5 ms·

Selling to the Fortune 500, Government, and Other Lovecraftian Horrors

146 points by graderjs 5y ago

thesumofall 5y ago
As someone who decides such purchases at a large “traditional” company there is a lot of truth to this. And yes, having a subscription (or one-off price) that flies below the radar does absolutely help. To further encourage this: please, please, please put videos, feature lists, and screenshots of your product on your website! These people do not want to go through a big process to buy your product (this is the whole reason they do not involve the purchasing department!). Hence, make it easy to understand what your product really is and easy to buy it. No, I really don’t want to call your Sales for USD 500, because I also don’t call Amazon to buy a TV from them Edit: this is actually also true for those multi-million dollar deals. I want to understand your product before I have a call with you because I want to be able to ask the right questions. The craziest are those companies that even during sales calls only show buzzword slides and not a single screenshot
- Terry_Roll 5y ago
  > please, please, please put videos, feature lists, and screenshots of your product on your website! >These people do not want to go through a big process to buy your product Yet some companies like to get potential suppliers in to check them out, despite all the literature & online website info. Thats when the real phishing begins, getting info thats not publicly available. Subtle questioning and things like that. > Dealing With The "You're Not Big Enough" Objection I know FTSE listed companies that would not trade with SME's because they were too small, even when it meant the product or service blatantly benefited the FTSE company.
  - justin_oaks 5y ago
    "Too small" means you're not big enough to sue if something goes wrong.
    - Terry_Roll 5y ago
      Thats assuming if something went wrong and also assumes something/someone could be sued. Have you seen various software EULA's?
- ozim 5y ago
  They want you to call sales is because they don't want to sell for $500 but if possible for $1500 and have to have a way to get info if they can do that. That is why a lot of SaaS stuff does not have price on their page or at least "enterprise" option is always call only.
  - jimcsharp 5y ago
    Can't have the sales guy invent functionality out of thin air without a call. Oh uh, yeah... XYZ - it totally does that and definitely doesn't function like a prototype.
    - ejb999 5y ago
      >>Can't have the sales guy invent functionality out of thin air without a call. Exactly! Find out what the customer needs it to do, and then tell them your solution does exactly that, even if it doesn't. If you list all your features online ahead of time, its a lot harder to lie to the customer.
- SteveGerencser 5y ago
  So very much this. I went through 4 30 minutes meetings with a vendor for a client of mine before I had enough with them and told them either give me a price or I'm forever done with them. 4 meetings just to get a price! Then they threw a price at us and we understood why they needed so many meetings. We ended up building the software we needed in house for 25% of what it would have cost to license theirs. And that includes creating an IT department that had not existed at that company before. Over a month wasted on pointless meetings just because they were afraid to share their price.
  - hmcamp 5y ago
    I’d love to hear more about this. Can you blog about it?
  - indymike 5y ago
    > 4 meetings just to get a price! This is often a sign the vendor doesn't know how to price their product. It sounds to me like they didn't have any index of where the lines really were - one line is price where the customer building it themselves ins the option. The other is the price too low we can't do the deal line. They were probably afraid to talk price because they were afraid to put the first number on the table. > We ended up building the software we needed in house for 25% of what it would have cost to license theirs. Not surprising. I've been in way too many of these kinds of meetings, both buying and selling. Now when I buy, I flat-out tell the sales rep: "We make software. One of your competitors is us building what you have. Give us a price that makes that option unattractive."
    - bradleyjg 5y ago
      Do you put your A team on internal software? Are the support, documentation, and maintenance stories the same as they are for revenue software? Etc. Not that this can’t be done and done well, but just like running your own datacenter the idea looks much more attractive at the beginning than it does a year or three in.
    - devonkim 5y ago
      Had a previous prospect with a large, well known software company that paid several times more per engineer than our own and somehow in the end they thought they could build and maintain the software for less than what we were charging (we didn’t even break into 7 figures annually at all). In the end they formed a team internally that was several times larger than ours when technically we met their stated capacity needs and for the foreseeable future. Last I heard 4 years later they were still building and operational using the same thing as what the vendor (my company) offered. Some companies really would rather pay many times more and take the hit financially because a culture of NIH is so prevalent and deep across the company that it’s considered a risk if the vendor can’t be pressured to be acquired.
- 7thaccount 5y ago
