Almost all software-as-a-service the company wants to climb the market and sell to businesses as well as to smaller customers. Doing so can lead to bigger contracts, more growth, and the kind of size it takes to become a well -known technology name – think Workday, ServiceNow, Palo Alto Networks, or Snowflake.
Despite how well this path is traversed, it is a surprisingly difficult move to get right.
In my current role as an operating partner at Battery Ventures, I put questions daily from companies with bottom-up sales moves-those focused on smaller customers who often buy the software itself-about on how to get into business. The first thing I will tell them is that moving up-market to enterprise is more complicated than they might think.
Unfortunately, many founders make the mistake of thinking that hiring a group of highly paid account executives (a fancy name for salespeople) is the same as “going enterprise.” No.
The transition to the enterprise requires major changes to every function in the company. This means hiring for new roles that don’t exist, and using tools that will match the new processes you’ll implement. New roles, tools, and processes mean additional costs.
So why do it? Because, when done correctly, the benefits outweigh the cost and complexity. An enterprise sales model allows you to expand your overall addressable market and impress customers with better net-revenue retention and stronger long-term value.
Moving into business is harder than it seems, and many companies are not willing to do it, especially in this market.
If you are making your move into business now, the stakes are rising. Volatile tech markets and fears of a recession mean enterprise technology consumers may be less likely to spend money on new, unproven technology in the coming months or years. So if you are new to the enterprise market, you need to enter the battle fully prepared to do it right.
Key components of growing a business include changes to your product, marketing, sales, legal, financial, HR, and customer success. I will provide an overview below of each of these areas, and related considerations for companies thinking about diving.
But first let’s examine your company’s overall business readiness.
Note: This post is an excerpt from Bill Binch’s new e-book, “Growing Up Enterprise”
What does ‘business readiness’ mean for your company?
First, ask yourself if any priorities are higher in your transition into business. Are you expanding around the world? Are you releasing a new product (product, not feature) in the near term?
I highly advise waiting on the business move until it becomes your company’s highest priority-something that is discussed at the weekly CEO staff meeting.
Why is this so important? Because business readiness is more than just sales and marketing. No one wants sales and marketing to reel in a big-fish customer just to break the deal because of operational hurdles. Let’s review some common scenarios to illustrate how this would work.