Are you building for enterprise customers? Here are some suggestions that might help...
Hi to all IH-ers that are thinking of building a SaaS or some sort of solution for bigger businesses or enterprise level customers. As a founder of a 6 year old HR SaaS that has a bunch of SMB clients, as well as some enterprise level customers (including a company that runs the largest fleet of street mapping cars in the world, the biggest glass manufacturer in the UK, a NATO aggressor squadron, and one of the biggest crypto companies in the world), here are some lessons we learned.
The hard bits
1. Be ready to roll
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You have to basically throw out everything you learned in the 'Lean Startup' book! Larger customers are absolutely not interested in a mocked up MVP, or a Carrd page or wireframe mockups or even pitch decks.
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They will want a product that is 'ready to go' out of the box, and they will almost always want a demonstration of capabilities, and evidence that your solution can be modified or customized extensively to suit their needs.
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If you say it can do 'X' by 'Y' time, you had better be sure that it does do it - you only get one chance to impress them or they may be lost for good.
2. Talk to the right people
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Enterprise customers have many layers of people and management and quite often, the people who may initially reach out to you may have no buying power, so you will find yourself giving the same presentation to many people at different levels sometimes up to the CEO level before you can expect any commitment.
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Often, they are not actually interested in what your product actually does, but they just want to reduce risk, or make themselves look good to upper management. When talking to different layers of management, you may have to change your pitch to suit what the person you are talking to wants to achieve, which is rarely about listing the features you have, rather, you have to craft the story to fix their particular pain point.
3. Get 'Salesy'
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There is no getting around the fact that you have to get your salesperson hat on and do some work here to get the doors opened for you. Almost all our bigger customers asked for a 1 on 1 demo session of our system and won't sign up for a self paced trial.
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They will have very specific questions and scenarios, and you will need to be able to answer them face to face. Not that they expect you to bow to their every need and modify your solution to suit - but if you can explain a workaround using your system, or even a better way of doing it using your tools, then it is a good way to get them excited and to commit.
4. Get a track record
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Nothing improves your chances to sell to a big business like having some other player in the same space or company size already using your solution. We've won lots of deals by 'name dropping' either their competitors or other respected companies that use our HR system (just like I did in the opening paragraph of this post!) :)
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Get other big companies on board by maybe offering a 'free for 'x' months' option, or a deep discount. Then get some testimonials. Most of our sales come from our Capterra and SourceForge reviews, and we copy the best ones to our website as well on a dedicated 'Reviews' page. They work!
5. Be prepared to do the 10,000km hurdles race
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Big companies have to comply with so many rules and regulations, as well as privacy and security & safety requirements. Be prepared for their operations or IT teams to grill you on your own security practices and compliance with things like GDPR and local privacy laws.
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If you are intending to sell to customers outside your own country, you had better get familiar with the laws of every country your customers will be in, and you will have to answer a lot of questions to the n'th detail, such as how long you keep backup records for, and where your data will be located, and whether you encrypt data at rest etc. You may even have to provide policy documents to prove that you do security training for your team to minimise phishing attacks etc. - even if you are just a one man team!
6. Form alliances
- Large customers LOVE integrations, so be ready to reach out to other SaaS vendors to build integrations between your systems and theirs - this adds to the 'lock in' once an enterprise customer signs up, as they will be reluctant to leave if they are tied into multiple systems via yours.
The good bits
1. $$$
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Probably the best thing about dealing with enterprise level customers is that they have deep pockets, and won't blink at all when you tell them that your solution is $2000/month. There is rarely any 'sticker shock' and once you have 'buy in', you are on a good road.
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Enterprise customers stick around for the long haul and are a very low churn risk (unless YOU do something bad to force their hand). They also like to pay annually up front to meet their internal finance/budget requirements. We have even had a few companies pay for a whole year now, but not roll it out internally for another 12 months which means a whole year of 'free' income with no support load.
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Bigger customers will also readily pay for customization or tweaks to the system if needed. Nothing better than someone paying you a lump sum to develop a feature that will actually benefit other customers of yours.
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Plus, larger customers also expect to pay some sort of consulting or onboarding fees to get up and running. We actually never used to charge for onboarding, which caused confusion for a lot of our customers, so now we put our onboarding costs on our web site as well, and they almost always go for an onboarding package on top of their subscription, which is a nice additional earner.
2. No posing required
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Surprisingly, most of our enterprise customers jumped on when we were just a 2 person company. They seriously don't seem to care if you are a small operation or a one man show. They just want evidence that you are serious, and that you can solve their problem.
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Prove that during the early meetings, and you practically have a customer for life.
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So it doesn't matter if you are building using a no-code tool, or writing it in Assembler - the stack you use if of no interest to them as long as it can get the job done.
