The goal of this presentation is to outline the various go-to-market strategies
available for B2B Software-as-a-Service companies. Of course, many of them
also apply to other categories of software products and services.
Frequently, the services provided by a SaaS company can be useful to any
business, from 5 to 50,000 employees. Going after small clients requires a very
different set of skills than selling to the enterprise. That’s why it is so important
to select which segment(s) of the market to address and how to go after them.
The big dilemma: who’s your target?
Vous êtes une société B2B SaaS française ? Vous avez des questions ?
N’hésitez pas à me contacter : email@example.com
Christoph Janz (Part 1, Part 2):
Some time ago my friend Boris
Wertz wrote a great blog post about
"the only 2 ways to build a $100
million business". I'd like to expand
on the topic and suggest that there
are eight ways to build a $100
million Internet company.
The way I look at it can be nicely
illustrated in this way (the y-axis is
ARPA per year, the x-axis is the
number of customers needed):
8 ways to build a $100M business
Finding the right positioning
When you start your company the very first question you need to ask yourself is
which kind of customers do you want to serve. Many start-ups (and even
growth firms) lack this discipline and they therefore serve customers of all
sizes. This leads to suboptimal results for all.
Make sure you know what the size of customer you want to serve is, what the
people in a company of that size do, the problems they have, the features that
will resonate and the channels you’ll need to sell into and service that
customer. Because it will vary dramatically by different segments I believe you
need to pick an animal size and go for it.
In software there is a gulf, you can pretty much sell things under $10,000
online, but once you need sales people involved you need to start, the pricing
needs to go up. You know, $30k, $40k, $50k because it becomes much more
expensive to sell them.
I see a lot of people who don’t really understand their business model and I
think that that’s a key thing to work out.
Enterprise software’s pricing issue
Selecting your target(s)
(≈20% of revenue)
Small / Medium Sized
(≈40% of revenue)
(≈40% of revenue)
Large number of low-price deals
=> automated sale
Medium touch Uneasy middle
High touch (Microsoft,
SAP, Oracle, IBM...)
Not worth it
Small number of
=> solution sale
Questions to ask yourself:
● Should you charge per
user or in usage?
● Free plan versus free trial
● High touch or self-service
Staying out of the startup graveyard
Why go for a solution sale?
Jason M. Lemkin:
Understand that you can make 3-20x the revenues on a given enterprise
customer with a solution sale vs a tool. Having been a VP at a Fortune 500
company, I can tell you that getting me as a corporate VP to pay $100k for a
web tool was basically impossible. It gets sent to procurement, and by the time
you are done, it’s hard to get anyone to pay more than $20k for a tool. [...]
But a solution? Solve my problem around billing? Around customer success?
Around CPQ? Well… you can get $20,000,000 if you truly solve a core
enterprise business problem. [...] But again, ask me to buy another tool? That’s
not on the list. So the budget here has to be a rounding error if it’s just a tool.
$5k ACV is fine. $10-15k maybe.
Selling to the enterprise:
Think about it this way: Salesforce is the most successful SaaS company on the
planet, with a $5b run rate and $30b+ market cap. Wow. But even after 13 years,
it still "only" has 100,000 customers.
At the low end of the market, you can buy Salesforce by yourself. At the high end
of the market, salespeople and partners are available to help you.
Their pricing goes up faster than your company size: the bigger you are, the
more value Salesforce can deliver to your company, the higher they price the
Objective: triggering sales without having to handle individual customers
➔ Focus your website on lead conversion
➔ Use a marketing automation solution for lead nurturing
➔ Manage SEO / SEM (Google Ads) to drive visits to the website
➔ Offer an automated signup and billing process
➔ Provide support through a knowledge base
➔ Decide whether to offer a Free or a Freemium plan:
I’m not trying to say that a B2B SaaS app shouldn’t ever consider Freemium.
And I’m not saying there aren’t great examples of it working. [...] However, I am
saying you should really analyse your reasons for choosing freemium, and
make sure you aren’t actually choosing ‘Free’.