  I'm ok with it either way as it usually acts as a good filter. If you don't have screenshots or prices listed I know the product is hideous AND expensive. The best vendor product in my industry has an easily accessible website with PDF & YouTube videos on how to use all features. All documentation is easy to peruse, it's used by several college textbooks, and their company is small enough to where I can call up the lead devs and get a bug patch or just chat when needed. It is also much cheaper than the majority of the competition. I was an expert in using the product before I ever used it. They also have trial licenses for all feature add-ons and will extend them if you had a busy month and didn't get the chance to use it. I once arranged for a trial license, tested out the feature, and built a full process around it as a "this is a workable solution to one of our problems for management". They even left me a nice and simple quote. Two years later we got involved with a project that absolutely needed that add-on and I just forwarded management an email showing that I tested it worked on our systems as advertised and even had the quote ready so we knew roughly how much it would cost (the quote had expired, but we knew it would be close).
- spaetzleesser 5y ago
  “please, please, please put videos, feature lists, and screenshots of your product on your website! These people do not want to go through a big process to buy your product (this is the whole reason they do not involve the purchasing department!). Hence, make it easy to understand what your product really is and easy to buy it.” Obfuscation of the actual product seems to work well for big ticket purchases. I have been in quite a few sales meetings where I tried to figure out what the f……ng product actually does but couldn’t get a straight answer. Same for pricing. But somehow the IT big shots loved the presentations and bought it. There seems be a layer of mutual bullshitting going between sales guy and VPs on the regular engineer doesn’t seem to be able to understand.
TristanBall 5y ago
I've been doing senior sysadmin or adjacent work, mostly for SME corporations with turnover in the $250-750m for 20 years, which has consisted primarily of saying "oh f, no price list, they're going to want to charge enterprise prices at a level I can't possibly make a business case for", interminable meetings with the dreaded pre-sales Two Suits and a Skirt hydra monster, and some minor stuff with backups and printers. While everything this guy says is largely true - I have after all had purchase proposals rounded up to the nearest $100k ( it wasn't close... ), But likewise it's often true that that $500-1000 credit card is only held by one person in a given team, and there are already many competing monthly charges on it, and it's also said manager's "get out of jail free card" for just throwing money at small problems that come up, without having to talk to their manager. That's an emotional requirement as much as anything, but it's linked to whether said manager can appear competent to their 1-up.. so if you think that $1000 card has more that $250 available for all reoccurring expenses, you may need to reconsider. And you might, justifiably, decide that's a reasonable customer selection filter, because no one wants a customer that behaves like a big enterprise but pays like consumer. But we're not like that, honest - I just want your X for me and the 3 people in the team it'd help, you'll probably never hear from us otherwise. Truly! Come on, we believed your marketing brochure.. meet us half way?
- TristanBall 5y ago
  Also, finance departments exist primarily to complain about the time it takes to reconcile your credit card charges, and to push as much as possible for said purchases to go through the B2B "on account" purchase process, and in 99.99% of non tech companies the head of finance will have more clout in the board room than anyone in your management chain - or you report to them, because tech is so obviously a finance function, in which case just give hope now* (* Actually, it can be fine, finance directors are often perfectly nice people, with that deeply soothing habit of just rounding up to the nearest $10k/100k/1M.. but really can we get this stuff of your credit card, Clair complains every week about chasing you for receipts)
  - thejteam 5y ago
    My wife works as a junior accounting clerk in the finance department of a small-medium (500-ish person) company. She has to reconcile credit cards each month. Yes, it takes days when there are poorly documented charges (federal contractor so all of these charges have to be documented to bill to a contract). Down to the penny. Two months ago my wife spent half a day tracking down a 2 cent discrepancy when somebody's handwritten 7 looked like a 9.
polote 5y ago
This is about selling a less than $500 per month software to the enterprise. I have experience selling $100k per year software to the enterprise and it barely look likes what is described in the article.
- rmccue 5y ago
  This is effectively How To Sell to Customers at Large Businesses, not How To Sell Enterprise Software. Useful if you want to sell your consumery software in, but agreed, there’s significant differences when selling bigger budget software.
- Aeolun 5y ago
  What does it look like? I think our software procurement process looks pretty much like this.
  - micromacrofoot 5y ago
    two lawyers arguing about indemnity for a year
  - treis 5y ago
    It's not a nurse or even lead doctor making a decision. It's the CXO or VP or Director depending on how big the company is. They're also price conscious. Everyone has a budget and the more of that budget you take up the worse it is for them. Enterprises are good because they have big problems that cost lots and lots of money. They're willing to give you a significant fraction of that money if you solve the problem.
    - treis 5y ago
      Forgot to add, but the politics. Especially for software where there's a perpetual struggle between IT and the business side for power. Have had one client where IT left a call when they released people from the business side were there.
  - tptacek 5y ago
bartman 5y ago
