Ask HN: How do B2B startups sell to corporations?
Hi,
I am founder of a chatbot startup... it's a b2b..
I am interested to know how to sell to corporate America? how does it work?
There's not really a "how it works" for this. If I had to tell you how it works I'd say: it works by you making friends inside a corporation and convincing them to buy your product. Did that help? :). Probably not, so here's a little more: you preferably start with a member of your founding team who is articulate, outgoing, amiable and enjoys meeting and talking with people. That person needs to know the product and competitive environment cold, and it helps if they are passionate believers in the value prop. They need to have an identified list of target companies. They need to start calling and emailing and working contacts to get meetings. Eventually, if you actually have a value prop, one of those meetings will result in a relationship with someone who is willing to champion the product internally.
You then work outward from that contact, meeting with their colleagues, eventually identifying decision makers who control actual budget that can be used to pay you for something. If you do all this skillfully then you may get them to commit to a purchase. They will then have to shepherd you through a potentially long series of internal policy and legal hurdles. You may need to get on a qualified vendor list, or meet certain business stability criteria. You will likely need approvals of the deal from different departments, and their legal team will review and try to negotiate any agreements you request them to sign. You can see why developing internal champions is absolutely critical. In every single successful deal we did, by the time we got to the second or third round of meetings our internal champions were doing most of the selling.
The last thing I'll say is that it can be powerfully tempting to think you can purchase success at this by hiring the right magic person who can work their little black book and make sales happen. I tend to doubt it, and it definitely never worked for us. A founding sales person can make this happen. That's the person I'm talking about above. But just bringing in a hired gun is unlikely to result in success imo. I think you need to believe in your own thing enough, and be good enough at talking about it, that you can land your first few deals. Then when you do bring aboard professional sales people you'll have some actual idea of why people buy from you and how to systematize the approach. Good luck with it!
A thousand times, this is right on. Hired gun sales folk are generally going to follow the path of least resistance--they will try to get other people at your startup to do the boring/hard work they themselves ought to be doing. Or try to push through deals with lousy margins to get their revenue commission, or a dozen other pathological things. Plus, if you (founder) can't sell the thing, it's going to be super, super tricky to identify someone else who is even capable.
If you are hiring for lead gen or biz dev then that's an investment like PPC or SEO...someone inside the building has to convert the sale.
Backing up a bit, companies have to pick their targets: smb, midmarket, or enterprise (say over $1.5B/annum). There is a vastly different sales motion required for each. Further, there are different sales motions (and different salespeople) even in the SMB vs midmarket world depending on price points: under $5k, under $50k, etc.
But the high level problem is actually really simple. Salespeople who are good at this -- really good -- can easily earn $1m/year in cash comp. That is not an exaggeration. A standard comp plan will have a commission north of 15% with accelerators after meeting quota. So they basically aren't hirable. They may be willing to be a cofounder, but most likely, they will want to work for a big existing company... because see the cash comp above. And unfortunately, to be the first salesperson, you need someone really good. Because they're going to be doing their own prospecting as well.
It is possible to strike it lucky with a salesperson looking for a break, but how do you evaluate that person? That requires sales skills. Just like you would never ask a salesperson to evaluate an engineer, an engineer is going to have a shit time evaluating a saleperson.
A note jumping through the legal/paperwork hurdles with large companies: be prepared for it to take a long time. A very long time in some cases.
It all depends on who you’re working with, how big the company is, and how much money the deal is worth.
IMO going through that successfully is also sending a signal that you have sufficient endurance - there's a large risk for a corporate to sign up for a long contract with a startup, they don't know how long you're going to be in business for. If the startup doesn't have the appetite to spend 2-3 years to get a contract over the line, then they aren't going to be a stable partner for the long term.
You need to also have sufficient numbers of small/medium scale deals so you're not 100% relying on elephant hunting.
I will give you an example. A few years ago every c had a BlackBerry. IT ran BlackBerry business server alongside Exchange. Everyone was happy. One day a non-exec got an iPhone from his other job and wanted his emails from your co on the same device. There is no way to resist these requests, they will have it. Need to upgrade Exchange? Do it then, need to turn on web services, do it then. Need to hire back that team from Cisco for the week to sort the router, do it then. Need to hire the compliance consultant to rewrite your policies...etc.
