Selling to Big Enterprises as a Bootstrapped Company...and Figuring Out Who to Sell to In the First Place

Can you sell to very big companies as a very small company? And how do you figure out what kind of customers to target in the first place anyway?

MICHELE HANSEN 
Hey, and welcome back to software social. I'm Michele

COLLEEN SCHNETTLER
and I'm Colleen. 

MICHELE HANSEN
And we're inviting you to join our conversation about what's going on in our businesses.

COLLEEN SCHNETTLER
Michele, do you want to get started today?

MICHELE HANSEN
Yeah, so something I'm thinking a lot about is the golden goose of software: enterprise software.

COLLEEN SCHNETTLER
Oh, man. Okay.

MICHELE HANSEN
Yeah. So I mean, you had mentioned a couple weeks ago how you have this dream that if you had a SaaS business, everything would be roses, and amazing. And there wouldn't be any problems. Right?

COLLEEN SCHNETTLER
Correct.

MICHELE HANSEN
And so the next level of that dream that a lot of people have is if they could just sell enterprise software, where, you know, the companies would never cancel. And they have these giant expensive contracts and like, everything is amazing, right?

COLLEEN SCHNETTLER
Yep.

MICHELE HANSEN
Yeah. So I'm thinking about this a lot, because I feel like there's a lot of different ways to do enterprise and there's a lot of granularity in it that gets lost. And at a high level though, what I want to talk about first is how, one of the reasons why SaaS and especially small customer funded SaaS works and a company like ours, which only has my husband and I running it, but we have tens of thousands of customers is because our work has a one:many relationship. And so if you can picture that, every time we do work, we add a new feature, we add a landing page, you know, anytime we're doing work on our service, most of the time that work has a one:many relationship, we add a feature and it helps tens of thousands of people simultaneously, right? Or we add a new landing page and that helps us attract thousands of customers simultaneously.

COLLEEN
Sure.

MICHELE
The thing about enterprise work on the other hand, it has a one to one relationship. There's a lot of custom work that has to be done. And so in that way, it's almost a little bit more like freelance work.

COLLEEN
Okay.

MICHELE
And so that's important because when when looking at enterprise software and serving enterprise markets, there's all these different things that companies have as requirements. And very often those things can be things that maybe only that one particular customer has, or if you're doing something like on premise, that's a one:one relationship. And as a really small company, we need to maximize for work that has a one:many relationship. If I'm sure any sense at all, stop me.

COLLEEN
Yeah, no, you're making great sense. I just, I am curious why you're even thinking about enterprise software. And I say that because I used to work for a Fortune 500 company, and, man, we bought really expensive software, but you probably had to sit in 20 meetings before we agreed to buy it. So I know that there's, I guess, like, why are you even thinking of it? Is it is it just to have a different revenue stream?

MICHELE 
We reached out to buy big enterprises.

COLLEEN
Oh, I didn't know that.

MICHELE
This is my next sort of thing, that there's different ways to serve big enterprises. And so the traditional way, as you mentioned, is 20 meetings, you know, three golf outings, you know, five fancy dinners, right, like all that kind of sales cycle, right? So there's that level of it. We're not doing that level. But we do have people in large organizations who reach out to us but this has some different flavors. So one of my favorite ways of serving enterprises is basically when someone within a team has something that they need to get done as part of their everyday work. And for whatever reason, they need to do it faster or they need to do it better. They don't like the tools they have and so they go off and find something themselves. And then they make the case to their boss or to their leadership, that you should use the product. And this either gets put on that team's credit card, called a P Card in most places, which might have a say a $500 monthly limit per service, which is why people like Patrick McKenzie, recommend that price point so often, $499 or $999, because those are sign off levels for price points, actually. So enterprises have a word for this, they call it "shadow IT" which is this kind of like derisive name, because they're implying that it hasn't gone through the big procurement process and the security reviews and everything, but it's a great way to sort of shortcut into a big organization that has reliable ongoing needs, that's going to keep reliably paying you.

