Death By Pilot — dealing with long sales cycles in your startup
If you are doing any kind of enterprise sales long sales cycles will be extremely familiar to you. Indeed, if you are building a company in a slow-moving or regulated space, whether it be self-driving cars licensing tech to OEMs or healthtech companies selling into hospitals, you may find yourself building a conversation over many months before getting a full-fledged contract.
I call it death by pilot.
How do you show enough results quickly enough? You don’t have enough data for just the end of the funnel, the key is to show meaningful progress at every step. Plenty has been written about the topic, I found this post from Tomasz Tunguz particular insightful. Here is a general-purpose framework of my own creation that can help your conversations with VCs far easier.
At the end of the day it’s about a good product and there is no magical formula that will answer each of these questions. But there are time-tested techniques employed by a variety of companies across many verticals that can help:
- Improve the UX to help increase retention from leads and convert them into pilots. The time-tested strategy is to make a product freemium ie try before you buy. And combine that with self-service ie your product is so intuitive that someone can use it easily without needing much support at least in the beginning.
- Hire someone who has strong relationships in the customers you are selling to. This will typically be the VP of Sales but depending on the stage and focus of your startup could be also the CEO or the technical leaders.
- Leverage results across pilots to drive them all towards contracts. Often time you will be limited by what data you can share especially across competitors. But anonymized aggregated reports can also be shared as industry reports which would provide a benefit to all participating companies and could even become a line of business for you.
- Marketing of all kinds — customer testimonials, PR, SEO etc — can arguably move the needle the most for the customers at the edges of the adoption curve. This means those who are early adopters and want to be ahead of the curve, or those who are late adopters and afraid of getting left behind.
- Creating backends that can work across a variety of customers. VCs are ultimately looking for exponential growth, if you have to much custom work you could still be a fantastic company but better suited for other sources of capital.
What are some other techniques to deal with enterprise sales that have worked for you? Comment away.