What Startups Need to Know About Selling to the CIO: Tips from 7-Time CIO Mark Settle
Selling to the chief information officer can be a daunting task, especially if you’re an unproven startup. The challenges CIOs face are complex, affecting every aspect of a company’s business. These people have a lot of responsibility, so they tend to be cautious and deliberate when making decisions about technology. What do you need to say to help them see your product’s value and take a chance on it?
There’s no silver bullet answer to that question, but it definitely helps to have some insider insight. That’s just what I gained during a recent conversation with seven-time CIO Mark Settle. Mark has worked in many industries including information services, enterprise software, consumer products, and more. He’s currently the CIO at Okta, the leading independent provider of identity for the enterprise, serving a wide range of brands including Experian, 20th Century Fox, LinkedIn, and Adobe.
Mark identified three top challenges that are always on the minds of CIOs: collaboration tools, cloud operations, and security.
“Everybody is frustrated with collaboration tools because there’s such a wide variety, and — in most cases — very little governance or standardization,” Mark says. “Cloud operations are an ongoing challenge – while most companies have some kind of footprint on Amazon, Microsoft, or Google, they’re still learning how to make use of those resources in the most productive and cost-effective way.”
As for security, Mark sees that as not only a top priority, but also as one that’s never going away. “It’s terribly difficult to find the right balance between tools and processes so that you can continually respond to threats as they become more esoteric and complex,” he says. “You can invest a ton of time and money in building security safeguards and yet never get a sense of satisfaction that you’ve resolved all (or even most) of your security risks.”
So, if you’re a startup serving in one of these three areas, and you haven’t yet made your mark on the map, how do you get a CIO to consider your product and take a leap of faith with your unproven solution? A good start is to understand how a CIO will be assessing your pitch.
CIO Buying Considerations
The first thing any CIO is going to be thinking about is the risk that accompanies any new application.
“CIOs will be very, very cautious about implementing any new business-critical application, especially one that can potentially impact revenue,” Mark says. “For example, if a new tool or application is going to interact with a revenue-generating website or a customer targeting app employed by your marketing group, the CIO will want to know all about how your product works and will probably require a lot of testing.” For these kinds of applications, the CIO will often point out that they already have something that’s working and question why they’d want to switch to a different solution. To help them get beyond the “devil you know” mindset, it’s useful to have a very solid case for change.
On the other hand, applications for less critical functions usually have fewer hoops to jump through. “If your application is going to help the internal service desk become more efficient or track new hire applicants, the CIO will be more willing to accept a little more business risk,” Mark explains. “Business isn’t going to shut down completely if something goes wrong.”
Another element the CIO will always consider is not only how the product’s maturity might affect performance, but also how much time might be spent providing product feedback.
“The tough thing with an immature product is that you can get locked into playing the role of a user acceptance testing organization as new releases come out or new capabilities are put in place,” Mark says, talking from personal experience. “You have to remember that if you’re going to adopt a product from a seed company or a Series A (and even sometimes an early stage B), you’re probably going to burn some calories providing feedback to the vendor and tripping over some holes and shortcomings that weren’t detected during the initial product screening process.”
The CIO will also likely consider the size of the vendor in terms of what it means for future service levels and availability.
“A lot of the time, small organizations don’t have separate engineering and customer support functions. I’ve dealt with emerging vendors where the people who developed the code also functioned as part time members of the vendor’s professional services and customer support teams,” Mark says. “If you encounter technical problems with products from small startup companies, you end up chasing a very precious and limited resource when you’re trying to get your problems resolved.”
Implementation and the potential consequences are topics that Mark believes are too often glossed over by IT buyers.
“It’s a chronic failing of most IT professionals that they fail to focus on product implementation and support issues until the very last stages of the product evaluation process,” Mark says. “They need to ask tough questions regarding implementation problems encountered by other customers; how the product will interact with other apps or tools; what kind of long-term technical or administrative support will be required to maintain and actually use the product; etc. Furthermore, CIOs need to know what types of support resources the vendor can supply if they get in a bind. These are all super-important considerations, but they always get left to the tail end of the process, after the buyer has already fallen in love with the product.”
Cost vs. Productivity
Finally, the CIO is obviously going to look at any new application from a cost perspective. How that perspective influences the decision depends in part on the category of software.
“In the collaboration space, a lot of the tools are freeware, so it’s often less of a cost pressure and more of a productivity issue,” says Mark. Sometimes, the conversation is almost more philosophical than tactical. “Some might argue that if two people stumbled upon a tool that made them more productive, they should just use it. But, in a larger company, other people might make a case for having guidelines and preferred tools for various tasks like video conferencing, file sharing, texting, and so forth to promote enterprise-wide collaboration.”
Security is on the other end of the scale. “With security apps, there are definite cost issues,” Mark says. “There’s a proliferation of tools, many of which seem uniquely niche-focused to tackle a specific problem. It’s tempting to throw a lot of technology at security issues, so there are always opportunities for either a roll-up or more of a platform play in these areas — something that would get you out of a best-of-breed approach.” Mark doesn’t discount the best-of-breed approach, but notes that it does drive a costlier end state.
And, for cloud operations, Mark thinks cost optimization is an important area of consideration for both CIOs and vendors. “I would encourage the people who are thinking about the ‘next big problem’ to spend some time on cost optimization,” he says. “Will you move workloads back and forth between your on-premise data center and the cloud, and — if so — how will you then make the most cost-effective use of those cloud resources?”
Tactical Tips for Making the CIO Sale
Once you’ve got your head around the kinds of buying considerations that are top-of-mind for CIOs, you can start thinking about which specific tactics you can use to sell into enterprise companies. Mark has two recommendations.
“I’ve served as an advisor to small companies of fewer than 100 or even 50 people. At that stage of development, my advice is to find the killer use case (or the two killer use cases) and sell the hell out of that. You have to be very disciplined in finding use cases that effectively demonstrate your value proposition and allow you to lock down your product development plans and sales strategies.”
Mark warns against inadvertently trying to become all things to all people, but he understands how tempting it can be when multiple clients are asking for different features. “The poor sales guys are bringing back all this market intelligence, and the product guys end up getting pulled in all these different directions, and the long and short of it is you can’t go anywhere because you’re not focused enough,” Mark says. “That’s definitely a problem.
The other tactical tip Mark has to offer is simple, “Sell as much as you can through references and the professional peers of your initial customers. That’s why those first few customers are so important. You’re going to want to use them as references going forward.”