And then the other way that we often get it is people reach out to us and they do need to use it across the entire organization. And we have to go through security reviews and contract negotiations and whatnot. And this is all my mind because I realized the other day that I probably spend about a third of my time on this kind of work, whether that's having phone calls or negotiating contracts, or any of those other details that go into it. But that I don't think we've ever had a single customer with a custom negotiated contract cancel on us.

COLLEEN
Ah, yeah.

MICHELE
But you don't necessarily have to have a big sales force to get that kind of thing that kind of plan levels through, but it does, it does take a lot of specific work. And the thing is, is when I'm doing that, when I'm having a call with one huge customer, or I'm negotiating contract with them, that's work that's going for just that one customer. It's a one to one relationship. And so, this is where this really comes into play for a small SaaS company like us, is when we're talking about things like on premise where it's a one to one relationship. But so any work that we might do on that, or like help, we might need to give them with their installation of it, that's all one to one and needs to be priced accordingly. But the thing is, is customers who request that often have these, you know, compliance requirements, you know, whatever industries they're in, that they can't get around it. And so they have to pay a lot more for something.

So I'm thinking about all this, but there's a there's a great site that I found recently called enterpriseready.io. And it goes through a lot of the features that enterprises might require. And it was interesting looking through this, you have things like Single Sign On, audit logs, integrations, things like that, because absolutely, these are things that big companies require. But we don't have all of them. And we're selling to big companies all the time. And so my point here is that you can be selling to enterprise without necessarily doing that whole enterprise song and dance on the sales side. And you can say like, you know, we'd love to work with you, here's what we have. We don't have single sign on, or we don't have, you know, SOC2 audits, or we don't have audits of our financial statements every year. And if the buyer in the organization loves your product enough, maybe they've gotten to try it for free or on a lower plan with their boss's P Card, they can advocate to their legal department and actually get through those things. And you don't even need whatever those requirements are. Doesn't happen all the time, but I think it's really helpful to look at a list like this, and then also remember that it's not necessarily all requirements that you might need before you try to launch into that space, which I think is a headspace that people get in in a lot of different ways of, "My product doesn't have every single feature that someone could possibly ask for. So I'm not going to launch it yet."

COLLEEN
So So do you guys ever reach out to enterprise?

MICHELE
No, we do not do any cold sales whatsoever.

COLLEN
Wow. Okay. So what would you recommend? So I feel like in the bootstrap space, most people avoid enterprise because of that list you just described. So like, what I'm hearing from you is, is if you have a great product that they really want, there might be a way around kind of going through their formal long sales process.

MICHELE
Yeah, so if you have a product, that is something they really need to get their work done, you know, as long as I'm talking here, specifically things to get a process done right. Rather than say if you have process change software that's selling them a benefit, but not necessarily a need that they have that might be a lot harder, you might have to go through the regular channels. But yeah, since we started, I want to say within six months after launching, we had people at big companies signing up to use us. And sometimes I mean, their usage is really low like somebody, someone and a huge company, and they just have a small project they need to get done. And they pay us, you know, $40 once and that's the end of it. But what we've also had scenarios where it's it's a specific team within a huge company, and we're only dealing with that specific team. And for some reason, the security people have just never cared or found out about us, or legal. And then we also have times when we seem to meet with, you know, every department in the company. And the other thing is, it's not necessarily huge companies, like we have had security reviews and legal reviews and all those kinds of things for really small companies, but but they had compliance reasons why they had to go through all of those processes.

COLLEEN
So do you think you said you guys have done some on premise work, which I didn't realize you do?

MICHELE
A little bit. We try not to.

COLLEEN
Yeah, do you find as a team of two that is a good investment of your time and resources.

