Key insights

• ⚠️ Selling to startups may not be the best move for all companies.
• 🔍 Founders should evaluate if their product is a natural fit for startups before pursuing this market.
• 🛑 Startups may face challenges in selling to other startups.
• 💡 Selling to startups may be challenging if the product is only relevant for companies with massive data needs or a certain scale of operations.
• 💸 Startups can be demanding and not want to pay for products or services.
• 📈 Startups often underestimate the importance of in-house functions such as sales, marketing, and HR.
• 🚀 Selling to startups can be a powerful strategy to access larger markets and create pathways to enterprises.
• 🎯 Selling to startups requires understanding the game you're playing.

Q&A

• How should companies approach selling to startups?

  It's crucial to understand the game you're playing and know how selling to startups fits into the overall strategy. While selling to startups can be a valuable sales strategy, it's important to understand that even companies like AWS and Stripe, which use startups as a strategy, still need enterprise sales teams.

• How can selling to startups benefit a company?

  Selling to startups can be a powerful strategy to access larger markets and create pathways to enterprises. It can also provide an approach for gaining access to broader markets and lead to success in other market segments, as seen with companies like Gusto payroll.

• What functions do startups often underestimate the importance of?

  Startups often underestimate the importance of in-house functions like sales, marketing, and HR. Founders with a product background may find sales intimidating, and many startups rely on self-serve strategies, underestimating the effort required for direct sales.

• How demanding can startups be as customers?

  Startups can be demanding and may not want to pay for products or services. Additionally, early customers might churn as the company grows and requires a different product for the evolving buyer. It's important to consider if a product can grow with the customer or will require constant adaptation for new buyers.

• What challenges may startups face in selling to other startups?

  Startups may face challenges in selling to other startups if the product is only relevant for companies with specific scale or data needs. Moreover, startups often target clients who do not yet have the problem their product solves, making the sales process more difficult.

• Is selling software to startups always a successful strategy?

  No, while selling to startups has been successful for companies like Stripe and PagerDuty, it may not be the best move for all companies. Founders should evaluate if their product is a natural fit for startups before pursuing this market.

• 00:00 Selling software to startups can be a successful strategy, but it's not always the best move; founders should evaluate if their product is a natural fit for startups before pursuing this market.
• 03:03 Startups may face challenges in selling to other startups, as they often target clients who do not yet have the problem their product solves. Selling to startups may not be easier than selling to enterprise customers, and the end users' demands can be similar regardless of the size of the company.
• 05:44 Startups can be demanding and not want to pay for products or services; early customers might churn as the company grows, requiring a different product for the evolving buyer; buyer needs change as a company grows, often leading to customer churn; thoughtful consideration should be given to whether a product can grow with the customer or will require constant adaptation for new buyers.
• 08:38 Startups often underestimate the importance of in-house functions such as sales, marketing, and HR. Sales can be intimidating for founders with a product background. Many startups rely on self-serve strategies and underestimate the effort required for direct sales.
• 11:23 Startups need to consider how to effectively market and sell their product, with a focus on customer acquisition strategies. Selling to startups can be a powerful strategy to access larger markets and create pathways to enterprises.
• 14:22 Selling to startups requires understanding the game you're playing, AWS and Stripe use startups as a strategy but still need enterprise sales teams, know which game you're playing and how selling to startups fits into that, study successful companies' strategies for guidance.