4 Mistakes Startups Make When Selling to Enterprises

So, you have a brilliant technology product that promises to solve important problems for enterprise customers, enhancing their competitive edge, and saving them heaps of money. You’ve built the proverbial field of dreams, and now—surely, they will come, yes?

While few entrepreneurs frame their vision in quite such credulous terms, it is easy for young startups to underestimate just how complex enterprise organizational systems can be. Selling to enterprise is a full-contact sport requiring strategy, social skills, and preparation. It is extremely common for newer founders to be worn down by the political, technical, and organizational grind of enterprise decision making.

So, where do you begin? How do you avoid being knocked out of the game? For startups entering the arena, here are four common mistakes we see time and again:

1. Aiming too high, too soon—While it’s tempting to target the largest, most lucrative deals from day one, founders need to understand that every step up in enterprise size introduces an order of magnitude increase in complexity. Security reviews, governance, and internal conflicts of interest deadlock proposals. When you are new to the game, it is far better to begin with smaller targets where you can work out playbooks, collect case studies and testimonials, and develop expertise before laddering up to large enterprises.

One back office software vendor we invested in, for example, had good product-market fit but struggled to gain any traction with large organizations. They focused on the middle market and immediately had much more success. Ultimately, they broke into large enterprises as well, by partnering with a complementary back office vendor who already had existing relationships.

2. Failing to do deep discovery—Startups who pitch enterprises without first doing comprehensive research are in for a rude awakening. If you want to be in business with enterprises for the long-term, your mission is to become indispensable to them. This notion was epitomized by Palantir in the early 2000s, with the idea of forward-deployed engineers, who served as “product discovery”assets. They went on-site with the existing product, and then found the gap between what the product did and what the users needed.

Understanding what problems enterprise customers really need to solve and what internal obstacles must be overcome in order to deliver your solution is your primary mission. Enterprises do not and should not care about your product—only about their problem. Your responsibility is to work tirelessly to learn their pain points and desired outcomes.

3. Mistaking a “Fan” for a “Champion”—By now you should know that you need one or more internal champions who can help you understand “how things work here,” whose job, status, or other project might be bolstered (or threatened) by your solution, who your competition is, and if they are already “living” in the enterprise. How do you identify a champion? They take your calls! But beware—people with “innovation” or “transformation” titles may be eager listeners, but rarely have genuine influence.

That was the lesson learned by another portfolio company that spent an inordinate amount of time with constituents at target customer companies who thought their technology was “really cool,” but ultimately did not have decision-making authority, budget, or decisive influence within their organizations. When looking for your enterprise champion, learn who has the power to say “yes” before investing too much time in demos and proposals.

4. Treating pitches as “one size fits all”—A big mistake we see from inexperienced  startups is thinking that their one, carefully crafted pitch deck is appropriate for every meeting. The truth is that each counterpart you face cares about different things. Ask your champion to help you understand who’s in the room, their responsibilities, strategic objectives, and quarterly targets, and what metrics and outcome matter to them, and customize your pitch, demos, playbooks, calculations, case studies, and answers accordingly.

Pitches need to be customized according to role, and also according to team. One AI company in our portfolio uses a more direct, product-centric, and ROI-driven pitch for small, point-solution teams, for instance, and a more consultative approach for larger organizational use cases, with greater emphasis on workflows, organizational outcomes, and large-scale business impact.

Whoever you are pitching to, be sure to run mock presentations ahead of time, practice timing, and keep 10 minutes in reserve to set the next meeting before leaving the room.

Enterprise AI sales aren’t easy, but teams that move deliberately, move more quickly and successfully: Start smaller than you ultimately desire, learn more deeply than your competitors, find your friends on the inside, and prepare for each meeting more than feels necessary. Ultimately, learning how to navigate the enterprise purchasing processes is as important as your technology itself.