At TheGP, I constantly see founders who are apprehensive when it comes to selling to enterprise customers. I get it. It’s a daunting process with a lengthy sales cycle, tons of bureaucracy, and the feeling that you should constantly adapt to customer needs to make it work. However, in over 20 years of helping founders go to market, I’ve watched founders take the longer road less traveled...and it works. You’ll close enterprise customers and, ultimately, gain traction in the market you’re going after.
Typically, founders work in sprints that generate immediate gratification, but selling to enterprise customers is a process that can take 9-15 months. It’s a long game. As a result, many founders believe that product-led growth is the one-size-fits-all answer (spoiler: it’s not) because they don't want to deal with the messiness of an expensive sales team or the red tape that comes with the complex web of decision-makers at big organizations. These fears are real, but you can overcome them and find success in the enterprise.
The goal of this post is twofold. First, I want to reassure founders that selling to the enterprise is attainable and actually good for long-term strategy despite the intimidating process. Second, I want to break down the specific habits that founders should develop to successfully close their first enterprise customer. Why should you even go after the enterprise? What milestones are important to hit throughout this process? What strategies can you use to best prepare for every sales meeting? If your investors discourage you from pursuing the enterprise, but your intuition tells you otherwise, how should you move forward? I’ll get into all of that.
There’s a framework I’ve developed over the years to guide founders through this. I call it the “Five Ps,” which are as follows:
2. A Plan
Let me explain.
We recently helped our portfolio company SPIRL, a security company that manages both service-to-service and service-to-cloud interactions through workload identity and federation, with their decision to pursue enterprise vs. mid-market customers. The founders of SPIRL, Evan Gilman and Eli Nesterov, are recognized experts in zero trust and workload identity. When I started working with them, they hadn’t built an enterprise-grade product yet, so from their perspective as engineers, leaning on product-led growth to sell to SMBs seemed like an attractive choice. Here’s the reality: Selling to SMBs is usually just as complex and demanding as selling to the enterprise. It’s also a much lower return on investment. Taking this route can take up to 6-9 months to close customers and you’ll only bring a fraction of the revenue compared to the enterprise.
Based on their deep experience as practitioners in workload identity, Evan and Eli knew firsthand that big organizations would spend significant resources securing the connections between people and the software they use (think: OKTA). But as businesses increasingly move to the cloud, workload-to-workload and workload-to-cloud connections need to be identified, secured, and managed. If SPIRL offered an enterprise-grade product that solved that, we knew that the company could always sell downstream to SMBs from there.
As a founder, the first question you should seriously ask yourself in this process is—should you even go after enterprise customers? Like Evan and Eli, it’s crucial to consciously choose this path. Why? Because successfully selling to the enterprise requires laser focus, and even more importantly, it requires a ton of patience.
As I’ve said, closing enterprise customers can take between 9-15 months. That’s a lifetime in startup years. But as a founder, here’s what you need to keep in mind about the enterprise from the outset:
Patience means also having conviction. When selling to the enterprise, know that it’s a balancing act. On the one hand, your compass will be paying customers who share your long-term strategic vision. But on the other hand, you’ll need to resist the urge to partner with customers who want to re-architect your solution.
Don’t expect immediate gratification. One meeting won’t close a deal with an enterprise customer. It could take up to a quarter to get buy-in from a customer and that’s OK. It will likely take a series of incredibly intentional meetings to close (more on those meetings later).
The enterprise expects more of your company. In the enterprise, technical expectations are more complex and you’ll need to deliver. Think: Security, integrations, support, infrastructure requirements, contracts, etc.
2. A Plan
When you’re going after large enterprise customers, you need to be clear and transparent about the desired result for sales. In SPIRL’s case, Evan and Eli knew that SPIFFE/SPIRE (open source) was the defacto technology for workload identity, as SPIFFE was already widely adopted by Fortune 1000 companies. But their big vision was to deliver SPIRE (the SPIFFE Runtime Environment) into everyone’s hands to ensure organizational security with respect to workload identity, and they wanted the value to be realized in 15 minutes or less.
So our plan was to create a story. Instead of educating customers about SPIFFE/SPIRE, Evan and Eli started to reference the technology as the foundation for SPIRL, the big, enterprise-grade solution they were building. Accordingly, the first step in your plan—which will ultimately help you create a story that sells—should be to listen for signals.
Start by setting up a meeting with your potential customer to get aligned. Importantly, resist the urge to show a demo. Seriously, don’t do it! Today, SPIRL is closing Fortune 1000 companies and they still haven’t shown a demo to a customer. Instead, whenever Evan and Eli meet with customers, they are laser-focused on the customer’s needs and the challenges of workload identity more broadly. The goal of this meeting is to listen to the customer, understand their specific problems, and assess the relevant stakeholders. This will help you start to build a mental model of the company's needs and how your product is going to systematically address those pain points.
I often encourage founders to ask inquisitive, open-ended questions in these initial meetings with customers to get a sense of the company’s end-to-end process, budget, budget cycle, and users. At this stage in the process, you should remain open and positive without appearing desperate. Any egos should be checked at the door—you’re on a mission to deliver a product that solves compelling business problems as opposed to a cool technology looking for a home. By doing that, you’ll get an opportunity for a second meeting, your real goal.
Your plan for the second meeting should be to deliver a customized demo that caters specifically to the customer’s needs. Remember to set expectations for yourself and your team here—it’s important to remain prescriptive in your deliverables in order to avoid scope creep. In that second meeting, I often encourage founders to ask the customer bold questions like: Why are we here? Why did you ask us to come back? What did you see in our product offering that is lacking in your organization? These questions are designed to be asked in front of the broader team to begin to identify who your internal advocate will be. This will encourage the customer to explicitly articulate the solution they need. It’s the opposite of simply showing up to a meeting, throwing things at the wall, and seeing what sticks.
