How to crack enterprise sales as a new startup
For most people, the first step of the entrepreneurial journey is thinking about your “big idea”. You’re taking a big risk, forgoing more secure short-term career options. During this phase, you’re thinking about your total addressable market (i.e. TAM), how you will disrupt an industry, and also differentiate from large incumbents and rapidly growing startups. You need both guts and imagination during this phase. If you finally lock in on a strong vision, you then need to be able to convince investors to back you. During the difficult journey of fundraising, typically your biggest battle is proving that your market is big enough. Thus, you start drinking the kool-aid and get your mind fixated on large markets, big visions, differentiation, moats, TAM, etc.
Great! Now, if you’re lucky, you’ve raised some money! Time to really dig in.
As you are building out your proof of concept beta products, you begin to start talking to customers more seriously. As a great entrepreneur, you want to validate the problems, start thinking about distribution, pricing, et al. But this is exactly when some cognitive dissonance starts to set in.
You take that exciting deck that you put together for investors, reformat it a bit, and start pitching customers — the only problem is, it falls flat. The customers don’t seem to care one bit about the major trends happening in the market and world, nor about how your product is going to address it all and help everyone. The customers roll their eyes when you tell them how your product is going to improve the employee experience, create the “future of work”, or build a tidal wave across the company. They could care less about any of this. They may smile and nod, and perhaps subscribe to your podcast, but they aren’t going to buy.
The first rule of cracking enterprise sales as a startup: “What’s in it for me?”
Whether you’re selling to a big company or a small company, whether you are a bottom-up freemium product or a top-down sales led product, the most important thing to address are the highly-specific and highly-nuanced problems faced by your buyer. This is often diametrically opposed to what you had to pitch to investors (that nuanced problem is the “small TAM” you were avoiding talking about).
The customer has a painful itch and you need to be there to scratch it for them. The more painful the itch, the faster the dollars will come. Now if this itch is systemic, then you may have a real opportunity to become a system of record. But you never want to start there. Systems of record are exciting for investors — but scary to buyers. Sounds a lot of work, and a lot of risk.
The first and most important thing you’ve gotta solve is finding that one nuanced niche sliver of opportunity from that buyer. Find the one dollar they already have in their wallet. Don’t start by offering something requires this buyer to go find another dollar. This should be your starting point for all enterprise sales.
The second rule of cracking enterprise sales as a startup: “Make it only for me”
You’re probably an entrepreneur because you’re good at knowing how to break the rules. You know which rules to follow, which ones to bend, and how to find a way to solve your problems outside of the straight and narrow path. But, unfortunately, this is not how corporate buyers think.
You may have pitched your investors on how you can sell your product into multiple personas at the company. This provides confidence, diversification, and a larger TAM. But telling a buyer that you can sell into multiple paths just signals that they should consider not being your champion in this sale — you may move on from them to someone else. You may use them as a stepping stone. Or worse yet, you’ll find ways to leverage them into an uncomfortable position.
If there is one thing that all corporate employees hate more than anything it is when a vendor goes above or around them. This is why you must often approach enterprise sales (especially when dealing with large enterprises) with hat in hand, demonstrating full commitment to that single buyer persona as the “only” path for you.
The third rule of cracking enterprise sales as a startup: “Price it for me to buy”
You probably forecasted your pricing in a certain idealistic way. Alas, you discover this is not how your target buyer purchases things today. I’m not saying that you have to abandon your desired economic model and adopt the customer’s format. But you do have to listen really carefully to the “principals” by which the buyer purchases.
Most likely, your buyer already has multiple SaaS products, so there should be some established frameworks you can leverage. Where you have to listen carefully is the “rules” by which they buy things in your particular use case — things they’ll pay for, refuse to pay for, how they’ll limit users, what sorts of add-ons they like to purchase, etc. Listening to “the rules” will enable you to keep your core model while also maximizing revenue and positioning the final offer with the lowest friction.
Of course there are hundreds of other things to nail in the customer journey, but these are three of the first principals that will help you get buyers’ attention, earn a few of those early dollars, and start building from there.
