by Ryan Junee5/11/2016
Many hackers-turned-founders understand that sales is an important and valuable skill, but shy away from doing it out of fear and uncertainty.
What if I told you that being a great enterprise salesperson requires the same skill set as being a great hacker? You just need to reframe how you think about sales.
Before I get started, I want to point out that this article is focused on early stage companies — those who are still in the “wild west” stage of figuring things out and do not yet have an established repeatable sales process and organization. That said, I assume you have found product-market fit, or are close to it.1
Hackers are experts at understanding complex systems and bending them to their will.2 Large enterprise sales requires the same skill set, but applied to a different kind of system.3 Where a computer system is a complex network of hardware and software, a large enterprise is a complex network of people and processes — and it can be understood and influenced in the same way. The emergent behavior of a corporation is the result of incentives and structured rules amongst its constituent people, much like the output of a computer system is the result of structured rules and data flows between pieces of code.
Enterprise sales, then, involves understanding and influencing the components (people) of the system in order to produce the desired behavior (buying your product.) Every system (company) is different, and so you need to develop a systematic approach to hacking (selling to) them.
This is especially true in the early stages of a startup. A mature company has generally figured out how to hack most of the possible systems in its target market and has created scripted processes to make it a rinse-and-repeat sales model. To follow the analogy through, in this way you can consider the typical “coin operated” sales person at a mature company to be more akin to a script kiddie than a hacker.
Usually the more complex the system, the more satisfaction the hacker feels when he or she pwns it. Great news: Enterprise sales systems are really complex, and hacking them can be much more difficult than hacking computer systems. This is because the components don’t always operate according to structured, rational rules. They are humans with emotions, which means you also have to understand their motivations, hopes and fears. If that additional chaos isn’t enough, consider that the feedback cycle is much slower when hacking an enterprise vs. hacking a computer system. This means you need to be much more methodical in your approach — brute force is generally not an option — and you don’t have as many chances to make mistakes.
Below I will offer some tips on hacking the enterprise. But first, it’s useful to point out some of the typical objects (people) you can expect to encounter in the system and their respective incentives and concerns:
Champion. A champion is your ally within the target company. He or she will have have deep familiarity with the pain your product solves, and will hope that your product is the solution. When you give your pitch, you will find the champion nodding along and completing your sentences for you.
The champion will do everything he or she can to get your product deployed at the company, but their influence depends on their seniority and authority. While line-level champions are great, you also need to find champions who are director-level and above. Champions may become so excited they will want to quit and join your company (it has happened to me multiple times), and in any case, a champion often acts as if they are one of your employees — they are your guy/gal on the inside.
These people are gold. Find them early and build strong relationships quickly.
Detractor. The opposite of a champion is a detractor. For some reason, these folks really don’t want to see your solution deployed at the company. Maybe it threatens their job. Maybe they are already invested in a competing product. Maybe they built the solution that is currently being used. Figure out who these folks are early, and generally try to stay off their radar. You need to rally enough support from champions and other parts of the organization to overpower any detractors.
IT. There are two types of IT organizations you may run into: The risk avoidant organization that perceives change as threatening and risky for the business, and thus shies away from it, and the forward-thinking IT organization that is programmed for risk taking and embracing change. Unfortunately, the former is a lot more common than the latter at large enterprises, and for this reason it’s usually a good strategy to avoid talking to IT (unless your product’s users are in IT.) It’s usually easier to get a meeting with IT compared to a business unit, but be warned, these meetings can end up leading you astray. Some IT groups don’t actually understand the true needs of the business — I’ve been burned by this in the past, building features that IT have asked for in order to get a deal done only to discover when putting the product in front of actual users that it wasn’t what they wanted.
Your strategy should generally be to avoid IT until required to go through security reviews and other approvals, and by this time you should have the business units “pulling” you so strongly that IT can’t slow things down for too long. There are of course exceptions to every rule. I have worked with some phenomenal IT people in the past who ended up being real champions and helping us get deployed across different parts of the business.
Procurement. If you are lucky enough to convince a decision maker/budget holder to buy your product, you will usually be handed over to procurement to negotiate the deal. Get ready for some pain, because usually these folks are incentivized to get the lowest price possible (though there are always exceptions.) Just make sure you are prepared to “give” them something — once they extract their pound of flesh they will get out of the way. This is one reason why a lot of enterprise software has a ridiculously high “list price”, but discounting by 80% or more is standard practice.
Legal. As you run the gauntlet you will likely encounter legal next. Their weapon of choice is often exhaustion — sending back endless redlines over clauses in the contract that in reality won’t have much impact. Your best strategy here is to decide up front what you really care about and what you are willing to give on.
