"A user interface is like a joke. If you have to explain it, it's not that good"
 Martin LeBlanc, Founder IconFinder

You build SaaS products for people not companies. You sell to people not companies. SaaS for the enterprise is only different because you have a lot of people. All with the same logo on their business card. You get one large sale for a lot of yesses. Selling to SME is one small sale for each yes.
 
One of the health problems my wife has faced is with her kidneys. We are very lucky that she has had excellent treatment. In the end a kidney transplant has allowed her a full recovery.
 
She is still under the watchful eye of the renal unit at our local hospital. This gives her access to something called PatientView. It allows her to look at results of blood tests and some other specialist medical information. An example of digital health in action.
 
My wife has been using the product for several years so is familiar with how it works. But on at least two occasions in the past year she has been asked for help by doctors or pharmacists. They don't understand the system or the data. Think about that. A software product designed for patients that is not even intuitive for medical professionals.
 
Its a common problem. A recent survey by Digital Health focused on the IT priorities for the NHS. There was a sting in the tail. On social media one tweet called out the elephant in the room “most clinical systems in clinical settings are unusable by clinicians”.
 
The same disease afflicts B2B SaaS and software of all kinds. Even some of the best are vulnerable. I find Xero simple to use but I am a qualified accountant. I always have a suspicion that the layman does not have things so easy. 
 
There is not shortage of advice on good UX design. Good people are hard to find but not that hard. The root cause is much more basic. Too much software is designed for companies not people.

Companies don’t use software, people do. When you sell a thousand licences to a large enterprise you do not gain one user. You gain 1,000 users with one sale. The success of your software will depend engaging each of those users and helping them succeed.
 
Lincoln Murphy’s recent article on customer success identified the key question. What has to happen for your customer to be successful? And followed on with the specifics:

• What do they need to do in your product? 
• What do they need to do outside of your product? 
• What does your product need to do for them behind the scenes? 
• What do you need to do for them?

 
They and them in these questions mean people. The leaders, managers and workers in your customers that use your product. 

The same principle applies to sales in spades. Enterprise sales leaders. Enterprise sales teams. How to move up to selling to the enterprise. And so on. Nope. You are selling to people.
 
An enterprise is a way of organising a large group of people in a combined economic unit. To some extent there will a common purpose and goals. That varies quite a bit from company to company in practice.
 
In every case though its still a group of people. To sell 1,000 SMB customers you might need to convince 100 people. You might only talk to 10 of them and the rest would be self serve. The numbers for selling 1,000 licence enterprise SaaS deal are much the same. Talk to around 10 people. Help them convince their teams, bosses etc so maybe 100 people in the loop. 
 
There are two differences. In the enterprise deal, everyone has the same logo on their business card. The enterprise deal is one big decision rather than 100 small decisions.
 
But that decision is the result of a complex set of interactions. Every user, every influencer, every buyer has their own individual needs. Your SaaS needs to serve many people. Be careful it doesn’t become a hybrid monster along the way. 

And we come back to the key to all business success. Change. You can’t solve a real world problem unless something changes. Lincoln Murphy has it dead right. Customer success only happens if the customer changes. Nir Eyal is on the same band wagon. A hook is mechanism for change.
 
The value in your SaaS is in change. Change in any business of any size happens because folk change what they do. Make different decisions. Follow different processes. Talk a different talk and walk a different walk.

This is simple. Focus everything you do on the individuals who will buy and use your SaaS. Help them achieve their goals. Make their lives easier. Deliver the change through the people.

"Leadership and learning are indispensable to each other."
John F Kennedy, Undelivered remarks for the Dallas Trade Mart, 22 November 1963

​The UK Government is trying to tackle a problem that has no solution. No not Brexit, productivity. Hiding behind royal engagements and outrageous tweets over the past few weeks have been a couple of huge announcements. The Chancellor’s budget speech and our new Industrial Strategy. Both focused on the question of productivity.
 
UK productivity has been sluggish to terrible for as long as I can remember. The latest official data tells us UK productivity per hour is 15% less than the G7 average. And growing at a slower rate.

​The Chancellor calls these sort of numbers “economicky.” In my mind they are the essence of life. They are also the main reason I am so passionate about the tech sector.
 
Successive governments have shown that policy biases and ill judged, small scale subsidies are not the solution. Its not about shiny new ideas - Grand Challenges in the words of the industrial strategy. Government needs to focus on infrastructure, regulation and education. Leave productivity to entrepreneurs and consumers.
 