When senior people want a toy they will have it (as long as it doesn't upset the other board members toys).
I guess that suggests that being the toy is the way to shortcut the long enterprise buying pattern. That or being the missing link that lets an IT manager deploy said toy more easily.
Institutional investors tend to be pretty conservative, and these are their sort of people.
A large corporation is like many small companies, under one umbrella with more or less cohesion, so they often have different tools.
if this is your only and big idea that you have to get married to so you can “ strike it big” then you are already playing at a disadvantage
The rest of us, your competition, have an idea every other week and just revisit them when they are economical
its not “strike while the iron is hot” its have 100 irons to begin with
So the economical nature of that reality became the idea behind our “advisory” business, exhibit a
For me it's unfortunately the case that I have lots of ideas and don't execute on them. Mostly, I think, because of doubts about getting to something profitable.
But the problem still is, how do you get that guy. There are so many people who claim to be that guy and few who actually are (and would be willing to switch).
Smart people won't switch companies just to earn a more money. Strong relationships are worth more than a bigger paycheck and while you might retain many relationships you certainly can't retain all when switching companies.
Seen this so many times - not just in sales but also in acquisition. Guy from startup joins MNC in decision making role, then proceeds to acquire startup.
How exactly does that work with the reseller? This is a person you pay ~15% to, and then technically your product is sold under their brand to the big corp? If so, how are they found typically?
New to b2b and figuring things out.
The corp still uses your software, not some whitelabeled version. This broken-telephone purchasing game is solely there because in a big corp it's really hard to write a check to a new unproven vendor, you'll just be a little line in the invoice they pay to the VAR each month.
You need the magic salesperson or lobbyist because they know the right 6. Some things get sold to the CEO, other things can’t be because the people downstream have another agenda.
I mean I get it that sales are all about connections but let's not pretend that everyone in here can go sailing with a 10M sailboat in order to meet the guy who knows a guy who knows a guy.
And then build from there.
Edit: Also your existing clients are your best "comercial". If you can get one CEO/CTO/(...) to make a phone call for you, this can help a lot. For above your product kind of cant suck (90% of IT related stuff getting sold to enterprises is overpriced crap)
This describes why the vast majority of sales pitches for relatively good products fail. In many companies the agenda of the cliques and players and internal politics of the firm is the major hurdle.
There are certainly some restrictions for audit purpose, and a bunch of loopholes to make sure business people can keep doing business stuff the way it as always been.
Most places have no alcohol on premise policies, but that doesn’t include the CEO suite.
There are lots of ways to waste money on sales, but if you are careful to avoid them, a single experienced professional sales person can work wonders, even for a startup that is still a few pivots away from its final shape.
This may not be the most HN-compatible opinion, and there are certainly many additional ways to sell to big companies, but I worry that a lot of founders, especially technical ones, overlook staffing sales until later than they should.
Having the right sales (not marketing) person can be the difference between success and something else. The right sales person can target and create a relationship the wrong person will just waste resources.
The most successful companies founders I've seen combo of sales and technical. If you are a technical solo founder get an experienced sales vp and give them 20%.
Marketing is usually a team effort so a more junior team can help. Don't hire someone to do both.. hire for sales first.
Sales before tales.
Sales is a part of marketing, in the theory, and they actually do a bit of both, communicating and capturing value. Communicating when they talk to prospects, capturing when they close deals.
The typical responsibility of Sales is to guide prospects/customers through the “sales funnel” or if you want to be really snazzy, the McKinsey “consumer decision journey.” Actively pushing new clients closer and closer to a deal, cross-selling and upselling current clients, etc.
But you wouldn’t expect salespeople to be writing advertising copy or making webpages, that’s the job of the broader marketing team
Do you have any tips?
That's how it works.
Unless you have moved the chatbot to a different website since then, based on the product as is, it would be better to focus on a) translating the website into English and b) finding some beta testers and users.
I guess most of the replies here are based on your use of the word coporation, hence they're sharing advice about lanfing multi-figure deals but realistically, the target market for FB chatbots are small to medium business owners.
Check out his thinking about “elephants” vs “deer” vs “rabbits”: https://bothsidesofthetable.com/most-startups-should-be-deer...
