RIP "Enterprise" Software
The formula for winning in SaaS has changed
In recent years, startup B2B SaaS companies have become a bit too predictable in their go to market approach. The formula looks like this:
Step 1 [Start with SMB’s]: Build a self-serve trial/freemium experience to learn about your customer’s pain points
Step 2 [The Move to Mid-Market]: Gradually add more features and break things into pricing tiers
Step 3 [Enterprise $$$]: Stand up Sales and Customer Success functions comprised of SDR’s, AE’s, and Account Managers (or similar)
Step 4 [Fortune 500]: Remove the ability to try the product without assistance and make the Sales team the gatekeepers to the universe
If there’s one thing that software has done in the past 20 years, it’s build increasingly focused solutions. Find a Revenue Analytics offering in 2010 or a SaaS Point of Sale platform for a particular industry. They mostly didn’t exist. Sure there were generic solutions you could invest thousands of hours (and consultants) in to make serviceable, but the explosion of software has driven far more tailored solutions. In theory, that should lead to a more intuitive purchase and implementation.
Investors tend to look for products built for a well defined user persona who have an acute pain and are ready to hand over their corporate card for a solution. But instead of selling like a vending machine ($ in, product out), the process has become increasingly convoluted. The selling motion from a decade ago more or less remains intact. This is frustrating not just to prospective customers, but also to Product and Engineering teams who pace themselves on the high quality signal that self-serve products generate. In today’s world, it’s becoming clear that the best businesses are those that aren’t afraid of someone trying their product without a company representative there to chaperone.
Enterprises will always have unique needs - from integrations to security to developer experience - but satisfying these shouldn’t require abandoning a self-serve product. If a product is so complicated it needs an interpreter, you’re leaving money on the table. We all need to unlearn a few things...
The SDR model is obsolete
Not many years ago, you could hire an army of outbound callers with a list of potential buyers and put them on auto-dial. Companies like Five9, InsideSales, ZoomInfo, and many more rely on these outbound teams. Today, everyone has these tools and buyers are barraged by sellers on a daily basis. The yield on this investment has effectively gone to zero. Rather than spray and pray (whether it be via email, phone, or LinkedIn), why not invest in product capabilities that can help curious potential buyers learn about your offering? Maybe it’s a guided walkthrough or series of videos, but hopefully it’s actually the full product offering with well defined journeys depending on the user’s needs. Or maybe train the team of SDR’s to understand the buyer’s job so they can answer real questions vs. go through a checklist to “qualify” an opportunity. Doesn’t it seem a bit silly to have your ideal buyer, who you’re looking to squeeze $10k-$100k/year from, talk to someone making $100 per lead first?
I really don’t want to Schedule a Demo
I often wonder if there’s a room full of CMO’s or digital marketers for hire who seem to think that their first move upon taking the helm at a growth-stage SaaS company is to make all click paths on a website end with a Request for a Demo.
Want to learn more? Talk to us.
Want to understand our pricing? Fill out a form.
Sit on a page for more than 3 seconds? Give us your email address so we can spam you.
Why not lead with your product? It’s not like we’re selling planes. Push everyone to create an account. Wow them with an outcome in a very short period of time. Then keep pulling that thread. That’s the magic of web-based products…
Don’t start with slides
Admittedly - I’ve capitulated a lot in life and taken the SDR call when no other option existed. Once they realized I was a serious buyer, a call with an Account Executive (AE) came next. And far too often, that starts with 10+ slides with some pie in the sky marketing language about how the product is going to change the future of my business. Twenty minutes later, we finally start to have a real conversation, only to realize a specialist (eg: Sales Engineer) is needed to answer any real question. So a 3rd call gets scheduled…
Even writing this I feel like I’m describing an experience with a Cable TV operator or Discount Airline. But we’re actually talking about Unicorns that are leaders in their Gartner MQ!
The best sales organizations are those that see themselves as consultants and try to put themselves in the shoes of their buyers. They take time to understand the pain, politics, and vendor landscape at the prospect’s company and are as much a champion of the decision maker as the decision maker is of them. And everyone is a master of their own product…
Enterprise Software vs. Software for Enterprises
Nothing above should be taken to say there isn’t value in selling to enterprises. Fortune 500/1000 companies still command a wild amount of budget/spend and ignoring them would be a fatal mistake. However, there’s a new class of companies that recognize they don’t need to radically change their sales process just to service these customers.
What do Databricks, Snowflake, Zoom, and Salesforce have in common? They’re doing (well in excess) of $1B in annual revenue and all have a button to try their product on their homepage. Not only that, they tie their success to that of their customers. Snowflake and Databricks both only charge based on consumption, while Salesforce and Zoom take a more traditional user-based approach. Either way, as long as one is diligent about managing access, they’ve aligned their success to that of their buyers. And while they each have varying degrees of quality onboarding, they’re not shy about putting the product out there.
As a side note, if you’re selling to engineers, analysts, or any specialist, you’re especially screwed if you expect that person to talk to sales before seeing the goods. Not only are these individuals often especially time-constrained, they tend to be very thorough evaluators and will do this in private, outside of the confines of a sales call.
Enterprises may never be completely turnkey buyers in the sense that you never speak to them while they pay you millions of dollars per year. However, getting the ball rolling and identifying your first “champion” inside is far easier if you don’t expect the person to answer your 96th cold call. Those that are scared to embrace this philosophy will ultimately lose big while those who invest in a winning pricing and product adoption model will win the next generation of buyers.
And yes, I could have made this a post about PLG, but this goes beyond that…