3. Natural growth
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Once you have your first couple of customers on board, things will markedly change as I explained earlier. Once other larger customers hear of their colleagues using your system, they will trust you more and reach out at unexpected times.
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Also, with larger customers, their staff turnover is high, and we have had many cases of people leaving one company and starting a new job at another and recommending our solution at the new company based on past experience with us.
4. It doesn't have to be complicated
- You DON'T have to build a solution with 1000 features. Very often, enterprise customers just want to replace the tedium of a spreadsheet! Seriously. You would be surprised at how often the basic problem is just 10 people wasting time updating a simple spreadsheet, and if you can save them time, they will keenly give you a purchase order.
In conclusion, I hope I haven't scared you away from seeking big enterprise customers. I just wanted to pre-warn you that this is very much like big game hunting, with the requisite big rewards. You just need to do a lot of ground work early on and reap the benefits later.
Feel free to ask me anything else in the comments section!
Thanks, very informative!
I have a similar experience. Enterprises are super-slow, but when they need something, they need it now.
A few other things I noticed:
So, yes. It takes a long time. Be ready and deliver - and don't be depressed because it takes so long.
I'm building for schools, which are very similar to "enterprise" customers (minus the budgets).
It's really hard to not get depressed when I've been doing it a long time without any customers...
Not sure if you know about @patio11 (Patrick McKenzie). He made Bingo Card Creator he was selling to schools. Said schools are terrible customers. You could probably relate to a lot of his content at https://www.kalzumeus.com/.
Not sure I would choose that market - good luck!
I was on the edge of abandoning the product exactly because it takes too long. To maximize the return on our effort of building the technology, we are now repackaging it into other products for non-enterprise markets. Perhaps you could do the same?
Wow super insightful. My current position right now is with a consulting company that provides IT services for some international schools. I can see how schools would be far from ideal... The existing products out there are typically pretty terrible, and I'm beginning to see why haha.
I used to sell to schools during my start-up days before I head back into corporates. I find that local councils can facilitate a path into schools, at least based on my experience in Australia. From there, I discovered that there are different type of schools - eventually I found my sweet spot is with public schools and schools for disabilities, not the private schools that I always thought it would be.
Very good points Damir, and should be added to my main list above. As for (3) that you mentioned, luckily for us we haven't been dragged into a long development or customization process... yet... But I can see that what you are saying is definitely a possibility with larger companies.
It's posts like these that makes me wish @csallen added a "bookmark" feature!
haha, I bookmarked hotglue.xyz just before reading this, but yeah, a native IH bookmark feature would be great.
Thanks for the post @Devan. I have a fully working app https://officemixer.app but no good way to get demos with customers. For someone like me who is not very comfortable with sales including harassing people on Linkedin or sending direct mails to create leads (they are 100% ignored anyway), is there any alternative place or way to start generating B2B leads and be less intrusive?
Thanks :)
Hey Eleni - Nice looking app and landing page! OfficeMixer is definitely something that larger companies would find useful. Actually, one of our earliest marketing efforts was direct outreach to companies via LinkedIn, and it worked quite well initially.
We would look for HR managers of large-ish companies, and send an email that was friendly and contained at least one interesting fact about that company to show that we had done our research and not just spam mailed them, e.g. "Hi Jane, congratulations on opening your latest office in Paris. If you need an HR software system to help manage your team across two countries..." etc.
Not a scalable way of doing things, but it helped get those initial customers trialling our system.
We also found that companies were split almost exactly 50/50 on whether they would self sign up for a trial, or else book a demo. Your landing page might get better results if you included both buttons. The 'Book a Demo' button could go straight to a Calendly booking form, and the 'Access Demo Company' could go to a form that captures their email before automatically taking them to the demo environment. At least both ways you have capture their email and can start a conversation with them.
Hello Devan,
Thanks a lot for the tips and insights. The demo buttons do sound like a good addition. Your results on contacting people directly sound very encouraging so I will give it a try for sure :)
Hi Devan, Thanks for the great insights. I presume you probably did some Product Fit research discussions with your target HR enterprise customers. How did you approach this? Was it similar to the above approach?
Hey Jex, actually most of my research was from my past 25 years experience talking to business owners and upper management (I used to be a consultant who installed accounting/payroll systems).
I took all that learning from those decades of talking to thousands of users as the starting point for developing my HR SaaS. Not your traditional 'product market fit' strategy, however still based on actual real world challenges and knowledge.
From there, we just had to do a little refining after we launched.
Great post @Devan! Your other post about how you started HR Partners is also inspiring!
https://www.indiehackers.com/post/show-ih-how-one-programmer-built-an-enterprise-level-hr-system-for-growing-businesses-5c426fb12b
Thank you Joe !! :)
Great post! I've been in the shoes of catering to enterprise customers as well, and let's say it that way - it was... interesting.
