5 ms·

One of the Biggest Mistakes Enterprise Startups Make

42 points by swampthing 14y ago

techtalsky 14y ago
I think 1 and 4 are the best points. It's a kill-two-birds-with-one-stone proposition. You get to give your first clients the care and feeding they need to become great initial success stories as you make some of the initial cash a startup needs so badly in its infancy. I think this is solid advice.
tptacek 14y ago
From extensive, sometimes bitter experience: I think there's a lot of truth to this. Startuplandia has a sales playbook that works well for selling to early adopters and the SMB market. That playbook does not work well selling into the F500. In particular, BigCo's don't respond productively to passive sales processes. A lot of the things you do to optimize passive sales, like free trials or tiered account models, don't really help F500 procurers. It is sometimes just as hard for those people to spend $5000 on something as it is to spend $100,000. Sometimes, it's actually better for those people to spend $100,000 on something even if $5000 would buy them a reliable call option on the value of the product. There's a reason the enterprise sales playbook leans so heavily on inside dial-for-dollars sales and direct account managers: that process works.
- danielweber 14y ago
  You can sell stuff for around $1000 to Fortune 500 easily, since they can just expense it. If your software is something that a Fortune 5000 needs only once, though, you shouldn't be selling it to them for $1000. Like Joel Spolsky said: free, cheap, or dear. There's little room for stuff in the middle. I've watched companies thrash themselves to death in that middle zone right up close.
mwcampbell 14y ago
It seems to me that it's a good idea to have an automated sales process and as much self-service as makes sense, anyway, for the customers who want to work that way.
- comrade_ogilvy 14y ago
  If it is really true that your software is mind-boggling useful and novel, that is a nice thing to shoot for. The article in question is talking about enterprise software. And even if your software is clean and beautiful, if it is actually doing something important, it probably must accomplish that task in a complex environment, e.g. does it have to play nice with legacy systems? For software companies who have a merely great idea, 98% of your potential customers are going to ignore you if they lack confidence that the implementation will succeed. Self-serve is a useful idea, but you may be setting a very high bar for yourself. Maybe that is the right move; maybe that is setting yourself up for failure.
Swannie 14y ago
I don't know if I can think of any major software company, that is not purely consumer focused, that doesn't have some sort of professional services group (Amazon AWS may be an exception - but they did have some talented "advocates" or "champions" early on that must have supported early customers). Enterprise software lives and dies by the quality of the professional services teams working on it. They will typically custom implement v1 and v2 of any new features that should go into the product, as there will usually be customer willing to pay for those features ahead of the product road map. This is where you can get solid gold. Product managers/owners who ignore this will end up writing useless features that don't work the way the customers need them to.

42 points by swampthing 14y ago

I think 1 and 4 are the best points. It's a kill-two-birds-with-one-stone proposition. You get to give your first clients the care and feeding they need to become great initial success stories as you make some of the initial cash a startup needs so badly in its infancy. I think this is solid advice.

tptacek 14y ago

From extensive, sometimes bitter experience: I think there's a lot of truth to this. Startuplandia has a sales playbook that works well for selling to early adopters and the SMB market. That playbook does not work well selling into the F500. In particular, BigCo's don't respond productively to passive sales processes. A lot of the things you do to optimize passive sales, like free trials or tiered account models, don't really help F500 procurers. It is sometimes just as hard for those people to spend $5000 on something as it is to spend $100,000. Sometimes, it's actually better for those people to spend $100,000 on something even if $5000 would buy them a reliable call option on the value of the product. There's a reason the enterprise sales playbook leans so heavily on inside dial-for-dollars sales and direct account managers: that process works.

danielweber 14y ago
You can sell stuff for around $1000 to Fortune 500 easily, since they can just expense it. If your software is something that a Fortune 5000 needs only once, though, you shouldn't be selling it to them for $1000. Like Joel Spolsky said: free, cheap, or dear. There's little room for stuff in the middle. I've watched companies thrash themselves to death in that middle zone right up close.

mwcampbell 14y ago

It seems to me that it's a good idea to have an automated sales process and as much self-service as makes sense, anyway, for the customers who want to work that way.

comrade_ogilvy 14y ago
If it is really true that your software is mind-boggling useful and novel, that is a nice thing to shoot for. The article in question is talking about enterprise software. And even if your software is clean and beautiful, if it is actually doing something important, it probably must accomplish that task in a complex environment, e.g. does it have to play nice with legacy systems? For software companies who have a merely great idea, 98% of your potential customers are going to ignore you if they lack confidence that the implementation will succeed. Self-serve is a useful idea, but you may be setting a very high bar for yourself. Maybe that is the right move; maybe that is setting yourself up for failure.

Swannie 14y ago

I don't know if I can think of any major software company, that is not purely consumer focused, that doesn't have some sort of professional services group (Amazon AWS may be an exception - but they did have some talented "advocates" or "champions" early on that must have supported early customers). Enterprise software lives and dies by the quality of the professional services teams working on it. They will typically custom implement v1 and v2 of any new features that should go into the product, as there will usually be customer willing to pay for those features ahead of the product road map. This is where you can get solid gold. Product managers/owners who ignore this will end up writing useless features that don't work the way the customers need them to.