5 Keys to Selling to Startups

January 24, 2013

I’ve previously written about how to sell your B2B technology product to whales. Their unique goals, tendencies and buying process demand a specific approach distinct from smaller companies.
But what if your target customer isn’t a whale at all? What if it’s a nimble, high-growth startup?
Popular knowledge is that selling to minnows is easier than selling to whales, but the truth is that the segment comes with its own challenges and pitfalls. Anyone who’s worked at or with a startup can tell you that the environment is unlike any a corporate one, and that goes for their buying process and criteria as well.
Ignoring the factors that make a startup sale unique, or worse, lazily treating one as an enterprise, can mean your win rate is lower than it should be.
Before designing a sales strategy for selling to startups or small businesses, consider the following five ideas to make your product more appealing:

1) Employ a Tiered Pricing Model

High-growth startups are generally allergic to committing big money upfront, since they are currently strapped for cash and don’t know what their needs or resources will be even next week. For this reason, a Freemium model or free trial will be especially attractive to them.
They’ll also like to see the product get cheaper as they scale into an enterprise, so even if they aren’t ready for the “enterprise” tier yet, they’ll like to see that it exists.

2) Align Yourself with Their High-Level Business Goals

The vast majority of startups that I’ve come across have one of two goals:

  1. Grow revenues as fast as possible, expenditures be damned.
  2. If they don’t yet have revenues, stay lean, cheap, and flexible until they’re able to get some.

As a result, they likely won’t respond to an ROI pitch optimized for an enterprise sale. Find out early which of these business goals describes your potential customer, and hammer home how your product will either help them grow revenues or save money.

3) Target the Right Buyer

Large companies may assign a lower-level employee or committee to evaluate technology products, but at startups, it’s usually an executive making the purchasing decisions semi-autonomously. Of course, which executive it is depends entirely on the industry and size of the contract.
Make sure your marketing content and messaging are targeted at the right level and function and use an appropriate vocabulary and touchpoint model for your buyer. For instance, a CTO is usually more interested in features, whereas a CFO is more likely to respond cost-savings.

4) Sell Through Growth-Friendly Marketing Channels

Consider where else growing companies will be spending their time to properly target growing customers. A job board or venture capital search keyword might be a terrible place to find Enterprise buyers, but if your buyer is a startup CEO, it may be worth looking into.

5) Show Your Product is Growing with Them

As a startup, your customer may not want or need the full set of features that an enterprise would. But they do have an eye on the future, so you need to show them that your product will grow with them.
You can do this with a really good product roadmap that you emphasize during your sales process, or simply by blogging about exciting new or upcoming features.
As with any 500-word blog post, this is an oversimplification and will have to be tweaked and refined to fit your specific product and market. An ad-hoc profile is not a substitute for thorough and targeted market research. Still, if the startup segment is important to you, mapping your sales process to a gross caricature of a startup is better than nothing.

What other ways can companies effectively go after “small fish”?

Behavioral Data Analyst

Nick is a Behavioral Data Analyst at <a href="https://www.betterment.com/">Betterment</a>. Previously he analyzed OpenView portfolio companies and their target markets to help them focus on opportunities for profitable growth.