A Guide to Enterprise Sales for Early-stage Founders
If you build it, they won't come. As a founder, it's your job to make the sales that fuel your company's growth––and that includes enterprise sales. Read this guide so you can land the big deals.
If you build it, they won’t come. That’s the truth. Your scrappy engineering team may build an amazing app, but just because you built it, customers won't show up. To get them to show, you need to get good at sales.
The typical advice for startups is to start small and work your way upmarket. Sales to small-to-medium businesses (SMBs) prove product/market fit, and sales to bigger businesses provide profit and sustainability. This framework relies on a major, unstated assumption: Sales to small businesses and enterprises are fundamentally different. The idea is that when you’re starting out, you can scrape by on sales to SMBs and learn (or hire for) enterprise sales down the road.
But what happens if this assumption doesn’t hold? What if SMB sales are actually more similar to enterprises sales than we might think?
Increasingly, all sales are starting to resemble what we traditionally call “enterprise sales.” Companies that wouldn’t have requested enterprise-ready features in previous years are now expecting single sign-on (SSO), directory sync (SCIM), audit logs, and more. The question is less about moving upmarket, and more about the upmarket moving toward you.
The truth is: To become a sustainable company, your small team needs to learn enterprise sales. Founders must improve their sales techniques and embrace the necessity of sales. And to do that, they must master the enterprise sales framework.
Why early-stage founders should learn enterprise sales
We know the objection: "I’m a founder, not a salesperson!" And while this objection is valid, it doesn’t hold true for startups. When your company is first getting off the ground, each employee needs to wear many hats—and the sales hat might be the most important to put on.
If you want your scrappy B2B startup to succeed, you need to understand the benefits of enterprise sales and pursue them with the same dedication you’d pursue developing a new feature. There are three main reasons we recommend learning enterprise sales.
1. Enterprise deals are profitable
Enterprise deals are more profitable than SMB deals for two major reasons—one obvious, one not so obvious. One, enterprise deals are bigger (duh); two, enterprise deals are stickier (huh?).
Jason Lemkin, CEO of SaaStr, estimates that you can grow your revenue by 20-30x just by tilting slightly upmarket. His math, which is admittedly a little back-of-the-napkin, relies on the way churn varies across customer sizes.
He estimates that B2B apps with self-service, individual web seats churn at about 2.5% per month (but often reach as high as 3.5% or 4%). If that math holds, a new customer of yours will, on average, last about 8-10 months before churning.
So when Lemkin advises tilting upmarket, he focuses on how that affects churn. He estimates that even a slightly bigger deal can cause churn to fall to as low as 1-1.5%. Depending on how well you nail product/market fit in an enterprise context, churn can even become negative as enterprises add seats across time.
When you make an enterprise customer, the deal itself is bigger, and the deal is more likely to last. That means profit—a lot of it.
2. Enterprise sales create a bigger market
If you include enterprise customers in your total addressable market (TAM), you’ll have more room to grow your customer base.
Pursuing exclusively small deals when you’re just starting out can be a useful limiting function. It can help you figure out product/market fit and the fundamental features your app needs to deliver on its promised solution. This limiting function can, however, become too limiting.
Justin Jackson, cofounder of podcast hosting and analytics company Transistor.fm, compares business to surfing, and markets to waves. According to him, “Ultimately, your product's potential is determined by the size, momentum, and characteristics of your market.” If you focus exclusively on the small business wave, you might not be ready for the enterprise wave. If you start thinking about it now, your TAM will be larger, and your understanding of it more complex.
3. Enterprises exert an inevitable gravity on business development
There’s a common misconception out there that with the right product, you can avoid enterprise sales or, in some cases, sales entirely. This myth is driven both by product-led companies and the narratives that surround them. Think companies like Dropbox and Twilio.
The narrative usually goes like this: If you build a product for a segment of users (say, developers), you can convince them to adopt it, then “land and expand” into the enterprise as usage spreads from the bottom up. This isn’t wrong. The error is in thinking that this sales tactic is a complete sales strategy.
In reality, as our analyses show, both Dropbox and Twilio started selling directly to developers across SMBs and enterprises but eventually hired full, true enterprise sales teams. Dropbox moved into the enterprise, even though its direct competitor, Box, had a long head start. Twilio eventually hired an enterprise sales team even after its founder remarked in 2017, “You don’t need sales.” Lenny Rachitsky, former growth product management lead at Airbnb, found in his research that “100% of companies ended up building a sales team, including every bottom-up driven business” [emphasis ours].
How to start loving (or at least tolerating) enterprise sales
Start your love affair with sales in two ways:
- Acknowledge that sales is a skill you can, and must learn.
- Treat early sales like an educational opportunity, not a transaction.
When your company consists of fewer than, say, 30 people—everyone does sales. This necessity—driven by slim employee counts and slimmer budgets—is obvious, but putting it into action is hard. So, you have to learn sales. But how?
