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Ask HN: Describe your first enterprise sale
496 points by hackerews on April 17, 2016 | hide | past | favorite | 96 comments
What was it like to make the first enterprise sale at your startup?

How'd the enterprise hear about you? What was the first meeting like? What obstacles and challenges did you run into? Were there other companies in the mix? What did you do wrong? What did you do right?

About six years ago I set up a Dropbox-like service for real estate brokers to handle the paperwork side of the sale and purchase of condominium blocks.

I built the product, which was basically a service for storing and authenticating access to PDFs.

I'd previously built a news portal for the industry and had a mailing list of around 8,000 professionals. I emailed them all and got nothing back. At the same time I researched a few flagship developments and contacted the parties involved. Eventually one agreed to use the service as a trial at zero cost. I was excited - this was a big business. But they weren't interested in continuing and I saw nothing back.

About a month later I received a phone call from the technology manager at a top 5 national firm who'd seen our product being used by this company and thought it was exactly what they needed. I flew for a meeting with them, I copy and pasted my way through a template SaaS contract. They made me fill in a disaster recovery questionnaire and quite a bit of other paperwork - no-one ever checked anything. They wanted the source code for this website in Escrow but in the end they never made any arrangements.

They signed the contract and six years on they still use the service, are the only client, and absolutely love it.

My only helpful advice would be that enterprise sales are actually way more personal than consumer stuff. Me and this technology manager get on well, and have worked well together for years. As the client, they expect to be bought lunch and dinners - that's just the way it is. After all, they sign the checks. Over time my contact has gradually realized that this is a one-man operation. At the same time he's risen high in this company because his initiative has delivered a service that really works for them. Meanwhile all their competitors spurned my 'simple' service to do it in-house, and most of them still haven't built anything. My client merged with another company who had sunk $220,000 into developing the same system and it didn't work. They scrapped it and now just use mine.

I don't want to talk about the service (or grow it) - I keep it going because the monthly check is good, and because they rely on the service.

To touch on your comment about how personal it is to sell into enterprise accounts. In enterprise I've found that most of the time when prospecting the equation for selling is 95% TRUST & 5% VALUE. Enterprise customers have a lot to lose if your offering goes south on them, so they need to trust their vendors.

That said it takes time to build trust. You can establish it over time by building authority and offering social proof in any industry.

Going direct to customers is a good way to start revenue but it's tough to scale. HP sells 80% of its revenue through partners. Instead of going direct to customers you should build a channel sales program and build up partner relationships.

Partners you work with should have clients already, clients you want. Clients that trust these partners because they do a good job.

That's how you get into enterprise quickly and scale.

I have built and sold five companies in the last 7 years. I was CIO at a $50M/year sales organization, now I am starting to take startups through a probono training on how to do sales for enterprise if anyone is interested in joining our sessions. No cost to anyone for as long as I enjoy hosting it. It's over google hangouts. Email me hn (at) strapr (dot) com to get on the list.

"It's not what you know. It's not who you know. It's who trusts you to solve problems." Is the advice I've been giving to people.

Thanks for doing this. Dropped an email.

Email sent. :)

I like this comment. A lot of initial sales are just pure relationship: you know someone who knows someone or randomly someone saw or met you at Meetup, website, forum... Maintaining the first deal is hard though because it's a tricky road: Do you have to do what they ask or do you think the market is bigger than just this one specific use case? Eventually the first 10 Enterprise customers are the ones who pay the bill.

> They made me fill in a disaster recovery questionnaire ... They wanted the source code for this website in Escrow ...

Can you elaborate on the details or circumstances these parts outlined? Particularly in regard to provisions or protocols to be followed in the event you become unable to render product service (due to disaster against the product or its infrastructure, personal circumstances, or otherwise).

I'm in a similar position that you've described. I'm mostly a one-man shop with a SAAS product that has a Fortune 100 customer. As it becomes increasingly integrated within their company they've voiced concern over what happens if I become unable to render service. We likely have contract amendments coming for code escrow, but I've no experience in this particular area, so thought I'd ask what you learned from these parts of your contract.

If it matters, the product is tightly customized to the customer's work flow, and provides a solution they've been unable to readily find elsewhere. So in the event that service can no longer be rendered, having them subscribe to another product wouldn't be immediately viable.

Where I've worked has been an <10 man shop with 2 critical personnel who wrote software that was responsible for the healthcare of hundreds of thousands of individuals, actually probably in the low millions.

We were required to have code escrow contingencies, and one company required those two key personnel not to travel on the same flights.

> not to travel on the same flight.

Did they also asked them not to travel in the same car? Chances of dying in a car accident are considerably higher than a plane, unless I am missing the reasoning behind it

It sort of spins out of bigger companies who tend to have a policy of "no more than 4 CO's in the same plane". It stems from when COs would all pile in to the same chartered plane because it was cheaper to do that and be flexible with time than to have them all drop what they're doing to sit on a commercial flight.

My company has the same policy for high enough management, but these days they all just travel solo on commercial flights anyway. It seems like it was different 20 years ago.

edit: I think they also maintain a car policy too, but I can't recall for certain.