Technology is an integral part of the productivity solution. At the leading edge this means research in advanced areas like AI. Medium term these are essential but in the short term they will have little impact. By definition cutting edge ideas apply only to a small segment of businesses. That results in a limited impact on productivity. 

​The big prize will come from established businesses making better use of technologies that are already proven. Luckily, this is also what B2B SaaS needs to happen to drive the next wave of growth.
 
At a high level its simple. Either:
 

1. Your B2B SaaS enables business to generate more revenue with the same number of people.
2. Your B2B SaaS enables a business to generate the same revenue with less people.

 
In both cases your customer’s productivity improves. If everyone does this then the productivity of the whole economy improves.
 
You may oversee that ittle in the UK budget or the industrial strategy will help achieve this goal. Correct. Don’t waste too much time looking for examples elsewhere either. 
 
This will only happen if entrepreneurs and leaders make it happen. 
 
Everyone I know in a SaaS company is working to make this happen. And every business is different facing its own challenges and opportunities. You need to find the right way for your company. 

You will not go far wrong by following these 5 principles:

• Help your customers deliver business change. Customer success is 100% driven by change. Your SaaS will not deliver benefits alone.  Don’t just sell your product. Make it easy to change. 
• Build customer relationships. Real sustainable business and genuine lifetime value arise from mutual commercial relationships. Not pipelines and funnels. That’s why its called CRM.
• Listen to customer needs. Nothing destroys your reputation faster than selling the wrong thing to the wrong customer. Success is about listening not selling.
• Measure yourself by retention not acquisition. There are a thousand ways to acquire customer but only one way to keep them. You can only retain customers by delivering value. Value is the object of your business so this is what you need to measure. Read this from reforge for more about this point.

Use team incentives not individual sales commissions and quotas. Sales people don’t deliver value. Great software, excellent service, a strong business model and even a clean office all make a contribution. Reward the whole team not just the sales team.

​If this is too much, remember the first item on the list. Help your customers deliver business change. Without this, you will not have a sustainable or scaleable business. And your SaaS product will make no difference in the world. 
 
Its like a meta variation of the old saying: execution, execution, execution. Government will not solve the productivity puzzle. We will. So let’s get on with it. Wherever you live, your country needs you! 

The startup world is all about the future. Founders talk about creating the future. Seizing the opportunities of a golden age. Never been easier to start a company. So you might ask, why bother investing time and effort in past performance?
 
Those board reports feel as if they are nothing but a mechanism for keeping investors and non exec directors happy. Annual accounts are even worse. They feel like ancient history. The numbers don’t make sense. For certain they don’t shine a positive light on the great things your company is doing.
 
Its all pain and no gain. Yet this misses some important point. Here are four simple reasons why that thinking is wrong. This stuff matters.

“I had also, during many years, followed a golden rule, namely that whenever published fact, a new observation of thought came across me, which was opposed to my general results, to make a memorandum of it without fail and at once; for I had found by experience that such facts and thoughts were far more apt to escape from the memory than favourable ones.” Charles Darwin

​

1. You are incredibly close to the pulse of your business. But it is easy to focus on the good news and ignore the bad. Only well grounded data about past performance will give you a complete picture of how things stand.
2. If you are doing your job as an entrepreneur, you will be experimenting all the time. How can you evaluate the results without looking at past performance?
3. Many people think of control as a matter of detail. Authorising payments. Forensic examination of ad content. That type of thing. Control and governance also need a step back. The specifics may be well managed but does the big picture reflect that. In my experience most control failures are a result of management manipulation. The only way to spot them is looking for exceptions top down.
4. You make decisions every day. If your board is adding value they will review and challenge those decisions at each meeting. The best way to do this is to combine real data with hopes and aspirations. That needs good data on past performance.

 
Any of these is a good enough reason to get some consistent reliable metrics about your SaaS. What about accounting numbers though. Aren't those for the birds? 

​In some respects yes. The rules vary from country to country. Part law and regulation, part accounting standards. Accounting standards in turn are half local and half international. All before you get to the interpretations of well paid professionals (like what I used to be). 
 
It can be quite hard to understand the story published accounts are telling. That is not a good reason to discard this data altogether. For a start standardisation and rules are limiting but also useful in some cases. Investors like comparing numbers. Knowing they are all prepared to the same standards adds a lot of value. And you need to be able to convince investors.
 
