4 ms·

I'm the OP -- happy to answer any questions those of you running B2B startups might have!

by brandonb 13y ago

tootie 13y ago
So at what point (if ever) did you hire someone to be in charge of customer acquisition?
- brandonb 13y ago
  About two years. Honestly, that was way too late -- if I could do it again, I'd put that person in place about a year into it. As hackers we learned to sell, which gave us valuable insight into the product, but once your product is half-decent, sales becomes a full-time job, and having somebody spend 100% of their time on it is a major "step function" in growth.
tieTYT 13y ago
I'm interested in becoming a consultant (but haven't taken any action yet). My first question is if your article applies to people like me. I'm not sure if you're selling a product or you're selling your skills as a service. Or, maybe it doesn't matter and your article is helpful to both groups?
- brandonb 13y ago
  This post was based on selling products to enterprises. I've never been a consultant, so I don't know for sure, but I'd suspect the rules are a bit different. For example, as a consultant, I would think many of your customers come through referrals, whereas when selling a product things like PR, AdWords, and a direct sales force are your main tools for getting business. I'd be interested in hearing your experience once you've been at it for a year or so. There are probably a lot of interesting lessons!
wasd 13y ago
I'm interested in starting a start up that deals with SMB. I think a lot of your advice is very applicable but you would change anything for a deal size that's between $4,500 - $6,000 per year?
- AndyNemmity 13y ago
  At large companies, a deal that small could be approved by tons of people. At that point, you don't even need a real decision maker.
- brandonb 13y ago
  For SMB, you might try some of the "New Enterprise" models described at http://brandonb.cc/is-your-b2b-startup-new-enterprise-or-old-enterprise http://brandonb.cc/is-your-b2b-startup-new-enterprise-or-old.... Square is a great model to follow. For a deal size of $4.5-$6k, you can scale with inside sales and go pretty far. I'd avoid field sales entirely!
beat 13y ago
Question 1... how do you feel about the "valley of death" pricing-wise? As a startup targeting enterprise, one of the things I am hoping for marketing-wise is to price under the departmental budget line, so individual managers can buy for their own needs without setting off defensive alarms. And the product scales outward, so I can start with one department as evangelists, and then rake in more money and bigger contracts as the product spreads. But when I think of, say, $5000/year revenues, if it's too high, I have to fight the corporate financial immune system. But if it's too low, I'm leaving money on the table when there's a ceiling on how many customers can ultimately be acquired.
- AndyNemmity 13y ago
  I don't know the valley of death pricing you're talking about, but pricing isn't a part of the conversation for me until people have already bought in that they need it. Pricing is not even on the list of concepts I have to consider to work through a process. I work for a very big company though. The product scales outward thing is overrated. Startups have talked to me about this too, and it doesn't make as much sense as everyone seems to think. You gain a foothold in an area in the company no one cares about, that doesn't mean anything. You are the least person to judge which parts of the company matter, so be careful about that idea. I just had a company do this. They built a foothold in an area no one cares about. I had to tell them, it's about as meaningless as an organization if you had our janitors using their software. If your evangelists are not connected and part of the decision making process, the information doesn't expand.
  - brandnewlow 13y ago
    You should write a "Why my company isn't going to buy your startup's product" blog post. It would help quite a few people.
    - AndyNemmity 13y ago
      There are a lot of reasons people don't talk about this stuff, and I shouldn't either. I'm being a bit too loose with my mouth already.
beat 13y ago
Question 2 - How much resistance do you find to SaaS in the enterprise? SaaS reduces the support cost immensely, but a lot of businesses don't seem to trust SaaS.
- AndyNemmity 13y ago
  It's changing and getting better due to cost. Just have all your documents about security, compliance, sox, all of that readily available. It's the first question.
- brandonb 13y ago
  Totally depends on the market. For example, most e-commerce companies are very comfortable using SaaS and Javascript snippets nowadays, but if you try to pitch SaaS to a bank, they'll just laugh. Over time, I think more companies will get comfortable with SaaS, but it will take years. If you're pitching SaaS to an industry that doesn't usually go for it, it sometimes it helps to avoid PII. Even banks are somewhat open to using SaaS for products that don't touch customer's names, transaction info, etc.
  - beat 13y ago
    I have a different problem than PII... my product will contain detailed configuration information about the customer's entire system. That makes it security-sensitive. Data will be encrypted at all times, but there's a psychological problem of having configuration information in a SaaS system at all.
  - pionar 13y ago
    Good comments, plus, if you can do it, it might be wise to have a version of your product that's not SAAS. A self-hosted version, like Github Enterprise. Be careful, though, self-hosted customers can be huge PITA's.
    - beat 13y ago
      It's already in the business plan, albeit in a vague way. One of the big advantages of SaaS is that I can practice Continuous Delivery and be constantly improving the product while I sell it. Besides PITA customers (a problem that can be mitigated with an install process that Does Not Suck), there's a problem of supporting increasingly obsolete versions in the field.
larrys 13y ago
Not seeing a link on your blog to your company. Had to go to your profile to see that. Any reason it's not on your blog?