Part of this is about making sure people are available at last minute notification. If you're in transit from Sydney, Australia to London, UK, you're out of action for 30+ hours plus the time to get over jet lag.

I am not buying that, People sleep and do morning routine for 10+ hours and on top of that they have personal life and weekends, you won't ask them to stop doing that so they will be available for you at last minute notification.

Whoever is oncall rotation for that week does.

Guess you're not familiar with the old term "pager duty".

That's typically handled by code escrow, and an legal agreement around you being unresponsive after X days of attempted contact via methods X, Y, and Z, etc... It's a separate thing from DR (which is normally infrastructure focused).

Understood on the difference between being personally unresponsive vs. an infrastructure disaster. I should've been more clear; I've edited my original reply.

Code escrow is in fact what we're looking at. I guess part of my question intended to hear more about how outlining and negotiating that process went. E.g. I'm curious what objections or sticking points may have been encountered, from either side, when approaching the agreement to make a copy of the product accessible to the customer (in certain circumstances).

Hopefully it's straight forward and non-interesting, in which case I'd have no further questions.

I've been on the other side of that scenario.

In our case, we bought a license for the software + source code and hosted it in our data center. We paid for maintenance and a support agreement that included a fixed number of hours for break/fix and new features.

Worked pretty well.

Support SLA is pretty common in enterprise, but what do you mean with "new features"? Did you put SLA also on features development?

With that arrangement, so we basically bought a bucket of use it or lose it hours that could be used for anything. That included enhancements to the software.

It sounds wasteful, but because it was a two-man the cost was low relative to value.

Our escrow agreement is just a two-paragraph addendum to our main agreement that refers to our escrow provider's standard agreement. You sign a three-way agreement with each client and the escrow provider.

We use NCC Group as our escrow provider. There are cheaper options but NCC has good name recognition which helps customers feel more comfortable.

As for what to charge, we just marked up their price a bit and called that our "source code escrow add-on".

Do you still work a day job, or maintain this full-time for them?

I moved on to found another startup.

if you ever want to grow the service, i'd love to chat about either white-labelling it or selling it directly to other real estate brokerages. i have a few connections at a top national firms as well as regional players. my email address is my HN handle [at] gmail if you ever are interested in chatting.

I created a order taking ios app for companies in Italy with Sales reps.

Here's all my first sale story.

-Inbound marketing

I setup a web site...and eventually got some leads (name email phone).

-Qualifying call

I call them up and asked them about the problem they were trying to solve. Many of them were just Software tourists (people that sign up just for fun) but some looked promising.

-Skype meeting Setup.

Some of them asked me to visit them... I said yes, but I told them that I would to set up a short Skype meeting first to understand their problem better... In reality I just wanted to know I there where really App-Worthy before doing the human brochure.

-Skype meeting.

At the beginning of the skype meeting I would try to know more about them, their role in the company etc.. After a little warm up I would dive into the problems list and asked them what my app should do for them rather then just presenting my app.

I asked them if they already have a budget, and when they would like to solve the problem

I show them part of my app (only the parts they asked for) and clearly asked them from 1 to 10 if they think my app would solves their problem.

If I got a vote 8 or below I asked what it would take to reach a 10.

If I got a vote above 8 I asked what we should next..

Most of them usually reply "send me a proposal"

-End of story

After few days... I received my first signed proposal... without meetng them.

this all sounds about right. refinements i would add:

* don't ask the customer what the next step is, tell them, show them, push them in the right direction. they have a job to do, and don't want to think about yours.

* also setup a final proposal review meeting for last minute q&a. ask what any last hurdles might be. then push hard for the signature, buyers respect a seller who is confidently trying to drive the schedule forward. be polite but drive forward.

* include a deposit, if not the entire licensing fee as a requirement to start work/deployment. a customer that does not pay you is not a real customer, they are trying to manipulate you for some other purpose i.e. reducing their incumbent vendor's price.

* if you have a working product, do not, under any circumstances, offer any kind of "30 day out" clause, or refund, or whatever. this just means you are going to waste 30 days of your time and money. this is fine for SaaS with freemium, but not enterprisey sales/services driven deals.

in larger businesses you can be flexible on the last point (i.e. accepting a purchase order instead of cash), but as a small shop you can't afford to waste your time or be jerked around by assholes.

but honestly i wouldn't even worry about it, if you're a newbie at sales, it's 100% guaranteed you're going to learn that the hard way. c'est la vie.

the 'what happens next' question should be answered or asked depending on the client's personality. sometimes the client wants to be a little important in the negotiations or the company clearly has their own way of doing things, so I ask them 'now what', but it is never asked so bluntly. More along the lines of "To move forward, I typically would send you a proposal/invoice, but I would defer to you on how you company handles this. What works for you?"

"software tourists" - from now on I will be using this term

I've been a software tourist dozens of times. Even have a Google Voice mailbox just for software salesman to blackhole into.