After you’ve done a round or two of redlines, a good strategy is to have a frank and authentic discussion listing out those things that you care about, and give in on the stuff that won’t really make a difference for you. That, combined with strong support from your champion (who should be in the background telling legal to hurry up and get the deal done), will help you close out the negotiation and get a signature.
Finance. You may not need to interact with finance directly, as they may just talk to procurement, but it’s important to aware of the motivations of the finance team. One thing they are thinking about is the budget and budget cycle. For example, you may find that the finance team prefers to pay more money up front to use up some of this quarter’s budget, rather than to space out payments over time. Also important is whether they have a preference for capex or opex, which will influence whether they prefer to make a lump sum payment for a purchase of software vs paying monthly license fees. This affects your pricing model as well as the structure of your sales team and comp plans.
Now that you have some sense about what the components of the enterprise system look like here are a few tips for hacking it:
Uncover the motivations of every player.
In the beginning you should devote a lot of time to listening and learning. Map out the people in your target company, draw a diagram. Just like a great hacker spends a lot of time poking around, exploring and understanding how a system works before attempting to influence it, you need to spend a lot of time really understanding the organization, motivations and interactions.
Build strong relationships with your champion(s).
When doing a large enterprise deal it will fall through before it closes, maybe more than once. You will need to lean on your champions to revive the deal and keep it moving. You need to turn these champions into your friends — you should be able to text them any time of night and ask for their help. Your champions are your best entry point into influencing the system.
Hire the right type of sales people.
Now that you understand what selling to the enterprise is like, you should make sure you hire the right people given the stage of your company. Personally I tend to optimize for skills and raw characteristics over experience. An especially common problem is hiring the wrong fit for your stage – for example, hiring a “coin operated” script kiddie salesperson out of a large company when you really need a hacker. You want people who are comfortable with uncertainty, who can learn quickly, and have strong intuitive and intellectual intelligence to understand the system well enough to influence it.
Keep your map front and center.
You spent time mapping out the system in advance. Now, you must always keep it in mind, especially when strange things seem to be happening. Go back and evaluate the different people, their motivations, and their interactions. Figure out how to play the system to your advantage, and inject the right messages in the right places. Position your product in the right way to the right people at the right time. This is where the art of selling comes into play so I can’t give concrete tactical advice here, other than to draw your awareness to the fact that it is where most of the magic happens in sales.
Engage on many fronts.
It’s a good practice to create pairs of relationships. For example, pair executives at your company with executives at the customer, your engineers with their IT and security folks, your product people with their business unit leaders etc. That said, always make sure one person (usually the account executive) is overseeing and coordinating all the interactions.
Instrument your process.
It’s important to instrument your sales process (collecting data and generating reports) in the same way you would use a packet sniffer or debugger when hacking. You need to measure your sales process in order to improve it.
Don’t forget that companies are people too.
It may seem like one organization selling to another organization. But really, decisions are made by people, and people don’t always act rationally. You can use this to your advantage by building the right relationships as described above, or it can blindside you and cause a deal to blow up if you don’t have the correct understanding of the people involved in the system. Remember that friendships lead to partnerships. Remember also that friendships often transcend the employer. By nurturing these relationships they will pay off across multiple companies.
I hope this perspective on enterprise sales encourages more hacker founders to get out there and sell their products more effectively.
Ryan Junee is an entrepreneur, startup advisor, and investor. Currently he is the founder and CEO of industrial enterprise collaboration app Parsable. Previously, he founded Inporia (W11) and Omnisio (W08), which was acquired by Google. Junee holds a BE in Computer Engineering from the University of Sydney, and an MSEE in Electrical Engineering from Stanford.
Notes 1 In this article I’m talking about a very specific phase of the enterprise sales cycle — going from a qualified lead to a closed deal. I presume you already have a good product and have found product-market fit (or are close.) If this isn’t the case, there has been plenty written online about finding product-market fit. I recommend starting here. This article is also not about prospecting or finding/identifying the right customers — which is actually where you should spend a large amount of your effort, so as not to waste time chasing dead ends.
2 “To programmers, ‘hacker’ connotes mastery in the most literal sense: someone who can make a computer do what he wants — whether the computer wants to or not.” — Paul Graham
3 In this article I’m really talking about selling to large enterprise companies: Think Fortune 500, high-touch complex sales with with lots of people involved; $1M+ deals. This is often called “elephant hunting.”
Thanks to Eugene Levitsky, Ab Belani and Harish Srinivasan for reading drafts of this article.