitude more - at best. Once you've been through the purchasing grinder once, you will do just about anything to avoid purchasing anything every again. So no dammit, the vendors don't need to change - the bureaucracy-ladel, rule-ridden, time-wasting purchasing departments need to!
- alangibson 6y ago
  I agree with you in principle, but they're not going to reform because reform is in they eye of the beholder. For them everything is fine. They don't care how many gray hairs it costs you. Given that, it seems to me wise to look for ways to make purchasing less nightmarish without needing to reform several thousand large bureaucracies.
  - GordonS 6y ago
    Even in the "happy path" where vendors accept POs, 30-day credit terms etc, the purchasing process is still a nightmare, even if it's less so than for card payments. And it's not "just" about stressing out those that interact with the purchasing process - big organisations waste a lot of otherwise productive hours, affecting their bottom line. When I consider the vast sums of money wasted by the purchasing bureaucracy where I work, it boggles the mind. Everyone knows it, but inertia and fear of change are rampant in large organisations.
- pembrook 6y ago
  This is why any smart Saas company is charging, at minimum, thousands of dollars per month for medium-large sized customers. They know the purchasing process will be the same headache regardless of whether the product costs $100/month or $10,000/month. If the company is large and the tool enables collaboration and time-saving, $10,000 is literally a rounding error for a company with 500+ employees in comparison to the potential value delivered. When I see B2B Saas companies with pricing plans that top out at $50/month, I want to pull my hair out. They are leaving so much money at the table and simultaneously starving themselves of the revenue needed to grow and build a long-term business.
cosmie 6y ago
That's pretty much not going to happen. That said, what you can do is: - Provide a plan that fit within common purchasing card limits/tiers, to enable those who want to bypass the internal controls of their purchasing department and just slip it in on an expense report and be done with it. - Provide a plan that adds several zeros, to make it worth the hassle when you get a customer that does try to go through the official purchasing department process. This will entail contract reviews, security/compliance certifications/audits, invoicing hassles, ongoing support requests (you will get lots of emails, even for things that could trivially be self-serviced by the client), etc. You'll be sinking lots of labor into this process regardless of the price tag, so make it worth it.
- glaucon 6y ago
  "common purchasing card limits/tiers" Strongly agree with you although what "common" means here is tricky. I imagine "common" in Local Government is different from tech giants ... and geography brings another whole dimension into it. Less of a problem if your product is strongly focused on one country and one industry. "Provide a plan that adds several zeros" I think this is ideal but I've noticed that this isn't generally how it's done. The third tier of pricing is generally "Talk to us" and the first part of "Talk to us" is the supplier working out how much they can get and so requires the sort of sales management skills which many tech startups don't have. In passing there's a lot of sense about pricing in https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...
  - cosmie 6y ago
    > Strongly agree with you although what "common" means here is tricky. Ha, true! I've never seen it done, but someone should really A/B test adding a "Expensing this product for work? Reach out for a custom payment plan that fits your needs!" message if their product is popular with a business crowd. > is the supplier working out how much they can get and so requires the sort of sales management skills which many tech startups don't have. So this is sometimes the case, but not always. Is the standard plan enough for you, but you require us to invoice your AP department for payment? Or you a second login for IT with access to the login/audit logs, but otherwise don't need any "enterprise" features? You can likely get it close to the listed rate, with a minor premium for the additional effort. Will you be a high volume user, but capable of being self-sufficient with the self-service tooling? You can get tiered pricing based off of usage, no account manager, and a fixed rate for engineering time if you need any custom support. Will you be a massive pain - requiring an in-depth security audit, require us to agree to potentially costly-to-comply-with contractual clauses, need an account person to do every little thing for you (plus constantly (re)train your staff/agency's staff), require a generous amount of engineering time baked into the contract, and split out the agreement between a base MSA and incremental SOWs for each actual usage internally? Your pricing is no longer based on the actual product itself, but on the uncertain but potentially massive amount of labor that's going to be required to support your account. So "Talk to us" is as much the supplier trying to figure out specifically what sort of customer you are and what your needs are (and how much you'll ultimately going to cost them), as it is working out the pricing to go with that. Which is why you don't generally see an actual listed rate with several zeros added, because that is honestly only one of the potential outcomes and "Talk to us" leaves open capturing the other outcomes as well. I've also had success using the "Talk to us" to get lower than list rates. Sometimes because my needs are such a tiny fraction of the intended usage of the plan with a list rate. Sometimes because I work for a company that does $10bn a year in revenue, and the company is hopeful that my usage of the tool will potentially domino into other users internally seeking it out. You're right in that many tech startups don't have a high level of sales management skills from the get go, but only the very last example above really requires true sales effort. The rest are just very low pressure sales needs that require minimal if any incremental effort to support, but just happen to not fit cleanly in the pre-defined plan templates you have listed.
QueensGambit 6y ago
Our app costs $18 per month and one of our customers said she could buy only using a PO. So, I told her to use it for free till she finds a way to pay by card. We are likely to gain more by having an enthusiastic user, rather than losing her for the stupid purchasing department.
- j2bax 6y ago
  Could you just set up a recurring invoice via Stripe so that she doesn't feel like a freeloader?
  - pc86 6y ago
    She said she needs a PO.
- dsr_ 6y ago
  So sell her an enterprise subscription for $2500/year, with up to 10 logins, and take the PO. Now you have a year to figure out how to make that routine.
  - QueensGambit 6y ago
    Eventually, we should be able to do that. But, that would get into a long approval process right now.
    - dsr_ 6y ago
      Right now, you're getting 0 from the sale. You can afford to let them take months to pay you.
      - QueensGambit 6y ago
        We have 800+ small businesses as customers. This one is from a large company who don't come in as inbound lead. Don't you think it is better to understand how to work with them rather than hitting a wall with their purchasing department?
lazylizard 6y ago
i pay for a $20/mth saas from my own cc n claim afterwards because they dont issue POs and finance doesnt have a cc. one day I'll be late with the payments a few times so that we can start the discussion with some other vendor that will charge >100x but can issue POs.
slake 6y ago
This is so true. The sheer administrative/legal effort and expense it takes smaller enterprise software vendors to execute a single sale is crazy. I'd happily offer lower prices if the process was easier.