I'm just curious about stuff. I want to play with the trial, read the manual, see the data sheets and whitepapers, etc. But your stupid website demands my contact information. I'm not trying to waste your time, and if you'd just let me at the damn PDFs I wouldn't.

>>I'm just curious about stuff. I want to play with the trial, read the manual, see the data sheets and whitepapers, etc. But your stupid website demands my contact information.

It's so that a few days after you download the PDF, someone can contact you and ask what you thought. I've been in that position a few times and I really appreciated it, because I was really busy and had totally forgotten to read the material.

Besides, it's a really, really good way to identify which companies are worth doing business with. You provide your contact info to five companies and then check to see which ones care enough to call you vs. just spam you with junk. IME signals like that matter as much as the product itself.

It's so that a few days after you download the PDF, someone can contact you and ask what you thought.

Yeah, that scales really well for both of us.

Why wouldn't it? Have an automated email sent ~8-11am in the morning their time, personalize it with their name, ask for their thoughts. They either reply or don't - either way, automation made sure you didn't waste any time.

Let's see.

   cd \\rackstation\raid\pdf

   dir /s

   . . .

   Total Files Listed:
   128297 File(s) 195,523,570,325 bytes
   22700 Dir(s) 8,922,298,789,888 bytes free
How about this: I need something, I'll call you.

OK, if you don't want to engage with the company, no need to engage. No need to make it a principles battle. Not every business is concerned about entertaining your itch for reading.

I assume you didn't accumulate the 128297 pdf's in the space of a day or a week or even an year (that would be over 351 pdf's per day, every day of the year). I assume you download like what? 10 pdf's per day? If you can take the time to visit 10 company websites and go through their documentation every day, I assume you cab find the time to read (and possibly respond to) 10 emails per day

If you can take the time to visit 10 company websites and go through their documentation every day, I assume you cab find the time to read (and possibly respond to) 10 emails per day

Know how I can tell you're not an EE?

Many software professionals can become a free sales force if software companies would let them. I may tour dozens of solutions for different things - I'm educating myself on what's out there, and just because I'm not in your sales funnel now, it doesn't mean that I won't leave business at your door step in the future (which I've done several times throughout my career)

This also translates to small businesses as well. It is similar to the approach I take. Biggest difference is that the proposal I send is closer to a contract (with payment terms clearly defined).

I'm curious: What kind of $ amounts are we talking about here?

I don't have a story about enterprise sales, but if you'll allow me I will just slip in the story of the first copy of software that I sold. I hope no one minds.

I wrote a silly computer game about cats (http://store.steampowered.com/app/386900), essentially making a puzzle game out of finite-state automata questions you get during the computation course of a Computer Science degree. Of course, the abstraction on the mechanics involve cats, because it's a good way to trick people into doing computer science.

Now, three weeks before I released the product, I stuck up a webpage where people could purchase the game for a higher price, but the twist was that they could send me a picture of their cat, and I'd put the cat in the game, in a level somewhere. I didn't really know if anyone would be interested, I didn't do any marketing, but since it didn't take long to hook Stripe up and the idea amused me, I went for it. The next day I received my first customer, someone from Peru, who in broken English described their cat 'Missy', and attached a dozen or so photos of her. So, I draw an in-game representation of the Peruvian cat, place her in the game, and add a feature where when the user mouses-over Missy, an overlay pops up with a photo inside. I still have no idea how this customer found me, but I do know who their cat is, what food it likes, what toys are its favourite. Over the course of the three weeks, a little more than a dozen people preordered and sent me (usually loads) of pictures of their cat(s), which was quite a personal subject for some. More than one had recently lost their pet, and wished me to memorialise the cat inside the game, either for them, or their wife/husband, as a gift or as a surprise when they played it through. I did not expect to be in some way apart of people's grieving. Some of them wrote me much later to express their thanks. What stuck with me most though was the feeling of making a personal connection with someone on the otherside of the globe, Peru, Singapore, Algeria, etc, and effectively being introduced to a member of their family. It was a surprisingly meaningful experience.

So no, not at all about big enterprise sales, instead a $10 game involving cats, but, there you go.

I love your story! And the game looks fresh and a nice idea (I liked the art)

Thanks for sharing the story. I just bought a copy. I love cats and enjoyed my automata class in school, but I would have never thought to take such a nerdy topic and turn it into a puzzle game.

That's a great story, and it looks like a good game.

Could you elaborate on Steam sales? Non-steam? Thanks!

I released on Steam, and Steam's been great. Since I just developed the game by myself, I only needed to sell a couple thousand copies to break even, and that happened fairly quickly. Releasing on my site (http://cranktrain.com) and on other stores like the Humble Store, the Mac Store, that's all rather worthwhile too, it all adds up. My site is a small Django site with Stripe, so that gives me the biggest margins, though I then have to sort out things like European VAT payments, which is a pain, but hopefully I'll grow that for my next game and it'll become worthwhile.

The Cat Machine has done modestly well, but it's let me work on games full-time. And it all started with that one cat-owner in Peru.

Have a look at https://quaderno.io/ for handling the EU VAT stuff. I actually don't use it, but I remember that they provided a checkout experience similar to Stripe.

