Why Stewart Butterfield is Wrong and Right About Enterprise Sales
I love Slack. It’s the best IM product I’ve used to date and I’ve used many of them. I’m also a career enterprise tech sales exec who helps enterprise tech startups go to market. So when I read this piece by Stewart Butterfield http://www.businessinsider.com/slack-ceo-stewart-butterfield-no-salespeople-2016-3 I felt like I had to respond as I see this kind of thing being said over and over and over again in the startup world. I believe it reveals a naivete about how large organizations buy technology, and how technology is sold to them.
The claim is that Slack is special because it appeals to all users in an enterprise, hence they don’t need B2B sales people. This is just goofy and is not an argument, but rather it’s an aspiration based on zero facts. I guess Microsoft can fire it’s sales force now, right? I mean, in a company where all the employees use Outlook, it will just sell itself by this reasoning. Ditto for laptops/desktop PCs etc. This is just errant nonsense.
Then the article goes on to claim there is a precedent, citing Atlassian as a case in point. Hmmm. Go to LinkedIn, pull up Atlassian, use advanced search and put the keyword “sales” in — you get 422 results. They have titles like “Enterprise Advocates” (these folks all have enterprise sales backgrounds) and “Channel Sales” etc. In fact, their team looks a lot like every other enterprise tech company.
What Stewart is right about is that in the past a lot of enterprise technology was sold “top down”, meaning it played mostly to the preferences and priorities of management/leadership. This is how we end up with CRM systems like Salesforce.com which every sales person on earth will tell you sucks to use and does not help them sell. Management was sold on the cloud model, the integration, the compliance and the benefit of the platform from a top-down perspective.
This is both a bad business decision and a bad people management decision in that it tells end users of technology that their concerns aren’t important enough to drive decisions. It’s demoralizing to have a hostile piece of software shoved at you to use which doesn’t help you do your job better. Stewart is right to deplore this kind of decision making and how users of technology are ill-served by it.
Slack is the antithesis of this thinking. Stewart and his team were and are obsessed with user concerns and user experience. And when decisions are being driven by these criteria, technology can be sold this way as long as it’s inexpensive enough or in other ways does not invoke for formal procurement processes. To me, the amazing thing Stewart did is taking on a segment that was already filled with products — IM/Collaboration — and did it better by obsessing about users. I think the entire enterprise tech business needs to take this lesson to heart: Software that isn’t great for users is vulnerable to competitive displacement even in a mature product category.
However, this is to see only half the playing field. In fact, organizations have what I think of as “emergent concerns” that arise from the size, scope of operations and externalities such as regulations and ecosystems. It’s not unimportant that a given technology cooperate with what an enterprise already owns. Likewise, it should have features to support the compliance issues you face (and Slack has had to add all of this kind of capability to be sellable to the enterprise).
What Stewart and many others miss is how to influence these top down decisions. You see, these concerns are not addressed by product use. They are complex, group decisions that ultimately have political and organizational aspects to them which you can’t address by a free download of software. You need someone to advocate for your product effectively in a large, complex organization. This is where enterprise sales teams come in — they work with the top down concerns of large organizations by understanding a company’s strategy, it’s technology landscape and compliance issues and organization. Enterprise sales teams advocate for a given solution to the stakeholders who own those very important and legitimate areas of concern.
Another aspect of large enterprises is that they often formalize procurement processes to ensure all of the stakeholders involved in any decision get to have their say, and that the process is undertaken in an ethical way. Enterprise sales teams spend a lot of time working through these processes, which expect a human from the vendor to participate. Not understanding this signals not understanding how large enterprises work and why they do so. In a way, it’s typical Silicon Valley arrogance to ignore these crucial criteria. And of course, this is why even companies like Github are hiring an enterprise sales team.
I’ll close with an observation that seems to bother many denizens of StartupLand today. Customer experience surveys of B2B buying show time and time again that human interactions drives 50–60% of the “buying experience” while actual product features/use drives about 20% of it. This is because of the facts of life in a complex, large organization that has many other concerns than simple features and functionality. That’s why enterprise sales people are trained in the “Complex Sale” in the first place.