Selling to the Fortune 500, Government, and Other Lovecraftian Horrors (2013)

https://training.kalzumeus.com/newsletters/archive/enterprise_sales

by putnam • 9 years ago

111 24 9 years ago

training.kalzumeus.com

I think this is a good article. It works well for internal "sales" too, where the main budget is developer time instead of dollars (which translates to dollars eventually of course). I've worked in these sort of teams for the greater part of my career and I've learned that the word "permissions", as referenced in the article, is an immediate trigger for asking for more capital i.e. dev resources to complete the project.

As the classic xkcd comic[1] implies, there is a large difference in difficulty for certain tasks that may be seen as roughly equal in effort to the end user.

[1] https://xkcd.com/1425/

SwellJoe• 9 years ago

It's interesting that the "virtually impossible" task of a few years ago is a joke app of today ("Hot dog or not hot dog"). Machine learning is moving fast lately.

SOLAR_FIELDS2• 9 years ago

Indeed. The field is moving quickly. Part of the joke though was that the problem is still hard enough that the app was only able to identify one food item. We're getting closer, but it's still quite a hard problem.

kbenson2• 9 years ago

I kind of wished I had signed up for patio11's newsletter years ago. It hits just the right spot of being informative and actionable to actually be enjoyable for me to read.

He's not still doing it since he went to Stripe, is he?

patio11• 9 years ago

I plan on continuing writing in my own capacity; been a bit busy the last few months though (a combination of work and us having our second child in February).

kbenson2• 9 years ago

That's good to hear, and congratulations on the increasing responsibilities of fatherhood. ;)

probdist• 9 years ago

I've help sell software-as-a-service to large businesses for a few years and this is a good read. An interesting additional nugget is that when the stakes get big enough customers often are being guided by a consultant (Accenture etc) in crafting things beyond an internal purchasing/procurement/IT mashup. You need to make sure you help the customer and the consultant to get the sale.

putnam2• 9 years ago

So Accenture does due diligence on the expected ROI from the product?

What if you're offering a SaaS product that no one there (but everyone on HN) gets - Is it possible to be both Accenture (review and craft a deal and explain the benefit to the business really well) and also be the software-as-a-service if the client has never bought anything like this before?

Context: I am trying to sell DL consulting/productized models but enterprises either say 'we don't really do that' or 'we do that but we don't work with consultants'.

beachy• 9 years ago

What if you're offering a SaaS product that no one there (but everyone on HN) gets

When you feel you're in this position, you should possible reevaluate your offering or the way you think about it.

Although all of the things in TFA ring true, its also true that very often, your internal champion at the customer is actually pretty savvy, and has a strong understanding of their own needs. Not always - but often.

I interepret the feedback you are getting from them as "I don't understand".

If so, thats your problem, not anyone else's.

In the early days we used to market our product as super flexible, way beyond what anyone else had, you could "bend it to do anything". We had a smartypants view of the world, our offer was meta-data driven, yada yada.

After a while it became clear that potential customers did not understand. They (curse them) wanted to see our product in action, solving their business problems. They didn't want to embark on some big configuration journey.

If you can I'd suggest you think about ways to offer "out of the box" implementations of your product, where no consulting activity is required - then seek out early adopters/champions inside the organization who will bring you inside.

gsylvie• 9 years ago

Reminds me of how many Atlassian Platinum Partners offer "licensing support".

e.g. http://valiantys.com/en/software/licensing/

Each company decides how to conduct their purchases. We let you choose your preferred currency (USD, GBP, EUR, CHF or CAD) and payment method (bank transfer or credit card).

This is just arbitrage! e.g., "If Atlassian doesn't accept your company's standard payment style, we'll bridge the gap for a fee!"