What reading about Enterprise sales has not prepared me for is months-long legal negotiations, and there is very little writing on this topic out there. Whereas you can pretty much agree to any terms that don’t misrepresent how your product works when you’re just starting out, there comes the point of wanting to spend a lot more scrutiny on your contracts without having in-house legal yet. If you’re a founder, that probably means you will be sending redlines, thinking about indemnities and warranties and handling other wonderful aspects of doing business internationally (privacy terms, jurisdiction, insurance, …). While true that price discrimination helps to make these cases mostly worth it, they are still a crazy time suck and finding a savvy lawyer to take it off your hands may or may not be easily possible (lawyer fees for one such deal once ended up being 50% of the whole deal value - we raised enterprise prices after that). Watch out especially when you’re in an industry going through lots of M&A activity as your self-service customers may suddenly be part of large Fortune 500 organizations, and despite all advice to the contrary, stakeholders who know your pricing already do balk at your 5-10x Enterprise prices. I do wish there were more stories of how the legal side of these deals is dealt with, what sticking points in contracts take up most of your time, and what „hacks“ you found. (One hack that saved me a lot of time: Treat your terms like you would any other part of your product. Iterate, work on the UX, remove barriers to adoption. After a bunch of gnarly negotiations over things that matter to your client, but not usually to you I compiled a list of changes and had our lawyer revise the terms to avoid the need to negotiate those parts moving forward. Alas, it’s a moving target and we’re in the midst of another iteration like this.)
- rmccue 5y ago
  I haven’t yet found a way to solve these problems, but a few tips I can offer from my experience: 1) Separate your order form from your standard services agreement. Put your services agreement online as a PDF, which sends a strong signal that you don’t generally negotiate these terms. 2) Allow amendments within your order form, but make them part of the commercial conversation. You might want to have a cutoff where you choose not to customise the contract; eg no custom terms for deals less than $XX,000 per month. 3) Accept that this is just the process for your larger customers. In larger deals, you’ll probably be signing a standard supplier contract they already have, with only the service-specific terms mattering. This could include terms needed for regulatory requirements eg which are not negotiable. Design your contracts to account for this. 4) Understand why your customer wants to redline something. This might be regulatory, it might be consistency with other suppliers, or it might just be pushing their luck. Case in point, we’re currently going back and forth with a FTSE 100 bank, and they have inserted a clause requiring us to have our working locations approved by them. We’re a remote, global company, so we’d need every employee approved. But the reason they care is due to banking regulations around sanctions, so we came to a mutual agreement that countries would be acceptable to us both. 4) Have a good way to track all these deviations. They’ll happen, so you just need to get used to them to some degree. Design variables into your system which integrate with your CRM so that you can codify this as much as possible. (But, be careful when doing this, since you’ll be providing your sales team with more levers which they will pull to get the deal.)
teekert 5y ago
Haha, OP forgot the phase where purchasing agent goes through repeated rounds of offering solutions that the company already owns but which you already checked are not matching your needs.
h2odragon 5y ago
Becoming a parasite on the larger critters requires adaptation of the feeding apparatus to an extent that may not be compatable with the previous modes of living. Those hosts are big and have plenty of fat, there's a forest of others feeding off them already, seems like a great niche, no?
throwaway984393 5y ago
> Enterprises are not price conscious Enterprises have to account for what they spend money on. They can either do that as part of an existing budget, or they can carve out a brand new budget. The latter is always harder than the former. If your price point fits neatly into a tiny gap they have left in their existing budget, things will be easier. OTOH if they have to carve out new budget, but they have an engineering department and there is a "free self-hosted" alternative, they will almost always go for that instead. > 3. Purchasing Agent Sends Out Questions There is often a very large and annoying process around this step that is much larger than purchasing, which is vetting a new vendor and product. Any Enterprise that has to deal with regulatory compliance or international laws will need to look for problems in the vendor or their product. This is a time-consuming and expensive process. If you are courting an Enterprise, do everything in your power to find out what their concerns are and make a 1-pager that explains them all, and separately a massive tome that details every answer. You'll want to cover all the questions Legal might have, address regulations, and enumerate exactly who has access to what part of a system['s data] and when and how. If you really want to catch big fish, also detail every aspect of your different payment and operational models, even if you don't include the actual price. The price doesn't matter as much as knowing how the thing will function and what its limits are. If you design your system to work a certain way for Enterprise, be prepared to change how it works for a whale customer. Always have in the back of your mind "I may need to fork this whole thing just for Customer X". Get the sale, worry about tech debt later. Anyone working in your company will hate that, but the ability to work around one detail or another can result in millions of dollars in sales. Also, help craft their strategy for rolling out the solution thought the Enterprise rather than just for one team. Design a management portal that works at an Org level and can delegate access down a hierarchy of teams, and enable SSO using standards that Enterprises use. They may be much more inclined to purchase a big fat plan for their entire org rather than for just one team.