Athletes on a professional sports team practice. They watch back their game film and memorize playbooks. The same goes for selling to the enterprise. I often tell founders that this starts with nailing the pitch.
When I started working with Evan and Eli, I got them in a war room to dig into exactly what they were trying to build. Evan is the author of Zero Trust Networks and was an engineer at PagerDuty. So I asked him questions like: What do you do? Why did you become passionate about solving workload identity? Given your background working at PagerDuty - what frustrates you? As founders, they needed to have the answers to those questions quickly and succinctly.
Eventually, Evan and Eli said they wanted SPIFFE, which was part of the open-source community, in everyone’s hands. So I asked: What’s stopping you from doing that? They explained that the implementation can take up to a year and the requirements can cost up to seven figures. This was the ‘aha’ moment. SPIRL would be the enterprise-grade solution that could address implementation and other technical barriers, fulfilling their North Star to get SPIRL (SPIFFE implementation) into everyone’s hands.
To practice selling to the enterprise, I often conduct mock customer meetings with founders. I advise founders to level-set those meetings with succinct introductions that actually work to gather information about the customer. Remember, these meetings are always all about them. For example, instead of spending time walking the customer through your founding team (a big mistake I see founders make all the time), quickly acknowledge why you’re passionate about the space you’re selling in. In Evan’s case, his experience at PagerDuty made him a practitioner in workload identity—he experienced the same frustrations as the customer firsthand. That resonated.
Some other strategies to practice customer meetings effectively:
Always make the meetings interactive. Ask the customer why your company caught their attention. Ask them about certain features, and if they would be willing to pay for those features. More importantly, would their senior leadership agree to pay for it?
Remember that mistakes get made on the individual level. When a customer asks you a question, try to understand where it’s coming from to identify the person on your team who can best answer that specific question.
Know that nothing can prepare you for the real thing. When I practice these customer meetings with founders, what I’m really doing is building a founder’s ability to be a good storyteller. Typically, this means the founder needs to articulate their real-life experiences as a practitioner and show how they’ve garnered validation from previous customers.
It’s important not to be married to one specific value prop. When it comes to your messaging, selling to the enterprise is not one-size-fits-all like selling to SMBs. In the enterprise, you have to ask the right questions and pivot at critical inflection points to be successful. So how can you be flexible with your positioning as a company without deviating from your core vision?
SPIRL had to pivot its messaging early on in its enterprise journey because talking about SPIFFE/SPIRE’s open-source community felt comfortable. But to actually sell an enterprise-grade solution, the company would need to be completely repositioned. Enter: SPIRL.
A pivot in enterprise sales often means associating yourself with success. So we started to say the following to customers: “What Confluent is to Kafka, SPIRL is to SPIFFE/SPIRE.” Like Kafka, SPIFFE started as an open-source solution and evolved into Confluent, the enterprise solution. Immediately, customers started to “get” it.
To help founders figure out how to associate themselves with success, I often ask them a rudimentary question: What do you want to be when you grow up? Do you want to be the next Nike? The next Apple? The next Stripe? Fill in the blank with the company you aspire to be, and your pivot will follow.
When you’re selling to large companies, these companies will often want to work on a proof of concept together before agreeing to a long-term deal. I advise founders not to say “Yes, of course!” without getting something in return. Many times, this is a sobering moment for the customer. Once you introduce monetary value into the equation, two things can happen. Customers will either agree to subsidize the change to your roadmap or the customer will accept the roadmap as it’s currently scheduled. The art here is to align customers to your roadmap without sacrificing your vision. In other words, resist the urge to become a consulting company. Remember, the right customer will not ask you to re-architect your solution—they’ll want to partner with you in a way that creates value for both their organization and your company.
As a founder, you have finite resources and it’s important to remember that you should charge for a proof of concept. At the very least, you want the customer to have skin in the game. When an enterprise customer asks for a POC, you also don’t need to immediately run to your Head of Engineering and demand that a certain feature gets built without a clear return. What would be the point of that?
If you ask for a development fee in exchange for a POC, the work is no longer a science project. The stakes are raised and it’s real. It’s worth noting here that it is okay to waive a POC development fee, but in return, you should ask to meet with the company’s economic buyer. It’s not for a commitment at this point, but to exchange value for a direct relationship. In these partnerships, you should become an extension of the enterprise customer’s team, solving big, strategic problems together to build a solution.
As a founder, your biggest asset is your time. If you have the discipline to ask customers difficult questions early on that challenge their perspective, it will truly save you so much time, money, and heartache.
I’ll end by saying that none of these pillars are meant to be prescriptive—it’s just a framework meant to guide founders through the difficult, but rewarding decision to sell to the enterprise. Incorporate the strategies above that you think will be most impactful for your business, but take the time to plan. You’ll be glad you did, and it will give you the confidence needed to pursue—and succeed in—the enterprise world.
Danny Oliveri leads the go-to-market team at TheGP and gives founders the best education when it comes to the art and science of GTM strategies. His specialty is helping founders actually move the needle in terms of revenue, product-market fit, structuring deals, and negotiating terms. He brings over 20 years of sales and sales management experience, specializing in driving early-stage companies through periods of hyper-growth.
We surveyed over 50 talent leaders for their observations on the hiring market and candidate trends
Our perspective on experimenting with new AI applications