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If your company serves a smaller niche than the giants in the a16z analysis, you probably need top down sales much earlier in the growth journey. There are only
by ttul 6y ago
If your company serves a smaller niche than the giants in the a16z analysis, you probably need top down sales much earlier in the growth journey. There are only so many products that get to $20M ARR without a sales team.
From personal experience, top down selling is very hard to get right. You suddenly have to learn how to make a sophisticated business value proposition rather than just saying, “here’s my stuff. It’s really great. Look who else is using it.”
It’s also hard to find good people to lead enterprise sales, particularly if you’ve been a product led founder and don’t know what good enterprise sales looks like. It’s definitely an inflection point with a lot of risk for bad execution.
- gumby 6y ago> It’s also hard to find good people to lead enterprise sales, particularly if you’ve been a product led founder and don’t know what good enterprise sales looks like. Reposting to emphasize this excellent point. If you’ve never been part of an enterprise sales effort you need someone to help you get it going, much less make it happen. It’s a completely different world: very expensive, very slow, weird, and very lucrative if you can get it to work.
- ttul 6y agoIt’s a very unfamiliar world for sure. All of a sudden, you find yourself having to have discussions with financial people and management people who have no direct personal interest in your product. You then have to figure out what its indirect value proposition is to them.
- thrav 6y agoIf you own any amount of Salesforce licenses, you can request a Salesforce Innovation Center (SIC) meeting, and ask them to teach you how they do it. They won’t hesitate to pull in a VP who has been doing it for a decade and they’ll open the kimono and tell you everything you could possibly want to know about their approach. You have to sit through some pitches for this access, and it will include lots of talk about how Salesforce helps, but there is a ton of value in the exercise. The exercise itself is its own lesson in enterprise selling.
- icebergwarrior 6y agoI would not recommend this. This will not help a founder with 2-5m in revenue and a team of 20-40 sell. This will be a waste of time. If you want mentorship and you are a founder, I would directly message early VP's of sales and ask for help. Also, read the great Saastr blog by Jason Lemkin.
- wikibob 6y agoPlease don’t use that colloquialism. It is vulgar and offensive. If you mean “show the inner workings” then just say that.
- gumby 6y agoI would take a class like the Dale Carnegie sales class. Really excellent fr enterprise sales, but when I took it the students included two guys opening a T shirt stand on Cape Cod (sales cycle less than 2 minutes) and a saleswoman from KLA-Tencor (sales cycle between 18 and 36 months), a salesperson for ADT, etc. One of the most useful courses I've ever taken. And for enterprise sales there's a whole vocabulary and model to learn: your coach, understanding who has the signoff, when you're talking to someone who will waste your time -- and when someone who seems insignificant but is actually the decision maker, how to structure the deals. And how to hire, manage, and incent (mostly but not exclusively financially) them.
- yesimahuman 6y agoAnd there's absolutely zero shame in bringing on a COO or someone else with the experience to manage a sales leader. If you don't have that experience, just bringing on a sales leader is not enough, as that role requires a lot of management and the incentives can be very different.
- dgudkov 6y ago>If your company serves a smaller niche than the giants in the a16z analysis, you probably need top down sales much earlier in the growth journey. Any suggestions regarding how much earlier?
- ttul 6y agoI think you can derive this from your desired growth rate and the structure of the market. Many markets are top heavy: a few giants dominate and then there are many many tiny customers and often not much in between. In one market, let’s say there are 1,000 customers who are small companies themselves and who will each pay $10,000 per year to use your service. And then there are 100 companies who are big and will spend $100,000 per year. The little companies are simple sales and buy using their credit card. The big companies are a complex sale and require a top down approach with complex approvals. You can win the first 1,000 customers organically, but because not everyone is ready to buy all at once, let’s say it takes 5 years to win them all - in other words you’re adding 200 x $10,000 = $2M of new ARR each year. By the way, this would be a fantastic market all by itself. But sadly, with each passing year, your organic growth from small customers brings a lower percentage growth rate. $0 - $2M is exciting and so is $2M - $4M. But $4M - $6M is only 50%. And $6M - $8M is only 33%... If you want to keep up 100% annual growth, you’re going to need to bring in some big customers starting in year three so that you can go from $4M to $8M instead of just $4M to $6M. To win that extra $2M in ARR, you’ll need 20 large customers along with the 200 small customers from organic growth. Now, I don’t know what your market looks like, but I’d say that the time to bring in top down sales is around when you’ve found product market fit as evidenced by steady organic growth. If you are getting repeat sales from small customers who are really happy with your product, then, chances are, big customers would love to have what you make too. They just have to be sold to. In other words, I would not wait. Start doing top down sales as soon as your product is hitting its stride with repeated happy customers.
- s17n 6y agoIn this scenario, your odds are probably best with the CEO leading enterprise sales - at least, that's how the successful companies that I've been a part of did it. A product led founder works best in a product-led market.