We’re pleased to announce the Bowery Capital 2020 Startup Sales Stack Report! This report is meant to serve as a guiding framework for anyone evaluating sales solutions. Whether sales, marketing, customer success or management, if you’re thinking of using or buying software to optimize customer…
Beating legacy software vendors is a serious challenge that many SaaS founders face early in the life of their company and so we had Zack Kass in to the studio this week to chat about the topic. Zack is currently the Director of Enterprise Sales at Mixpanel and knows a thing or two about beating legacy software vendors having competed with very old school companies during his time at CrowdFlower (BPO legacy vendors) and Shyp (Logistics legacy vendors). As Zach says, no one beats legacy vendors by accident so we thought we would lay out the 4 key things that matter to Mixpanel and Zack when thinking about beating legacy software vendors.
(1) Build A Playbook & Practice It In Advance – Zack sees a lot of founders and their teams “learn on the job” which can be an easy ticket to not beating legacy software vendors. Learn everything you can up front and ensure that there is a playbook that is repeatable and well practiced. Learn the ins and outs of procurement and security reviews. Understand exactly who is going to each and every meeting. Know what everyone is going to say. Have all of your contracts, MSAs, and security audits in place before you go beating legacy software vendors. Having all of your ducks in a row in advance will give the prospect comfort and the view that this isn’t your first rodeo. This, Zack says, is one of the most under appreciated components of beating legacy software vendors.
(2) Say No Often & Don’t Travel Until You Are Ready – Many early stage SaaS founders get enamored when a Fortune 500 company reaches out. They go and visit the prospect and get excited about the possibility of working with them. Little do they know that there are 4 other large companies already installed, 2 large vendors helping write the new RFP, and 1 vendor who is golfing buddies with the CTO. Zack coaches founders to really qualify discussions with large companies up front and not travel until you are truly ready to go up against the legacy vendors. The cost associated with the visit from a time and budget standpoint can be enormous and not worth it most times in the beginning of your business.
(3) Shield Your CEO Until Absolutely Necessary – One of the best nuggets you can put in front of a prospect related to beating legacy software vendors is your CEO. They are usually much smarter about the market and the prospect may be impressed that the CEO shows up (legacy vendors will rarely do this). Zack coaches founders and CEOs to not get involved in a large deal until late in the process. Sending an AE first gives the illusion that the business is sizable but also creates an aura around the CEO when they come into the room. Not showing all your cards up front is important to beating legacy software vendors and keeping your CEO and founders away from the process until the end can be the difference between winning and losing.
(4) Hire For Intellect & Horsepower – Unless you are in a specialized space like government or healthcare software sales, Zack views the “rolodex driven sales person” as somewhat of a waste when thinking about beating legacy software vendors. With buyer personas changing and the rise of the digital native in the buyers seat, potential customers want a partner who is smart and going to help them solve problems versus the partner who is going to take them golfing. As a result Zack coaches SaaS founders on hiring the smartest and most driven younger people into AE or sales roles. Interview for market knowledge and insight, presentation and problem solving capability, and technical skill. They will show up and be way more knowledgable than a typical salesperson that sticks to the product marketing buzzwords. In many of Zack’s prior lives at CrowdFlower and Shyp this was the difference between beating legacy software vendors and losing to legacy software vendors.
Danger ahead! Lately we’ve observed some obvious, and also not-so-obvious challenges in pitching a product that sells into the SMB segment to VCs. While the total addressable market for SMB B2B SaaS products may be huge in terms of numbers of customers, this is almost…