Most angel investors don’t make a big deal over this. Take a longer view and the situation changes. VCs and corporate investors want to see proper accounting numbers. The same is true for or any form of exit - trade buyer, financial buyer or IPO. Tom Tunguz wrote a good article on this exact point. Published when the accounting rules for SaaS changed this year.
 
Not only that, they want to know how you get from the figures you look at every day to the formal accounts. When I did due diligence, one of the first questions on the checklist was “Have the management accounts been reconciled to the financial accounts?” Its still there.
 
So you need to ask yourself, what happens when someone appears with deep pockets. Do you want to present the numbers with confidence? Or scramble around delating diligence until you are ready?

​So numbers matter. Get the right financial information and you can make better decisions. Use your numbers to present your business with more credibility. Yet preparing and managing this stuff is still a burden. And it can feel that there is very little help out there. I plan to change that. Share your opinion and be among the first to hear how managing financial information can be faster, easier and better. 

Please share your opinion - Sunstone Financial Information Survey

Business tools provide handy shortcuts and improve efficiency. Used for their intended purpose good business tools can lead to massive productivity improvements. Apply them the way they were designed and you will get results.
 
Enterprise SaaS companies are both builders and users of such tools. And one of the clear benefits of the SaaS model is making better, more innovative tools available to every business.
 
But SaaS does not overcome the biggest danger with any tool. Start using business tools for the wrong purpose and they can become an instrument of torture not a source of value.
 
CRM and its reporting arm sales pipelines are one of the most misused tools around today. 

​They provide an excellent snapshot of the future health of your business. Your SaaS can get a clear indicator of future revenue and with a bit of effort some good data on which sales processes or sales teams are driving growth.
 
However, many people take this one step too far. CRM and pipeline data becomes a tool to manage. A mechanism to make decisions. And therein lies the danger.
 
Good pipeline data is a great way to ask the right questions. Don’t let the data get polluted by a bias towards preset goals and targets. Good decisions flow from answering good questions not just from abstract, summarised data. 

This is most obvious for enterprise SaaS sales.
 
Each sale is the culmination of a long cycle with many twists and turns. Its not out of whack to spend six months building an enterprise relationship and another nine months to achieve the first sale. 
 
And in enterprise SaaS you are also looking for upsell. Each sales opportunity is only part of a wider relationship picture.Ongoing revenue, new ideas, expansion sales, service challenges and the rest.
 
Your pipeline is just a snapshot at a point in time. Every stage is like an individual window that captures only those opportunities that are in a specific position at a given moment.
 
It doesn’t matter whether you use the categories I outlined a few weeks ago in Simple SaaS 
Or adopt a more conventional structure. Your pipeline is a valuable yet static view.
 
An enterprise relationship is like a dynamic living organism.
Think of it like comparing your turnover to your growth rate. Turnover tells you how well you have done but its a static figure. In the past. Growth is dynamic. A much better indicator of where you are going. 

Relationships are dynamic and unique. Each relationship needs to be treated as a special case and managed as such. More accurately, for enterprise SaaS we are talking about the group of relationships that forms you customer contacts for each enterprise organisation.
 
Customer A and Customer Y may be in the same “pot” from a pipeline reporting point of view. But they will have arrived there by very different routes. The account team will be planning their own specific next steps. And value of the relationship will depend on how those plans are executed.
 
“Strategic” sales choices like: “lets push all of these to the next stage this quarter” or let’s make sure every customer is offered this special new feature” are counter productive. They distract from a focus on customer need and they risk upsetting the delicate balance of the relationship. 

​Sitting on Boards, pipeline is one of the first things I look at each month. It gives me a great pulse check on the business. And it help find the right questions to ask the management team.
 
But I also like to listen to the CEO or the Sales Director talk about the market. This gives me a much better feel for the dynamics than the report.
 
When I ask my questions, I am not looking for simple answers. I want to hear specifics. Plans to convert important relationships. Actions to address customer problems or concerns. Change to strategy in response to the customer’s business dynamic.
 
All about a unique approach for each enterprise SaaS customer. Designed to maximise the company’s chance of developing a strong relationship that generates value for both sides. 

This has lots of implications regardless of the type of customer you are targetting. The gulf between product and service buying for an enterprise SaaS customer is especially wide.
​
I want to point out a couple of key things in this piece. ​

Another excellent article which caught my eye was a product manager’s guide to moving up market from Tom Tunguz.

I can’t improve on the list of product features your SaaS product needs to be enterprise ready. If you ever enter into an enterprise procurement process, covering these bases will save you a lot of heartache. And likely prevent your bid falling at the first hurdle.