This challenge is why people like Peter Kazanjy, founder of Atrium and author of Founding Sales, have risen to prominence. In a deck that every smart founder is passing around, Kazanjy analyzes why founders struggle with sales and how they can do better.
One of the first things he says is that founders often have stereotypes of sales people. Founders, perhaps especially if they’re engineer-founders, often see themselves as creative problem-solvers and see sales people as pushy, overpaid loudmouths. On the whole, founders and salespeople tend to have different backgrounds, different skillsets, different attitudes, and different weaknesses and strengths. But this is a stereotype you need to overcome because salespeople are the ones that keep you and your peers paid.
Because of these differences, merely acknowledging that learning sales is important isn’t enough. To fall in love, early-stage founders have to treat sales as an opportunity to shape the growth of their business. Once you understand how important sales is, you can treat it with the prioritization it deserves.
Kazanjy emphasizes that sales isn’t merely a process of passing on a product from your dev team to the customer. Sales informs and directs the inflection points that shape your business. In the slide below, he visualizes the path of sales answering questions like: “Do we know what problem we’re solving?” and “Does it actually work?”
Once sales delivers a market-validated “Yes!”, product development can ship new iterations. Your business grows to its next inflection point where sales, again, unlocks the next stage of your growth. This staggered, founder-led, sales-informed journey is how B2B startups build enterprise value. And this journey is the one you, as an early-stage founder, need to fall in love with.
Kazanjy is stern: “Founders should be their own first salesperson.” He writes that assigning sales out is “fraught with downsides”: non-founders won’t know the product as well, non-founders won’t be able to navigate deal-closing feature requests, and non-founders just aren’t as impressive as founders when it comes to making early-stage, personality-driven enterprise deals.
Sales isn’t a dirty word—it’s how you’re going to grow your business.
Need-to-know enterprise sales terminology
Your new sales environment will stand only if given certain conceptual pillars. Just like there are shibboleths revealing a salesperson doesn’t know anything about business or engineering, there are concepts in sales that can reveal founders are equally ignorant.
To help you and your team, here are some of the key terms and phrases necessary for survival in a sales role:
- Enterprise: A large business or a company that manages hundreds or thousands of employees.
- Enterprise sales: Selling a product or service to an enterprise in a process involving multiple stakeholders, a long sales cycle, high investment, high risk, and high complexity.
- Lead: A person or a business that may eventually become a client.
- Positioning: A brief description of a product or service, the target customer, and how the product or service fits their needs.
- Sales motion: The philosophy and tactics an organization uses to sell its products.
- Enterprise sales funnel: The process or journey that leads follow on the way to purchase.
- Customer Lifetime Value (CLV): The total amount of money a customer is expected to spend with your business during their contract with you.
- Customer Acquisition Cost (CAC): The amount spent to acquire a new customer, usually in sales and marketing efforts.
- Marketing Qualified Lead (MQL): A lead who is interested in your product and has taken the first steps toward becoming a customer.
- Annual Contract Value (ACV): The average annual value of a customer’s subscription.
- Sales Qualified Lead (SQL): A lead the sales team has determined is ready to contact and close a sale.
- Vendor review: An assessment an enterprise makes to evaluate its vendors against key performance indicators (KPIs).
- Sales cycle: The process and the length of time it takes to sell a product to a customer. According to SaaSMetrics, deals that are worth $100,000+ in ACV will, on average, take three to six months to close.
How to start selling to enterprises
Every company and every industry is slightly different, so they have slightly different sales cycles. Broadly speaking, however, the enterprise sales process, as defined by Steven Sinofsky of Andreessen Horowitz, has three main steps that are largely universal.
1. Build a Relationship
We’ve all been in situations where a pushy salesperson approaches us and starts going on and on about the features and benefits of a product. They don’t even bother to ask us what we might be looking for.
As bad as that tactic is in selling cars or windows, it’s even worse when selling software solutions to a large enterprise.
Every sales process needs to start with building a relationship with the prospect. There are some tried-and-true approaches to accomplishing that task:
- Invert your perspective. The product you sell should be the last thing on your mind. Instead, focus on the enterprise to which you’re selling (the customer) and the needs and problems they have. The more you understand about the customer, the better equipped you’ll be to offer solutions.
- Sell a solution. In enterprise sales, you’re dealing with multiple stakeholders, each with different needs and problems that need solving. If you think of your approach in terms of providing solutions to every stakeholder, you’ll be able to build relationships at all levels of the enterprise.
- Embrace the politics. In enterprise sales, the person who makes the purchase decision might never touch your product, while the users may not have much say about the sale. To be successful, you’ll need to manage the relationships of all of your customers’ teams, some of whom may not even get along very well.
- Find a champion. One of the best things you can do is find someone inside your customer’s organization, even if they don’t make the final decision, who will go to bat for you—someone who has a degree of influence, who knows the ins and outs of their purchasing process, and most of all, who really wants your product.
Once you’ve built a relationship with your customer and understand their business and their challenges, the next main step is to share your vision of the future with them, and how they get there.
