Business Strategy · Sales Strategy

How should early stage companies prioritize SMB (Mid-market), Government, and Enterprise clients?

Bob Fucci Sales and Revenue Growth, Strategy, Advisor, Speaker

February 4th, 2016

How do CEO's in this forum think about who you sell to in your initial phase and how does your strategy build your brand in an enduring way?

Rob G

February 4th, 2016

working on startup #4 currently and the process has been different for each.  If there is a common thread i would say it is 'go for the low hanging fruit' first or "stick with what you know".  The initial kernel of my current company sounded pretty 'consumer-ish', but we have no experience selling to consumers so we deliberately reworked the model to fit our expertise - enterprise.  It has worked out very well so far - reduced a lot of uncertainty, reduced PM fit evaluation time, easier to target and define prospects, should (haven't launched yet) reduce time to revenue, etc.  Our end user is still a consumer, but we reach them through orgs that function more like mid-size to enterprise orgs.  These orgs who are our customers have an established relationship with the end user so thus far it seems to ad instant credibility to our brand. 

Barry Folsom Visionary Strategist, Strategic Marketing and Operational Executive

February 4th, 2016

Early stage companies should pick 1 and only 1 of those segments to focus on.  Then pick a narrow sub-segment.  And then pick a narrow sub-sub-segment.


The sub-segment is your TAM while the sub-sub-segment is your SAM.  Now the trick is to gain >35% market share in that sub-segment.


Counter-intuitive: for a startup/early-stage company, the more NARROW the initial target sub-sub market, the larger it actually is!!!!


By having that laser focus on the sub-sub-segment, your team drills down into the details (they won’t do that if you have multiple sub-sub-segments) and learn the ‘vocabulary’ of that sub-sub-segment and translated your website, marketing/sales materials into sub-sub-segment speak.   Why force your target sub-sub-segment prospects to do all the translating from your (arrogant) tech-speak into their ROI-speak?


Yep, painful because it doesn’t let your employees off the hook for truly understand, relating to, and become sub-sub-segment advocates using their ‘vocabulary’.


One example:   Company: disaster recovery SaaS.  Focus on professionals services>legal.  Changed their tagline to the ‘vocabulary’ of legal:  “business continuity” .


I can share a slide showing the differences it makes in their home page!!! 


Barry James

Steven Sheiner Senior Executive, Business Strategist & Entrepreneur

February 4th, 2016

There are no easy answers to your question except "it depends".  It depends on whether you're selling a me-too product or trying to disrupt.  Is your selling proposition saving money, make more money or gain efficiency.  Is it a new market or a mature one. Do you require a change in how your customers business operates, is it a long or short selling cycle.  Does your product or service put the buyer at risk if it doesn't work and on and on.  

Damian Roskill Chief Marketing Officer at AppNeta

February 4th, 2016

I think the answer to your question lies, at least partially, in who the product works best for. If you're dealing with a problem that only affects Enterprise clients (e.g. large scale, multi-currency, multi-country marketing budgeting), then you prioritize that. I'd ask you back, where is the best product-market fit?

MaxBlox/Founder Institute Director, Chennai Area at The Founder Institute

February 4th, 2016

If you have a choice I encourage going to SMB first. In some ways you create the best solution possible, because the solution has to be optimized for price, for usability ( SMB dont have specialist staff) and your infrastructure and services have to be cost-efficient.   Growing into enterprise from there is a lot easier and you carry major advantages against the incumbent then. That is the strategy we have followed.

Jessica Magoch Sales doesn't have to be a dirty word. Get more clients without being icky, sleazy, or just plain annoying.

February 4th, 2016

Go where you're most needed first.  You may find that's the only place you need to be. I'd rather have 10 SMB clients than 1 Fortune 500...  You can build a stable foundation that way.  Consider the bigger clients bonuses... because they can walk away at any moment and you don't want it to hurt the bottom line too much.

Neil HereWeAre Want To find-close Business Online without competition Before They Google Search? We solve this problem 1(508)-481-8567

February 4th, 2016

How should early stage companies prioritize SMB (Mid-market), Government, and Enterprise clients?

Just because you think there is a market doesn't mean it's actually there or even worth going after. Don't answer any segment priortize question based on what you think are opportunities.

You need to know for sure.

You should ask, research then brutally honestly answer the following questions before prioritizing market segment targets:

  1. Know your competition and where they do their business. This tells you if there is even room for yours
  2. Know if the problem you solve is a wide enough issue for your many target audiences that the probable adopters are actually is "looking" for a solution v what they do know, impact, cost v value.
  3. Know what you can actually deliver and how fast
  4. What prices v value coupled with a willingness to part with cash for that value is real amongst the market segments
  5. What strains on your business would be the result of landing accounts in these stated areas would be caused nd is it worth it
  6. Can you actually meet the demand if you successfully create it.
  7. Know the time and process it takes to gain traction and business in these market segments. For instance, government takes a lot of time, needs budgeting, you must identify and then have key people in the right agencies, users,  pushing to get what you have, gain their place v others in the budgeting process, get cash obligated, then you and they must write and use a proprietary recipe spec that only you can actually meet, go out to bid, respond. Is that really worth the time and effort?
  8. Know what the impact of gaining such a customer would be on your costs and people power needed to deliver if you get orders and or customers in those segments. 
  9. Be honest re what it would take in ramp up, expansion, added support, operations, people  v the real profit % against effort and delivery and is it all worth it to you and your company.
After answering those questions, then you can actually
  • know not guess what prospect direction and market segment to prioritize v impact on your business in operations/cost of development needed for going after these higher level prospects, 
  • is it even worth it, 
  • which ones specifically are a good fit for you and your business, 
  • know why, 
  • know the actual process for going after and landing customers at this level or market segment levels
  • Use the actual process that is required to get the PO that has been revealed by your research so your effort stands a chance of landing the customer.
Now you can prioritize appropriately.

Jaime J Master Trainer y Entrenador evolvo

February 5th, 2016

I think this is a matter of prospecting.  Defining a market segment is different from qualifying prospects.  Whenever the variable time is part of sales equation (sales cycle or achieving monthly goals) you better be objective in order to know and achieve certainty on which markets (clients) you should focus on leading to a purchase.  Prospection is key.

Matthew Mellor CEO of Strenuus

February 4th, 2016

I agree with Damian. My preference is to focus on the groups or individuals who will derive the greatest benefit from a solution, and work upward through the enterprise. It's important to have a champion in the organization, and real-world examples where you / they can demonstrate the value proposition.

Bruno ROCCA I specialize in revenue generation, and advise companies on all activities required to make it happen

February 5th, 2016

I think this is all about how fast is the sales cycle - and thus the initial iterative cycle with customers. The longer a customer takes from contact to company getting good metrics on activation and retention the longer this cycle is. I would suggest that shortening that cycle is key while focusing on the customers who will act the fastest and pay the most.