MICHELE
We try to avoid it because it has that one to one relationship, right? So it's, it's not as scalable for us to do that. But we understand that there are scenarios where a company may have to have an air gapped solution. So we don't even put it on our website. And we don't really talk about it unless people really need it. Also, we, because it's so much more expensive for us to provide it from our time perspective, we price it much, much, much higher than any of our other plans. And so we always like to run our business in a way that is in the best interest of the customer. And so we don't want to steer them into something that's more expensive than they actually need. If there's a way for us to avoid that.

COLLEEN
Yeah, I just I've always just, it seems like a huge red flag. Like from my perspective, it always just seems like oh, enterprise, it would be terrible. But the fact that you guys don't do cold sales like that's a big determining factor, you'd probably have a whole different experience if you were reaching to them, right?

MICHELE
Yeah. Oh, yeah, that's a lot more work. And my broader point here is there are a lot of ways that people write on the internet about how a business should be run a lot of assumptions they make. And not just in this specific regard, but there are a lot of unspoken rules about running a business that you might think like, oh, if I want to sell to enterprises, I need an enterprise sales staff that you know, full of professional golfers who can land these deals for me...when you don't actually need that. You can still sell to companies of any size, it'll be more difficult and that you know, they have requirements that are not just features but are you know, compliance related that are much harder to meet but you can find scenarios or you know or find ways around those things. If your a buyer is motivated enough, if your product is good enough.

COLLEEN
Awesome.

MICHELE
But i but i think you know, a lot of the startup literature, right like it implies that or it assumes that you know, you've got you've got a salesforce, you've got a whole engineering team, you've got, you know, all these resources, you've just got to burn them all to grow as fast as you can. And that just doesn't apply to small companies like us. And so it's important to break down those those assumptions and realize when they really don't apply and then there's more than one path to selling.

COLLEEN
Very nice.

MICHELE
I find it it seems to intimidate people, you know, when they when you see startup writing written from the perspective of unlimited resources. Anyway, that's, that's what's on my mind this week. What about you?

COLLEEN
So, I kind of had an interesting week in the world of side projects. I thought I was done. Okay. Like I thought I was almost finished with my project, and I was really excited, and I log on a Monday and I was like, I just got to wrap up a few more things. And at the timing is really, really perfect because I have a client that basically needs what I'm building.

MICHELE
Nice!

COLLEEN
Yeah, so I thought this would be a great opportunity for me to get this deployed, and then use it with my client. But of course, I come in Monday full of energy and enthusiasm and hope. And I just started running into some technical roadblocks. That were very frustrating. And, you know, eventually you always solve your technical problems, right. I think the thing about business, especially if you have a background in software is, eventually you'll figure it out. But man, it was kind of an emotional roller coaster being like, I'm almost done. I'm gonna get to use this on production to "Ooh, nope, it's not ready." So yeah, I've just kind of had to manage my mental energy with that excitement and then realizing I had a potential issue that I had to fix. So I'm trying not to let it get me down.

But because of this, I actually started in like kind of learning a little bit more about one of the big players in the space, their product. And I actually got to use their product and play around with it. So that was actually good experience. On one hand, it was like, "Wow, their product is so good!" But on the other, I have the perspective that I'm kind of trying to attract a different audience than they are. They're looking, you know, they serve big businesses and, and things like that. And I'm kind of trying to make the simplest solution for a common problem. So there was just some, you know, technical challenges, like I said, and just kind of managing energy with not having that done. By the time I thought I was going to get done. So there's that.

But also, I've been thinking a lot about what we talked about last week, which was customer interviews and talking to people.

MICHELE
Yay!

COLLEEN
Right?? And so, I got a Reddit account, and I started posting a little bit of it on Reddit. I didn't get a lot of engagement. But I think with these communities like you kind of have to build engagement. I don't think it's something that just happens.

MICHELE
Maybe depends. I mean, yeah, what what did you post?