IYasha 5y ago
Google comes, google buys, google buries. Selling software or a service to tops is okay, but there's a danger it quickly turns into working for VIPs, serving their demands, or end up being a private government contractor bound by tons of NDAs, NEAs (no export), etc. etc. stc. I've seen people fall pretty hard or giving their all trying to balance things out. I wish I said to some people: If you sign something, make sure we hear from you again.
mmcconnell1618 5y ago
Awesome content with actionable tips but I have to say they are less applicable at “enterprise prices.” Once you exceed the corporate card buying pattern, risk and budget enter the picture. Sometimes the department needs to wait for the next budget cycle. Sometimes you have the better solution but another vendor has SOC2 compliance and without it, the enterprise won’t take the risk.
- lmeyerov 5y ago
  Yep. Some magic questions more at where enterprise pricing begins: - "Oh budgeting isn't until end of year.. what can we do until then?" Then you do a 50K thing for 5mo until thing under their personal or direct bosses authority and work to get into budget thereafter at a higher rate. It's not surprising to find ~personal authority at $50-100K/yr for lowest level managers (the team who wants you and whose manager has someone trusted doing the picking), with only a quick informal/formal ok of their boss. - Procurement often gets involved early and want to get their 5% or whatever discount. "Yes we can use discounts as part of rightsizing you.. how about multiyear, with X+Y licenses in year two and X+Y+Z in year three, and as long as you prepay, we are good." - Security compliance people are often people ;-) Questions here to work around product gaps often just require you to align with whatever journey they need you to be on and identify some workarounds till then. (But you must be on that journey for this to work) - "what would 10x how useful this is? What feature would be a game changer for your team, and for the org?" Part of the enterprise trick is steadily enabling them to pay more and more over time. - "We don't do this for our smaller customers , but would you feel less at risk with a bundle where add training and support at $$$/day, with 1 week / qtr prepaid? Or any integration + feature services like for important system X?" What's ho-hum and easy for you may significantly derisk + increase value to them, and their sense of cost is different from yours. It's to see 5-10% of a SaaS's customers be enterprise yet half the revenue be from them, and 20%+ being around these funny service add-ons. Early on, they can even be your main revenue ("design partner") while the tinySaaS revenue builds up. A good hack early on can be to get an enterprise sales or product advisor / consultant to sit in some calls with you for the most embarrassing basics like these, and same around your product + pipeline process, until you can get dedicated folks.
indymike 5y ago
Here's the truth: the enterprise is feudal. Government is the exception. The process must be followed to the letter of the law/regulation, but the process is filled with places that officials have discretion. Private sector procurement processes can be bypassed given your deal falls in one of these three buckets: a) The purchase is trivial. This is the "hack" the article is talking about, and for most SaaS is the best way to go. Over time, as more of the enterprise uses the product it starts to matter, and the next exception will apply. b) If your solution is something that really matters and an officer of the company signs off on it, you have a legal contract, no matter the internal process that was supposed to be followed. Additionally, the officer of the company that signed off has signaled to the other officers that they can, if they wish, skip legal, IT and procurement vetting. In many cases vetting will be "adjusted" rather than have an internal fight between Sales and IT. c) The purchase is from a company where the enterprise has an investment. I.e. the venture arm is into the vendor for $LOTS. The best two ways to sell to the enterprise: price under the approval limit and grow wallet share, or have something so incredible that the enterprise will buy on your terms.
bob1029 5y ago
> One obstacle to making these sales at Stage 2/Stage 3 is that customers really want to see social proof, because they have the get-fired-if-this-doesn't-work-out worry. A typical phrase you will hear from customers at this point is "We don't want to be your biggest client." We do B2B software for banks, and this is (was) easily the hardest barrier to overcome. But, we did actually overcome and managed to get to production for several customers. Once you have ~3 customers to point back to, its like you have some secret access for the rest of the market segment. Our customers talk to each other a lot. It is a very tight community. The bootstrapping was ultimately possible because our organization has been doing business with the banking industry since the 90s. We had a lot of prior contacts to work with to get that first install. I don't think what we did would have been possible without this prerequisite. The very first customer was essentially an arrangement where they would not be billed a dime until some percentage of business functionality was stable in production. We had to burn a lot of time and money for zero payout just to get one shot to access the market. Overall, doing business with banks is not fun. I would not recommend it unless you enjoy writing more emails than code.
tiffanyh 5y ago
(2013), maybe even earlier. https://news.ycombinator.com/item?id=8800727 https://news.ycombinator.com/item?id=8800727

