14 ms·

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

295 points by zeeshanm 12y ago

lifeisstillgood 12y ago
The UK government is trying hard to remedy a lot of the issues raised here for software development. GCloud (catalog of SaaS services - once you are an approved supplier theoretically your "ally" patio11 suggests merely has to click and purchase is real. A similar setup for software development is underway right now. What I am saying is, the essential problem of sales to enterprise is still making something someone wants, and finding that someone and persuading them to sign. Edit: not disagreeing with anything patio11 says - in fact I think I am supporting the main point - government and enterprise sales ain't so different and they are gettin more similar each day.
- cykho 12y ago
  I'd be wary to think they are converging. The enterprise sales cycle is getting shorter and more user driven (more folks can charge a per-user individual fee as opposed to site licenses). This makes the process more accessible than ever. Government on the other side is increasingly consolidating vendors under systems integrators creating an ever higher barrier to competition (http://iq.govwin.com/corp/downloads/Deltek-WashTechTopSI.pdf http://iq.govwin.com/corp/downloads/Deltek-WashTechTopSI.pdf).
HillRat 12y ago
Nice piece, but selling to enterprise customers and selling to the government only tangentially overlap. While most of the advice is transportable, the number one rule of selling to any government -- federal, state, or local -- is get on the approved vendor list. Getting on GSA is fundamental; getting on as many state-level purchasing schedules as possible is the next step. Unfortunately, this almost certainly means you'll end up giving a chunk of revenue to companies whose sole business model is "we're a GSA-certified vendor" and who will handle the regulatory runarounds for you. But the rewards are significant -- schedule vendors are often exempt from RFP requirements, so you can skip the usual pain point of writing RFQ responses and bidding for business, and get right to the selling.
porter 12y ago
Thanks Patrick, you always write great and actionable content.
angrybits 12y ago
I like the bit about reacting to sign-ups from boeing.com emails, I wonder if anyone out there is curating a "whale list" that gives the domains you should care about.
- cykho 12y ago
  Great idea - I just looked this up - NASDAQ has a nice list in CSV format along with market cap: http://www.nasdaq.com/screening/company-list.aspx http://www.nasdaq.com/screening/company-list.aspx
codingdave 12y ago
Government is totally different than enterprise. Government is extremely price conscious, and may even have regulatory requirements that dictate a purchasing process. There may be formal request processes, approvals, public hearings and comment processes, etc. There can be formalized criteria that dictate who wins an RFP. If you try to lump enterprise sales and government sales in the same boat, you will be in for failure. And the whole limit that this article is talking about exploiting, of sticking under a specific amount... That is called frequently called "DOA" - Delegation of Authority. And the trick stated, to keep your price under a specific DOA level, is questionable. People who aren't trusted to spend more than $500 also likely do not have a large budget, so your $500 a month would kill their yearly budget, and you would lose the sale anyway, or at best become a target for cost reductions in the future. Sure, using tricks like that might quicken a sales cycle and avoid annoying bureaucracy. But in the long run, you will still lose. You are a pain point in the budget of a 1st line manager, instead of a prized vendor in the large budget of a higher manager. When the day comes that the corporation challenges all its managers to shave 15% of their yearly budget, guess what list you end up on? Trust me, you do NOT want your monthly bill to be falling in the budget of a low-level manager. Instead, Deal with the pain. Put up with the bureaucracy. Do the PO process. Get in as a line item on a budget higher in the hierarchy. You then are really considered a cost-effective solution, and higher-level leaders don't like admitting mistakes, so they will put their political clout behind keeping you in that organization.
- Encosia 12y ago
  This has not been my experience with selling to US State governments. Most (all?) are required to the take the lowest bid that satisfies their requirements, but they are free to craft their requirements so that only one vendor can possibly meet them. I raise my rate when working with government entities (to account for the significant administrative overhead and lead time on payment), as compared to private companies, and still have no trouble getting POs for my asking price.
  - bdcravens 12y ago
    ...they are free to craft their requirements so that only one vendor can possibly meet them. I've been the recipient of a government (in this case, large municipal essential services department) RFP that was crafted for me.
rokhayakebe 12y ago
How about not selling to these guys, period. I just have this feeling that once you take money from a Fortune company, you are their employee. Same goes for the government.
- patio11 12y ago
  Why, specifically? You might be under the impression that they get something radically different than the standard SaaS app. In most cases, they just get the standard SaaS app. It looks quite similar to the SaaS app that you can buy for $500, except with a few knobs tweaked. Customer/vendor is a very different relationship than employer/employee, even for consultants to say nothing of SaaS vendors. You don't have to run your vacation plans past them, you can moonlight at 10 jobs simultaneously without of running out of hours or having any of the jobs think this is odd, you can hire people to do the delivery in a way an employee cannot, you can sell your relationship, etc etc. No lie: occasionally more stressful than working for W-2, and you largely don't get the option to just focus on delivery, but it's a very different beast.
