Fundercrat Recommends Seeding Your Non-Disruptive Platform
I tagged this post trendwatch, and then realised I don’t use that tag enough.
Anyway, there’s an interesting, if unfortunately rarely inspirational, section on TechCrunch featuring ten minute video interviews; Ask a VC.
I’ve watched almost an hour of this now and am struck by how little of any substance any of the VCs utter. Has media training emaciated investor business comment?
Maybe it’s just my sample size, but the guests I saw come across as kind of fundercrats. That is, they come across more like old-school middle-managers. It’s too full of jargon and the kind of ‘I-read-the-paper-this-morning’ piffle you’d expect from armchair analysts. Which is a pity, as you’d think these people could really shine with tons of real world examples colouring cutting edge, sharp assessments of what it takes to succeed right now.
Despite this lack, one guest from July I will discuss talked about How The Enterprise Sales Model Has Changed. (*)
Remember, these guys are focused on startups and infant firms.
They first tackled how you establish ‘trust’ in the enterprise space. The standard, sage advice on getting to really understand how your prospect is doing business today is always solid. Many a salesperson could interrogate more here. With an important addition…
How do you fit into the existing frameworks they’re using? He’s spot on that you need to “minimise risk”, but could have built on this to bring out that it’s hugely about removing the fear of changing something, and the perception of that change that is vital to soften. He said that to survive you must sell a disruptive solution yes, but which crucially is non-disruptive to the inner workings of the enterprise.
Then, as a former Oracle software employee, he was asked to explain the changes in enterprise selling;.
“The big change in the startup eco system is the movement from sales-oriented businesses to a more product oriented business.
And the buyer of business application and technology are also the users of these business applications and technology.
In the last generation, some people would make the decision but they would never use the product, and others would use the product).
And that has changed.
As a result people are selling product to the end-user.
And they are going bottoms-up.
So they are finding line of business users and they’re selling it to them.
And that’s how they get the initial distribution.
And then they go up and start selling the enterprise solution.”
Sounds interesting. In my experience this has been happening since 2002. So hardly a livewire hot trend of today. I’m sure Jill Konrath with her ‘get in small and at the side’ style approach of Selling To Big Companies would echo that feeling.
He then contradicts himself slightly doesn’t he. Anything in the $50-100k bracket should remain “top-down” by approaching the CIO, whereas with items around the $500-1000 mark you’re better suited to “seed the platform” with the users.
Quite a scale there. An again an aged lens. It doesn’t feel good enough to settle on the obvious linear relationship between deal size and entry point. There’s a more important axis nowadays. Where the pain is felt, how severe it is, and how attached it is to the current top strategic aim.
The next section requests advice for establishing a salesteam and sales model when it comes to building an enterprise startup, specifically with how different this would be from incumbents. A frustratingly 90s-style set-up was suggested. The word freemium replacing (updating) putting in something on eval.
Yes, incumbents may have the solution, market penetration and distribution sorted. So he states you ‘need to understand your very disruptive Value Proposition and how it fits into their world, then what pricing it can sustain’.
His thinking was that if you price on “unit use case” think freemium model, with limited functionality, then move up.
If the ticket is higher, through say $30-40k deals, then have inside and outside teams.
Higher still, like $100k sales, then go direct, with a salesrep going to cust to explain the ‘value prop’.
So, no changes there from the past couple of decades. I fondly recall the free CDs my marketing colleagues used to rip off magazines twenty years ago when wanting a leads database.
He uses the undefined term “market motion” as something you must understand, along with your product positioning and delivery to determine sales team construction.
I’m amazed he appears not to have heard of companies like Atlassian and Palantir. In the ERP space they’re the current darling case studies on having huge sales with no salespeople at all.
Anyway, with your ten minute coffee break takeaway I’d think of the point about how to pitch your wares as both ‘very disruptive’ yet also completely ‘non-disruptive’ to the way they operate.
* As an aside, he comes from an outfit that have funded 200 companies over the past twenty years with the current strapline ‘think big move fast’. Entertainingly, these include Snapchat, “We are participating, as we have in every round, because we truly believe. Snapchat has joined the relatively small number of companies that can be used as a verb“. This reminds me of the workshop games you can run where you ask people to suggest what – if your company name was a verb – your customers would say its definition was…