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My experiences with Sales
3 min read
Sales are the only thing that helps with the success of any company. You might have the world's greatest product and technology, but without a sustainable sales pipeline the company with just disappear.
There are two primary sales models for selling software:
Sales Led Growth (SLG) - traditional model with a salesperson selling the product
Product Led Growth (PLG) - there is no salesperson, but drive the user to use the product and get value out of it so they can start to pay for more usage.
Both models are very important for a startup, but there are unique problems for both models for a budding startup. SLG typically brings in large ticket item sales, while PLG brings in a large number of users who may convert into prospective customers. IMO, PLG is not a direct sales driver, it helps build a pipeline of customers who can be driven toward SLG over time.
Every product must have an enterprise sales team to survive and PLG is just additive but not a replacement for SLG. There is no such thing as a pure PLG product.
Enterprise sales are super critical for the survival of most software startups. Most enterprises require premium features such as SSO, Support agreements, SLAs for compliance requirements and software companies typically charge them extra for these features. For example, imagine a software company selling a product for $100 for non-enterprise customers. The same product will be sold to enterprises for $500+.
But it's next to impossible for small startups to sell to large enterprises. The typical issues that startups run into are:
Startup Skepticism - Large enterprises, rightfully, are skeptical that the startup may not survive in the years to come. Few ways to overcome this problem are:
Connections at the enterprise who can vouch for you
Open Source, so the customer will have a path to use the product even if the company shuts the door.
Vendor Risk Assessment (VRA) - Large enterprises typically expect to procure software from SOC2-certified providers, so they are reasonably sure that there are adequate controls and processes on the vendor end. But typically startups can't afford to spend the time/resource in acquiring these certifications and so they are simply shut out. Some customers may have an alternative or additional process with custom questionnaires to complete the VRA. There can be hundreds of questions that need to be answered for closing the contract.
Relationships - Enterprise sales typically happen via relationships unless you are solving a burning problem that enterprises can't live without (which is quite rare). As a startup, unless you have access to someone with influence who can understand the value of your product and can vouch for you, it's just super hard to complete the enterprise sale.
Customer Persona - it's also important to understand the persona you are selling the software to. Typically business customer personas are willing to pay as long as the product solves their business problem.
Non-enterprise customers do not bring in a lot of revenue into the product. They typically do not even break-even from the cost perspective. But they help in understanding usage trends, bring in more users and help the prospects for enterprise sales later.