Earlier today @ericbahn and I had a quick Slack chat about selling into a customer's workflow. I thought it might be helpful to relay pieces of it here.
1) It's not enough to have an amazing product that solves a dire need.
1) It's not enough to have an amazing product that solves a dire need.
2) There are a lot of other important considerations and a BIG one is switching costs. You'll need to understand if your product has a high or a low switching cost.
Let's dig into some examples.
Let's dig into some examples.
3) My company sold ads. And it was an EASY fast sales process. Why? Because marketers are willing to try out lots of different ads. The friction to do so is low.
4) The flip side is if your ads didn't perform, retention was hard, and marketers would move on to the next ad product. So, great entry conditions, but challenging retention conditions.
5) @ericbahn 's startup was Beat The GMAT. (Totally different biz.) BTG started as a discussion forum around GMAT questions.
He had competitors who also had forums. But again, easy entry conditions. You could post your same q on all the forums.
He had competitors who also had forums. But again, easy entry conditions. You could post your same q on all the forums.
6) His retention conditions were better though. Applicants would stick with BTG because they would get more thorough responses on BTG and also faster, so that created a stickiness. He was able to outcompete his competitors even though the barrier to entry was low.
7) If you look at other products yet - take marketing automation software. Very hard entry point. Why? Because it's very integrated with marketers' workflow. You cannot just easily try to use another mktg auto software. It's a lot of work just to switch to a new software.
8) This is both good and bad. Good if you are already in someone's workflow. Bad if you are trying to selling into someone's workflow. Really really hard sale.
You basically have to get timing right -- when someone doesn't yet have software or is so fed up w/ a current solution
You basically have to get timing right -- when someone doesn't yet have software or is so fed up w/ a current solution
9) And timing is HARD! Who knows when a potential customer is ready to use you? It's usually easier to go after cos that don't already have a solution.
Such as startups.
In fact this was exactly @HubSpot's play -- go for smaller fish who don't use anything. Then grow w/ them.
Such as startups.
In fact this was exactly @HubSpot's play -- go for smaller fish who don't use anything. Then grow w/ them.
10) You see this w/ a lot of products actually - Slack, Stripe -- tons of SaaS tools uses this playbook.
If you go enterprise and are head-to-head w/ existing solns, then you need to be prepared for long sales cycles, constant follow up to get timing right.
If you go enterprise and are head-to-head w/ existing solns, then you need to be prepared for long sales cycles, constant follow up to get timing right.
11) This is why it's usually easier to try to build something that doesn't require ripping out some other software. Sell in w/ a new angle (that is still a need / a real problem) and then expand from there.
12) Also if you don't go head-to-head, then you often don't need to build out as many features. It's hard to convince someone to switch to you if you are not at least matching what is available. And even after building all that out, there's still inertia.
13) Last thought - so, low barriers to entry are not necessarily bad -- that's often the fastest way in. The rhetorical q is how do you make your solution better and better over time so that you aren't taken out?