But don’t be deceived into thinking this is anything like enough. As the title says this is just for a product manager. Selling SaaS to the enterprise has multiple dimensions. Meeting certain technical standards and the preconditions set by procurement is only the entry ticket.

Last week someone asked me to share the basic proposal structure I used to use when selling complex professional services. Writing this down reminded me of a fundamental truth about selling services.

Every sale needs its own unique selling point.

Most entrepreneurs will be familiar with the idea of a USP. A clear and distinctive advantage that set your SaaS apart from the competition.

The implication is that there is a clear USP which will appeal to a range of potential customers. Services are not like that. Services are personal. So each customer likes to feel that the USP is designed from them and them alone.

Back in the day, we used to refer to this as the killer slide. Every proposal had to have one page that made the buying decision for the client. 

Achieving this when you are selling to the enterprise needs a couple of things. 

First, this will never appear on the procurement agenda. Procurement’s job is to get specific answers to a whole range of standard questions. This allows them to do like for like comparisons and score your SaaS against its competitors.

Winning this type of scoring is an art form in itself. But it does not touch on USP. By definition this defies comparison. To figure this out you need to talk to the real buyers. The people in the enterprise that will benefit from your SaaS.
​
Your USP for a specific customer needs to be couched in the benefits that key people within that enterprise will realise if they use your SaaS. (Note use it, not just buy it.) 

The service mindset is the key to enterprise SaaS. Building a product with the right operations and support to deliver behind it is a core essential. You can take account of these needs from the outset of your startup.

Once you engage with customers, you have to get on the business benefits agenda.

Satisfy procurement and deliver the wow factor the business buyers. away. Or, click the Write button and compose something new.

All that aside, a different thought struck me as I was driving home. In my mind, these guys are already a customer. They are busy people with high pressure jobs that are literally life and death. And they gave up 3 hours of time between them to help me out.

Since I have gained value, I must owe them more value in return. Its an obligation plain and simple. 

That took me back to thinking about this article from Price Intelligently which argues for a retention first mindset rather than an acquisition first approach. The authors have approached this from a metrics standpoint. And they demonstrate clearly that reducing churn can be a straight path to rapid growth.

But metrics are outcomes not strategy. Churn and its relative LTV are good examples. They capture an important concept. Yet they result from measuring customer lifetime at the end not from the beginning. That can’t be right!

Nonetheless, I liked the principle when I first read the post. I was also a little bit doubtful to be honest. Retention first sounds very attractive to someone who prefers building relationships to cold sales. So was I just playing to my own preferences?

My customer meeting has put that niggling doubt to bed. Good business works on human relationships. Not just transactional benefits.

That’s why numbers and benchmarks are useful tools but no way to run a business. 

So for me, retention first is a simple principle. One that applies to any B2B SaaS from day one. And it works like this:

• As soon as you figure out someone is a potential customer, your job is to retain their interest.
• Real lifetime value is measured by the benefits gained and the depth of relationship. Not by the date when a customer stops paying.
• You measure the strength of your business by relationships not pipeline.
• Like everything else this is not a zero sum game. You are trying to give more value than you get. Whether money changes hands or not.

This is why CRM systems were developed in the first place. Too many are now just pipeline crunchers. With new, richer data sources, there is a big opportunity to do this differently. We can all begin with how we approach any and all business relationships. 

Until recently, I worked for one of the leading professional services firms in the world. The organisation had fantastic depth of human talent. And an unrivalled client base amongst the leading companies across the globe. We all made a ton of money.

Yet as leaders we could never escape the feeling that something was missing. Every client engagement was different. A team of smart people would think through a complex business problem and use their experience and a bit of innovation to develop a specific solution. 

If only, we could capture the essentials and repeat the same solution over and over. What a business model that would make! 

​For years we struggled to turn gold plated, world leading services into products. Every leader was adamant this was the way forward. I well remember one senior partner literally thumping the table in a 3 Michelin Star London restaurant. Barking “Repeatable solutions” at us in his most stentorian tone.

Contrast this with the startup world today. SaaS is the business model of choice for software.

By definition, it takes a product (software) and turns it into a service. And technology enables this mindset to spread far wider than just software. As one of the leading thinkers in the industry, Ben Thompson of Stratechery, put it recently, we are now in a world of “everything as a service.”

It looks like the leaders in services are desperate to become product businesses. While those who make a living from products are striving just as hard to turn those into services.