Once you get a fish on, you'll need a professional sales person to carry the deal forward. Meeting, review, reply, next meeting, follow-up, etc.
Cold prospecting from directories and trade-orgs is another channel. Call,call,call. Then call some more.
And keep pumping the newsletter, opt-in only, keep content fresh.
Definitely avoid highly regulated verticals at first as they will drown you with security/governance requirements before you even get to their lawyers. Meanwhile get to know these frameworks and what will be expected of you if you want to approach them in the future.
From a feature-set perspective, any large company is going to want to see management interfaces with single sign-on, at least basic roles (read only, billing, ops). Customer should also be able to do everything via API that they can via UI. You should have good audit logs and be able to push them or let the customer come get them. If your architecture supports it, most large customers would like the option for a dedicated tenant instance.
Good luck!
I too am working on a chatbot startup, that's b2b: https://insideropinion.com/
The path I'm working:
1. Identify a clear problem / use case
2. Determine inside of a corporation who makes purchasing decisions to solve said problem / use case
3. Search LinkedIn for contacts at companies that fit into that role
4. Reach out over LinkedIn and / or use system such as Hunter.io to connect over emails
5. Goal is a video demo / discussion, pitch the product and show them how you think it can help
6. If you make a connection, ask if they know others that may be interested
7. Attend trade shows for your segment if possible
Main thing is follow up, follow up, follow up. Sometimes on my 3rd or 4th follow up I'll get a hit. Ask questions about their business and be as clear as possible. Conversions should be anywhere from 1% - 20% depending on the market segment (I'm not sure what yours is).
Won't plug that here, but I think you'd get a lot out of this interview I did with Stephanie Hurlburt, cofounder of Binomial, where she explains how she learned to close 6 and 7-figure deals as a technical founder with no business background: https://anchor.fm/sales-for-founders/episodes/How-to-close-7...
1. Prospecting 2. Conversations 3. Closing 4. Promised land(revenue)
Slides of the talk: https://www.dropbox.com/s/v9zlx72t9b4yk8d/Tyler%20Bosmeny%20...
If I had to choose one approach I'd say demo your service for months so they can get accustomed to it. Most companies I know give demos for very short time-spans. If you give a one month demo the client might not even get the chance to look at it because he has fifty other things to do. Let him get accustomed in using it, making it a part of his workflow.
I still like the idea though!
The new trendy (and really great tool) is datadog, a HN company. They went out the window when the trial expired after 1 week and their asshole sales were at war against any extension. How am I supposed to demo the tool and sell it internally when it can't even be accessed?
As if it were not enough, they kept calling day after day to try force the sale. Then they got banned soon afterwards, after some mid level folks got a hold of both of these practices. Nobody wants to deal with that.
If you've never worked in that domain, you can trial the tool and figure out what they're about. Short version is to go for ELK + Datadog + NewRelic.
If it takes non-trivial infrastructure (firewalls, AD integration, what have you), it can take 2 or 3 months just to get the demo running. If your demo license only lasts two weeks, no decision maker ever sees a running instance, but sometimes somebody in the chain is too embarrassed to admit it took so long.
After you've got some sales under your belt, sponsor a booth at a tradeshow relevant to your market. Demo your product in-person, collect leads and follow up for more sales. Rinse and repeat.
But - we are not everybody.
If you're targeting someone you think has got a specific pain that you can credibly help with - a well crafted, unique and relevant pitch, with appropriately timed followups does work for a significant amount of people.
Probably low because I was in a rush and didn't explain the content at all.
As a previous commenter mentioned, understanding what your product is and your go-to-market motion is super important. Are you a bottom up developer or user-led adoption with ideas to expand or are you going pure top-down enterprise? Either will take time but I've worked with many a company that successfully went from bottom up and generated significant enterprise sales like https://Snyk.io.
If you choose to go top down, find advisors or investors who have relationships at some of your corporate prospects. Going top down super early requires relationships to get in the door. Second, you have to figure out exactly who in the organization you need to get to and understand what is their pain and how you can uniquely solve it. I've seen way too many early stage founders get in the door to explore and they end up hunting for dodo birds - they're extinct and don't exist.