hobs 6y ago

Yeah, telling your customers that they should modernize is a great way to let someone else sell to them.

cwp 6y ago
OTOH, telling an entire industry to reorganize to accommodate your internal processes is also a fools errand. Just imagine the dilemma this puts on the growth team: "Hmm, spend 1000x effort to land this one customer or fix an obscure bug in the signup page and get an extra 1000 self-serve customers this month. Golly, I don't know..."
- npsimons 6y ago
  Seriously, though, GP is correct. Small companies that can adapt and snag these contracts won't push for change because they have a "competitive" advantage, and the businesses they sell to won't change because it's too painful for them. The whole industry isn't being asked to change, small B2B software houses will just keep ticking along, navigating the maze of purchasing to live high on the hog.
- MattGaiser 6y ago
  The industry has the choice of changing or ever racing ahead of AWS, who can take their potential customers merely by already being in the purchasing database.
mtnGoat 6y ago
If the means don't justify the ends, let my competition sell to them... Then it will be adding to their failure, not mine. I do agree with your sentiment though, asking the customer to change is an uphill battle. I have customers with lots of custom billing situations, I loathe then all.
slake 6y ago
This is true, but truly the customer's own benefits are being compromised here. They can obtain better effectiveness at lower prices and push their margins, but procurement policy is not something companies want to mess with too much. It's also how they apply the same procurement policies to equipment purchases and software subscriptions. Some of those forms I don't even have a clue how to answer since it's so irrelevant.

alangibson 6y ago

I've never heard a better plan for failure. "Hey $10B company, I'm gonna need you to modernize your purchasing department before we go any further."

quanticle 6y ago
I don't think it's a plan for failure at all. I think it's entirely within Atlassian's rights to consider these customers to be more trouble than they're worth and pursue customers who don't have such braindead internal processes.
- dbbk 6y ago
  I guess it's intentional failure. I agree you don't have to accept every customer.
slake 6y ago
Imagine that the company is paying 25% extra because of these policies.

GordonS 6y ago

As someone who works in the enterprise space, I fully agree with you. In every enterprise I've ever worked at, the purchasing process is a nightmare - it invariably takes months at best to purchase anything, and the bureaucracy, meetings and wasted time will cost you your soul. When you add up all the wasted man-hours it takes to purchase a $100 app, it will easily run to an order of magnitude more - at best. Once you've been through the purchasing grinder once, you will do just about anything to avoid purchasing anything every again. So no dammit, the vendors don't need to change - the bureaucracy-ladel, rule-ridden, time-wasting purchasing departments need to!

alangibson 6y ago
I agree with you in principle, but they're not going to reform because reform is in they eye of the beholder. For them everything is fine. They don't care how many gray hairs it costs you. Given that, it seems to me wise to look for ways to make purchasing less nightmarish without needing to reform several thousand large bureaucracies.
- GordonS 6y ago
  Even in the "happy path" where vendors accept POs, 30-day credit terms etc, the purchasing process is still a nightmare, even if it's less so than for card payments. And it's not "just" about stressing out those that interact with the purchasing process - big organisations waste a lot of otherwise productive hours, affecting their bottom line. When I consider the vast sums of money wasted by the purchasing bureaucracy where I work, it boggles the mind. Everyone knows it, but inertia and fear of change are rampant in large organisations.
pembrook 6y ago
This is why any smart Saas company is charging, at minimum, thousands of dollars per month for medium-large sized customers. They know the purchasing process will be the same headache regardless of whether the product costs $100/month or $10,000/month. If the company is large and the tool enables collaboration and time-saving, $10,000 is literally a rounding error for a company with 500+ employees in comparison to the potential value delivered. When I see B2B Saas companies with pricing plans that top out at $50/month, I want to pull my hair out. They are leaving so much money at the table and simultaneously starving themselves of the revenue needed to grow and build a long-term business.