I can confirm any point in your post. In addition to that, I'd like to highlight the following things:
While I am not against being ready to roll, it doesn't have to be true that you cannot have a mocked MVP or wireframes. We did exactly that in my last startup team to get a huge client.
I have done those 10,000 km hurdles. So long you are not even happy when the first invoice is paid. Some things I learned:
Get things in writing and include limits. Startups usually move fast but since enterprise sales will require holding their hand in hundred Zoom meetings you better be sure that the revenue will match the time spent. Sure it is always a gamble, but what I learned from signing a huge insurance company who said they will put their entire inbound department on my platform is to ensure pricing is based on exactly that. If they change their mind, as they did, to a smaller user base then make sure per user price is higher. Seems like a basic advice, but easy to forget if you assume that it is all or nothing for such customers. Turned out they did a small rollout instead and now my only real profit from the time used is a very good reference customer.
Understand the jargon. This is a difficult one for me. I despise enterprise jargon and their long process.
Certifications is key. Things like ISO27001 makes a world of difference even when not required. Same with GDPR, while there is no GDPR certification and everyone needs to comply with the law, just writing a little bit about how you deal with it is important. Adding a compliance page on our website makes the legal/security process a lot simpler, it gains trust and they stop asking a million questions (larger corps who have competent people will still ask specific smart questions).
Charge for extras. I don't want a lawyer to read through their custom DPA. Make sure you have terms that could be accepted by larger customers. If there are any issues for them CHARGE for an enterprise plan which includes SLA, dedicated support person and custom DPAs. Make it expensive so they consider just accepting your DPA. Many enterprise customers think they can dictate what vendors should do, don't fall for it - you can say no. In many cases they are just on auto-pilot. As long as their demands are met and the terms are reasonable they are in most cases able to accept it if you put up the argument.
Never do client customisation in your code. LargeCorp want a useful feature? Spec it up based on general demand and give them a quote, if they accept it then it benefits all your users. If they want something more customised tell them to use the API. Any internal customisation will always always come back and bite you. It will make your code more complicated and more importantly your other users will be confused and it will hurt sales.
Totally identified with Point 1 and 5. Get things in writing is key - sometimes things can slip and fingers can point. Writing is going to be key for accountability both side. Every big customer is gonna think they are king esp if they know they are the pilot. Code customisation is going to be a pain for maintenance.
Addition to that, govt customers are a slightly different breed. Need to be able to justify the benefits way more than a for-profit organisation
#5 is huge. A large majority of B2B companies are located in the USA, and when asked about compliance, they often respond, "don't worry, we're HIPAA compliant" and have no clue that it carries no weight outside their borders. Want to be a global company, then get a global perspective. Well done good writeup.
Thank you. Yes, its been doing my head in, talking about HIPAA, and not to mention SOC1 and SOC2 which is US only, and ISO27001 which a few other countries demand. I believe HIPAA is also a thing here in Australia, though not as enforced as ISO27001. Then we have our '13 privacy principles' that our government enacted. Then there is GDPR!!! There is always some overlap, but also differences that you have to be aware of when asked.
We almost need a full time person just working on this aspect alone!
Thanks for this post @Devan! Can resonate a lot with number 6 - it is actually why we started building hotglue (https://hotglue.xyz). Integrations are such a core part of SaaS now, most B2B SaaS tools don't consider integrations a feature but rather a prerequisite to even using the product!
Absolutely David. Building (and maintaining) third party APIs are always a lot of work, so it is great to see tools like yours that reduce a LOT of that overhead. Best of luck with HotGlue!
Great post and advice Davan. The thought of chasing bigger B2B enterprise type clients is very daunting.
Very interesting that you say the small size of your team hasn't been an issue. We have had some very large corporations sign-up and we have always been concerned about them finding out there are only two of us running the show.
We hadn't planned to go enterprise at all but from our signups we might have to seriously consider how we are going to approach it.
Thanks Louise/James. Yes, if you have the time to invest in doing the pre-sales work, definitely look into getting a steady base of Enterprise sized clients - they will become your 'bread and butter'. All you need to do is put on a professional front and prove you are not 'fly by nighters' and you can get a foot in the door.
Hey, great post!
I also have enterprise solutions for my largest project - Price2Spy and I think that most of what you've said applies in my case as well!
Thanks Misha! Great to hear it resonates with your experience too. Good luck with Price2Spy.
Thanks!
This is brilliant! Thanks for taking the time to pen this down.
Thank you! Glad you found it useful.
Very informative article. Thanks
Thank you for posting @Devan! How do you decide whether to focus on B2B or B2C?
Thanks! It was quite simple... I had about 3 B2C startups, and 1 B2B, and the B2C ones were making me about $30/month whereas the B2B one was making me about 100x that! :D
But more seriously, I had worked exclusively B2B in my prior consulting business, so I was more familiar with that market and how to deal with them.