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I've been selling software to large enterprises for ten years. AMA!

I've spent four years in technical sales, selling data streaming middleware and trading frontends to Investment banks and another six, selling the software of my own startups to Fortune 500 companies in various industries and locations around the world.

I've got a lot wrong in the beginning - and it took me a lot of time and great mentoring to learn how to get in and even start the discussion, how to find the right people to talk to, how to build support, convince stakeholders, navigate procurement and how to ultimately close the deal.

My experience is in selling developer tooling and highly technical solutions (messaging middleware, cloud architecture tools) from small (1 to <100 employees) to mid-sized and very large enterprise companies.

Happy to help with any questions about how to get enterprises to buy from you in the early stages of your startup.

posted to Icon for group AMAs
AMAs
on March 18, 2021
  1. 2

    Hi Wolfram, sounds interesting to me!
    I have some questions:

    • How do you validate what you are building will be of use to enterprises
    • How do you find the right people to talk to and how do you start the conversation?
    1. 1

      Hey, great questions.

      1. I think there are essentially two ways to validate product-market fit with enterprises:
      • Many successful enterprise software companies I'm familiar with were founded by people who worked in large companies, observed a problem, and created a solution for it.
      • Especially in recent years, we've seen a lot of bottom-up enterprise tools, e.g. Slack or Github, which were initially adopted by employees directly and then sold upwards to their companies.

      For our own product, we've used a mix of these two. We built something we generally knew enterprises needed and then provided generous free tiers / cheap basic plans for individual enterprise employees to try our stuff. This provided the initial validation as well as valuable leads.

      Then, we've scanned through the list of subscriber emails, filtered out all the gmails, hotmails etc. and looked for [email protected] ones. We've stalked their LinkedIn, analyzed their usage of our app, and reached out to them with very specific and customized offers to help and questions on how to improve. This had a very high response rate (>70%) and got us in touch with developers in the enterprise that already used our stuff.
      From there, it was delicate. You can't be too pushy. You definitely can't be salesy. This is not the guy who'll pay for anything. But, as you keep providing value, you can ask questions about their usecase and requirements. I was always surprised how candid the answers were I got - less secrecy than I thought. Often, the initial dev will talk about your product within their team. They have a certain stake in its success - given that they're the ones who've discovered it. Once two or three use it, ask to talk to the next higher up about their long-term plans.

      1. This answer follows on from question #1. I'll assume you have a product with a low-touch sales cloud version (e.g. free tier/< 20$/month base tier) and an enterprise version that is orders of magnitudes more expensive. If you have a pure enterprise product that requires a 6-7 figure initial investment, different rules apply. For that, you'd sell via your network, trade shows, and salespeople. But let's stick with the bottom-up model for the time being.

      Most enterprise devs that pick up a 10$ / month tool are fairly unaware of their company's security and legal requirements. Once your tool's usage bubbles up to a higher level, someone recognizes that a) your product is used within their company and b) your "cheap" offering does not comply with any number of internal requirements.

      This can be something like data-security policies (e.g. no data on third-party servers), SLA requirements, audit requirements, needed permission and access control structures, or any number of other policies this company has.
      At this point, a higher-up manager or someone from procurement reaches out and inquires about your enterprise offering.

      If your enterprise version ticks the required boxes, there is, in my experience, surprisingly little discussion about price (unless you charge something completely outrageous). The company needs it (as proven by the existing usage) and you can provide it in a manner compliant with their policies and processes. From here, it's a matter of navigating procurement (add 20% to the price, which you can knock of so procurement gets its bonus) and closing the deal. This usually involves any combination of the following steps:

      • You send a license agreement over. (Get a lawyer to draft one or copy one from an existing product with a similar business model as yours - *although for legal reasons, I don't officially suggest that.)
      • You get an altered license agreement back with completely unacceptable terms, e.g. holding you liable for any problem the company's IT faces for the next decade, whether related to you or not.
      • You remove the worst bits, reach an agreement on the acceptable bits, and sent it back.
      • You are asked to provide some context on your company and possibly some certifications (SOC-2 report, HIPAA compliance etc.).
      • You refuse half of it. (trust me, this is fine. Almost no one ticks every box in the compliance lists - but keep the tonality around this friendly and cheerful.)
      • You finally have an agreed license and enough checks. Procurement now goes off and finds someone who'll provide the budget and sign the deal.
        This can take ages, and quite a few deals are lost in this stage. Email your procurement person every few days and ask for updates/ offer help. Don't let off now. Potentially offer a 10% discount if it's signed before some date.
      • You get the signed agreement. You countersign, mail a very hefty invoice, and open the champagne.
      1. 1

        Hi! That's some valuable insight. Thank you for sharing!

        I also always thought that working as a Consultant for big companies would be one of the best ways to come up with an idea of a product big companies need. As I'm not working as a Consultant for many big companies it's definitely challenging to come up with ideas. But I like the idea to create something the users of companies start using first and let them basically sell it "bottom - up" to the company. I think this might be something I will look into, if I start a new project. But right now I have already two running projects that are not candidates for this technique and I still want them to progress more. So maybe I can do it some time later.

  2. 1

    I think one of the most common questions you get asked. However, one of the most important is what advice you have for beginners. I work with this platform regarding enterprise application development https://www.techmagic.co/blog/top-enterprise-application-development-technologies/ , and they have been extremely helpful. Not only that made my job easier. But they also helped me to build a better relationship with my customers and not only. However, I think you can never stop learning and exploring, especially in this domain, so I am ready to hear any information or advice and put it into practice.

  3. 1

    Hi Wolfram,

    It's interesting to learn more about finding the right people to talk to and how to gather some insides on how their current processes are structured, so we could bring the most value.

    • We're building a technology to streamline product development and marketing based on analyzing web search data to derive things like demand and competition levels for unique products' value propositions.
    • From my experience, it well suits contexts when the product is either new or belongs to a company willing to expand its market share for an existing product. To conquer new market share, there should be a marketing budget.
    • This brings us to communicating with larger-scale companies, and I'm mostly interested in whether it's Product or Marketing folks we should be talking to, their level (manager, director, c-level, etc.), and the best moment in their work we should hit to maximize the conversion to booked demos.

    Thanks.

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