Thanks for the update! That's great it's profitable.

Did you go through Greenlight?

I did indeed. Not the best process in the world, but I was only there a week.

They should've been talking about your game in cat forums or something...?

This story made my day, thank you for posting it.

Thanks! How long did the game take to make?

We recently had our first huge sale to a single customer. It started out as an inbound inquiry to the general email address. I wasn't involved at this time (there are 6 of us, but only one other person handles anything sales/customer related). I believe there were a total of 4 emails outlining the general service, our products, current pricing, and what we could offer in the future. I later learned it was a very junior member of their team who was collecting this information.

The final email, which included a presentation, led to the scheduling of a call with about six people from their side on the call (and two of us). This call lasted about 90 minutes with me talking almost non-stop. After the call they asked for an NDA so that we could share more details. It took about two weeks to get the NDA in place.

The NDA was followed by a request for me to visit them in person for a couple of days. We're based in Chicago and it was a three hour flight. The meeting lasted about 10 hours, with about a half-dozen of their staffers involved, including their consultants. Consultants were involved to offer advice on build-versus-buy.

After I went home, I was asked if their management team could come to Chicago. This ended up being an 8-hour meeting. At the close of that meeting, I had a verbal approval. The paperwork took another week or so to get in order. The initial funds were wired immediately after the contract was signed.

The initial funds were wired immediately after the contract was signed.

For those who are new to enterprise sales and reading this - this is highly unusual for enterprise sales.

Be prepared to waste many man-days chasing after payments to be payed and expect months of delays in receiving them.

The larger the contract the more the delays.

That's the nature of the game

To clarify, I would not call this a typical enterprise deal or typical enterprise customer. I agree completely with you--closing a big deal is one thing, getting paid for it is quite another.

It is amazing what not giving the customer the product until they have paid does for speeding up the payment process. I have yet to have a customer who can't manage to get the bill paid when they really want the product.

In large enterprise sales, you would typically structure the payments into various milestones.

You may be able to invoice the first one before you actually give them anything but there is a vanishingly small chance of collecting the full payment until well after the product is deployed, probably in-use and occasionally after demands for features that were not agreed upon have been delivered.

>We recently had our first huge sale to a single customer.

in general terms can you talk about the size we're talking about (how many figures)? This is actually missing from a lot of stories in this thread but I think would be useful.

This sale is worth about $750,000, with opportunity for additional sales in the near and medium term. Our technology is core to their long-term objective.

As a bit of additional information, those first few emails that I mentioned took place over several months. From what I can tell the consultant and customer were reviewing the entire industry to see what was available. When they finally decided on a direction, things went pretty quickly.

Although this sale seemed fairly straightforward, all of the other warm leads and almost-contracts were anything but. I would say there were about nine other deals that got very, very close, but never closed. I previously had a $250,000 sale with a verbal commitment from a customer with budget to literally give away. But in the end, the deal died (because of inter-organizational politics).

My bit of unsolicited advice: Never, ever stop filling that pipeline. Keep casting that net, no matter how many times you miss.


One tip: I've found that it's useful to make a standard bi-directional NDA that has exactly the same terms for both parties. This frequently lets you skip the two weeks of back-and-forth getting agreement on the NDA terms. You just say "we have a standard bi-directional NDA, do you want me to send it to you?", and they usually just skim it and sign without getting lawyers involved at all.

I agree with your approach, but in this particular case, it just took them that long to get back to us.

Yeah, that happens too. (-:

A Fortune 100 company reached out to one of our advisors looking for technology that was right in our wheel house. We didn't yet have a product but we had the technical underpinnings of a product. I think when they first agreed to talk to us they thought it would just be a way to educate some of their engineers on state of the art techniques in our field. Sort of continuing education for their staff. But we threw together a demo in a week and it impressed them enough that we kept talking and the tone shifted to the potential for a commercial relationship. We put together a few more custom demos and got them to the point where they believed we could deliver technologically. From there we went to a 3-month trial where we gave them the "real product" but only on about 1/10th of their full data. I think we charged about $15k/month for that. The trial was a success and it came time to iron out the full-blown contract. This was a huge ordeal. Because they had so much leverage in the relationship, they threw every awful thing you can imagine in the contract. The negotiation process was stressful and got pretty nasty at points. We caved on many things but held firm on a couple and actually had to walk at one point. They played dead for a couple weeks and then came back to the table. It took about 4 or 5 months to get it over the finish line and we were able to get them to pay the trial fee for all of the months the contract was in limbo (that felt like a big win). The contract was worth just north of $1M and in retrospect I think we got a good deal. What did we do right? We came in very high on price initially and that helped us settled on the higher end. What did we do wrong? We probably fought more than we should have on some of the terms since now we know they were mostly just CYA. It would have been nice to have wrapped it up much more quickly.

In short: takes forever, prepare for pain due to power inequality, and aim high on price.

If you don't mind me asking, how much higher was your initial price?

About 3x that.

We ran a web scraper startup selling leads to London property agencies.

