If your company serves a smaller niche than the giants in the a16z analysis, you probably need top down sales much earlier in the growth journey. There are only so many products that get to $20M ARR without a sales team.
From personal experience, top down selling is very hard to get right. You suddenly have to learn how to make a sophisticated business value proposition rather than just saying, “here’s my stuff. It’s really great. Look who else is using it.”
It’s also hard to find good people to lead enterprise sales, particularly if you’ve been a product led founder and don’t know what good enterprise sales looks like. It’s definitely an inflection point with a lot of risk for bad execution.
> It’s also hard to find good people to lead enterprise sales, particularly if you’ve been a product led founder and don’t know what good enterprise sales looks like.
Reposting to emphasize this excellent point.
If you’ve never been part of an enterprise sales effort you need someone to help you get it going, much less make it happen. It’s a completely different world: very expensive, very slow, weird, and very lucrative if you can get it to work.
It’s a very unfamiliar world for sure. All of a sudden, you find yourself having to have discussions with financial people and management people who have no direct personal interest in your product. You then have to figure out what its indirect value proposition is to them.
If you own any amount of Salesforce licenses, you can request a Salesforce Innovation Center (SIC) meeting, and ask them to teach you how they do it. They won’t hesitate to pull in a VP who has been doing it for a decade and they’ll open the kimono and tell you everything you could possibly want to know about their approach.
You have to sit through some pitches for this access, and it will include lots of talk about how Salesforce helps, but there is a ton of value in the exercise.
The exercise itself is its own lesson in enterprise selling.
I would not recommend this. This will not help a founder with 2-5m in revenue and a team of 20-40 sell. This will be a waste of time.
If you want mentorship and you are a founder, I would directly message early VP's of sales and ask for help. Also, read the great Saastr blog by Jason Lemkin.
I would take a class like the Dale Carnegie sales class. Really excellent fr enterprise sales, but when I took it the students included two guys opening a T shirt stand on Cape Cod (sales cycle less than 2 minutes) and a saleswoman from KLA-Tencor (sales cycle between 18 and 36 months), a salesperson for ADT, etc. One of the most useful courses I've ever taken.
And for enterprise sales there's a whole vocabulary and model to learn: your coach, understanding who has the signoff, when you're talking to someone who will waste your time -- and when someone who seems insignificant but is actually the decision maker, how to structure the deals. And how to hire, manage, and incent (mostly but not exclusively financially) them.
And there's absolutely zero shame in bringing on a COO or someone else with the experience to manage a sales leader. If you don't have that experience, just bringing on a sales leader is not enough, as that role requires a lot of management and the incentives can be very different.
In this scenario, your odds are probably best with the CEO leading enterprise sales - at least, that's how the successful companies that I've been a part of did it. A product led founder works best in a product-led market.
I think you can derive this from your desired growth rate and the structure of the market. Many markets are top heavy: a few giants dominate and then there are many many tiny customers and often not much in between.
In one market, let’s say there are 1,000 customers who are small companies themselves and who will each pay $10,000 per year to use your service. And then there are 100 companies who are big and will spend $100,000 per year. The little companies are simple sales and buy using their credit card. The big companies are a complex sale and require a top down approach with complex approvals.
You can win the first 1,000 customers organically, but because not everyone is ready to buy all at once, let’s say it takes 5 years to win them all - in other words you’re adding 200 x $10,000 = $2M of new ARR each year. By the way, this would be a fantastic market all by itself.
But sadly, with each passing year, your organic growth from small customers brings a lower percentage growth rate. $0 - $2M is exciting and so is $2M - $4M. But $4M - $6M is only 50%. And $6M - $8M is only 33%...
If you want to keep up 100% annual growth, you’re going to need to bring in some big customers starting in year three so that you can go from $4M to $8M instead of just $4M to $6M. To win that extra $2M in ARR, you’ll need 20 large customers along with the 200 small customers from organic growth.