2. Articulate Your Vision
One of the primary functions of a salesperson is storytelling. A good salesperson paints a picture of a bright future for the customer—a future free of the problems and challenges they currently face, with your product as the solution.
To accomplish this, you need to be able to demonstrate how your product adds value to their organization. This goes beyond how your product solves problems; you need to be able to explain how your product will pay for itself after the initial cost of purchase and implementation. How it will save money, increase productivity, or otherwise contribute value—in real dollars—to the organization.
Another way to articulate your vision is to guide your customers through the decision-making process. This is a prescriptive approach in which you draw a straight line from the challenges they’re having to how your product addresses them. You’ll also want to proactively cover any possible objections that stakeholders might have and how you can overcome them. This approach makes it easier for the prospect to make a decision.
Finally, another effective approach is to create content, including white papers, case studies, blog posts, and webinars in which you share your point of view about the market or industry that your customers operate in. These are commonly used in top-of-funnel marketing programs but are also an effective way to stay in contact with prospects and show them how you can be of value to their enterprise.
Establish a Partnership
In almost every industry, existing customers are far more valuable than new ones. Existing customers are easier to sell additional products and services to, and they are far less costly to acquire. That’s why, when you do acquire a new customer, your goal should be to make them a long-term partner.
But that partnership thinking should start even before you close the first sale. Enterprise sales cycles are typically long—months or sometimes years. Use this long-term thinking to your advantage by being the partner who is always there for your customer, answering questions and offering solutions. Be ready to provide hands-on customer service.
Persistence and patience are critical. That’s how you compete against larger, less patient, competitors.
What to look for in a salesperson when you're ready
Sales, of course, is a specialized and highly valuable skill set. When your company consists of founders and engineers, it’s essential that you make some sales on your own so your company is sustainable and you can find product/market fit. But, eventually, you’ll want to hire people who can do sales full time.
Making that first sales hire can be daunting, because it’s hard for founders to know whether they’re hiring the right person.
Craig Burel, partner at Reciprocal Ventures, recommends that founders frame the sales hiring process with three questions:
- What is our current growth trajectory?
- What is our ideal customer profile?
- What are my personal strengths and weaknesses as an operator?
The answers to those questions will help you define the type of salesperson you need. The first two questions help determine who’s best for the role, and the third will have you refine your search to someone who complements your skills.
When you start the sales process, you’ll see many different titles on candidates’ resumes. In a startup, your first salespeople will have to be flexible and adaptable, wearing many different sales hats. But it’s important to think carefully about the primary role for which you’re hiring.
Here are the common sales roles you’ll see as you start your hiring process:
- Inside Sales Representative: Calls on companies directly via phone, email, or other remote communication.
- Sales Development Representative: Qualifies leads in the initial stages of the process.
- Field Sales Representative: Also called outside sales; calls on prospects through in-person visits.
- Account Executive: Manages the relationship with the customer after the sale is closed.
- Sales Engineer: Works with the sales team to advise customers on the technical aspects of the product.
- Customer Success: Makes sure the customer is using the product to maximum effect, and that they are satisfied.
A Word About Marketing
As skeptical as you might be about sales, that likely goes double for marketing (especially if you’re an engineer-founder). But a good marketing department, either internal or an outside consultancy, will be critical as your sales team grows.
It’s an entirely different topic, but think of marketing as a sales enabler. People whose job it is to make sales’ jobs easier.
You—yes you—can do enterprise sales
It’s often been said that “everyone’s a salesperson.” It’s an old saying, but there is a lot of truth to it, especially in a startup.
Without sales, there is no product, no engineers, no company. Revenue is the lifeblood of any organization, and it’s provided by the sales team.
Small, scrappy, B2B teams don’t have the luxury of slick salespeople, so that task falls on the people who are already in place and who know the product better than anyone: the founders.
In those early days, founders who want to be successful need to get involved in the sales process. It may not be the job you’ve always dreamed of, but it has to be done.
And you can do it.
WorkOS helps you close enterprise deals without wasting engineering resources
There’s one thing we haven’t mentioned yet that also unites founders, engineers, and salespeople: a distaste for enterprise-ready features. We’re talking compliance, authentication, user provisioning, and more. A salesperson hates these features because they alone can shut down an enterprise deal in the making. Founders hate these features because they want to work on features that will differentiate their apps, not features that will complete a checklist. That’s where WorkOS comes in.
With WorkOS, you can set your up app for enterprise success—all without spending engineering resources you don’t have.
Take Webflow, for example. Webflow knew single sign on (SSO) was important to making enterprise deals, but with an estimated 3 months to complete, the feature fell to the backlog. After Bryant Chou, Webflow’s cofounder and CTO, heard about WorkOS, he was able to integrate WorkOS SSO to support all Identity Providers in the span of a few hours.
That’s speed you just can’t get with internal resources. Get started with Google OAuth SSO and Magic Links. Did we mention they’re both free to start? Forever? Try WorkOS today.