I built the product in 3 months in Hungary after which my partner was about to sell it but couldn't due to a vis major.

I extracted the addresses of all London agencies (~2000) from a website collecting them. Then I built a simple CRM system in about a week that was essentially a Google Maps frontend with all of them on it + ability to add notes & color mark them according to their status (if I have visited, interest, etc.).

Than I flew to London, printed some brochures and walked in ~500 of them in a week. (London is/was packed with them, there were sometimes 3 in a row.) I ran around with a brand new iPad 2 which brought me lots of interest - in the iPad..

We got 1 big sale, where I bumped into the CEO of a small chain. He was very entrepreneurial and simply wanted to give it a try. It took a couple of days of negotiation over the phone to iron out the terms. There was no second in-person meeting.

FYI, we got some 10 smaller sales but the marked proved way smaller than anticipated so we shut down.

Nice story! With the large volume of Hungarians moving to London, was there not a way you could use your data to help them find a place to live? Having a web scraper that finds appropriate listings before you could physically comb through the websites sounds like it would gain some traction.

Simple, contacted VPs of sales for of a large consultancies and offered to give them a percentage of any sale I got from leads they provided. Found one, and required their CEO sign-off on it. After that, all the leads I got were hot and for me, larger than I would have gotten on my own; for the company feeding me the leads, the project sizes were too small.

Did that really worked ?

Yes, got enough clients to grow on just cashflow; one leads turned client I got from it was a very well known globally recognized brand, publicly traded and a market-cap of half-billion+.

I was 17, skipped the last days of school and sold a forum-/chat-/etc. software to the largest german TV channel. The software didn't actually exist at that time, I had to make do with a prototype built in powerpoint.

We got about 20k€ iirc, and later learnt that we should have probably added a zero to that. Took us quite a while to build it and became a bit much for me to manage that project, but we got it done mostly intact.

The whole thing was quite a mess of php spaghetti-code, though. Still had a lot to learn.

We had a good idea where we wanted to be - HR software. We built our enterprise product by looking online at what others were doing in the space, then building something that had a single key screen in it that was better than anything else we could find. It seems one good page is often all you need to entice prospects (we certainly didn't have a fully formed product).

Then we got lucky, which is something you probably need at some stage. We came across (chance networking) a giant Telco who needed our product. They'd just 6 months earlier been through a typically elaborate and baroque RFP process to pick their incumbent, a big US player with an exceptionally ugly legacy product. Despite doing their due diligence up the wazoo, they got shafted when the vendor decided to stop selling that product and asked them to pony up again for a multi-100K re-implementation fee onto their new platform.

Telco was enormously pissed off, and we lucked across them just at that moment. They were open to procuring their replacement product in a more lightweight way, so we side-stepped the RFP process and snuck in (also found out afterwards we were about an order of magnitude cheaper - though cost is often not that big a factor in enterprise sales).

From there on we were on a roll, because Telco was so ginourmous, we got plenty of other people signing up just off the back of the halo effect of that one deal.

Then we did all the hard yards - converting those steadily growing revenues into product improvements, and all the stuff that's less luck and more execution. We did awesome, great work, but its questionable whether we'd have got the chance to even run onto the field if not for an initial lucky break.

Things you need for enterprise sales:

- luck

- a likeable, trustworthy front person with a cultural affinity with target customers

- the illusion of a solid, well managed company, i.e. not a one man band

- the patience to do a swag of accompany paperwork - RFPs, disaster recovery plans, external audits, etc. All a PITA, but worth gold

- the balls to ask for large amounts of money for your product, because its worth it, and you're worth it

- perseverance

Great story!

How did you manage this: >>- the illusion of a solid, well managed company, i.e. not a one man band<<?

Really a matter of faking it until you've made it..

- have a physical address

- have photos of your employees (even if some were drafted in from the office next door)

- be highly responsive to strange (to you) requests for documentation etc. from their IT, procurement, exec and management teams

- this is hard but don't over stress when they are late paying you. It takes a hideously long time for corporates to actually cut you a check. They always pay - eventually. But its not impossible to wait for 9 months longer than you thought to get paid, just because of their process. You have to somehow survive this

- have a lawyer

We bootstrapped off of consulting revenue to cover the costs in the start

Our first customer was a lead from one of my co-founders. He'd been in another company a few years prior in the same space, and that company went bust, and the customer needed a new solution. An easy first sale. Later sales proved to be extremely difficult.

IIRC our original price list ranged form $15k to $100k. The typical sale included hardware, a 1U rank-mount server that we pre-instated our software on.

Why were sales so difficult?

- Enterprise sales can take a long time to close. I think our average close time was a year. That's not surprising when you think about the process most companies have to go through -- getting buy-in across divisions, waiting for an annual budget period to arrive, etc. Educational institutions took the longest -- over a year. You need a lot of runway.

- Enterprise sales are very high-touch. Lots of phone calls, lots of demos, lots of on-site visits. Prepare to buy lots of meals for decision-makers! It's reasonable for a large company to want to spend time to get comfortable with a start-up... you're competing with HP, Microsoft, EMC, etc. for these customers, and none of them are going away anytime soon, but your startup needs to prove it's real and has staying power.