- cykho 12y ago
  The cashflow amazing. A recurring license with a large enterprise means thousands of per-seat fees rolling in on a consistent basis. And larger enterprises are less likely to churn since they are more stable businesses and take longer to change either way. This creates a solid revenue stream which can be the backbone of your company's revenue.
- ropman76 12y ago
  I worked frontline customer support for a small software company that sold to county governments. The sales process was just as bad as described in this article. Most of the goverment workers and elected officials were very pleasant to work with. I had a few who were royal pains to deal but most of the people I dealt with on a regular basis were by far easier than my support at a insurance company.
- rokhayakebe 12y ago
  Thanks all for the feedback, but I still prefer to not sell to the government. You may be right that it is less scary than it looks, hence a lost opportunity, but I prefer to never deal with them as a customer.
kevan 12y ago
> Stop thinking like a human. Think like a corporation. Corporations are like humans whose smallest increment of currency is the largest paycheck you've ever received. This is a pretty important point. The financial scale that a company operates at can be hard to reason about if you aren't involved in that part of its operations. Buying $500 licenses for an IDE in my department seems prohibitively expensive from my perspective, but for the company it probably costs less than the furniture in the office.
- sokoloff 12y ago
  There's little "probably" about it. I assure that most office furniture is absurdly over-priced and indeed would dwarf a $500 license. Just a desk chair with modest comfort and ergonomic features will be priced in that ballpark, with anything that you'd consider "nice" being higher than that.
MichaelGG 12y ago
So where should you draw the "Call for a quote" line? I'm a few months from launching a B2B tool with a great value (improve telco tech support efficiency by a good factor - I've had a prototype install running at one company for a few years and they simply cannot operate without it). I'm thinking of SaaS at launch. My lowest monthly plan is probably $250 to 490. (In addition to a free "personal" edition for people playing with projects.) My average price point I think will be in the 2k to 5k a month. I have a verbal commit from a medium sized customer at $10k. How much do I publish online? Do I run the risk of alienating one segment by simply being available to another?
- adam 12y ago
  The thing you really have to watch out for here if you have lower prices published is the big guys seeing that and thinking they can get your services for that much too. You have to have your story really nailed of why the 2k-5k services are worth that much more. Usually this is in the form of service level agreements, support levels, response times, security, etc. As an anecdote, we had "small business pricing" published on our site and organizations like The World Bank, Koch, and a few others were paying $279/month which was insane. We made a few thousand a year on those plans, and a few hundred thousand on "enterprise" clients. We don't have small business plans anymore.
  - MichaelGG 12y ago
    Thanks for the reply! Bigger customers will need more user logins and more processing capacity. So they segment alright that way, although I'm not sure how many axes to include (users, TB/month, peak messages/sec, feature set, etc.). But a <$500 plan won't include more than a TB a month, and even medium users will need that much.
chatmasta 12y ago
"common engineer misapprehension that BFE sales requires playing golf, inviting clients to steak dinners, and having budgets beyond to reach of small businesses." Can engineers not play golf? I'd like to read a post on how to get in on this sales process -- ultimately, that's always where the money is!
- zhte415 12y ago
  The ability to play golf, unless one grew up in a golfing family, appears to be included as part of the package in certain promotions. A direct download to the brain. "Now I know golf" Mr Anderson may say in later life having capitulated to Mr Smith. It is inexplicable.
  - mcguire 12y ago
    Playing golf is irrelevant. Hanging around on the lawn with a stick and a ball and the right company is the important part.
kephra 12y ago
I did a few enterprise sales, e.g. to Deutsche Post AG or Siemens, and I have to disagree to point 7 here. At first German companies do not sent a check in an envelope, but use Germans much better banking network for wire transfer. Unlike US direct debit and direct credit are free of charge and execute within a day between two banks, and nearly instant at same bank. The other thing about point 7 is a "trick" I learned more then 30 years ago: Offer 2% discount, if customer pays within 7 days. Everybody who can count will do, even enterprise.
LargeCompanies 12y ago
I have ZERO CLUE and or social skills to seal the deal with Fortune 500 companies. I am basically a solo founder (have a tech partner, but he's 25% in vs. me 500% in) whose work grabs the attention of the biggest companies in the world. I publish my work on the iNet and or demo it and in doing so VP and higher ups of Fortune 50 to 500 companies reach out wanting to do business and or it could be just flirt and or figure out how my partner and I achieved what we have accomplished. Examples... 1. Two months after announcing our work we were invited out to the valley to demo our tech to an entity out there. They were total jerks to us and baited us to tell them how we accomplished X. That was a low day .. felt like we flew out to the valley to get kick in the stomach by a giant. 2. Fast forward 16 months later and just about every massive tech company has reached out to us showing some level of interest. Not sure how they find out about us (a east coast start-up), but they do and we get excited but then demoralized as nothing happens. 