There is so much more on this topic and one method I advocate is focusing on enterprise design partnerships vs. selling which has more of a partnering model than a transatcional one. More on that here in a SaaStr podcast I was on - https://www.saastr.com/saastr-podcast-190-ed-sim-founder-gp-...
Follow up once. Not too many times. Sometimes people ignore the first time because they're in their emails looking for something else.
Some people prefer cold calling, but I find the success rates are much, much lower and you can't convey the same information. I think cold calling is only popular because it's easy to monitor failure rates.
I’d spend about 30% of my time doing cold outreach. I’d get a conversion 2-3 times a week. One day I sold about $250k of high margin training vouchers (it was MS Office user certification iirc) through a single phone call. It literally paid for that year of college.
In terms of job hunting, I got about 2 out of 4 responses this way, so it's still a 50% rate. This actually landed me my first job.
This was from a few years back though. It might be harder now that everyone has automated messaging and CRMs designed to look like they're from a human being (probably illegally without an unsubscribe button).
It depends a lot on how you do it. I think the message has to hit well, it has to look personal enough, hence the screenshots have to be designed for that specific company. But done wrong, it can look a bit desperate.
You also have to find someone who can make a decision. A lot of people are terrified of this, but higher ranked people can actually forward you to the right VP in charge. We've cold contacted the CEO of the biggest media company in the country this way, and he was very happy with the meeting.
Some people prefer a wider net, like 1000 messages a day, with a 2% success rate. That's fine too. Sometimes it gets better results, because you end up with people more desperate for a solution. I just think the personal cold email method works better than cold calls, and it's a lot more fun.
For founders, personal emails help, because you can ask them why they rejected you, and that helps in improving the product or strategy.
I'm late to the party, but thanks for reminding me. I got my first job out of college (engineer) because of a cold call to a business.
2 let your VC do the above
3 crowd favorite, let your VC force other companies he already invested in/sits on board to integrate your product and then do number 2
But in your case number 1 should be change your name and language, unless you are looking for government (NSA/CIA) contract.
For B2B it usually takes three months from first contact to closed deal. That means you need a healthy pipeline of deals to keep the cash flowing.
Crossing the Chasm[2] is a must-read and classic book about marketing and selling B2B software.
[1] As I say, make buyers want to pay: https://www.gkogan.co/blog/buyers/
It's not all roses; sometimes the extra layers of indirection between you and the actual customer can be a little onerous.
Wistia's CEO recently posted about mistakes made early on, and a better approach to building affinity vs awareness through relationships. https://twitter.com/csavage/status/1180148970825437191
Sales matters, patience matters, but content brings people already seeking a solution to you...and/or agitates a pain point they've forgotten.
Big companies can be sold to by tiny startups. Finding the right person is a grind - no easy way about it. Once you’ve found them, it is truly about building the relationship and then letting them guide you through their purchasing process.
[0] https://blog.hubspot.com/sales/identify-sales-prospects-infl...
Major account sales by Rackham is a classic
How to sell from Entrepid is an algorithm you can follow https://static1.squarespace.com/static/57daf6098419c27febcd4...
Connections are important but in some areas you may have to hire a lobbyist to get them, while in other areas you just need to show up at a trade convention and chat people up.
We'd like to land-and-expand since our product has to be used by teams but I'd love to get the sales cycle shorter.
Big companies or .gov are too expensive to for you to work with unless they are coming to you.
Dead man walking.
- outside sales executive (e.g., the person who visits the customer, they typically work from coworking or home-offices)
- inside sales executive (e.g., a sales support person, typically doesn't travel and works at coworking or home-office full-time)
- outside sales engineer (e.g., a customer-facing technical person who answers questions and helps sell solutions with the sales exec)
- master agreements (generally-agreeded terms and conditions)
- Memorandum of Understanding (MOU)
- Letter of Intent (LOI) - before final quote & contract
- Purchase Orders (PO's)
- Request For Proposal (RFP)
- Request For Quotation (RFQ)
and lengthy sales cycles that often take 6 months to 2 years, depending on the product or service
Another way to get in is start immediately under a master agreement and do consulting-ish tasks, and gradually sell more solutions and temporary staff roles as they come up ("building a beachhead").
https://www.theregister.co.uk/2019/10/25/amazon_fails_to_sto...