Practically every software-as-a-service company wants to move up-market and sell to enterprises as well as to smaller customers. Doing so can lead to bigger contracts, more growth and the kind of scale required to become a well-known technology name — think Workday, ServiceNow, Palo Alto Networks or Snowflake.
Despite how well trodden this path is, it’s a surprisingly difficult motion to get right.
In my current role as an operating partner at Battery Ventures, I field questions daily from companies with bottom-up sales motions — those focused on smaller customers who often buy software themselves — about how to make the jump into enterprise. I also got this question constantly during my previous sales career, most notably in my senior roles at Marketo* and Pendo.io.* The first thing I told people, and what I still tell them today, is that moving up-market to the enterprise is a lot more complicated than they might think.
That’s why I wrote this lengthy guide to “Growing Up Enterprise,” which I’m releasing here in six installments. You can also contact me to receive a full copy of the e-book.
This guide is lengthy, but one way to think about it is this: If you hired me to help build your enterprise plan, this guide contains everything we’d need to cover to do it. And instead of delivering the content through a consulting engagement, it’s distilled into something that, in total, will take just a couple of hours to go through.
Repeat after me: Going to the enterprise is a COMPANY-WIDE motion
Everyone says they want to move into the enterprise. That’s desire. But it’s not the same as actually being ready. Unfortunately, a lot of founders make the mistake of thinking that hiring a bunch of highly paid account executives (AEs) is the same as “going enterprise”. It’s not.
Moving up into the enterprise requires fundamental changes to every function inside the company. It means hiring new roles that don’t exist today, along with adopting tools that will match up to the new business processes you’ll implement. New roles, tools and processes also mean additional expense. But the reason you grow into the enterprise? It widens your total addressable market and creates customers with better net revenue retention and better long-term value.
First, answer the questions below to assess some basic qualifiers to your readiness.
What priority ranks ahead of this? Are you expanding globally? Are you releasing a new product (full product, not feature) in the near term?
If you answered yes, you should strongly consider waiting on the enterprise motion until it can rank as your highest priority. Growing up enterprise needs to be the #1 mission for the company and something talked about in the weekly CEO staff meeting.
Imagine BMW in Germany engages with your team and wants to spend $500K with your org. But to do so, they need to have their data reside within Germany. Do you have a server there? If not, how long does it take to stand up? How much does it cost?
Are you prepared to stand up servers in a situation like this? What if it costs $250K of that $500K deal? What if it takes longer than the deal cycle to roll out? Is the juice worth the squeeze on this one deal?
Now imagine Qantas Airlines in Australia engages with your team and wants to spend $500K with your org. But they need a white-glove experience with lots of hand-holding during implementation and rollout. How do you deliver that when your team is 14-17 hours of time zone away?
Can your org succeed in helping a large customer in a remote geography launch? Can they offer around-the-clock support? How?
Boeing in the U.S. wants to engage with your team and spend $500K with your org. You send them your master service agreement (MSA), but they send you back their MSA and inform you that for them to purchase, it needs to be on their paper.
Do you have in-house counsel? Do you understand critical legal concepts like liability caps and indemnifications? Do you have the right level of corporate insurance caps? Is your security robust and enterprise-grade, adhering to international standards like SOC2 and ISO certification? (We’ll discuss these more below.)
Here’s the point of the readiness survey: we haven’t even touched on sales or marketing yet!
The goal of this questionnaire is to reinforce the fact that the move to the enterprise is indeed a company-wide mission. The three examples in questions two to four are all OUTSIDE of sales—— they are about operations, customer service and legal. Sales and marketing are the heavy lift. So if you don’t have the functions that surround sales and marketing in a good spot, you’re going to face blockers.
Hopefully this introduction has underscored the importance of going enterprise as a company priority. That means assigning objectives and key results (OKRs) or quarterly goals with milestones and metrics to track your progress.
The next five posts in this series will break down the functional areas of the business to serve as a compass for planning your expansion into the enterprise. These include:
- Marketing and Sales Development
- Legal, Finance and HR
- Sales and Customer Success
- Key Takeaways and Summary
Battery Ventures provides investment advisory services solely to privately offered funds. Battery Ventures neither solicits nor makes its services available to the public or other advisory clients. For more information about Battery Ventures’ potential financing capabilities for prospective portfolio companies, please refer to our website.
*Denotes a past or present Battery portfolio company. For a full list of all Battery investments, please click here. Investments identified above are for illustrative purposes only.
No assumptions should be made that any investments identified above were or will be profitable. It should not be assumed that recommendations in the future will be profitable or equal the performance of the companies identified above.
Content obtained from third-party sources, although believed to be reliable, has not been independently verified as to its accuracy or completeness and cannot be guaranteed. Battery Ventures has no obligation to update, modify or amend the content of this post nor notify its readers in the event that any information, opinion, projection, forecast or estimate included, changes or subsequently becomes inaccurate.