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Ask HN: How do B2B startups sell to corporations?

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Re: Ask HN: How do B2B startups sell to corporations?

#41

Post by rolltiide »

markbnj wrote: post #26

The advice I'll give is based on my experience as cofounder of an early online banking technology company back in the mid-90s. We started with three people in rented class-C space and over seven years did high six-figure deals with large and small banks including Fleet, Bank of America, Citi and others. There's not really a "how it works" for this. If I had to tell you how it works I'd say: it works by you making fri…

and if you dont have any of these things dont pursue the idea!

if this is your only and big idea that you have to get married to so you can “ strike it big” then you are already playing at a disadvantage

The rest of us, your competition, have an idea every other week and just revisit them when they are economical

its not “strike while the iron is hot” its have 100 irons to begin with

Re: Ask HN: How do B2B startups sell to corporations?

#42

Post by not_a_moth »

crmd wrote: post #27

I am the CTO of a “unicorn” B2B tech company that focuses almost exclusively on the global 2000. Sales are 95% about relationships and 5% about Product. If you want to sell into Citibank, you go hire the one guy or girl who previously sold $20M of X to Citi, who golfs with the VP of Procurement and goes to Billy Joel concerts with the VP of infrastructure operations. Once you hire this person it feels like cheating,…

> You almost certainly will also need a reseller who has an MSA (master services agreement) with the firm, so you don’t have to spend 6 months in due diligence with their lawyers.

How exactly does that work with the reseller? This is a person you pay ~15% to, and then technically your product is sold under their brand to the big corp? If so, how are they found typically?

New to b2b and figuring things out.

Re: Ask HN: How do B2B startups sell to corporations?

#43

Post by openthc »

jcims wrote: post #10
openthc wrote: post #3

We sell to a very narrow segment. I've got Google alerts for loads of phrases and trade show names. We try to attend as many shows as we can. Sometimes with a booth, mostly without...just rocking our own gear and handing out cards. Some have a cheap way to add your logo somewhere to get awareness going. Once you get a fish on, you'll need a professional sales person to carry the deal forward. Meeting, review, reply,…

This is the way to go. People will know they are taking a calculated risk with a startup, if you get to know their industry you will gain a better intuition about their use cases (and in particular ones they haven't thought of yet). Definitely avoid highly regulated verticals at first as they will drown you with security/governance requirements before you even get to their lawyers. Meanwhile get to know these framewo…

Oops! We're in a heavily regulated space. Upside is that it keeps competition out. Your 3rd paragraph is 100% accurate IME

Re: Ask HN: How do B2B startups sell to corporations?

#45

Post by Androider »

not_a_moth wrote: post #42
crmd wrote: post #27

I am the CTO of a “unicorn” B2B tech company that focuses almost exclusively on the global 2000. Sales are 95% about relationships and 5% about Product. If you want to sell into Citibank, you go hire the one guy or girl who previously sold $20M of X to Citi, who golfs with the VP of Procurement and goes to Billy Joel concerts with the VP of infrastructure operations. Once you hire this person it feels like cheating,…

> You almost certainly will also need a reseller who has an MSA (master services agreement) with the firm, so you don’t have to spend 6 months in due diligence with their lawyers. How exactly does that work with the reseller? This is a person you pay ~15% to, and then technically your product is sold under their brand to the big corp? If so, how are they found typically? New to b2b and figuring things out.

You don't need to find them, the decision maker in the corp tells their procurement people they want to buy your product, the procurement people tell their approved reseller to reach out to you (someone like these fine folks https://www.trustradius.com/value-added-resellers-vars) for the purchase order. The VAR gives you the PO, you bill the VAR, and the VAR just hands over the license key or whatever to the corp, and deals with things like renewals (if they're good, and sometimes that's up to you). The VAR probably has no idea what your software does.

The corp still uses your software, not some whitelabeled version. This broken-telephone purchasing game is solely there because in a big corp it's really hard to write a check to a new unproven vendor, you'll just be a little line in the invoice they pay to the VAR each month.

Re: Ask HN: How do B2B startups sell to corporations?

#46

Post by x0x0 »

markbnj wrote: post #26

The advice I'll give is based on my experience as cofounder of an early online banking technology company back in the mid-90s. We started with three people in rented class-C space and over seven years did high six-figure deals with large and small banks including Fleet, Bank of America, Citi and others. There's not really a "how it works" for this. If I had to tell you how it works I'd say: it works by you making fri…

This is all true, but tbh, OP is not going to make this happen.

Backing up a bit, companies have to pick their targets: smb, midmarket, or enterprise (say over $1.5B/annum). There is a vastly different sales motion required for each. Further, there are different sales motions (and different salespeople) even in the SMB vs midmarket world depending on price points: under $5k, under $50k, etc.

But the high level problem is actually really simple. Salespeople who are good at this -- really good -- can easily earn $1m/year in cash comp. That is not an exaggeration. A standard comp plan will have a commission north of 15% with accelerators after meeting quota. So they basically aren't hirable. They may be willing to be a cofounder, but most likely, they will want to work for a big existing company... because see the cash comp above. And unfortunately, to be the first salesperson, you need someone really good. Because they're going to be doing their own prospecting as well.

It is possible to strike it lucky with a salesperson looking for a break, but how do you evaluate that person? That requires sales skills. Just like you would never ask a salesperson to evaluate an engineer, an engineer is going to have a shit time evaluating a saleperson.

Re: Ask HN: How do B2B startups sell to corporations?

#47

Post by tappio »

sk5t wrote: post #30
thrav wrote: post #17

Earlier quoted context omitted.

Depending on how big they’re talking, year long cycles are not uncommon.

12 months from first contact to first dollar--nevermind first dollar above recouping costs--seems a deliriously optimistic goal in certain industries.

It has been roughly 2 years for us to get first dollar with corporations, and will probably take 3 more to recoup the costs. The good thing is that once you get in, it is pretty hard for competitors to get you out. They really need to have a superior value prop.

Re: Ask HN: How do B2B startups sell to corporations?

#49

Post by gnicholas »

austhrow743 wrote: post #7

Read this https://training.kalzumeus.com/newsletters/archive/enterpris...

Not sure why this is so low on the page, as it was incredibly helpful. I even went to the author's archive directory [1] so I could read his other posts about sales and life running/selling a SaaS company. He is candid and knowledgeable. Definitely bookmarking — thanks for the link!

1: https://training.kalzumeus.com/newsletters/archive/

Re: Ask HN: How do B2B startups sell to corporations?

#50

Post by rasz »

1 Call up your old Ivy classmates, they work in corpos

2 let your VC do the above

3 crowd favorite, let your VC force other companies he already invested in/sits on board to integrate your product and then do number 2

But in your case number 1 should be change your name and language, unless you are looking for government (NSA/CIA) contract.

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