COLLEEN
I was asking people what they do with their images, like how, okay, I basically went into the rails forum and the Heroku forum, and just put up posts to be like, hey, how do you guys handle it? And everyone that responded, which wasn't, but a handful of people was rolling some kind of custom solution. And then it got me thinking about what we talked about, another thing we talked about was pain and frequency. So I think, for at least the people I know, this is painful, but it's not frequent. So if you work at a company, like a standard, you know, mid-sized company, this is something you really only have to set up one time. Now people like me, like we talked about who work for a lot of different organizations, a lot of different applications. Yes, you have to set it up over and over and over. But as a consultant, I don't know if there's an incentive because if you bill hourly, like, what's your incentive to purchase an add on that takes out, you know, takes away five hours of your, of your billable hours.

MICHELE
On to the next project?

COLLEEN
Well, for me, it is like, I like to finish things, right? So for me, yes, I could roll this for every client. But I like to provide -- so much of consulting is about your relationships with your clients. So whenever I can say, Hey, I can put you on this plan, that's 50 bucks a month, or, you know, I could spend however many thousand dollars billing, creating it myself, I feel good about when I feel like I'm providing them value. I'm saving them money. And I like to get it done. Right. So it's, it's always for me, it's a win win, but I don't know. I don't know if other people will feel the same about that.

MICHELEE
As a former project manager at a web development agency, something that saved us half a day's worth of work that would be billed directly to the customer as part of building the website. That sounds like a clear win because I mean, you know, at any given time, I mean, this was a while ago, so things are probably structured different now. But like we had a one to two back end developers, one front end developer, one to two designers, and if I could cut off half a day of development time for something we were doing with every single site, that was a huge win because then we could do more sites and make more money. And if we just bake it into the project costs or the hosting cost for the customer and tell them you know, you're going to pay this much per month on for you know, what does that WordPress hosting site [note: was thinking of WPEngine] and you know this for your image hosting and, and whatnot, then the customer is like, okay, yeah, whatever, fine. And we say five hours that would have been awesome.

COLLEEN
Awesome.

MICHELE
But it sounds like midsize companies are not your customer, but maybe, maybe agencies are?

COLLEEN
Yeah, so one of the things I've started doing -- which I think might be the smartest thing I've done yet -- is this big player in the space like they have a really active forum. So I've been kind of hanging out on their forum to see what people are complaining about.

MICHELE
Mm hmm. You know, that's great, that's the Amy Hoy Sales Safari approach!

COLLEEN
Thank you. Thank you. So I'm kind of trying to figure out like, what kind of frustrations people are having with their product. So I can, you know, kind of incorporate those fixes into my product.

MICHELE
Nice.

COLLEEN
Yeah. So that's probably the best thing I've done. I do have. It's interesting, because I have a lot of other consultants in my network. But I have not really started interviewing them yet. About if this is an actual problem. I think the real people I'd want to get a hold of would be one of those conflict consultancies, right like businesses that are consultancies. So I know a couple people that work in consultancies, so there might be an opportunity to talk to them. But this is something else I wanted to talk to you about. Because you probably remember six months ago -- I've done two rounds of customer interviews with previous ideas -- Okay, so the first round was for the kind of the childcare thing that I was looking at. And that was determined to be a bad idea. And that worked great. The second set of customer interviews I did was with small SaaS founders. And at the time, I was trying to kind of come up with a Google analytics dashboard solution. 

MICHELE
Yeah, for content auditing, right?

COLLEEN
Right! Content. Yeah, it was a content audit. I was I was kind of the idea was like content, content audit for like site SEO and stuff like that. And, you know, I talked to a lot, I don't know, maybe five people, but I've been reading more about how when you talk to someone, you're supposed to, like, just listen and let them tell you their problems. And I must not have been asking the right questions because everyone told me they had no problems. Yeah, like example, can I give you an example? I'd be like, hey, like, people were just like, Oh, we don't use analytics. And I was like, Don't you want to grow? And then people, you know, we're like, No, not really. It's like, maybe so I, I feel like when I do this next senate interviews, I need to either work harder on my questions or not talk. I didn't think I was talking too much. But I was really having a heart -- even with with you. I think I interviewed you. And I had a hard time pulling problems out. And I just I don't not quite sure why that was.