- During one of your first get-to-know-you calls, I highly recommend learning about the internal process of the company. What's the signature authority of your contact? Who has to sign off to approve a payment of the size you're thinking of? It's not uncommon to believe you have all the approvals you need, and actually be wrong. We had situations where we installed gear on-site and later learned that a VP needed to sign a check of that size. Don't be rude, but make sure you ask the right questions. You may need to get the name of someone in Payables to get the real deal.

- To avoid the lengthy approvals process... a trick I liked was to make a custom product just below the expense limit cutoff. For one company I talked to, they could authorize and expense anything under $1k, so we made a product that was $1k/month that they could pay with a credit card and expense.

- Contracts are part of the long lead time. Expect lots of modifications. If you don't have an attorney handy, this can be a real expense.

- Source code escrow came up a lot. You may want to investigate options ahead of time and bake the cost into your pricing structure.

By the end of my time there, I was convinced that enterprise sales weren't worth the trouble.

I won't give too many details as negotiations have only just closed, but we are product development engineers building a physical hardware/software system and selling to operators to whom product development is a completely foreign concept.

We knew who our target customers were, and made contact with one who came to us at a trade-show. This went through a few rounds of talks, but although the initial contact and his manager were dead keen, the decision maker stalled and we gave up.

Simultaneously, we found a contact in our network who got us to near the top of the hierarchy of a second much bigger customer. They sent a single manager to have a demo, and we must have blown him away because they brought the CEO, CFO, some VPs and even a board member around for the same demo a few days later. They proposed a partnership that day and left us to iron out the details. Direct access to the decision makers was a HUGE part of making this happen.

It took about four weeks of meetings and emails to get alignment, but we're now preparing for a paid trial with an MOU for a much longer partnership assuming all goes well. The biggest challenge was withholding their desired exclusivity in different ways until we reached alignment on the upside to us, at which point we gave them the lockouts and distribution rights they wanted.

Fortunately this deal went well for us, but had it not we'd be talking about how much time we wasted preparing models and spreadsheets and refining terms of agreement. We had other paths we could have gone down, and the interest from this customer was validation that the product was valuable so we weren't short of options. I think that gave us good negotiating leverage, and we were ready to walk away at one point. The biggest irritation was probably the translation from verbal discussions to written form, as it seemed like terms we'd talked through and removed were being re-added in different flavours each round. Careless (or perhaps deliberate...) wording could have cost us half our upside, but we spotted that and resolved it.

I don't believe any other companies were in the mix. I suspect they saw that our product was a distinct improvement over their existing capability on so many counts that they just jumped at the prospect of getting it exclusively before their competitors did.

We were building a price comparison company. I was trying to figure out ways to make money after we were turned down by YC and unsatisfied with 4 months of fundraising. Thought we'd try and sell our price lists to businesses who wanted to be competitive.

I tracked down the biggest in the region, found someone there who had upvoted a couple answers of mine on Quora, pinged him there, and he replied. Said it was interesting, but he had no idea what price comparison was, so forwarded me on to the COO.

I met the COO at Starbucks, we talked for a couple hours. Initially, he said it was a very interesting concept, but he didn't understand how to integrate our information into his product. I said it would be easy to integrate it in his data warehouse. He asked me what that was. I explained, he asked me how much we'd want to build it for them part time. The contract was signed the next day after a 30 second meeting with the CEO, and so we were in the data business.

I didn't get on well with the CEO, in great part because I was still inexperienced at the political side of sales and would say what I thought in emails, particularly about their existing BI efforts. So we parted ways after 6 months, but they had a data warehouse and automated reports by that point, which afaik are still running there under a new team.

To this day it is my only cold pitch conversion. Every other client I ever had came through connections (making me wonder the value of spending time on pitching). Sometimes as random as - I met a guy in a conference I talked at, he invites me to his next government event, he introduces me to his friend who left the civil service for a VC, the VC likes what I'm saying and introduces me to her portfolio companies, one of them signs.

I used to run a company called Active Interview. I say "used to" because the product is on auto-pilot now, and just cruising along without any support with MRR of around $1200.

The very first sale was done before our recurring pricing was even built. We had a contact who sold video interviewing to One Laptop Per Child without a product. He was a sales guy trying to build a product, but was having trouble executing on the implementation (as programmers, this is probably an old story). He saw our product and said it was exactly what he was trying to build. He agree to split the revenue with us 50/50, if we allowed him to use our product for his clients. That was our first and last enterprise check, and this was before our product was even fully finished. The One Laptop Per Child interviewing went very well, and we were able to get some minor publicity out of it. At that point, we thought we had something big, and wanted to pursue our vision of a SaaS product, instead of doing pure enterprise with the sales person who found us. We were one of the first video interviewing products, along with Hirevue, and was sure there was a market out there. At first, this was true.

