Ask HN: Why should businesses drop their software for my enterprise solution? | Hacker News Reader

Ask HN: Why should businesses drop their software for my enterprise solution?

I'm trying to work on a business idea which is a B2B enterprise solution. The core roadblock I am facing is that almost all the businesses in this domain have built their software solutions. My goal here is to create a universal platform that should significantly cut down their software development/management cost. But, I can't get around the idea of asking businesses to drop their software in favour of mine. Of course, this is assuming that my offer holds up to their standard. Is it something that you would consider if you were running one of these businesses?

PS, I trying to reach out to potential customers to gather as much data as I can, but it is taking longer than I expected.

View on HN

Businesses will switch to a third-party solution if the perceived cost savings, benefits, and risks line up. SAP, SalesForce, and WordPress successfully replaced custom software, just to give three examples.

You have to frame your pitch or proposition to address what a business owner (or whomever makes the decisions) will care about: cost, savings, benefits and business value, and risk. I’ve sat in on presentations and seen the software sales people unprepared to address what should have been obvious concerns about risk. A business owner will probably want to know if they will own and control their data, how it might be used, if they can get their data out. The CTO will likely ask about integration, customizing, and migration.

Asking a company to commit to a new platform or solution means asking the company to trust you. Potential customers have to trust that you can deliver a working solution, that you can maintain the software and support them, and that they won’t experience a lot of headaches.

Getting early adopters is tough because you won’t have a lot of success stories to point to. You may find it easier to pitch to businesses that need but don’t have a solution in place rather than to those that do, to ease the credibility question.

I think Steve Jobs said that you need to show customers something ten times better than what they have, not just an incremental improvement. You can focus on the improvements in terms of cutting costs, greater functionality, or reducing risk.

I would be careful about framing savings solely in terms of reducing software development cost, because some customers will interpret that as eliminating jobs, and that will cause internal resistance. Instead frame the savings as freeing up resources from mundane tasks for more important things.

I’ve seen companies resist and reject third-party solutions because they have invested in custom software. It may be sunk cost fallacy, it may be ego. You want to avoid criticizing what they have done internally and present your solution as a good path forward.

Thank you for the clear, comprehensive response. This definitely tickled my brain into considering a few more angles. Risk management wasn't actively on my mind so thanks for the reminder. While I did mention that the goal of the project is to bring down the software cost for these businesses, I considered it to be implied that there should be a significant improvement to existing systems. I say this because focusing on a single version after listening to prospects of multiple potential customers, should generally produce a system superior to those maintained individually by each customer. At least I am inclined to believe this at the moment. But you're right that I should be careful in framing my pitch.

PS, I think many many people have said something along the similar lines. "Your product has to be 10x better than the customers' next best alternative."

In my experience working at a lot of companies that have a mix of in-house and third-party solutions, management generally prefers to use off-the-shelf software because of the costs and predictability. But you have to persuade them that they are not losing any functionality and can customize and integrate. People like to think that their business is special.

I still get asked to write accounting systems. I usually say "Use Quickbooks" (or any of the many available off-the-shelf packages). Then I get told "We can't, we do X, Y, and Z that off-the-shelf systems can't handle." Digging into that I almost always (one exception in two decades) find that they aren't doing anything special, they are either doing accounting wrong (they built an idiosyncratic system for themselves) or they just didn't understand different terminology or features of Quickbooks or whatever. Perhaps ironically the question of switching accounting systems often comes up after failing an audit.

I went through this with a Salesforce adoption a couple of years ago -- "We can't use Salesforce because it can't do so-and-so that our home-grown CRM does." But it can, it just uses different terminology. So you have to understand the business domain and expect this kind of resistance and know how to overcome the objections.

If you get the CTO or IT people involved they may perceive off-the-shelf software pushed on them by management and consultants as a threat to their job at worst, or a new deployment/migration/integration nightmare at best. So prepare to deal with that. IT people will focus on risks, and they may exaggerate, but you have to have a solution for migration in and out of your software (assure them they own and have access to all of their data in some standard format like a relational database), and you need to show the customizing and integration features if those apply.

Reducing friction and risk is probably the best thing you can do. Offer a fully-functional limited or trial version. Make sure you have a turnkey setup. I once worked for an educational software company that included laserdisc players with their software because requiring a school to buy those was too much friction. Have a laptop or PC you can plug in for your potential customers to use. Every complication you can eliminate to get them using your software will smooth the process, and it shows you are customer-focused. Think about how motivated you would be if someone sent you a link to a .zip file and a Word document with out-of-date installation instructions.

Thanks for all the insights! This sure does help. :)

Do you know why they have built their own software?

Most of these businesses have customers that directly engage with them online. From what I've observed, their requirements were more individually defined at first, but over time, all of them have similar generalised requirements with a slight touch of a few unique ones.

As I said, I am still in the process of gathering the required data, so its too soon to tell.

Reply on news.ycombinator.com