146 points by graderjs 5y ago

As someone who decides such purchases at a large “traditional” company there is a lot of truth to this. And yes, having a subscription (or one-off price) that flies below the radar does absolutely help. To further encourage this: please, please, please put videos, feature lists, and screenshots of your product on your website! These people do not want to go through a big process to buy your product (this is the whole reason they do not involve the purchasing department!). Hence, make it easy to understand what your product really is and easy to buy it. No, I really don’t want to call your Sales for USD 500, because I also don’t call Amazon to buy a TV from them Edit: this is actually also true for those multi-million dollar deals. I want to understand your product before I have a call with you because I want to be able to ask the right questions. The craziest are those companies that even during sales calls only show buzzword slides and not a single screenshot

Terry_Roll 5y ago
> please, please, please put videos, feature lists, and screenshots of your product on your website! >These people do not want to go through a big process to buy your product Yet some companies like to get potential suppliers in to check them out, despite all the literature & online website info. Thats when the real phishing begins, getting info thats not publicly available. Subtle questioning and things like that. > Dealing With The "You're Not Big Enough" Objection I know FTSE listed companies that would not trade with SME's because they were too small, even when it meant the product or service blatantly benefited the FTSE company.
- justin_oaks 5y ago
  "Too small" means you're not big enough to sue if something goes wrong.
  - Terry_Roll 5y ago
    Thats assuming if something went wrong and also assumes something/someone could be sued. Have you seen various software EULA's?
ozim 5y ago
They want you to call sales is because they don't want to sell for $500 but if possible for $1500 and have to have a way to get info if they can do that. That is why a lot of SaaS stuff does not have price on their page or at least "enterprise" option is always call only.
- jimcsharp 5y ago
  Can't have the sales guy invent functionality out of thin air without a call. Oh uh, yeah... XYZ - it totally does that and definitely doesn't function like a prototype.
  - ejb999 5y ago
    >>Can't have the sales guy invent functionality out of thin air without a call. Exactly! Find out what the customer needs it to do, and then tell them your solution does exactly that, even if it doesn't. If you list all your features online ahead of time, its a lot harder to lie to the customer.
SteveGerencser 5y ago
So very much this. I went through 4 30 minutes meetings with a vendor for a client of mine before I had enough with them and told them either give me a price or I'm forever done with them. 4 meetings just to get a price! Then they threw a price at us and we understood why they needed so many meetings. We ended up building the software we needed in house for 25% of what it would have cost to license theirs. And that includes creating an IT department that had not existed at that company before. Over a month wasted on pointless meetings just because they were afraid to share their price.
- hmcamp 5y ago
  I’d love to hear more about this. Can you blog about it?
- indymike 5y ago
  > 4 meetings just to get a price! This is often a sign the vendor doesn't know how to price their product. It sounds to me like they didn't have any index of where the lines really were - one line is price where the customer building it themselves ins the option. The other is the price too low we can't do the deal line. They were probably afraid to talk price because they were afraid to put the first number on the table. > We ended up building the software we needed in house for 25% of what it would have cost to license theirs. Not surprising. I've been in way too many of these kinds of meetings, both buying and selling. Now when I buy, I flat-out tell the sales rep: "We make software. One of your competitors is us building what you have. Give us a price that makes that option unattractive."
  - bradleyjg 5y ago
    Do you put your A team on internal software? Are the support, documentation, and maintenance stories the same as they are for revenue software? Etc. Not that this can’t be done and done well, but just like running your own datacenter the idea looks much more attractive at the beginning than it does a year or three in.
  - devonkim 5y ago
    Had a previous prospect with a large, well known software company that paid several times more per engineer than our own and somehow in the end they thought they could build and maintain the software for less than what we were charging (we didn’t even break into 7 figures annually at all). In the end they formed a team internally that was several times larger than ours when technically we met their stated capacity needs and for the foreseeable future. Last I heard 4 years later they were still building and operational using the same thing as what the vendor (my company) offered. Some companies really would rather pay many times more and take the hit financially because a culture of NIH is so prevalent and deep across the company that it’s considered a risk if the vendor can’t be pressured to be acquired.
7thaccount 5y ago
I'm ok with it either way as it usually acts as a good filter. If you don't have screenshots or prices listed I know the product is hideous AND expensive. The best vendor product in my industry has an easily accessible website with PDF & YouTube videos on how to use all features. All documentation is easy to peruse, it's used by several college textbooks, and their company is small enough to where I can call up the lead devs and get a bug patch or just chat when needed. It is also much cheaper than the majority of the competition. I was an expert in using the product before I ever used it. They also have trial licenses for all feature add-ons and will extend them if you had a busy month and didn't get the chance to use it. I once arranged for a trial license, tested out the feature, and built a full process around it as a "this is a workable solution to one of our problems for management". They even left me a nice and simple quote. Two years later we got involved with a project that absolutely needed that add-on and I just forwarded management an email showing that I tested it worked on our systems as advertised and even had the quote ready so we knew roughly how much it would cost (the quote had expired, but we knew it would be close).
spaetzleesser 5y ago
“please, please, please put videos, feature lists, and screenshots of your product on your website! These people do not want to go through a big process to buy your product (this is the whole reason they do not involve the purchasing department!). Hence, make it easy to understand what your product really is and easy to buy it.” Obfuscation of the actual product seems to work well for big ticket purchases. I have been in quite a few sales meetings where I tried to figure out what the f……ng product actually does but couldn’t get a straight answer. Same for pricing. But somehow the IT big shots loved the presentations and bought it. There seems be a layer of mutual bullshitting going between sales guy and VPs on the regular engineer doesn’t seem to be able to understand.