3. Most recently I demoed our tech at a hackathon. After my demo a VP of Fortune 500 company was super excited and said i want to use this at my end of the year board meeting. Ok, awesome let's make this happen I thought. Though first big wig you will need to sign a document and half licensing agreement. Oops that small document that protected us killed the deal and well NOW I AM CRAZY TIRED OF DEALING WITH THESE UPS AND DOWNS. We can and have a history of making cool things, but totally lack the social skills and business acumen. It time to hang things up and possibly open source our work. Many companies bottom lines will hurt once we and if we open source it. Though of course we will remain living our meager lives. Done starting up after 10 years, broke, in debt, 4o years old and family-less (she is tired of waiting for it to happen too.. back to the corporate world so i can have that family ive always wanted).
- MichaelGG 12y ago
  Unless the "small document" was something ludicrous, it seems highly unlikely that it killed any deal. More likely is that like the other prospects, there was zero true intention, and maybe the document was just an excuse. Or, something about your pitch or follow up is turning people off. Have you sought out some advisors? Just getting meetings with all these companies is a good accomplishment. So perhaps you need s neutral third party to review what you're doing and try to find out where it's going wrong.
- 12y ago
shin_lao 12y ago
A typical phrase you will hear from customers at this point is "We don't want to be your biggest client." This is not something you can get around easily. Some companies have strict rules such as "we can't be more than 30% of your revenue". The reason behind that is that if a customer represents a very large amount of your revenue, you can be considered as a de facto subsidiary. The real way around it is to work with a larger intermediary company. Patrick's story is interesting but it won't work against hard formal processes.
- Moto7451 12y ago
  Huh, interesting. I googled around but couldn't find any info about a de facto subsidiary. Can you add some color to that?
- logicallee 12y ago
  where would the client get this information? (can't you say whatever you want?) Also this seems easy to massage, you can just resell a commodity under cost to generate all the 'revenue' you want (at negative margin.)
  - shin_lao 12y ago
    Obviously I don't know the laws of every country in the world but I would be surprised that lying about the revenues of your company isn't at least a felony.
ommunist 12y ago
A single best piece about software sales I have read during the last 5 years. Very inspiring. Thank you.
hayksaakian 12y ago
These are practical tips I have used to success. Highly recommended reading.
beering 12y ago
I'd say there are many different levels of "enterprisey" sales, depending on the deal size and whether you're selling to a small, medium, or large entity, and whether it's public or private. A competitive bidding process is nothing like a discretionary purchase. Pros: * Sometimes they're not spending their own money. Especially if they're spending grant money, simply price your package for the amount of the grant. They may have no incentive to save money if it's use-it-or-lose-it. * Enterprises or gov't sometimes have plenty of money to throw around, especially in the above scenario. Come up with as many frivolous "add-on" features as you can, put ridiculous price tags on it, and watch clients inexplicably check all the boxes. SMS notifications for only $5000/year? Deal! * Big government contracts may be for 5 years of service paid upfront. Think about what that does to your cashflow. Cons: * Your soul withers away.
the_why_of_y 12y ago
Wow, running a business in a third-world country without ~zero-cost over-night electronic money transfer between banks must suck... sending paper checks, by snail mail, in 2014? "they will ... send a check to an address picked randomly from the set of them printed on the invoice. (Make sure you give them one easy, obvious option for where to send the checks, and that that mailbox is monitored for discrete envelopes containing paper worth potentially tens of thousands of dollars. You can get a check reissued but it will be extra pain and take another several weeks.)"
- serve_yay 12y ago
  I'm sure he cried all the way to the bank.
- therzathegza 12y ago
  At five figure checks, they can send it via carrier pigeon if they like :).
kjs3 12y ago
I didn't see where he says "don't sell to them, sell to the organizations that sell to them". There's an entire ecosystem of resellers/VARs/distributors/etc that, for a cut, will shield you from many of the issues you'll face in the Gov or Enterprise world. For example, I've been "sold" as a consultant via a government subcontractor(1) that took care of bidding, billing, contracts and renewals, etc and simply paid me the rate I asked for. Similarly, I've had products that a distributor took on and did all the legwork to get on the GSA lists so all we had to do was fulfillment and support. They would even structure the financials such that it met whatever DOA requirement the end customer needed, but paid us up front. (1) FWIW, the entity that subcontracted me was another small biz that was taking advantage of the "8A" category of small business set asides. If you fit in one of the categories, it might be an option as well. This is obviously a US-centric option. https://www.sba.gov/category/navigation-structure/8a-business-development-program https://www.sba.gov/category/navigation-structure/8a-busines...
- devonkim 12y ago
  Ironically, this is a part of how some actually decent, large software companies that you'd think could afford the BS overhead and broaden out their revenue streams by using the partners. Google, for example, has a number of enterprise integrators that deal with the terrible BS of anything related to organizations that spend more time trying to figure out what to do than actually doing anything.

