The low-down Hide
- Young founders don’t have the institutional knowledge
- Consumer products change lives, enterprise products change systems
- Delayed gratification
- Shifting your mindset from C to B
- Are you a Slack or a Salesforce?
- Orientating your startup to big enterprise selling
- Put your best face forward (yours)
- Understand before being understood
- Avoid the whispering gallery
- Ditch the digital ads
In the past, startups and big contracts have gone together about as well as oil and water.
Startups don’t think big governmental or corporate contracts suit them, despite the huge budgets and outsized profit potential. Governments and corporations alike don’t think startups are capable, being so starkly risk-averse they go with their old mates at large incumbents rather than giving someone new a chance.
But considering you only need to secure one or two big enterprise contracts (in other words, catching an elephant) to manifest an extremely profitable business, why aren’t startups trying to poach them?
Young founders don’t have the institutional knowledge
Founders in their 20s and 30s – especially those who have been engineering, dev, or product-focused their whole careers, don’t have 5-10 years of experience in the enterprise market. They will struggle to anticipate its needs. This also means a dearth of enterprise connections, and cold-selling to multiple layers of corporate bureaucracy is often a non-starter when you don’t know how.
Consumer products change lives, enterprise products change systems
The most minor, utilitarian product can spark joy in a customer’s life. You only have to look at people’s weird attachments to their roombas. A consumer product’s clear impact on the individual gives founders the reward of making a difference. Selling a piece of software that catalyses accountancy processes?
Even if you’re the type of founder who hates selling, you’ve gotta admit there’s a rush in running an ad in the morning and seeing a sales spike in the afternoon. Theoretically, you could make a sale to a stranger in the street. With B2B enterprise sales, you devote huge amounts of time – months or even years – to preparing pitches and tailoring solutions. That’s a lot of runway. And even after you’ve secured the deal, your sales cycles are long.
Shifting your mindset from C to B
B2C selling is a lot closer to the entrepreneur’s dream. You imagine the gratitude of your faithful customers, the excited unboxing on delivery day, the glowing reviews. You are a generous god.
B2BB (business to big business) selling involves a lot of grim corporate faces – people with cumbersome systems looking for less cumbersome systems. It’s harder to deliver contagious enthusiasm in boardroom environments, and harder to engage your targets emotionally. On the hedonic to utilitarian purchasing scale (think buying a sports car vs. buying a washing machine), you’re firmly in utilitarian territory.
But a small startup has a lot to offer a big enterprise, and a lot to gain in return.
- You are extremely agile. Big enterprises often need holistically tailored, highly scalable solutions. If shifting their whole operation to something simple like the Microsoft suite isn’t suitable, they’ll look for firms who can design from the ground up.
- Your costs go down after the first iteration. Once you’ve built your first model, you’ll have a resaleable core product you can adapt for other customers. To deliver a modified product to a new customer, your costs plummet. To deliver the same product to a new customer, your costs are zero.
- Big business is already looking to the small guys to provide advanced tech, namely for AI, machine learning, and cyber-security.
To switch gears from small fry to that 300lb bass IT conglomerate, you’ll need to decide whether you’re pull or push – product-led or sales-led.
Are you a Slack or a Salesforce?
In product-led growth (PLG), your product is a glowing beacon, built to reel people in with its sheer brilliance, user-friendliness, and freebie perks. PLG is aligned with pull marketing. Customers discover the product, sign up of their own accord, and teach themselves how to use it (sometimes with the help of in-platform tutorials). PLG can bring your customer acquisition costs to a nice low level (even $0).
PLGs often use pipeline models, reeling you in with free trials or freemium plans, and slowly upgrading you to a paying customer as your business expands. Almost all project management platforms like Asana, Monday, Trello use this model, as well as comms software like Slack and storage software like Dropbox.
Sales-led growth (SLG) relates to push marketing. You’re armed with an elite sales team who spend every hour of their days getting people to buy, renew, upgrade, and buy some more. Your salespeople will have a hands-on involvement in activating the product – regular contact/coaching, demos, and onboarding.
Both have their advantages in enterprise selling.
SLG appeals to those who want to be hand-held. It can seem old school, especially in an age where 75% of B2B buyers prefer to self-educate. But figuring out your best approach is a simple exercise in target audience analysis. Old school incumbents often have old school staffing.
Secondly, if you’re in an emerging tech market like AI or machine learning, you’ll likely fall naturally into SLG, as even your most technocratic customers will need educating. The major downside is the cost of sales teams and their hefty commissions.
PLG is leading the trend. At least 21 companies who have IPO’d in recent years are product led, their value is twice as high as the public SaaS index as a whole, and they tend to grow faster at scale. Their orientation suits corporate customers who like to learn for themselves, and would rather hop online to buy than call or meet a salesperson.
Orientating your startup to big enterprise selling
Big enterprises, SMEs, and individual buyers can all coexist in the same market. But due to their structural as well as size differences, catching elephants calls for a different strategy to hunting rabbits.
Selling a product-led product has one simple step: build a one-size-fits-all solution that’s better than all of your competitors’. Simple.
Building on sales-led growth needs a bit more consideration.
Put your best face forward (yours)
The only thing that’s going to take you from a cold, unknown, untested prospect is trust. But only 40% of people feel salespeople are trustworthy. So you’re on the backfoot before you begin.
One thing that helps is being a founder-salesperson. It matters to them if you can be bothered to show up in person (it might also be your only option if you’ve no budget for a sales team yet).
People also rank ‘active listening’ – showing clear indicators of absorbing and understanding their perspective – as the number 1 trait they value in salespeople. That’s something you can easily do. This soft skill will help you to…
Understand before being understood
Initial conversations with your leads shouldn’t be selling-focused. There will be huge amounts of information to download before you can pose solutions. You’ll also need a broad understanding of the industry and wider business needs so you can add value to the discussion.
In short, talk about them before you talk about you. Buckle up – you’re in this negotiation for the long haul.
Avoid the whispering gallery
Complex information gets garbled as it’s passed through the ranks. Your big enterprise point of contact will need to relay your pitch to several levels of decision makers. Your key points need to be memorable and digestible – cut the jargon and use plenty of soundbites.
Ditch the digital ads
Everyone loves a trade show. You’re out of the office for the day, there’s usually beer. And potential business buyers are literally in the market. As a small startup, you need to physically show your potential clients that you’re capable and trustworthy. You’ll need to make personal connections and work to build them into relationships. None of this can be achieved with targeted advertising.
In the same vein, social media marketing gets replaced with serious content marketing. That’s valuable, information-dense articles addressing the real day-to-day problems your business customers face, with very subtle call-to-actions at the end. Distribute your high-value content across LinkedIn and work on becoming a voice of the industry.
Selling to small businesses as a small business makes sense. You have a natural rapport, your sales and purchasing cycles often align, and lots of little sales can help you scale. But don’t hold off on going big just because you don’t feel ready. It might be your lack of readiness (read: lack of inflexibility) that makes you the perfect pairing for a profitable elephant.