TristanBall 5y ago

I've been doing senior sysadmin or adjacent work, mostly for SME corporations with turnover in the $250-750m for 20 years, which has consisted primarily of saying "oh f, no price list, they're going to want to charge enterprise prices at a level I can't possibly make a business case for", interminable meetings with the dreaded pre-sales Two Suits and a Skirt hydra monster, and some minor stuff with backups and printers. While everything this guy says is largely true - I have after all had purchase proposals rounded up to the nearest $100k ( it wasn't close... ), But likewise it's often true that that $500-1000 credit card is only held by one person in a given team, and there are already many competing monthly charges on it, and it's also said manager's "get out of jail free card" for just throwing money at small problems that come up, without having to talk to their manager. That's an emotional requirement as much as anything, but it's linked to whether said manager can appear competent to their 1-up.. so if you think that $1000 card has more that $250 available for all reoccurring expenses, you may need to reconsider. And you might, justifiably, decide that's a reasonable customer selection filter, because no one wants a customer that behaves like a big enterprise but pays like consumer. But we're not like that, honest - I just want your X for me and the 3 people in the team it'd help, you'll probably never hear from us otherwise. Truly! Come on, we believed your marketing brochure.. meet us half way?

TristanBall 5y ago
Also, finance departments exist primarily to complain about the time it takes to reconcile your credit card charges, and to push as much as possible for said purchases to go through the B2B "on account" purchase process, and in 99.99% of non tech companies the head of finance will have more clout in the board room than anyone in your management chain - or you report to them, because tech is so obviously a finance function, in which case just give hope now* (* Actually, it can be fine, finance directors are often perfectly nice people, with that deeply soothing habit of just rounding up to the nearest $10k/100k/1M.. but really can we get this stuff of your credit card, Clair complains every week about chasing you for receipts)
- thejteam 5y ago
  My wife works as a junior accounting clerk in the finance department of a small-medium (500-ish person) company. She has to reconcile credit cards each month. Yes, it takes days when there are poorly documented charges (federal contractor so all of these charges have to be documented to bill to a contract). Down to the penny. Two months ago my wife spent half a day tracking down a 2 cent discrepancy when somebody's handwritten 7 looked like a 9.

polote 5y ago

This is about selling a less than $500 per month software to the enterprise. I have experience selling $100k per year software to the enterprise and it barely look likes what is described in the article.

rmccue 5y ago
This is effectively How To Sell to Customers at Large Businesses, not How To Sell Enterprise Software. Useful if you want to sell your consumery software in, but agreed, there’s significant differences when selling bigger budget software.
Aeolun 5y ago
What does it look like? I think our software procurement process looks pretty much like this.
- micromacrofoot 5y ago
  two lawyers arguing about indemnity for a year
- treis 5y ago
  It's not a nurse or even lead doctor making a decision. It's the CXO or VP or Director depending on how big the company is. They're also price conscious. Everyone has a budget and the more of that budget you take up the worse it is for them. Enterprises are good because they have big problems that cost lots and lots of money. They're willing to give you a significant fraction of that money if you solve the problem.
  - treis 5y ago
    Forgot to add, but the politics. Especially for software where there's a perpetual struggle between IT and the business side for power. Have had one client where IT left a call when they released people from the business side were there.
- tptacek 5y ago