MICHELE
Maybe you were baking assumptions into your questions.

COLLEEN
Yeah. Or maybe I was like, pushing my thought like -- maybe I was pushing too much in terms of what I thought they should do. As opposed to letting them just tell me. But it was just odd because I distinctly remember that people weren't sharing a lot of frustrations with me. And maybe because I was focusing on analytics, and like, they just literally didn't care.

MICHELE
Maybe there weren't frustrations there.

COLLEEN
Yeah. And well, maybe that's it right, I was really focused on content and analytics. And maybe that just wasn't the right place to be focused on maybe they were not too stressed about analytics. 

MICHELE
The other thing about interviewing people is that people will rarely tell you explicitly that something is a problem, which is kind of funny, because all of the literature and I say this, you know, is "find the problem," right? And then find the main and writing and frequency, right, right. People will rarely say that. And usually when I am listening for a problem, it starts out with, talk to me about your process for understanding what content is working. And then I just have them walk me through the entire process. And then you deduce where the problems are, and the problem may be in the form of, they're spending 12 hours manually creating a spreadsheet, that's a problem, that's a lot of time. Or they have to use a vendor for something. And they really don't like that vendor for some reason, or that vendor is really expensive. Or there could be a whole host of other things, that they may not articulate as a problem, but is something that is costing them time or money or is genuinely causing frustration. And they have to, you know, hit three different analytics API's to get this one number, right, like those things are all problems, but someone may not articulate them as a problem. Yeah. So you just have them walk you through their entire process. And just in that process of saying, Okay, tell me more about that step. That step you were creating that that spreadsheet for 12 hours, why were you creating that spreadsheet? Who was it for? Where did that come from? What are you getting out of that? What do you wish you could do instead? They may, it may have never occurred to them that there could be another way to do it.

COLLEEN
Yeah. Okay.What are your thoughts on? So like I said, I'm building this image thing. I'm excited about it. I'm learning a ton. I'll use it. But I don't actually know if it's like a business-business. So I'd like to keep my eyes open for other opportunities as I'm talking to people. So what are your thoughts on just talking to people when I don't even have an idea?

MICHELE
Yeah, talked to them about their processes, if there's a specific type of process where you want to solve things, and you can just hunt for things. I think what you're doing with going on competitor websites, and seeing where people are frustrated with their products, that's an awesome way to find a niche product. If there's an area where you have a particular interest in a type of technical problem or a solution space or an industry vertical, whatever that is, just hunting around in general for those frustrations, and again, they may not be verbalized as my problem is that I spent 12 hours making a spreadsheet. It's, you have to get them talking a little bit more and understand the entire start to finish process to see where those pain points are, and those points, maybe multiple points as well.

COLLEEN
Yeah. So I was listening to a different podcast and they were talking about a book called The Mom Test. Have you read that?

MICHELE
Oh, I hate the title of that book. I've never been able to get past that.

COLLEEN
I hate the title too! 
 
MICHELE
I just... isn't the the idea of that book is that you shouldn't share your product idea with your mom because she'll be nice to you?

COLLEEN
I mean, that's what I garnered from the podcast.

MICHELE
So many stereotypes about mothers and about relationships with mothers and women as these docile people that... I've heard great things about the actual content of the book, but the framing of it is -- whew! 

COLLEEN
Yes, I agree.

MICHELE
Needs to be updated! <laughter> YIKES.

COLLEEN
Totally agree. But one of the things they were talking about was, in the book, he talks about kind of what you were just saying, which is just like pulling, pulling the pulling information from people without pushing too much of like, here's my great idea, and you want to use my great idea, and things like that.