295 points by zeeshanm 12y ago

The UK government is trying hard to remedy a lot of the issues raised here for software development. GCloud (catalog of SaaS services - once you are an approved supplier theoretically your "ally" patio11 suggests merely has to click and purchase is real. A similar setup for software development is underway right now. What I am saying is, the essential problem of sales to enterprise is still making something someone wants, and finding that someone and persuading them to sign. Edit: not disagreeing with anything patio11 says - in fact I think I am supporting the main point - government and enterprise sales ain't so different and they are gettin more similar each day.

cykho 12y ago
I'd be wary to think they are converging. The enterprise sales cycle is getting shorter and more user driven (more folks can charge a per-user individual fee as opposed to site licenses). This makes the process more accessible than ever. Government on the other side is increasingly consolidating vendors under systems integrators creating an ever higher barrier to competition (http://iq.govwin.com/corp/downloads/Deltek-WashTechTopSI.pdf http://iq.govwin.com/corp/downloads/Deltek-WashTechTopSI.pdf).

HillRat 12y ago

Nice piece, but selling to enterprise customers and selling to the government only tangentially overlap. While most of the advice is transportable, the number one rule of selling to any government -- federal, state, or local -- is get on the approved vendor list. Getting on GSA is fundamental; getting on as many state-level purchasing schedules as possible is the next step. Unfortunately, this almost certainly means you'll end up giving a chunk of revenue to companies whose sole business model is "we're a GSA-certified vendor" and who will handle the regulatory runarounds for you. But the rewards are significant -- schedule vendors are often exempt from RFP requirements, so you can skip the usual pain point of writing RFQ responses and bidding for business, and get right to the selling.

porter 12y ago

Thanks Patrick, you always write great and actionable content.

angrybits 12y ago

I like the bit about reacting to sign-ups from boeing.com emails, I wonder if anyone out there is curating a "whale list" that gives the domains you should care about.