Automating the sales process
So how did our model evolve? People think that we were relatively smart coming up with this fancy
new business model. What happened was we were in Australia, hundreds of miles from anyone, and
we were 22, so there were a whole bunch of constraints to us that we couldn’t get around. First we
couldn’t have a sales team, we couldn’t afford one, we were 22 year olds who couldn’t raise any
So software has got to sell itself. If it’s going to sell itself, it needs to be low price, because you can’t
sell 50,000 dollars worth of software online so it needs to sell itself. If it’s going to sell itself it needs to
be cheap. You’re going to have to sell an absolute ton of this stuff before you are going to make any
money. If you’re going to sell a ton of stuff, you need to sell it globally. If you’re going to sell it globally,
you need to have pricing on the website, you need to be able to download it and install it and so forth.
So our model really came about because we were in Sydney.
The product should do the talking
This is one of the reasons we think enterprise is a dirty word. It’s also why it’s
an absolute pleasure to design products for what we call the Fortune
The Fortune 5,000,000 are the the small businesses, the side-businesses, the
freelancers. The people who buy our products are the people who use our
products. If they don’t get value on both the financial side and the productivity
side they don’t stick around. [...]
In the world of small business software the product — not the salesperson —
does the talking. There’s no camouflaging value when the buyer is the user.
Objective: getting companies to sign off on large deals.
● You need to have a dedicated sales team
● The key is getting qualified leads, which requires spending a lot of time in
the field and on the phone
● The average closing time usually is around 6-9 months
● The number of potential customers is much lower
● Ultimately, you want to go after channel partners (but they won’t work right
Addressing big customers
The need for a sales team
INGRES was a major learning experience for me, because I was a product manager and
totally focused on creating the absolute best product in the world. You know what we
found? It didn't matter. Oracle kicked our asses because they focused on positioning,
marketing and selling as opposed to building the best product.
While I have some sympathy with not investing too heavily in sales people until the
product has properly been tested and commercialized in the enterprise environment, in
the end it’s a fact that it takes sales people to move product through large organizations.
And of course the most successful technology companies: Google, Facebook,
Salesforce.com, Oracle, Microsoft all have a lot of sales people.
Avoid leaving money on the table
Jason M. Lemkin:
So my real worry is just this: up-and-coming SaaS entrepreneurs think they can
get to $4m, $10m, $30m or whatever just with customer happiness officers. [...]
I love the idea as a customer-centric guy. But the problem is, if you don't have
trained closers in your company, then 98 times out of 100, even best case, you
are leaving a ton of money on the table.
Do your happiness officers know how to qualify and maximize a deal size? Sell
to power? [...] I doubt it. So even best case, for most SaaS companies, you're
leaving tons of money on the table without great closers.
Land and expand
One of the myths of SaaS is that the products are so good, so easy to use, so
quick to deploy… that the product sells itself. Given the popularity of
try-before-you-buy and freemium-to-premium models for software as a service,
it’s easy to see where that myth comes from.
But as many startups discover to their horror — after they “land” users and try
to “expand” to more departments in a large company or government agency —
this is far from the truth. Even with early viral growth, SaaS products don’t sell
themselves. Strong enterprise sales is critical to capturing market share.
Align your strategy with your target
When launching a B2B startup, you need to be very clear, right from the start,
about the type of company you’re going to be chasing.
➔ Aim for prospects that are too large and you’re going to get clogged into
lengthy sales processes you might not be prepared for.
➔ Go after small companies and you might end up spending way more that
you make just to acquire additional customers.
Whatever your choice, make sure that your company culture, your cost
structure and your skillset are aligned with the type of clients you’re looking for.
Don’t go after the wrong type of customer!
Mark Suster (Upfront Ventures)
Jason M. Lemkin (Storm Ventures)
Christoph Janz (Point Nine Capital)
Jason Fried (Basecamp)
Scott Farquhar (Atlassian)
Mark Cranney (a16z)