cosmie 6y ago

That's pretty much not going to happen. That said, what you can do is: - Provide a plan that fit within common purchasing card limits/tiers, to enable those who want to bypass the internal controls of their purchasing department and just slip it in on an expense report and be done with it. - Provide a plan that adds several zeros, to make it worth the hassle when you get a customer that does try to go through the official purchasing department process. This will entail contract reviews, security/compliance certifications/audits, invoicing hassles, ongoing support requests (you will get lots of emails, even for things that could trivially be self-serviced by the client), etc. You'll be sinking lots of labor into this process regardless of the price tag, so make it worth it.

glaucon 6y ago
"common purchasing card limits/tiers" Strongly agree with you although what "common" means here is tricky. I imagine "common" in Local Government is different from tech giants ... and geography brings another whole dimension into it. Less of a problem if your product is strongly focused on one country and one industry. "Provide a plan that adds several zeros" I think this is ideal but I've noticed that this isn't generally how it's done. The third tier of pricing is generally "Talk to us" and the first part of "Talk to us" is the supplier working out how much they can get and so requires the sort of sales management skills which many tech startups don't have. In passing there's a lot of sense about pricing in https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/ https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...
- cosmie 6y ago
  > Strongly agree with you although what "common" means here is tricky. Ha, true! I've never seen it done, but someone should really A/B test adding a "Expensing this product for work? Reach out for a custom payment plan that fits your needs!" message if their product is popular with a business crowd. > is the supplier working out how much they can get and so requires the sort of sales management skills which many tech startups don't have. So this is sometimes the case, but not always. Is the standard plan enough for you, but you require us to invoice your AP department for payment? Or you a second login for IT with access to the login/audit logs, but otherwise don't need any "enterprise" features? You can likely get it close to the listed rate, with a minor premium for the additional effort. Will you be a high volume user, but capable of being self-sufficient with the self-service tooling? You can get tiered pricing based off of usage, no account manager, and a fixed rate for engineering time if you need any custom support. Will you be a massive pain - requiring an in-depth security audit, require us to agree to potentially costly-to-comply-with contractual clauses, need an account person to do every little thing for you (plus constantly (re)train your staff/agency's staff), require a generous amount of engineering time baked into the contract, and split out the agreement between a base MSA and incremental SOWs for each actual usage internally? Your pricing is no longer based on the actual product itself, but on the uncertain but potentially massive amount of labor that's going to be required to support your account. So "Talk to us" is as much the supplier trying to figure out specifically what sort of customer you are and what your needs are (and how much you'll ultimately going to cost them), as it is working out the pricing to go with that. Which is why you don't generally see an actual listed rate with several zeros added, because that is honestly only one of the potential outcomes and "Talk to us" leaves open capturing the other outcomes as well. I've also had success using the "Talk to us" to get lower than list rates. Sometimes because my needs are such a tiny fraction of the intended usage of the plan with a list rate. Sometimes because I work for a company that does $10bn a year in revenue, and the company is hopeful that my usage of the tool will potentially domino into other users internally seeking it out. You're right in that many tech startups don't have a high level of sales management skills from the get go, but only the very last example above really requires true sales effort. The rest are just very low pressure sales needs that require minimal if any incremental effort to support, but just happen to not fit cleanly in the pre-defined plan templates you have listed.

QueensGambit 6y ago

Our app costs $18 per month and one of our customers said she could buy only using a PO. So, I told her to use it for free till she finds a way to pay by card. We are likely to gain more by having an enthusiastic user, rather than losing her for the stupid purchasing department.

j2bax 6y ago
Could you just set up a recurring invoice via Stripe so that she doesn't feel like a freeloader?
- pc86 6y ago
  She said she needs a PO.
dsr_ 6y ago
So sell her an enterprise subscription for $2500/year, with up to 10 logins, and take the PO. Now you have a year to figure out how to make that routine.
- QueensGambit 6y ago
  Eventually, we should be able to do that. But, that would get into a long approval process right now.
  - dsr_ 6y ago
    Right now, you're getting 0 from the sale. You can afford to let them take months to pay you.
    - QueensGambit 6y ago
      We have 800+ small businesses as customers. This one is from a large company who don't come in as inbound lead. Don't you think it is better to understand how to work with them rather than hitting a wall with their purchasing department?

lazylizard 6y ago

i pay for a $20/mth saas from my own cc n claim afterwards because they dont issue POs and finance doesnt have a cc. one day I'll be late with the payments a few times so that we can start the discussion with some other vendor that will charge >100x but can issue POs.

slake 6y ago

This is so true. The sheer administrative/legal effort and expense it takes smaller enterprise software vendors to execute a single sale is crazy. I'd happily offer lower prices if the process was easier.