Our first enterprise sale on our own was Airbnb, and was relatively easy. A lead from one of their departments sent in an email, and after a demo, they signed up for our $500/month plan. We created that plan only to provide a contrast to our $99/mo plan, which we thought would be the primary seller. Turns out $500/mo is nothing for enterprises, and soon that's the only plan anyone ever cared about. The Silicon Valley startups in general were much easier to sell to. Wildfire Interactive (later bought by Google) was also an early customer, as was odesk, and a couple of other startup companies. They were all very easy to deal with. They were abnormal though, as we found out later.

The real enterprise sales experience came from more traditional industries. For our product, that meant mostly recruiting firms. No one used the free trial, and everyone wanted a demo. They wanted to speak to someone over the phone, and do several rounds of demos. The first was usually with a smaller manager or analyst in HR. Then subsequent demos would be head of recruiting or HR, or other senior executives. Almost every demo ended with the clients being impressed by the product, but no commitment. We did demos with some of the largest recruiting companies in the US, and with some of the largest retail firms in the US (head of Marshalls/TJMaxx, for example). In the end they went with a bigger company because they couldn't trust a couple of scrappy guys with their business, even though the product was good. Our pricing was also off-putting, because it was way too low. Low prices send a signal of poor support and poor quality to senior executives. $500/mo is a rounding error to them, and we probably would've made a better impression by asking for $10k upfront and $2k/mo and assigned an account manager to each client so they have a point of contact.

That taught us a lesson - if you want to go after enterprise, it's not really about the product. It's all about sales and hiring account managers and showing that you too are a big company. In that sort of field, you almost have to take VC funding to "act big".

The alternative is to do what Basecamp did which is become thought leaders in your field, but we really didn't love the recruiting industry enough to even attempt to do that.

I'm not sure if this is the type of answer you're looking for, as this is more of a failed enterprise company. I've talked to a lot of small companies who do enterprise sales, and the success stories I've heard always revolve around building an in-house sales team and ensuring a successful on-boarding experience for customers by way of account managers.

That costs a lot. For bootstrapped companies, that's just not possible.

As far as creating an in-house sales team via bootstrapping, I've seen it be successful. The trick is to have a service based company with just enough sales and marketing to keep generating revenue. The hard part is for the partners to have the foresight to not pull all the cash reserves out for their personal gain and instead reinvest the revenue in creating new products until one takes off and becomes the main revenue generator.

I think that's fine while you're still tweaking and figuring out the sales machinery. Once you have that figured out, you can make money with money and it's time for funding.

If you're going after a niche B2B market, why bring on funding? You're just diluting the partners' equity.

Was the lack of enterprise sales, and being beaten out by competitors, the reason the product failed? From your story it sounds like you were on the brink of success relatively recently.

What are you working on now?

I think there were two big mistakes we made (plus countless smaller ones):

- we didn't love the recruiting industry. We loved the idea of running a business and building stuff. That's not why people pay you.

- we didn't understand market segments. Valley startups are different from large traditional companies are different from small companies. We also had many MBA and law programs as either paid users or leads, but we also fundamentally misunderstood their core problems. The go-to market approach needs to be different for each of those segments.

I could write a book about the mistakes we made. In the end, it's lack of experience, lack of segmenting the market and fully understanding the core value prop for each segment, and too much focus on building the app. We had a lot of fun figuring out edge cases and working on the engineering side of things. We didn't enjoy the recruiting industry, and didn't want to take the time to really understand our customers. To really understand your customers, you have to know their industry like an insider; that's how you close sales. If you can't do that, you should hire sales people who can.

Or, like most programmers, work on a problem in which you are already a customer.

Such a book would be pretty useful. Please do it.

Thanks for sharing your story. It's super interesting.

I've seen the long, drawn out and high touch enterprise sales process shock a lot of product and engineering driven startups.

It's too bad. I think this heavy sales process that enterprises usually demand slows down the pace of innovation. I mean, I get why they want account executives, and even why they feel more comfortable dealing with a seemingly "bigger" company. But there are a lot of people with game-changing ideas who can't get them off the ground because they can't build an effective sales org on a shoestring.

I wonder if there's a way around this situation. I mean, maybe some kind of AEs-as-a-service thing could be helpful (if that doesn't already exist).

There are sales-as-a-service type of companies out there, but most I've seen are a bit sleezy. Premium ones, I imagine, would cost similarly to a good salesperson.

The most successful model I've seen is hiring recent college grads who are sharp and willing to learn. They are cheap and will dive into the industry they're selling. A lot of funded startups operate this way, usually led by an experienced salesperson.

Folks have tried "AEs-as-a-service" but there is no happy balancing point between the very high cost of good AEs, customers of the service having effectively no way to monitor or control the AEs' behavior, extremely long time to payoff, and the natural awkwardness of trying to represent a company of which one is not a true member.

These are great. Could the OP please include a request for people to optionally include their technology stack?

Thanks either way!

A wonderful thread indeed!

Selling software to law firms. Father of a friend's wife had heard I was building the particular type of software his firm needed for a case. They purchased the software almost sight unseen. Sometimes you need a little luck with those first sales!

