25 tips to survive and thrive as an unsexy B2B startup
Enterprise is an unsexy, difficult area for a startup. While there are a lot of consumer start-ups hogging the lime light on the Indian startup scene, enterprise companies are slowly building away from the media spotlight. Building an enterprise requires a lot more planning, experience, and selling, as compared to building a consumer start-up. An entrepreneur cannot have a rough version of an app out in public to receive feedback on; they need to get things rigth the first time. A lot more is required to do this, and it is not everyone’s cup of tea.
To dissect the space and help people starting up in the enterprise domain, we got in touch with some experienced entrepreneurs to gain more insight.
ThreadSol is a SaaS company that lets manufacturing units optimize their use of material. Intellocut is their flagship product. Recently, they launched intelloBuy. ThreadSol is a pioneer in Enterprise Material Management, which enables manufacturers to boost their topline by reducing material costs by 10%. This amounts to millions of dollars in most cases (that is, with world garment / car seat / upholstery / footwear manufacturers). The company has been operational for 1.5 years and is present in 7 countries. (India, Sri Lanka, Bangladesh, Vietnam, Turkey, Indonesia, Pakistan). ThreadSol has been running with 100% QoQ growth for the past 6 quarters with a profitability margin. Mausmi Ambastha, co-founder of ThreadSol gives the following pointers from her experience:
- The enterprise space by itself is challenging. An enterprise startup needs a 100% sales DNA. The whole organization, be it sales, marketing, development, implementation or any other internal department, needs to work with razor sharp focus for sales.
- Rapidly open fronts in multiple geographies to de-risk your revenue’s dependence on one geography. Unlike consumers, there are only so many enterprises in a particular geography.
- Having multiple products in your portfolio also de-risks your revenue stream, and ensures the sales engine is always fuelled.
- The traditional approach of build-sell-grow-build perpetuation is losing out to the VC-fueled super-steroid cash-burn growth strategy of recent ti However, Enterprise startups can pull off a coup in the market by remaining highly focused on sales, with a differentiated portfolio in multiple countries. That’s how ThreadSol has been growing at a rate of 100% QoQ for the last six quarters, and has spread operations to nine countries, with three products with very healthy profits.
- Pitching to enterprise customers requires a very focused and personalized approach, and the ability to articulate your solution such that it is understood by owners or managers. If the product shows clear benefits, addresses a pain point of a business, and is priced with a ROI of less than 6 months, that product is bound to sell.
- For an enterprise startup, work experience helps in understanding the intricate working of a corporate, and the interpersonal dynamics of a complex organisation. It ensures that one will be adept at handling people and communications in difficult scenarios.
Co-founded by Gopikrishna Kannan, Hashworks has been into user experience design. Gopi brings with him more than 15 years’ experience at multinational companies, and also the experience of starting his own enterprise company (which failed to take off). Here is what he has to share:
- You can't talk disruption without sustainability. Running the business is paramount for any enterprise, how your product helps them win in the existing market is going to be your USP.
- Be a subject matter expert. Show knowledge of the pain areas, keep talking on, writing on, and demonstrating your cause, before selling your product.
- Have relevance; your industry or your target enterprise should know you. Gain experience, create goodwill, be an influencer.
- The problems you solve are more important than what you offer.
- Networking/Connections matter a lot.
- Reach out to big fish first; don’t go to small players. If the big ones like you, the smaller ones will follow in their wake.
- Know who the influencers are at all levels; selling to leadership alone will not help. Engage the value chain, developers, and middle managers, and demonstrate the problem.
- Your product should blend into the enterprise ecosystem. Only known problems get attention, so look for big wounds. Heal that big wound.
- You need to be methodical and meticulous, as well as speak their language. Being formal is very important. Start-ups need to be formal with the enterprise.
- Do a small POC (proof of concept) demonstration to clients, showing them that your solution works like a charm in their ecosystem.
- Don't forget to charge them for the POC, anything free doesn't carry value and is soon forgotten. Display their problem "big and bold", and they will know why they need you
- Prior experience is a must. Unless you know the technicalities, no innovation can happen. It is not about knowing, it is more about experience.
A growth hacking toolkit, AppVirality is a fast growing start-up that helps companies boost their mobile apps. Backed by some of the best angels in India, AppVirality has got some marquee clients onboard. AppVirality’s co-founder Laxman Papineni has the following points to share:
- Dealing with enterprise customers is very different. Here you can't really predict anything. Unlike in B2C, here you don't really own a customer until they start paying you.
- In terms of onboard time, enterprise customers take anywhere between weeks to months to complete the POC and go live with the solution. So, startups should really keep long sales cycles in mind before building something for enterprise customers. They are not going to pay you immediately.
- A simple change in the team hierarchy at an enterprise you’re pitching to can bring the discussion back to initial stages, and you might have to start it all over again.
- Content marketing targeted at marketing/growth teams worked really well in AppVirality’s case. So far, they have attained nearly 20 enterprise customers in India.
- Prior experience is not a necessity, but one needs to have been well exposed to selling and dealing with enterprises. This exposure helps a lot in planning things, be it the product road map or financial planning, to sustain before getting paid from customers. For example enterprise customers prefer a perfect product over a feature-loaded imperfect product. So it’s better to make a perfect product, rather than adding more and more features.
A social media analytics product, Simplify360 is a growing company with clients across the globe. Simplify360 was also in the news for the big acquisition offers it got from Twitter and the like. Founded by Bhupendra Khanal, the company has been growing steadily and has gained a lot of experience in the enterprise domain. Here is what Bhupendra has to say:
- Starting an enterprise company is easy in India, but scaling up is very challenging. Both Indian companies and MNCs prefer global products, and it is very difficult to change people’s perceptions.
- A problem is also that local captive units of MNCs have very little power in deciding on which products to buy. They are mostly governed by HQs overseas. We saw a big change in mindset in India over the last 12 months; local leaders of MNCs’ Indian units started taking more local decisions and began to try out Indian products. This also made some leaders in Indian companies more positive towards local products.
- Capital is not easy to get, as most VCs prefer B2C business. But there are some really awesome enterprises like Airtel, CCD, Viacom, Star TV etc, where the young and result-oriented leadership teams look at product merit over origination.
(image credit: Shutter Stock)