The Better Customer–Startups or Big Enterprise?

Step inside the Group Partner Lounge to hear Y Combinator Group Partners Harj Taggar, Michael Seibel and Brad Flora discuss the pros and cons of startups selling software to other startups. Or is there a better approach out there?

00:00 - Intro
01:20 - When selling to startups doesn't work?
03:53 - Startups might not have the problem
05:03 - Startups are not an easy customer than enterprise
05:55 - Early stage companies churn
09:35 - Sales
12:01 - The benefits of charging startups
14:22 - Bottoms up sales strategy
15:18 - Big takeaway

#startups #sales #tech #software

[ycombinator]

What challenges does your target market present?

[Daveboymagic]

Basically: Do not choose your target customers based on demographics (revenue, number of employees, etc.) but rather on whether they have a specific problem.

[chapterme]

Chapters (Powered by ChapterMe) -
00:00 - Intro - YC companies selling to startups
01:20 - When selling to startups doesn't work?
03:17 - Snowflake and Workday
03:53 - Startups might not have the problem
05:03 - Startups are not an easy customer than enterprise
05:55 - Early stage companies churn
06:21 - Heroku and Perfect Audience
07:58 - Triplebyte
09:35 - The deadly sales fallacy
12:01 - The benefits of charging startups
12:33 - Gusto
13:20 - AWS - Selling to startups creates a path to large enterprises
14:22 - Bottoms up sales strategy
15:18 - Big takeaway - When it's a good idea to sell to startups?

[StreamAgency]

"Put together an MVP with a self-serve-flow ... RICHES!"
You crazy for that one!

[narasimhakaushikn]

One reason companies churn though you might catch them early could be because the employees in them could also have left as they grew. New employees are those that suit a large company and bring tools they're familiar with from a previous large company.

[ManiDoraisamy-GDE]

Great video! There is one problem with going enterprise early on. Enterprises can arm-twist us into building features are too specific to them and convert us into dev shops. I wish there was more discussion on that topic.

[avrelian]

The civilization metaphor was so on point. Another amazing video

[expertociber]

We moved our target market to startups last week, so this is really interesting for us

[diegocharrycardenas]

Greetings from Colombia entrepreneurs! Software market is about to explode in Latam. Learning a lot from Y Combinator.

[boringmanager]

oh yes, you can totally go and build an enterprise solution on your own/small team and then ram through the bureaucracy and only then you can go to investors and show a working prototype and ask for a 100k investment. What a joke.

Three grown ups in the room, all patting each other on the back and not saying a word of sense for 15 minutes.

You want founders to go for a big prize - don't give no advice, call your buddy from Amazon or Facebook or whatever and set up a meeting.

[JonathanRintala]

Good stuff! Great thoughts on when selling to startups is a good idea. Nice example with Stripe and also when your product is more entreprisey by nature - it is not ideal. Founders alot of times def are looking for an easy way out - going full-on self-serve or building/selling with themselves as ICP - which could be dangerous.

[yasinnabi]

starting a business is very difficult and impossible if you cannot create value in the market. once you create value and be able to solve problems, That is your success... it doesn't matter what business you run, you will succeed. a fellow creator

[tommy_]

Super valuable info. Focus on selling to customers that have the problem your product solves. The product you build is just as important as the system you build to sell to those customers.

[holdilocks]

One problem you get with software is really the initial lies the salepeople tell you. For example does it do this? Oh yeah it does and I can have so and so help you set it up. You get it and every time you ask for the setup, they say, oh we need you to talk to this person, I only do this. So it becomes endless meetings, with no help.

[digiexgroup]

It doesn't matter Startup or Enterprise.
Starting from pain point of users => Create Use-Case => Build Ideal Customer Profile => Classified target customers size (Startup / SMBs / Enterprise) => Build custom Sales Deck / approach / engagement model for each target => execute

[JuicyDogg]

When it comes to the comment about the VP of sales coming in and switching to Saleforce - that is more about corporate politics rather than the actual CRM system not proving features they require. If the VP endorses salesforce and something goes wrong its salesforce's problem, if the VP endorses a new and up coming CRM like Hexospark, and something goes wrong, then the VP made a mistake. The value of the reputation of salesforce in the global picture of corporate politics is relevant and must be taken into account!

[georgeparrish]

Y Combinator StartUps selling to other Y Combinator StartUps....sounds like StartX StartUps selling to StartX alumni. Investors are looking at the numbers from these institutions to see the percentage of customer base that didn't come out of their universes.

[mysportisyourpunishment]

Sales!??? Haha, this is all I do! I sell for a living...it's in my DNA

[eightnoteight]

payments may not change with people scale but it definitely changes with transactions scale

[DrTune]

This was great, many lols and insights