How startups should sell to the enterprise
DEMO is all about startups pitching their new products, but a panel discussion on Thursday turned the tables, with CIOs telling startups what they can do to win business in the enterprise.
The panel was moderated by CITEWorld editorial director Matt Rosoff and featured Dish Network CIO Mike McClaskey, BDP International global CIO Angela Yochem, EchoSign co-founder Jason Lemkin, and Workday strategic CIO Steven John.
Citing the growing reach of technology into new departments of the enterprise, Lemkin warned that buying decisions for technology all eventually come back to the CIO. Even though other areas of the company may make small or even moderately sized purchases, CIOs may take note of the vendors that circumvent them when making the sale, and could block them from any future business. What seems like a short-term win could turn out to be a long-term problem.
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However, some startups have been able to sell to enterprise customers after taking an alternative route. Yammer, for example, was mentioned during the panel as a company that gained traction with lower-level employees, often without the knowledge of the CIO. Once Yammer started to attract attention from executives, it embraced CIOs and scaled to meet their needs, satisfying both an enterprise customer's users and decision makers.
Similarly, McClaskey mentioned the opportunity afforded through consumer technology outlets, such as the Google Play and Apple App Stores. Almost all CIOs use multiple devices that access these outlets, and if they come across a potentially useful enterprise technology while using a personal device, they're more likely to seek more information about it later on.
Flexibility was mentioned as a key aspect for startup companies that are lucky enough to land large customers early on. McClaskey cited two cases in which Dish opted to work with startups. One of the most important aspects of the relationships was the younger companies' willingness to incorporate Dish's input on the product. The startups' product development teams worked directly with Dish to help adjust aspects of the product to accommodate their needs. This is important not only to sustain business with early customers, but to help attract new customers in the future.
Lemkin cited the importance of use cases and references when trying to attract customers as a young company. Those that are willing to adapt in order to establish strong relationships early on will be more likely to build similar relationships with new customers.
The panel also discussed the importance of maintaining trust with customers and other connections throughout the IT industry. John cited trust as a main factor in all business decisions, from engaging in new business to hiring employees. Decision makers in large enterprises are more likely to side with people who they can trust, whether that trust comes directly from previous business or from word-of-mouth recommendations from others in the industry.
Yochem pointed out the benefit of establishing a good relationship even when failing to complete a sale. Regardless of how a discussion on new business goes, the connection made in the process is still valuable. Another important and often overlooked consideration is asking around for any other potential customers. Even if a potential customer company isn't in a position to make a purchase, they might know of others who are. Yochem advised salespeople at startups to end every conversation with a potential customer by asking if they know anyone else they should talk to.
The panelists also gave valuable insight into the most effective, and ineffective, methods of engaging an enterprise customer. McClaskey mentioned being "bombarded" with cold calls, emails and webinar invites from sales representatives, and often even from third-party companies hired to do this work for them. These requests often receive the lowest priority, sometimes for no other reason than that they get lost in the white noise created by all the companies that want their business.
The best way to connect with a CIO, according to McClaskey, is through mutual connections analysts, partners, references, or other companies they've done business with.
Similarly, Lemkin also warned against bringing in outside employees to head up their sales operations too early on. Most entrepreneurs won't have a clear idea of what they want in a president or vice president of sales until they've made a handful of meaningful sales on their own. He advised startups to hold off on hiring a sales vice president until they've made two sales to CIO-type customers, and to learn from that experience.
For young companies selling tech products and services, Lemkin said the CIO is their best ally. Following his advice, and that of his colleagues, may set one startup apart from the rest of the crowd.
Colin Neagle covers emerging technologies and the startup scene for Network World. Follow him on Twitter @ntwrkwrldneagle and keep up with the Microsoft, Cisco and Open Source community blogs. Colin's email address is email@example.com.
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