Started a company that sells SAAS to US investment banks. I was a former banker and spent a lot of time priming my colleagues for the service prior to starting it assuming they would be willing customers when it was ready (we addressed a niche that was quite a problem for the banks). I thought that if we built a better mouse trap that significantly improved the user experience (for investors, the under writers and the issuers - the companies that actually raise the money) and saved everyone thousands of dollars it would be a no brainier for the banks to use us. Didn't happen. When the time came, bankers who, contrary to public perception are highly risk averse and focus on risk mitigation, didn't want to migrate to something untested despite our domain knowledge and demonstrable improvements. They didn't say this of course - it was always another reason such as "it's not my choice" or whatever.

The way we established a foot hold was to go straight to the issuers. What made our service unique is that while a bank was our user the service was often chosen on behalf of someone else (their client, the issuer). 99% of the time the issuer is silent on which service the banks use, after all they pay the banks to advise them. So we instead sold the service to them (well in the beginning let them use it for free). They in turn told the banks that they needed to use our service and the banks, who ultimately serve the issuers, simply complied. Once we had 2-3 of the banks onboard, network effects kicked in. With each sale we would go to another bank and say "let me show you what we did for XYZ"

Moral of the story (for us at least): 1) someone may indicate they are a champion but when the time comes, most are unlikely to be there. For every team of 40-50 you can at best expect 1-2 people willing to be champions 2) if possible (and I can appreciate that not all services can do this) sell to the person that ultimately benefits from this. In our case, banks use our software in relation to capital markets deals for other companies like John Deere so go to John Deere directly. 3) random point not mentioned above but worth highlighting ... I find that enterprise customers care more about making a dollar than saving a dollar. Our sales improved dramatically by tweaking the message to focus on this. If possible, focus on how you help these organizations grow P&L 4) I am a HUGE believer in Trojan Horses (and I don't mean hacking software). If possible, figure out a way to get your prospects using or benefiting from your software immediately by giving some service away (maybe not even your core service) weekly or if possible daily. The more they interact with you, the easier it is to bridge the divide and get through the process. 5) last point, don't get hung up on engagement letters. I know the lawyers will advise against this but a lot of deals die in the engagement letter phase. I appreciate not every business can do this but I made it crystal clear to my accounts that if they don't like my service they don't need to pay for it - that gave gem the comfort to use it regularly and at the end, they all paid for every use.

I can go on further on some of the tactical nuances of the above and other strategies. Feel free to ping me.

Yeah I'd like to hear more. What are the specific ways you tweaked your message to focus on making a dollar?

In a typical enterprise sale, the people making the decision (to buy your solution) are usually too senior to be the ones actually using it. There is a subtle corollary to this that I did not appreciate at first... often, these people are responsible for the profit of their group but less responsible for the costs associated with the technology. Thus, teams are less sensitive to cost than they are top-line revenue. There is a lot of theory about how silly focusing on top line is instead of profit but we all know the difference between theory and practice.

So how did I change my pitch: I ripped out all the slides that walked through my site and all the neat ways we saved time, automated workflows, etc. I focused on the data we generated (in one page) and threw in two case studies that highlighted how decisions made with our data generated more revenue.

It is important to highlight that the pitch-deck is not what is selling your solution, you are. The key is to tell a story worth listening to and I use my pitch decks to guide that story. My pitch today has X pages:

- Cover Page - Page with client logos (demonstrating social acceptance) - Page with big picture showing our platform works on all browser enabled devices (a major innovation on wall street) - Page demonstrating the insights our data creates - 2x case studies

Hard to put an exact number on how well this new method of focusing on the outcome rather than the solution has helped but I do not believe I am exaggerating by saying it improved close rate by 1-2 order of magnitudes.

If you want to read some great books that I believe will dramatically improve your close rate, I recommend the following in order:

1) Dale Carnegie's How to Win Friends and Influence People - if put in practice, this will pay a life-time of dividends. I wish this was taught in schools.

2) Getting to Yes (on negotiation theory) - a powerful negotiation framework allows you to create and preserve value in very measurable ways.

3) the Psychology of Influence - great case studies on how people make decisions, often in ways that are irrational. I incorporated a lot of the learning points into my pitch and in our slides and absolutely saw a shift.

I love thinking through this stuff so to the extent you want to chat more, happy to hop on a call or grab a coffee if you're in NYC. Shoot me an email (in my profile).

Thanks, it's so useful to get this kind of detailed advice from someone who has worked through these challenges. I may take you up on that offer!

How we got our first enterprise customer (a company in Sri Lanka)


tl;dr; We got the contact from one of our investors. First meeting was a product demo and a short presentation. There were long time gaps between meetings (it took several months to get to the trial). We didn't have a simpler way of doing the trial.

went to a marketing tech conference and pitched our idea about AdWords Automation : AdNabu to a bunch of people. Exchanged cards with a few of them. We couldn't get meetings with any of them.

We got a call from from an enterprise with whom we couldn't interact personally. Met them in their office twice, started a free trial, showed positive results and they became a paying customer in a month

We had to sign a lot of documents but the contract is longer and more profitable to us :)


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