In other words Selling to Fortune 500 is hard enough. For a real challenge "Try Selling to Fortune 500 When You Yourself Are Also Fortune 500." :-)

jayonsoftware• 9 years ago

I have worked for bunch F100 organization and many times I have ended up writing my own library or tool because the effort that need to buy a $99 tool is so huge, its cheaper to write my own logging frame work, ORM or deployment script. It cost same effort to buy a $99 or $250K product.

devonkim• 9 years ago

Similarly, the open source review process for so many companies I've seen has been so onerous that it was easier to write your own proprietary clone with absolutely none of the community and review possible with OSS. Enterprise processes in general are historically oriented around avoiding downside risks at the expense of agility and growth because it's simply easier to lose money than to gain it when you're an incumbent in a market vertical.

kemiller2002• 9 years ago

This is so true. When I worked for one, we needed 2000 (maybe 1000 I can't remember), but not a lot for a small workflow system to support an application. The purchasing department came back and said we had to use the "official" workflow system, which would have cost us close 1 million dollars to implement, and none of us understood. We spent probably 9 months arguing with them about getting an exception which we did for another system that was closer to what we wanted and was only something like 250k. They bought the licenses and then canceled the project because the business decided they wanted something else by that time.

ufmace2• 9 years ago

I ended up being the PO guy in my department for a F500 company. We could usually buy most things around a few hundred bucks on a corporate credit card with minimal process, but certain categories and anything more expensive needed a requisition and PO. It mostly wasn't too painful as long as we had bought from the company before, but good luck getting a new supplier set up. It's quite fun to spend a month trying to get a new supplier set up only to hear that they won't accept our POs because we apparently have a history of not paying on time, despite our tens of billions of revenues.

I'm not sure whether to be impressed or disturbed at a place with no difference between a $99 and $250k order. At that place, my direct manager could authorize up to $10k, and the next layer up needed to sign off for anything above that up to I think $50k or so.

tyingq2• 9 years ago

Google is particularly funny to watch trying to sell to F500 companies. Their sales pitch is roughly: "Buy Our Cloud Services because We're Smarter Than You". While mostly true, that approach tends not to convert well.

I've seen Amazon eat their lunch over and over. And Amazon's not even as good at it as, say, Oracle.

andrewflnr• 9 years ago

How does Amazon pitch their services in that context?

tyingq2• 9 years ago

Better idea of how to stroke egos. Like allowing AWS to take on the infrastructure frees the client up to do their "innovative work". More empathy about compliance issues, internal politics,etc. Pre written whitepapers the client can use to calm their internal IT security people, etc.

Basically just putting in the work to understand how to sell to that crowd.

ufmace2• 9 years ago

I haven't been the formal decision maker they've pitched to, but I have seen that Amazon does have an enterprise sales staff that will help you out with figuring out how to use AWS, send your feedback to the development managers, route technical questions to the right people, fly out to your office to give presentations, and generally be there to solve any problems that come up.

If Google has any enterprise sales people for their cloud tech, I've never seen or heard of them.

mherrmann3• 9 years ago

I liked the point "GitHub probably makes more money from their largest Enterprise customer than from all personal accounts combined". I think the same is true for desktop apps. For instance, Sublime Text's price point of $70 is precisely for Enterprises. Nevertheless, I believe ST could easily make an extra $ x0,000 by having a one day sale for personal customers. I blogged about this [1].

[1] https://fman.io/blog/finally-understanding-sublime-texts-pri...

paulddraper2• 9 years ago

Huh? For software I use 5 hours a day, $70 is definitely personal pricing.

Compare, say, Intellij IDEA (does some things better, some things worse), which sells for several hundred dollars per year.

mherrmann3• 9 years ago

It's seriously great you see it that way. I wish there were more people like you.

As a bootstrapper, I compare it to my other (eg. living) expenses. $70 feeds me for several days.

You mention IntelliJ. I use another JetBrains IDE: PyCharm. A two year subscription cost me $66. Sure, I will have to pay again in two years time. But I would argue PyCharm is much more powerful than ST.

That's no criticism of ST. It provides tremendous value and as I mention in the post, I did buy a license. But I don't think that most people consider $70 "personal pricing". I wish it were that way because I'm selling a (ST-inspired) desktop app myself [1]. But I don't think it is.

[1] https://fman.io

Selling to the Fortune 500, Government, and Other Lovecraftian Horrors (2013)

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