cykho 12y ago
Great idea - I just looked this up - NASDAQ has a nice list in CSV format along with market cap: http://www.nasdaq.com/screening/company-list.aspx http://www.nasdaq.com/screening/company-list.aspx

codingdave 12y ago

Government is totally different than enterprise. Government is extremely price conscious, and may even have regulatory requirements that dictate a purchasing process. There may be formal request processes, approvals, public hearings and comment processes, etc. There can be formalized criteria that dictate who wins an RFP. If you try to lump enterprise sales and government sales in the same boat, you will be in for failure. And the whole limit that this article is talking about exploiting, of sticking under a specific amount... That is called frequently called "DOA" - Delegation of Authority. And the trick stated, to keep your price under a specific DOA level, is questionable. People who aren't trusted to spend more than $500 also likely do not have a large budget, so your $500 a month would kill their yearly budget, and you would lose the sale anyway, or at best become a target for cost reductions in the future. Sure, using tricks like that might quicken a sales cycle and avoid annoying bureaucracy. But in the long run, you will still lose. You are a pain point in the budget of a 1st line manager, instead of a prized vendor in the large budget of a higher manager. When the day comes that the corporation challenges all its managers to shave 15% of their yearly budget, guess what list you end up on? Trust me, you do NOT want your monthly bill to be falling in the budget of a low-level manager. Instead, Deal with the pain. Put up with the bureaucracy. Do the PO process. Get in as a line item on a budget higher in the hierarchy. You then are really considered a cost-effective solution, and higher-level leaders don't like admitting mistakes, so they will put their political clout behind keeping you in that organization.

Encosia 12y ago
This has not been my experience with selling to US State governments. Most (all?) are required to the take the lowest bid that satisfies their requirements, but they are free to craft their requirements so that only one vendor can possibly meet them. I raise my rate when working with government entities (to account for the significant administrative overhead and lead time on payment), as compared to private companies, and still have no trouble getting POs for my asking price.
- bdcravens 12y ago
  ...they are free to craft their requirements so that only one vendor can possibly meet them. I've been the recipient of a government (in this case, large municipal essential services department) RFP that was crafted for me.

rokhayakebe 12y ago

How about not selling to these guys, period. I just have this feeling that once you take money from a Fortune company, you are their employee. Same goes for the government.

patio11 12y ago
Why, specifically? You might be under the impression that they get something radically different than the standard SaaS app. In most cases, they just get the standard SaaS app. It looks quite similar to the SaaS app that you can buy for $500, except with a few knobs tweaked. Customer/vendor is a very different relationship than employer/employee, even for consultants to say nothing of SaaS vendors. You don't have to run your vacation plans past them, you can moonlight at 10 jobs simultaneously without of running out of hours or having any of the jobs think this is odd, you can hire people to do the delivery in a way an employee cannot, you can sell your relationship, etc etc. No lie: occasionally more stressful than working for W-2, and you largely don't get the option to just focus on delivery, but it's a very different beast.
cykho 12y ago
The cashflow amazing. A recurring license with a large enterprise means thousands of per-seat fees rolling in on a consistent basis. And larger enterprises are less likely to churn since they are more stable businesses and take longer to change either way. This creates a solid revenue stream which can be the backbone of your company's revenue.
ropman76 12y ago
I worked frontline customer support for a small software company that sold to county governments. The sales process was just as bad as described in this article. Most of the goverment workers and elected officials were very pleasant to work with. I had a few who were royal pains to deal but most of the people I dealt with on a regular basis were by far easier than my support at a insurance company.
rokhayakebe 12y ago
Thanks all for the feedback, but I still prefer to not sell to the government. You may be right that it is less scary than it looks, hence a lost opportunity, but I prefer to never deal with them as a customer.

kevan 12y ago

> Stop thinking like a human. Think like a corporation. Corporations are like humans whose smallest increment of currency is the largest paycheck you've ever received. This is a pretty important point. The financial scale that a company operates at can be hard to reason about if you aren't involved in that part of its operations. Buying $500 licenses for an IDE in my department seems prohibitively expensive from my perspective, but for the company it probably costs less than the furniture in the office.

sokoloff 12y ago
There's little "probably" about it. I assure that most office furniture is absurdly over-priced and indeed would dwarf a $500 license. Just a desk chair with modest comfort and ergonomic features will be priced in that ballpark, with anything that you'd consider "nice" being higher than that.

