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

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?

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