MICHELE
Yeah, you're not going to get honest feedback. If you say, hey, do you like this site I made? "Sure, yeah, it's great." But, and, yeah, that's just a terrible idea to do testing like that in general. And even then, if you're putting something in front of someone, it's usability testing, and there's a whole field of user experience devoted to specifically to that and how you frame questions in that kind of a context rather than a exploratory interview like we're talking about here, right here. 

COLLEEN
And that's the phase I'm in. I'm in the exploratory interview phase like I'm not in terms of the how do you use this phase yet.

MICHELE
It sounds like you're looking for a direction right now, your rudder is kind of changing.

COLLEEN
I'm always looking for direction! So here's the thing. here's, here's the thing is, in the past, I think I have let go of ideas too quickly, because my time is so valuable. And I mean that in terms of like, especially now with the pandemic, right, I got it. I have so little time I have clients, I've kids at home, I have a family that wants to hang out with me. And so I'm terrified of making the wrong decision and not because I'm scared to fail -- like I'm okay with the failure. I'm not okay with putting in 40 or 60 hours or months and months of work for whatever I build to be a disaster. Not a disaster, but a huge flop because I feel like I just don't have time for that like. I'm not 20. I'm in my late 30s. I'm ready, let's go! 

MICHELE
Do you need to be productive, right? And there's that very real pressure of like, if you're spending this time on something. And so use that high responsibly. I feel that.

COLLEEN
That's exactly that. Yeah, that's exactly where I'm coming from. So, but but on the other hand, I feel like because I'm, I'm so scared of wasting time that I don't feel like I have. I drop ideas really quickly. Like, I'm not going to lie to you on Monday, when I hit this other technical hurdle. I was just like, man, and then when I tried the big, you know, the big company solution, and it's pretty good. I was like, man, I should just throw my stuff away. And so, yes, you know, I think that's been one of my struggles is like quitting too quickly. Tell me your thoughts on that.

MICHELE
I think the way to prevent that 60 hours of wasted development time, is doing what you're doing now, which is doing the research. You were irritated. I don't think it's the medium or large size company. Maybe use this big industry standard competitor out there. But maybe there's a space to make things better for, for agency developers or for freelancers. And now it's "Okay. I know these aren't my customers, but maybe these people are." So you're just on to the next step. It's not. It's not failure. It's not spinning your wheels, you're just getting more specific. That's progress.

COLLEEN
Yeah. And this is something I was thinking of is like, I don't know what I don't know a lot about the no code community. But something like this would be perfect. Like a drop in thing for the no code community would be awesome. Like, there's all these forums out there, like you can integrate in your no code, and they just email you stuff. So there could be a way -- Yeah, I don't know enough about it. But when I really think of where this could be useful, because that's what I'm trying to build, like, server side cloud image management with pretty much no code. So on your end, so yeah, I haven't given it up and even this idea, and this is why I didn't quit on Monday. Because even if no one uses this, I'm going to use it. And I have learned so much while going through the process that it has felt good, like, it still felt good. But yeah, sometimes it's just exhausting. 

MICHELE
No matter what, you've saved yourself five hours per project, and that's a huge one.

COLLEEN
That's huge, right? Like, for me, that's a huge win. Like, that'll be great. And it'll be consistent because that's like another thing when you switch from client to client, they all have different things. It's like, which one is it's, it's exhausting. I feel that this is kind of an inflection point in the past where I would have just thrown up my hands and been like, yeah, this was a terrible idea. No one wants it. This time, I want to commit a little harder to talking to people and getting in the community and seeing what's really going on.

MICHELE
You're learning.

COLLEEN
Yeah, so much!

MICHELE
You've learn that it won't be a fit for one type of customer. Now you can learn if it's a fit for another type of customer.

COLLEEN
Yes. All right. Well, That's all I got for this week. 

MICHELE
All right, well, we'll catch you next week. 

COLLEEN
Thank you for joining us.


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