MichaelGG 12y ago

So where should you draw the "Call for a quote" line? I'm a few months from launching a B2B tool with a great value (improve telco tech support efficiency by a good factor - I've had a prototype install running at one company for a few years and they simply cannot operate without it). I'm thinking of SaaS at launch. My lowest monthly plan is probably $250 to 490. (In addition to a free "personal" edition for people playing with projects.) My average price point I think will be in the 2k to 5k a month. I have a verbal commit from a medium sized customer at $10k. How much do I publish online? Do I run the risk of alienating one segment by simply being available to another?

adam 12y ago
The thing you really have to watch out for here if you have lower prices published is the big guys seeing that and thinking they can get your services for that much too. You have to have your story really nailed of why the 2k-5k services are worth that much more. Usually this is in the form of service level agreements, support levels, response times, security, etc. As an anecdote, we had "small business pricing" published on our site and organizations like The World Bank, Koch, and a few others were paying $279/month which was insane. We made a few thousand a year on those plans, and a few hundred thousand on "enterprise" clients. We don't have small business plans anymore.
- MichaelGG 12y ago
  Thanks for the reply! Bigger customers will need more user logins and more processing capacity. So they segment alright that way, although I'm not sure how many axes to include (users, TB/month, peak messages/sec, feature set, etc.). But a <$500 plan won't include more than a TB a month, and even medium users will need that much.

chatmasta 12y ago

"common engineer misapprehension that BFE sales requires playing golf, inviting clients to steak dinners, and having budgets beyond to reach of small businesses." Can engineers not play golf? I'd like to read a post on how to get in on this sales process -- ultimately, that's always where the money is!

zhte415 12y ago
The ability to play golf, unless one grew up in a golfing family, appears to be included as part of the package in certain promotions. A direct download to the brain. "Now I know golf" Mr Anderson may say in later life having capitulated to Mr Smith. It is inexplicable.
- mcguire 12y ago
  Playing golf is irrelevant. Hanging around on the lawn with a stick and a ball and the right company is the important part.

kephra 12y ago

I did a few enterprise sales, e.g. to Deutsche Post AG or Siemens, and I have to disagree to point 7 here. At first German companies do not sent a check in an envelope, but use Germans much better banking network for wire transfer. Unlike US direct debit and direct credit are free of charge and execute within a day between two banks, and nearly instant at same bank. The other thing about point 7 is a "trick" I learned more then 30 years ago: Offer 2% discount, if customer pays within 7 days. Everybody who can count will do, even enterprise.

LargeCompanies 12y ago

I have ZERO CLUE and or social skills to seal the deal with Fortune 500 companies. I am basically a solo founder (have a tech partner, but he's 25% in vs. me 500% in) whose work grabs the attention of the biggest companies in the world. I publish my work on the iNet and or demo it and in doing so VP and higher ups of Fortune 50 to 500 companies reach out wanting to do business and or it could be just flirt and or figure out how my partner and I achieved what we have accomplished. Examples... 1. Two months after announcing our work we were invited out to the valley to demo our tech to an entity out there. They were total jerks to us and baited us to tell them how we accomplished X. That was a low day .. felt like we flew out to the valley to get kick in the stomach by a giant. 2. Fast forward 16 months later and just about every massive tech company has reached out to us showing some level of interest. Not sure how they find out about us (a east coast start-up), but they do and we get excited but then demoralized as nothing happens. 3. Most recently I demoed our tech at a hackathon. After my demo a VP of Fortune 500 company was super excited and said i want to use this at my end of the year board meeting. Ok, awesome let's make this happen I thought. Though first big wig you will need to sign a document and half licensing agreement. Oops that small document that protected us killed the deal and well NOW I AM CRAZY TIRED OF DEALING WITH THESE UPS AND DOWNS. We can and have a history of making cool things, but totally lack the social skills and business acumen. It time to hang things up and possibly open source our work. Many companies bottom lines will hurt once we and if we open source it. Though of course we will remain living our meager lives. Done starting up after 10 years, broke, in debt, 4o years old and family-less (she is tired of waiting for it to happen too.. back to the corporate world so i can have that family ive always wanted).

