This article was published on September 7, 2013

5 things you need to know before starting an enterprise company


5 things you need to know before starting an enterprise company

Vik Singh is CEO and cofounder of Infer, which recently raised a $10 million Series A round from Redpoint Ventures and provides data-powered applications to companies like Box, Jive, Nitro, Tableau, and Zendesk. 


Over the past two years while building up my company, I’ve gained some valuable insights on what it takes to succeed in the enterprise world. Hailing previously from the consumer space, I’ve learned that while some of the principles we employed there do cross apply, all in all, the enterprise is a very different animal. Here are five key things aspiring enterprise entrepreneurs should know:

1. Focus on the 80% for a while

Don’t spread your company thin with many mediocre products, even if every other enterprise company is touting 10. It’s important to focus on your simplest, most important idea early on so you can develop a repeatable solution with a small team.

Take a page from the consumer world: Google’s “just a search box,” Dropbox’s “just a folder,” Twitter’s “just 150 characters,” and many others. Simplicity is not just a key consumer product principle. Companies are tired of fluffy products and want solutions that are easy to comprehend and “just work.”

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And even with that focus, remember that it’s nearly impossible to be an overnight sensation in the enterprise. There’s friction in companies, and so the sales cycles are long. Plan your seed funding to get you through at least two scary years of not knowing if your product will matter. The good news is that the enterprise is riddled with challenges and bloated products, so if you iterate on the right problem, your hard work is more likely to pay off than in the seemingly hit or miss consumer space.

2. Forget big logos – optimize for customer champions

Try to get paying customers early – not for the money, but for true feedback. You might pick up a few helpful nuggets of input from a free customer, but I’ll guarantee that you’ll learn way more from one that’s agreed to pay you top dollar. Test pricing early to see how your prospects react, as their reasoning will reveal your true value. Also, when customers have real skin in the game, they’ll move faster in getting your product up and running and help you hone in on your minimal viable product.

When signing on those early customers, it’s tempting to target big logos, but I’d avoid those guys in the beginning completely. Your product should be embarrassing at first, and you may not be ready for the scale, expectations, long political cycles, or heavy consulting that most large enterprises require. Instead, find emerging high-growth companies that are nimble, forward thinking, and just big enough.

Building your army of customer references is crucial, not just for feedback but for help closing future prospects. To do this, you need to be picky, and close companies with passionate champions and minimal custom needs. A happy customer is way more valuable than one paying 5x more but barely getting by on your product.

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3. You are the sales

Show respect to sales and go-to market strategy, as they’re absolutely critical to nail. Simply put, there’s a reason why the best products don’t always win in the enterprise. I hate to break it to you, but you (early employee) are going to be closing your first dozen or so customers. The first couple of sales are difficult, because no one knows you yet and your product hasn’t been sold before. It’s in fact more business development than sales in the beginning, as you need to be flexible and focus on win-wins. But after you close a few, you’ll start to pick up on the key parameters necessary for scaling your sales. At that point, I’m a fan of bringing on a sales person to test repeatability.

4. Build and depend on a dream team of enterprise-savvy advisors and doers

There’s absolutely no substitute for having an investor with deep enterprise experience and tribal wisdom. Find a current or former operator that’s passionate about your vision, easy to get along with, and accessible (I shared more advice on this in my recent article on VC signaling). Same goes for team members. It’s a huge plus if they’ve been involved in ventures ramping up from $0 – 20M+ in revenue, as their advice and level of patience will better align to your current needs and resources.

And once you get the right advising and operating team around you, it’s important to let things go. Read this, then re-read it about five times. Early on, you have to keep tight reigns on product and sales, but once you have the right people and expectations in place, it’s critical to delegate decision-making to those closer to the action.

5. Don’t boil the marketing ocean

It’s almost a fashion now to start a company and then immediately get press. Although tempting, it’s better to be patient and nail your product, as you’ll likely need to iterate a few times. While awareness is important, you don’t want to do multiple rounds of PR with different messages. And when you do take your story public, make your messaging clear and understandable. I still have no idea what the last 70% of new enterprise companies I’ve read about actually do. It’s better to be understood than sound humongous and all-encompassing.

When it comes to the rest of your go-to-market strategy, keep in mind that there’s no magic potion for growth. Don’t make investments in programs you don’t get (like “just buy Google AdWords”), just because an advisor told you to. Instead, see if there’s a way to test the idea on a small-scale first to learn, and remember, go-to market strategies need to be personalized to every business. It’s up to you to figure out those nuances by getting great advice, but in the end, trust yourself and go with what you understand – that’s what’s gotten you this far.

Image credit: Thinkstock



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