bartman 5y ago

What reading about Enterprise sales has not prepared me for is months-long legal negotiations, and there is very little writing on this topic out there. Whereas you can pretty much agree to any terms that don’t misrepresent how your product works when you’re just starting out, there comes the point of wanting to spend a lot more scrutiny on your contracts without having in-house legal yet. If you’re a founder, that probably means you will be sending redlines, thinking about indemnities and warranties and handling other wonderful aspects of doing business internationally (privacy terms, jurisdiction, insurance, …). While true that price discrimination helps to make these cases mostly worth it, they are still a crazy time suck and finding a savvy lawyer to take it off your hands may or may not be easily possible (lawyer fees for one such deal once ended up being 50% of the whole deal value - we raised enterprise prices after that). Watch out especially when you’re in an industry going through lots of M&A activity as your self-service customers may suddenly be part of large Fortune 500 organizations, and despite all advice to the contrary, stakeholders who know your pricing already do balk at your 5-10x Enterprise prices. I do wish there were more stories of how the legal side of these deals is dealt with, what sticking points in contracts take up most of your time, and what „hacks“ you found. (One hack that saved me a lot of time: Treat your terms like you would any other part of your product. Iterate, work on the UX, remove barriers to adoption. After a bunch of gnarly negotiations over things that matter to your client, but not usually to you I compiled a list of changes and had our lawyer revise the terms to avoid the need to negotiate those parts moving forward. Alas, it’s a moving target and we’re in the midst of another iteration like this.)

rmccue 5y ago
I haven’t yet found a way to solve these problems, but a few tips I can offer from my experience: 1) Separate your order form from your standard services agreement. Put your services agreement online as a PDF, which sends a strong signal that you don’t generally negotiate these terms. 2) Allow amendments within your order form, but make them part of the commercial conversation. You might want to have a cutoff where you choose not to customise the contract; eg no custom terms for deals less than $XX,000 per month. 3) Accept that this is just the process for your larger customers. In larger deals, you’ll probably be signing a standard supplier contract they already have, with only the service-specific terms mattering. This could include terms needed for regulatory requirements eg which are not negotiable. Design your contracts to account for this. 4) Understand why your customer wants to redline something. This might be regulatory, it might be consistency with other suppliers, or it might just be pushing their luck. Case in point, we’re currently going back and forth with a FTSE 100 bank, and they have inserted a clause requiring us to have our working locations approved by them. We’re a remote, global company, so we’d need every employee approved. But the reason they care is due to banking regulations around sanctions, so we came to a mutual agreement that countries would be acceptable to us both. 4) Have a good way to track all these deviations. They’ll happen, so you just need to get used to them to some degree. Design variables into your system which integrate with your CRM so that you can codify this as much as possible. (But, be careful when doing this, since you’ll be providing your sales team with more levers which they will pull to get the deal.)

teekert 5y ago

Haha, OP forgot the phase where purchasing agent goes through repeated rounds of offering solutions that the company already owns but which you already checked are not matching your needs.

h2odragon 5y ago

Becoming a parasite on the larger critters requires adaptation of the feeding apparatus to an extent that may not be compatable with the previous modes of living. Those hosts are big and have plenty of fat, there's a forest of others feeding off them already, seems like a great niche, no?

throwaway984393 5y ago

> Enterprises are not price conscious Enterprises have to account for what they spend money on. They can either do that as part of an existing budget, or they can carve out a brand new budget. The latter is always harder than the former. If your price point fits neatly into a tiny gap they have left in their existing budget, things will be easier. OTOH if they have to carve out new budget, but they have an engineering department and there is a "free self-hosted" alternative, they will almost always go for that instead. > 3. Purchasing Agent Sends Out Questions There is often a very large and annoying process around this step that is much larger than purchasing, which is vetting a new vendor and product. Any Enterprise that has to deal with regulatory compliance or international laws will need to look for problems in the vendor or their product. This is a time-consuming and expensive process. If you are courting an Enterprise, do everything in your power to find out what their concerns are and make a 1-pager that explains them all, and separately a massive tome that details every answer. You'll want to cover all the questions Legal might have, address regulations, and enumerate exactly who has access to what part of a system['s data] and when and how. If you really want to catch big fish, also detail every aspect of your different payment and operational models, even if you don't include the actual price. The price doesn't matter as much as knowing how the thing will function and what its limits are. If you design your system to work a certain way for Enterprise, be prepared to change how it works for a whale customer. Always have in the back of your mind "I may need to fork this whole thing just for Customer X". Get the sale, worry about tech debt later. Anyone working in your company will hate that, but the ability to work around one detail or another can result in millions of dollars in sales. Also, help craft their strategy for rolling out the solution thought the Enterprise rather than just for one team. Design a management portal that works at an Org level and can delegate access down a hierarchy of teams, and enable SSO using standards that Enterprises use. They may be much more inclined to purchase a big fat plan for their entire org rather than for just one team.

