B2B Startups should sell the pilot and not the large software license deal

While running Predikto, a B2B predictive analytics startup selling to Fortune 500s, we quickly realized that we had to sell a low risk targeted pilot in order to land the customer and then expand. Our product was a machine learning automation platform to predict failures in large industrial assets. We were selling software that automated close to 85% of the process of creating machine learning models to predict failures in turbines, locomotive engines, bullet train traction systems, motors, and more.

The value came from turning reactive maintenance (fixing something after the “part” failed which has impacted the operations of the asset) to preventative maintenance. The value of a true positive varied from $1 to $25M depending on the use case.

We were struggling with a SaaS based pricing and our SaaS go to market model. Most of our investors and startup “experts” wanted us to build a SaaS startup and not go the tool route for our platform.

The challenge was that our product was so critically important to our customer that they had huge teams responsible for predicting potential failures in assets by using the data these assets generated. We were selling to people who wanted a tool to solve the problem on their own instead of signing with a 25 person startup to solve the problem for them using a SaaS application.

The sale cycle was huge and brutal.

Most of our customers did not know how to negotiate and agree to a SaaS legal agreement. The customer attorneys and procurement were used to a pure consulting services agreement and a seperate software licensing agreement. SaaS language and legal contracts back in 2013/2014 with Fortune 100s were an issue and specially when we had not proven the value of the Predikto software.

We eventually shifted to selling and delivering 90 day pilots very well. Once inside and after proving the value of our Predikto MAX engine (marking name for the Machine Learning automation module), we would then try to upsell the multi year software license.

Some B2B Startups should sell a pilot and then expand

We eventually created a robust 90 day pilot methodology. We were able to pitch our differentiators and the Predikto story in the first hour of a sales meeting. The next hour was all about the pilot. We would present:

• Our methodology for a pilot
• The 90 day timeline and what takes place each step of the way
• The customer responsibilities, resource needs, data requirements, and workshop materials
• Our teams responsibilities, sample deliverables, meeting cadence, etc
• Final deliverable, application configured for their use case, and training samples of how their users would log into the application

We would charge a flat fee of $100,000 for a 90 day pilot. Having a robust methodology and everyone in the team fully aligned on what we were doing and the handoffs of a complex Industrial IoT platform configuration enabled us to deliver every single pilot on time in the last 3 years before getting acquired.

If you are struggling to show value and close large complex B2B enterprise deals, focus on having a really strong and robust pilot process that gets you a quick win and in the door.