Mark Leslie was in the Greylock offices today. Somewhat embarrassingly, I had just printed his HBR paper “The Sales Learning Curve” and left it on the printer (a fact that my partner Asheem, amused, pointed out to him). It’s a classic reading which I’d wanted to refresh on before comparing notes with our resident growth hacker Andy Johns, a thought leader on consumer user growth.
The smartest technologists are usually somewhat thoughtful about the pacing of their sales hiring and methodical in making their forecasts (and implicitly understand their own SLC). But they rarely bring the innovation resident in their products to the rest of the business. I am concerned when entrepreneurs tell me they’ve got a “traditional, enterprise sales model.” I also see a lot of presentations from really fantastic entrepreneurs with a slide that looks like this:
- ISV’s, Integrators
- OEM Partners
This says sales was an afterthought, or at least that they’ve defaulted to the status quo. Distribution decisions often influence product design (at the extreme, Amazon.com distribution = product design) and always influence organizational design.
Much has been written about why legacy packaged software companies find it hard to react to competitive cloud offerings such as Salesforce.com and Workday, but people usually focuses on two things: 1) innovator’s dilemma / the inability to cannibalize 90%+ margin maintenance revenue streams and 2) the need to re-architect from the ground up to create a truly multi-tenant, single-codebase application in order to both take advantage of cloud agility & scalability and deal with the cloud unreliability and latency.
But just as important to the Workday success story was the fanatical focus on customer success. In a SaaS business, the customer relationship is fundamentally different. Yes, Salesforce and Workday have “enterprise sales reps.” But if you gave legacy competitors the Workday code, and let them keep their sales, services and support organizations, I doubt they’d create and maintain valuable customer relationships.
Some things about enterprise sales are fundamental — i.e. if you are selling a storage appliance that costs $100k to make, you probably need to sell to the IT organization with field sales reps, at more than $100k. I’m not expecting Paypal or Dropbox-like virality. But how should your product be priced, sold and serviced? By who and why?
At Greylock, we look at a lot of ideas that aren’t fully baked yet. We don’t need you to have a funnel or a pipeline before you have a product. But, I’d be really excited if an entrepreneur showed me a deck that had a sales roadmap with half as much clarity as his product roadmap. These are some of the basic questions you could answer…
- Who are your power users / champions?
- Your distribution is: Direct/channel
- Your people are: Inside / outside
- Selling is: High volume / relationship
- Selling to: LoB / CIO
- Adoption is: Distributed / top-down