This year we have witnessed one of the driest years for tech initial public offerings (IPOs) in a long time. But that’s not to say that the opportunities aren’t there, especially for tech companies entering the enterprise space.
Out of the handful of IPOs that did happen, three – Coupa, Apptio and Twilio – were enterprise solutions. In the US, the business technology sector in 2016 was predicted to increase by more than 10%, in contrast to the overall US tech market, which was expected to see a more subdued 4.3% growth rate.
As the automation of processes increases, companies will become smaller and as such, will become increasingly reliant on external suppliers, especially to deliver fast innovation to provide a competitive edge. The need for enterprise technology solutions will therefore only grow. Despite the opportunities available, breaking into the sector is becoming more challenging as the number of players in the space increases and competition intensifies.
Here, Mark Perera, CEO & co-founder of technology leader in supplier collaboration platforms and enterprise level innovation, Old St Labs, shares his advice on how to successfully get your new technology into the enterprise space.
Know your (prospective) customer
When attempting to break into the enterprise sector, a crucial first step is gaining a comprehensive knowledge of your (potential) customers. Understanding their challenges and priorities will enable you to create a product that meets a real need. So how do you go about gaining that insight? A good place to start is to develop some quality questions, e.g. what their key business objectives are and what is hindering their achievement? Who are their current suppliers and where are they falling short? This may sound obvious, but many do not always have a good grasp of their current suppliers, especially when it comes to deliverables and measuring success. Speaking directly to people within the industry that would ultimately use your product is key.
It’s crucial to ensure that once you understand your customer’s main challenges, you make sure your branding and messaging reflects the fact that you are the solution to their problems. Successfully doing this makes it significantly easier to capture attention from the outset.
Establishing Procurement Leaders Network, a community dedicated to driving best practices across procurement and sourcing, allowed me to establish strong relationships with key people in the sector and gain their trust through sharing experiences and advice. This meant that when I started my latest venture, my relationships and credibility didn’t need to be developed from scratch. But, if you are just entering the enterprise space, this may not be the situation you find yourself in. In order to establish these relationships and showcase your expertise, creating content that proves your understanding of the problems the industry faces can help get your foot in the door.
Establishing strong relationships early on will pay dividends once they become established clients, as they’ll be far more open and willing to share their pain points with you on an ongoing basis. This information can then feed into the development of your proposition to ensure that you continue to deliver.
Explain your value
So, you’ve captured the interest of a number of potential clients by explaining how your solutions can help them but the hard work doesn’t end there. At this point, they are likely to want to know how you would actually deliver value to their business in practice. Explaining in detail how the product will be implemented and discussing specific targets and goals at this stage will help illustrate this. To further set yourself apart and demonstrate a commitment to delivering on your promise, define what customer success means and what you will be able to deliver at three months, six months and a year from now.
Getting to know the procurement team will also help you deliver value. Many companies try to avoid dealing with procurement as part of the selling process. But getting to know the relevant employees in the function is a good idea, as they can help you gain a deeper understanding of the buying process, where the budget is coming from and who signs it off. This will not only help your product development by giving you the background information about the people you should target in the selling process, but also understand how your product could scale.
Last but not least, I’d suggest building relationships and focusing your initial efforts on early adopters and innovators in your target sector. Often, they are interested in cutting edge technology and are more likely to see the value of trying something new. In comparison, traditional organisations are often more risk averse and not as receptive to working with you if you are unable to provide case studies proving your solution’s value.
Once a client base has been developed, it is key that you find and identify your brand ambassadors and use them to create compelling, rich case studies. These will allow you to reach some of your more traditional prospects further down the line. Your case studies can become powerful sources of brand promotion and help build excitement around your proposition.
Enterprise technology can be a challenging space for new technology companies to break into. But by developing an in-depth understanding of customers and their needs as well as building trust with key stakeholders, innovative and dedicated organisations can thrive.