Enterprise

Moving Upmarket and the ‘Ilities’

Many of today’s largest cloud platforms started with an SMB focus. A few reasons this is a great place to begin:

• Drives the lead and customer volume required to improve a platform with real market feedback.
• Forces improvement of operational, technical, and domain expertise required for upmarket credibility.
• Facilitates a quicker and more predictable MRR path (less dependencies on single large deals to hit plan).

You can’t stop here though. Continuously moving upmarket should be a focus of every fast growing platform. Why?

• Even a few larger deals layered on top of your current business can materially impact overall ARR.
• Larger organizations have larger budgets. More of your revenue pie should be coming from these businesses over time.
• Many of the reasons SMB customers use your product will still apply upmarket — you don’t want to cede this opportunity to competition.

The rest of this post explores three topics:

1\ Whats different about selling upmarket?

2\ Upmarket Prerequisites

3\ How to get started

Enterprise Is Different

Moving upmarket requires careful consideration — as it will be different than your typical SMB sell. Specifically:

• Selling across multiple personas across an organization and multi-level sign off up an organization.
• More complex technical integrations (more legacy systems to work with).
• Longer pilots. More teams and more numbers involved in proving value.
• Stringent security, compliance, auditing, and procurement processes.
• Ecosystem dependencies (support of 3rd party systems).
• Deeper customer support requirements (i.e. 24x7 response times)
• Longer sales cycles (a natural by product of the all the above).

While these differences will require building a new organizational muscle — there are some basic capabilities you need to be prepared to invest in.

Prerequisites — The ‘Ilities’

Before you staff sales and marketing resources against the enterprise opportunity — you need to assess if your business and core product is ready. This is not about domain specific features.

Rather, its the set of capabilities that speak to how you operate your service and business. Specifically — Security, Reliability, Scalability, Availability, and Liability.

Security

Stating you’re secure, and sharing a white paper of your security posture, will not be enough. There will likely be requests from the dedicated security teams of your prospects who want to understand in depth how you address security and compliance topics important to them. Its imperative to have a senior credible technical professional, ideally one with a interest and expertise in security, who can help your customers understand the depth of your current posture. This person will also be point on helping to guide your product road map for security and compliance related needs. This is not an ‘ility’ to take lightly. If you’re not ready to dedicate engineering resource to these efforts — you may not be ready for enterprise.

Reliability

Enterprises will not be forgiving with up-times that don’t meet their needs, no matter how great your features are. Its important to have clear documentation that shows your historical uptime. In an ideal world, you can go above and beyond by describing how you’re architected to achieve that uptime — and then make those updates publicly available for customers to consume. While some of this can be addressed with SLA’s, no contract in the world can make up for a service that struggles to remain online. If you’re not achieving good to great uptime for your service — you may not be ready for enterprise.

Scalability

Enterprises want to know you can handle their volume and performance needs. Ideally you have existing customers that you can use to signal some of the scalability and performance thresholds that matter to your enterprise prospects. The world is filled with high growth companies with scale\performance needs similar to (if not larger than) many enterprises. If you don’t have at least a few of customers at larger operational scale already in place — you may not be ready for enterprise.

Availability (Support and SLA’s)

Enterprises will have requirements defining how technical support issues are addressed. In some cases (i.e. system down), they will require you be available to them 24x7 within a few minutes of submitting such a request.

Ideally, you have through your existing business created a technical support process that can be leveraged. While the first few iterations can be bootstrapped, at some point you’ll want to think about your support offerings as a standalone product (i.e. AWS premium support).

Liabilities (and Contracts)

Enterprise deals require a lot of heavy lifting on the legal front. Some common items negotiated:

• Liability Amounts
• Contract Minimum Value
• Commit Durations
• SLA’s
• Volume Pricing

Enterprise will require you to hit thresholds across these vectors that you haven’t had to do for SMB. It’s critical to have account executives who understand how to navigate these points, and to have seasoned legal resources available. If you don’t have these resources in place — you may not be ready for enterprise

How to Start

Define Your Enterprise

There are two ways to define the enterprise segment of your business:

1\ Deal Size

2\ Company Size

Some recently public SAAS businesses, like Coupa, have a direct enterprise sales force that specifically targets organizations with more than 1,000 employees. Zendesk, on the other hand, uses a combination of usage and ACV metric: (>= 100 agents and $50k acv) to define enterprise.

While deal size alone can be appealing — I don’t recommend this approach. If you’re scaling well, it’s likely you’ll already have (or will soon have) some customers at very large spend. It’s too easy to draw false conclusions about your organizational capabilities from this set of customers.

Instead, I recommend defining your enterprise go to market efforts with a specific target company size and target persona. These tend to be the repeatable variables in complex selling that you will need to solve for.

Focused GTM Investment

As you move upmarket, it’s important to resource, measure, and iterate against these plans separate from your core go to market motion. Ideally, this means you have well dedicated operating plan (across sales, marketing, and product) highlighting specific investments against this segment.

However long you think it’ll take to gain traction in this segment — double it. Enterprise reps take longer to higher, longer to ramp to a full pipeline, and will take longer to draw out customer requirements that you may not be able to address today (i.e. product requests).

As with any emerging effort across your business, you’ll need cross functional support to make progress. Your CEO, Product Heads, Marketing Heads, and Board should be aligned with the investments and the timeline of progress you are making.