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What to consider when adding an enterprise option to your self-serve business
Self-serve software businesses are very much in vogue right now. Also known as “product-led growth” or “bottoms-up saas”, public companies like Slack, Zoom, Canva, Twilio, Datadog, Box, DocuSign, Gitlab and hundreds of private companies have all been built on the idea that you don’t need a sales team to get customers to buy your product.
Software products that fit the self-serve model tend to have 4 common characteristics:
They deliver value to end users, rather than to managers.
They can be bought directly by end users without going through a formal procurement process, or talking to a salesperson.
The first value milestone (or “aha moment”) can be reached without human assistance, and often without paying (in a free trial).
Customers can self-diagnose problems with online resources.
Investors and founders love the self-serve sales model, as it simplifies the GTM team to the point where it can be an extension of the product org and reduces the need to spend on sales and marketing.
The GTM team for a self-serve business can be fairly small; run by a head of growth from a product management or data-driven marketing background and staffed with some support specialists to answer questions, a content team to create product-centric messaging, a paid marketing team to drive users into the self-serve funnel. Everything else can be built into the product.
The self-serve model is great for selling to early adopters and early majority users, as they are aware of their problems, are seeking out solutions and can make a buying decision with product-centric messaging and transparent pricing.
However, there is a limit to how far you can penetrate the potential user base within any given company with a self-serve model, as not all potential users within a company are the early adopter/early majority type. At some point you will run into later adopters, who care more about impact and outcomes.
Wanting to penetrate the full user base within a company is probably the #1 reason why self-serve software companies build an enterprise offering and stand up an enterprise sales motion (with the #2 reason being wanting to go after companies that won’t self-serve) However, most of them are ill prepared for what it involves.
Why are they ill prepared? Because enterprise offerings and sales motions are the polar opposite of self-serve:
They deliver value to execs, rather than end users. More controls, more security, more reporting.
They are bought through a formal procurement process. A pilot/POC, a technical review, a security review, a legal review. A wider buying team.
Their rollout needs to be orchestrated across the org in order to drive critical mass adoption and reach the first value milestone.
The level of support is much higher. Higher SLAs, higher uptime, faster responses.
The messaging needs to be more customer-centric, as execs buy on outcomes rather than features and benefits.
The pricing is more complicated, as execs need to plan ahead of usage growth, rather than paying as they go.
Standing up an enterprise motion also has a huge impact on the size of the GTM team, essentially going from “marketing-lite” to full sales, marketing and account management, adding functions like:
Sales development reps to prospect the companies where there is already some critical mass of self-serve usage.
Sales reps to identify stakeholders, navigate the procurement process and create customers.
Sales operations to provide process, systems and analytics.
Sales enablement to create collateral, case studies and sales tools.
Sales engineers to handle technical questions and objections during the buying process.
Product marketing to develop customer-centric messaging and packaging.
Account managers to orchestrate onboarding and demonstrate impact.
Marketing ops to identify leads.
Management of all these groups.
A Chief Revenue Officer to lead the overall GTM team.
I see a lot of companies under-estimate the investment needed to pull this off and try to cut corners. However, a quick spin through the 10K’s of the self-serve gods gives us a key insight: Box, Slack, Zoom, Twilio, Docusign, SurveyMonkey, Gitlab, Datadog et all spend more on sales and marketing than on research and development, in many cases by a considerable margin.
Given the substantial investment needed, and the cultural disruption of building a sales team inside a product-first company, its important to figure out how much more of your addressable user base you can reach with an enterprise motion.
For example, if your product can be used by an entire sales team or entire engineering team, it’s worth adding an enterprise motion as sales and engineering are usually the two largest teams inside a company and its unlikely that all the salespeople or engineers will sign up via self-serve. The same logic holds for communications products that can be used by an entire company.
However, if your product is specific to a team within a smaller department (like social media management or graphic design) an enterprise motion is only going to pay off for the subset of customers that have large enough teams of that type (like PR agencies or design agencies in this case), so you want to make sure that subset of your customers is big enough to warrant standing up a new motion.
I’ve long been a fan of self-serve, having built several self-serve businesses in my career. I’m also a huge believer in the value that a sales team can create when focused on a well-defined set of target prospects, and there’s no better way to go about that than to prospect your own self-serve users.
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