I'm the OP -- happy to answer any questions those of you running B2B startups might have!

tootie 13y ago

So at what point (if ever) did you hire someone to be in charge of customer acquisition?

brandonb 13y ago
About two years. Honestly, that was way too late -- if I could do it again, I'd put that person in place about a year into it. As hackers we learned to sell, which gave us valuable insight into the product, but once your product is half-decent, sales becomes a full-time job, and having somebody spend 100% of their time on it is a major "step function" in growth.

tieTYT 13y ago

I'm interested in becoming a consultant (but haven't taken any action yet). My first question is if your article applies to people like me. I'm not sure if you're selling a product or you're selling your skills as a service. Or, maybe it doesn't matter and your article is helpful to both groups?

brandonb 13y ago
This post was based on selling products to enterprises. I've never been a consultant, so I don't know for sure, but I'd suspect the rules are a bit different. For example, as a consultant, I would think many of your customers come through referrals, whereas when selling a product things like PR, AdWords, and a direct sales force are your main tools for getting business. I'd be interested in hearing your experience once you've been at it for a year or so. There are probably a lot of interesting lessons!

wasd 13y ago

I'm interested in starting a start up that deals with SMB. I think a lot of your advice is very applicable but you would change anything for a deal size that's between $4,500 - $6,000 per year?

AndyNemmity 13y ago
At large companies, a deal that small could be approved by tons of people. At that point, you don't even need a real decision maker.
brandonb 13y ago
For SMB, you might try some of the "New Enterprise" models described at http://brandonb.cc/is-your-b2b-startup-new-enterprise-or-old-enterprise http://brandonb.cc/is-your-b2b-startup-new-enterprise-or-old.... Square is a great model to follow. For a deal size of $4.5-$6k, you can scale with inside sales and go pretty far. I'd avoid field sales entirely!

beat 13y ago

Question 1... how do you feel about the "valley of death" pricing-wise? As a startup targeting enterprise, one of the things I am hoping for marketing-wise is to price under the departmental budget line, so individual managers can buy for their own needs without setting off defensive alarms. And the product scales outward, so I can start with one department as evangelists, and then rake in more money and bigger contracts as the product spreads. But when I think of, say, $5000/year revenues, if it's too high, I have to fight the corporate financial immune system. But if it's too low, I'm leaving money on the table when there's a ceiling on how many customers can ultimately be acquired.

AndyNemmity 13y ago
I don't know the valley of death pricing you're talking about, but pricing isn't a part of the conversation for me until people have already bought in that they need it. Pricing is not even on the list of concepts I have to consider to work through a process. I work for a very big company though. The product scales outward thing is overrated. Startups have talked to me about this too, and it doesn't make as much sense as everyone seems to think. You gain a foothold in an area in the company no one cares about, that doesn't mean anything. You are the least person to judge which parts of the company matter, so be careful about that idea. I just had a company do this. They built a foothold in an area no one cares about. I had to tell them, it's about as meaningless as an organization if you had our janitors using their software. If your evangelists are not connected and part of the decision making process, the information doesn't expand.
- brandnewlow 13y ago
  You should write a "Why my company isn't going to buy your startup's product" blog post. It would help quite a few people.
  - AndyNemmity 13y ago
    There are a lot of reasons people don't talk about this stuff, and I shouldn't either. I'm being a bit too loose with my mouth already.

beat 13y ago

Question 2 - How much resistance do you find to SaaS in the enterprise? SaaS reduces the support cost immensely, but a lot of businesses don't seem to trust SaaS.

AndyNemmity 13y ago
It's changing and getting better due to cost. Just have all your documents about security, compliance, sox, all of that readily available. It's the first question.
brandonb 13y ago
Totally depends on the market. For example, most e-commerce companies are very comfortable using SaaS and Javascript snippets nowadays, but if you try to pitch SaaS to a bank, they'll just laugh. Over time, I think more companies will get comfortable with SaaS, but it will take years. If you're pitching SaaS to an industry that doesn't usually go for it, it sometimes it helps to avoid PII. Even banks are somewhat open to using SaaS for products that don't touch customer's names, transaction info, etc.
- beat 13y ago
  I have a different problem than PII... my product will contain detailed configuration information about the customer's entire system. That makes it security-sensitive. Data will be encrypted at all times, but there's a psychological problem of having configuration information in a SaaS system at all.
- pionar 13y ago
  Good comments, plus, if you can do it, it might be wise to have a version of your product that's not SAAS. A self-hosted version, like Github Enterprise. Be careful, though, self-hosted customers can be huge PITA's.
  - beat 13y ago
    It's already in the business plan, albeit in a vague way. One of the big advantages of SaaS is that I can practice Continuous Delivery and be constantly improving the product while I sell it. Besides PITA customers (a problem that can be mitigated with an install process that Does Not Suck), there's a problem of supporting increasingly obsolete versions in the field.

larrys 13y ago

Not seeing a link on your blog to your company. Had to go to your profile to see that. Any reason it's not on your blog?