When someone in a startup tells me that they are going for the enterprise segment, I get a ‘gulp’ feeling. In fact the only thing that makes me more anxious is if the startup is going for the public sector.
Because it can be super tricky to actually sell what you’re doing to them.
In the enterprise your user is often not the one actually paying the bills – especially for larger accounts. This complicates your sale; it doesn’t really matter if rank and file users are excited; if the person, who is going to fork over the cash doesn’t really see or understand the value of what you’re doing, it all may amount to nothing.
Best case? You can spend months and months and months closing just one sale. Worst case? There won’t be any sale despite your ongoing, costly efforts.
For public sector it can be even worse;
Take the complexity of the enterprise sale and add political layers, various discussion and decision fora that need to get aligned without any timely deadline and a procurement process where someone completely detached from what you’re trying to sell is going to decide IF and WHEN they will open up the tender process that’s relevant – and crucial – for your ability to make a substantial sale.
It can quickly turn into a nightmare. And a costly and frustrating one at that with little or no luck in the other end.
Now, I am not saying that it can’t be done. Of course it can. It’s just hard and extremely risky, and you will have to fight more than most for whatever deals you’re able to close. But once you get that done, the reward can be good as well; bigger deals, longer terms, more stability on your revenue etc.
However, I still like the consumer play the most; the shortest possible way to someone with a creditcard willing to pay for whatever kind of relief you bring to the customers pain.
To me, the consumer approach has several advantages;
It can be easier to figure out what the right product is because you can better experiment your way towards a better understanding of your future customer and her pain(s). Your user is your customer.
It can be more efficient to market and ultimately sell, because the journey to get to the individual customer is easier to map and get right.
It can be easier to at least drive trial of your product or service to give consumers a taste of what you can offer – and then deliver above and beyond, so they fall in love with your solution and stick around for more.
And ultimately it can be easier to get the satisfaction of actually having helped someone be better off because of something you did and made available. A feeling you really shouldn’t discount.