MichaelGG 12y ago
Unless the "small document" was something ludicrous, it seems highly unlikely that it killed any deal. More likely is that like the other prospects, there was zero true intention, and maybe the document was just an excuse. Or, something about your pitch or follow up is turning people off. Have you sought out some advisors? Just getting meetings with all these companies is a good accomplishment. So perhaps you need s neutral third party to review what you're doing and try to find out where it's going wrong.
12y ago

shin_lao 12y ago

A typical phrase you will hear from customers at this point is "We don't want to be your biggest client." This is not something you can get around easily. Some companies have strict rules such as "we can't be more than 30% of your revenue". The reason behind that is that if a customer represents a very large amount of your revenue, you can be considered as a de facto subsidiary. The real way around it is to work with a larger intermediary company. Patrick's story is interesting but it won't work against hard formal processes.

Moto7451 12y ago
Huh, interesting. I googled around but couldn't find any info about a de facto subsidiary. Can you add some color to that?
logicallee 12y ago
where would the client get this information? (can't you say whatever you want?) Also this seems easy to massage, you can just resell a commodity under cost to generate all the 'revenue' you want (at negative margin.)
- shin_lao 12y ago
  Obviously I don't know the laws of every country in the world but I would be surprised that lying about the revenues of your company isn't at least a felony.

ommunist 12y ago

A single best piece about software sales I have read during the last 5 years. Very inspiring. Thank you.

hayksaakian 12y ago

These are practical tips I have used to success. Highly recommended reading.

beering 12y ago

I'd say there are many different levels of "enterprisey" sales, depending on the deal size and whether you're selling to a small, medium, or large entity, and whether it's public or private. A competitive bidding process is nothing like a discretionary purchase. Pros: * Sometimes they're not spending their own money. Especially if they're spending grant money, simply price your package for the amount of the grant. They may have no incentive to save money if it's use-it-or-lose-it. * Enterprises or gov't sometimes have plenty of money to throw around, especially in the above scenario. Come up with as many frivolous "add-on" features as you can, put ridiculous price tags on it, and watch clients inexplicably check all the boxes. SMS notifications for only $5000/year? Deal! * Big government contracts may be for 5 years of service paid upfront. Think about what that does to your cashflow. Cons: * Your soul withers away.

the_why_of_y 12y ago

Wow, running a business in a third-world country without ~zero-cost over-night electronic money transfer between banks must suck... sending paper checks, by snail mail, in 2014? "they will ... send a check to an address picked randomly from the set of them printed on the invoice. (Make sure you give them one easy, obvious option for where to send the checks, and that that mailbox is monitored for discrete envelopes containing paper worth potentially tens of thousands of dollars. You can get a check reissued but it will be extra pain and take another several weeks.)"

serve_yay 12y ago
I'm sure he cried all the way to the bank.
therzathegza 12y ago
At five figure checks, they can send it via carrier pigeon if they like :).

kjs3 12y ago

I didn't see where he says "don't sell to them, sell to the organizations that sell to them". There's an entire ecosystem of resellers/VARs/distributors/etc that, for a cut, will shield you from many of the issues you'll face in the Gov or Enterprise world. For example, I've been "sold" as a consultant via a government subcontractor(1) that took care of bidding, billing, contracts and renewals, etc and simply paid me the rate I asked for. Similarly, I've had products that a distributor took on and did all the legwork to get on the GSA lists so all we had to do was fulfillment and support. They would even structure the financials such that it met whatever DOA requirement the end customer needed, but paid us up front. (1) FWIW, the entity that subcontracted me was another small biz that was taking advantage of the "8A" category of small business set asides. If you fit in one of the categories, it might be an option as well. This is obviously a US-centric option. https://www.sba.gov/category/navigation-structure/8a-business-development-program https://www.sba.gov/category/navigation-structure/8a-busines...

devonkim 12y ago
Ironically, this is a part of how some actually decent, large software companies that you'd think could afford the BS overhead and broaden out their revenue streams by using the partners. Google, for example, has a number of enterprise integrators that deal with the terrible BS of anything related to organizations that spend more time trying to figure out what to do than actually doing anything.