Now, I don’t know what your market looks like, but I’d say that the time to bring in top down sales is around when you’ve found product market fit as evidenced by steady organic growth. If you are getting repeat sales from small customers who are really happy with your product, then, chances are, big customers would love to have what you make too. They just have to be sold to.
In other words, I would not wait. Start doing top down sales as soon as your product is hitting its stride with repeated happy customers.
Thanks for posting! This gave me a good starting point to understanding how to plan B2B products and companies. I sorta knew some high-level differences in go-to-market strategy for B2B vs B2C, but this article explains the concepts well.
> In the early days of Github, the strong market demand for enterprise features initially clashed with a developer-first product and engineering organization, leading to lost deals. When a large financial institution requested direct customer support and access controls on the ability to push code, Github initially resisted, due to the fear that sales-driven enterprise product changes would erode the strong developer culture that was at the core of the platform’s viral growth in the first place. They lost the deal.
> When Paul St. John convinced the company to make the requisite product access adaptations and enable sales and support teams to speak directly with customers, GitHub won its first enterprise deal and never looked back.
I don't think "the early days of Github" did anything wrong though. They knew what was important to their user base of individual developers and were focusing on their B2C product.
Not every B2C offering needs a B2B counterpart. The necessity is discovered through small experiments and talking to users.
Losing a deal should not mean the end of the world for a startup. It's a necessary part of the process of discovering valuable problems that are common but are underserved.
For those interested in learning more, and particularly how to think about the product and organizational implications of adding enterprise sales, I did a heavybit talk on the subject based on Heroku's experience building its enterprise business.
If you start with a top down sales model and reach $20M, they’ll tell you you need a bottoms up model to reach $500M. The tough part is deciding which one to start with given your product, customers and access to good salespeople.
I don’t know anything about B2C sales, but I think Apple is good example to research for “enterprise” (up-market) level sales/marketing in B2C.
They went from 90 days away from bankruptcy to 2+ trillion B2C company in 20 years. They’re have most successful retail stores in the world and they’re always in the top of customer satisfaction.
In that case this article wouldn't be directly relevant but the fundamental issue of scaling the rate of growth to a new magnitude remains. A B2C company will likely need to add different distribution, channel and/or promotional strategies to scale from ~$20M to >$200M.
I was listening to a Philosophy podcast and a philosopher noted that Artisans were different than merchants. It got me thinking. Are there examples of a solo founders/Engineers being able to make sales?
While I'm often praised for my Engineering abilities/content on my website, I've been unable to profit.
My service is (best in class) helpful to low income people and/or Time Poor people. I have struggled putting up a paywall and made a mere 1600$ in donations over 2 years. Prior to donations I made 1k/yr off book sales.
Any marketing people I hired failed to generate traffic, but I'm starting to consider I simply need sales.
Edit- no I can't post my website, one dictator here doesn't like me. But if you are in the Frugal community, you have visited it.
I think your #1 problem is market. It seems hard to try and make money directly from the "Frugal community" - a community defined by a desire to not spend money.
You don't need Sales. You need a different market (spenders) or a different revenue source (ad-driven).
Or just make it an avocation. Not all things must create revenue to be valuable.
>a philosopher noted that Artisans were different than merchants.
Isn't this meaningless on its face? Everybody is "different," what does it mean here? Surely you aren't actually trying to say that founders/Engineers (who aren't different?) have never made a sale ever in any context, or if they have it was only in obscurity.
Continuing the "difference" thesis, aren't Money Poor and Time Poor people different?
Nothing prohibits you from putting your site in your (new) profile, but all in all you may simply be bumping up against a reality that poor people don't have much money. By definition.
From personal experience, top down selling is very hard to get right. You suddenly have to learn how to make a sophisticated business value proposition rather than just saying, “here’s my stuff. It’s really great. Look who else is using it.”
It’s also hard to find good people to lead enterprise sales, particularly if you’ve been a product led founder and don’t know what good enterprise sales looks like. It’s definitely an inflection point with a lot of risk for bad execution.