Thursday, March 28, 2013

Enterprise startups who don't build a professional services business making a mistake

Mark Suster on his Both Sides of the Table blog writes this: "Many young startups are being advised not to have a professional services business and in my opinion this is a big mistake."

This is a good lesson for anyone starting up a company selling to the business market. Ignore VC calls to go lean and not invest in professional services - rather, invest wisely to ensure you have successful product implementations and the resulting referenceable customers. Wise advice. Here's a brief excerpt:

The most important way to sell a product for an early-stage business (or frankly any stage) is to have strong referenceable customers. These are the lifeblood of your sales organization. Referenceable means they are willing to be part of your sales collateral, willing to take calls from key leads, willing to speak at your conferences, etc.

How do you get referenceable customers? You build a great product and make sure it is used in such a way as to deliver real benefit to your customers versus just the promise of a benefit outlined in your marketing materials.

As much as many non-experienced investors might like to believe, even great products don’t just roll themselves out. You need to implement them. This often means getting the product to talk with other existing products, implementing the product to match the specific needs of a customer’s internal processes, training, monitoring usage and encouraging adoption
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It also reminded me of this advice from Scott Weiss; his company decided to invest in customer-facing resources to give them big-company customer service, so the large enterprises they were targeting would not be afraid to buy from them.

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