You’ve seen the story a million times: scrappy team, building an app to help consumers and maybe a few small businesses. It does. Very well. Success brings investor interest, board meetings, more employees, revenue targets, marketing.
Before you know it, you’re staring at a big annual growth target with no clear path to get there. Your Growth team has The Fear in their eyes.
BUT... you have a few enterprise deals. Yes, the customers require more handholding, but the marginal cost of acquiring and supporting them is significantly outweighed by how much they pay you, 10-100x a mom and pop client.
Pausing here for a moment, two things you need to know about moving upmarket:
The above is a hint that you might be able to move upmarket. There’s a lot more research and testing to be done.
We’ll talk about Product here, but moving upmarket is a company strategy, not a product strategy. Every team will change how they operate as you change your customer base. It’s not an exaggeration to say that the end of a successful move upmarket is a different company, not just an altered product and sales process.
Easy enough to test this out. Slap a new enterprise price on the public site, hire a few sales reps, and go!
Understand Your New Customer
Crossing The Chasm tells us that these initial enterprise customers are early adopters. They will put up with the product not being 100%, because they like to be earlier on the innovation curve and get a good price.
You won't find a lot more of these folks to sell to, but they may point you to the next tier of customer. The next tier of customer won’t put up with a 60% solution, they’ll expect something significantly more tailored/polished, but they may be trying to solve the same problems.
Design Sprints are a great way to refine and test potential solution sets.
Identify customers - larger customers who provide good feedback and will have the time to engage
Iterate through solutions - identify the biggest issues the customers have with the product and prototype around them until they’re happy with the solutions
Test solutions - conduct market research/sizing based on prototypes and competitive positioning
This process should get you to the right initial enterprise feature set in a matter of weeks. Weeks may feel like forever in startup time, but jogging in the right direction is better than sprinting all over the place.
Change Your Mindset
The harder part of moving upmarket is changing how you think about customer problems. As a small company yourself, it can be hard to imagine what things are hard for a customer with thousands to tens of thousands of employees.
Taking a look at a few product considerations and relevant customer priorities based on size:
You can pretty quickly see where priorities have to shift. Small customers want simplicity, ease of use, and they don’t want to have to deal with a lot of vendors to get the job done. Enterprises have a lot of context that they want you to integrate with, from users and permissions to other systems that surround your app.
You don’t have to bridge all of these gaps on day one, but you do need to shift this mindset. You want your employees thinking about enterprise implications before they start changing things about the product.
What about mid-market?
I haven’t seen fundamentally unique buying behavior or needs in the mid-market. What I most often see are companies of a middle size that either buy software like a small company or buy software like a large company. Happy to see counter-examples, but given this experience, I say you still angle for enterprise or small and whatever mid-market companies buy with that profile.