IYasha 5y ago

Google comes, google buys, google buries. Selling software or a service to tops is okay, but there's a danger it quickly turns into working for VIPs, serving their demands, or end up being a private government contractor bound by tons of NDAs, NEAs (no export), etc. etc. stc. I've seen people fall pretty hard or giving their all trying to balance things out. I wish I said to some people: If you sign something, make sure we hear from you again.

mmcconnell1618 5y ago

Awesome content with actionable tips but I have to say they are less applicable at “enterprise prices.” Once you exceed the corporate card buying pattern, risk and budget enter the picture. Sometimes the department needs to wait for the next budget cycle. Sometimes you have the better solution but another vendor has SOC2 compliance and without it, the enterprise won’t take the risk.

lmeyerov 5y ago
Yep. Some magic questions more at where enterprise pricing begins: - "Oh budgeting isn't until end of year.. what can we do until then?" Then you do a 50K thing for 5mo until thing under their personal or direct bosses authority and work to get into budget thereafter at a higher rate. It's not surprising to find ~personal authority at $50-100K/yr for lowest level managers (the team who wants you and whose manager has someone trusted doing the picking), with only a quick informal/formal ok of their boss. - Procurement often gets involved early and want to get their 5% or whatever discount. "Yes we can use discounts as part of rightsizing you.. how about multiyear, with X+Y licenses in year two and X+Y+Z in year three, and as long as you prepay, we are good." - Security compliance people are often people ;-) Questions here to work around product gaps often just require you to align with whatever journey they need you to be on and identify some workarounds till then. (But you must be on that journey for this to work) - "what would 10x how useful this is? What feature would be a game changer for your team, and for the org?" Part of the enterprise trick is steadily enabling them to pay more and more over time. - "We don't do this for our smaller customers , but would you feel less at risk with a bundle where add training and support at $$$/day, with 1 week / qtr prepaid? Or any integration + feature services like for important system X?" What's ho-hum and easy for you may significantly derisk + increase value to them, and their sense of cost is different from yours. It's to see 5-10% of a SaaS's customers be enterprise yet half the revenue be from them, and 20%+ being around these funny service add-ons. Early on, they can even be your main revenue ("design partner") while the tinySaaS revenue builds up. A good hack early on can be to get an enterprise sales or product advisor / consultant to sit in some calls with you for the most embarrassing basics like these, and same around your product + pipeline process, until you can get dedicated folks.

indymike 5y ago

Here's the truth: the enterprise is feudal. Government is the exception. The process must be followed to the letter of the law/regulation, but the process is filled with places that officials have discretion. Private sector procurement processes can be bypassed given your deal falls in one of these three buckets: a) The purchase is trivial. This is the "hack" the article is talking about, and for most SaaS is the best way to go. Over time, as more of the enterprise uses the product it starts to matter, and the next exception will apply. b) If your solution is something that really matters and an officer of the company signs off on it, you have a legal contract, no matter the internal process that was supposed to be followed. Additionally, the officer of the company that signed off has signaled to the other officers that they can, if they wish, skip legal, IT and procurement vetting. In many cases vetting will be "adjusted" rather than have an internal fight between Sales and IT. c) The purchase is from a company where the enterprise has an investment. I.e. the venture arm is into the vendor for $LOTS. The best two ways to sell to the enterprise: price under the approval limit and grow wallet share, or have something so incredible that the enterprise will buy on your terms.

bob1029 5y ago

> One obstacle to making these sales at Stage 2/Stage 3 is that customers really want to see social proof, because they have the get-fired-if-this-doesn't-work-out worry. A typical phrase you will hear from customers at this point is "We don't want to be your biggest client." We do B2B software for banks, and this is (was) easily the hardest barrier to overcome. But, we did actually overcome and managed to get to production for several customers. Once you have ~3 customers to point back to, its like you have some secret access for the rest of the market segment. Our customers talk to each other a lot. It is a very tight community. The bootstrapping was ultimately possible because our organization has been doing business with the banking industry since the 90s. We had a lot of prior contacts to work with to get that first install. I don't think what we did would have been possible without this prerequisite. The very first customer was essentially an arrangement where they would not be billed a dime until some percentage of business functionality was stable in production. We had to burn a lot of time and money for zero payout just to get one shot to access the market. Overall, doing business with banks is not fun. I would not recommend it unless you enjoy writing more emails than code.

tiffanyh 5y ago

(2013), maybe even earlier. https://news.ycombinator.com/item?id=8800727 https://news.ycombinator.com/item?id=8800727