What is going on here? No doubt part of the answer is “grass is always greener” mentality. On a more positive angle, both attitudes show a bit of an innovation mindset which can only be a good thing for customers. But in the end, I don’t think we will see an outright exchange of business models. Services will win.

As customer we love to be treated to excellent service. Delivering services is more painful for most people. As technology overcomes that particular barrier, expect to see a service mentality take over (almost) everywhere. 

If you are building a product or running a product company, remember selling and delivering services needs a different approach to success. 

You are working through a complex never ending sales process for a big enterprise opportunity. Its the most important thing for your B2B SaaS right now. Ever find that your CRM system just doesn’t reflect reality? (Or ever wonder why a sales pipeline tool is called customer relationship management for that matter?)
 
Sorry I digress. This is not a process problem. Leads and various other clear and specific data are all recorded neat and precise in CRM.  Yet all the things that matter seem to be missing. Or hidden in notes and free text fields. 
 
There is a simple reason. CRM systems are designed for selling standard repeatable solutions. To customers with similar needs and predictable buying processes.   

​Unfortunately none of these things exist in the world of B2B SaaS. You are selling a service not software. (Check out this excellent article from Darmesh Shah for more). Customers will frame their needs in a different ways. Cultural factors will warp the style and method of adoption for your SaaS.
 
Layer on top of this the spaghetti medusa that is enterprise procurement and buying processes. There are a thousand different ways to SaaS. (Another small sidebar: Do yourself a favour and ignore any book/ article/ advice that offers a standard model for business procurement. These things are peppered with terms like influencers, decision makers and hierarchies. Its all rubbish. Every large organisation is different. Most don’t even know their own process very well.)
 
So your standard pipeline definitions are of no more than marginal relevance. You need to think about your enterprise sales pipeline a different way. Let me offer you a simple and flexible model which will help.
 
I claim no credit for this. I learned it from a lovely man and  good friend, Carl Erickson the CEO of Beacon Worldwide. I have been using it for 10 years and it has never failed me. It unites people with 100% opposite approaches to sales. It drives intense debate about all the right things. And as a business leader it kept me informed and in touch with future growth prospect like nothing else.

​A brief explanation of each step. And more important the simple test for moving an opportunity from one stage to the next. 

​Here you have the basics of your marketing plan. Which segments are you targeting? What is your value proposition? How do you reach the right audience? Nothing is specific at this stage. Its a way of capturing your market strategy.
 
Move after: A lead moves from 0 to 1 when you have direct contact with a named organisation.

Inbound or outbound this is where you capture live leads. At this stage you only need to be able to name the organisation. If you can identify the key individuals or at least the department so much the better.
 
The key question: Is this the right type of customer? Deciding whether it is worth investing in the pursuit is the next stage. For now, you only need to know if this organisation would benefit from your SaaS. And figure out if they are the right fit for your company.
 
Move after: You have had a direct person to person communication. You have identified the customer business issues. You have confirmed the date of the next meeting/ discussion. (Note: you need to meet all of these criteria.)

This is where the toughest decision lies. Now that you are taking to someone, how much time and effort should you invest in the opportunity. The key to answering this question has nothing to do with business value. Instead you must answer three questions:

1. How does this organisation make this type of buying decision?
2. Can you engage directly with those who have the power to make that decision?
3. Why will this organisation buy now?
   

Note: The first two questions must be answered in that order. If you don’t understand the buying process, you don’t know if you are talking to power. Job titles mean absolute zero. Even if it says Director In Charge of Buying SaaS on the business card, it means nothing.
 
Note: For an established company with time to wait, question 3 is part of the evaluation stage. A startup can’t afford this time so answer it early.
 
Move after: You know you have access to power. No exceptions. 

​Now you are in the traditional phase of enterprise sales. Responding to requests for information, completing bid documents, checking out the competition, agreeing budgets and so on. 
 
This is expensive. And it feels exciting and important. But observe that the most critical decisions have already been taken. Your SaaS is a good fit for the customer’s business need. You know who makes the decisions and you are talking to those people (almost never one person). You also know that this is the right time for the customer.
 
I hope its clear why you should have this stuff sorted before you start heavy investment in an opportunity.
 
Move after: You have verbal confirmation that you are the chosen supplier. 

​Read that last sentence again. When the call or email comes through to tell you you have won, the sale is not made. So don’t hold the party. Don’t pay commission. Don’t bank the money. Don’t count your chickens.
 
There is a whole load of contractual stuff to resolve. Most times, there may also be a bunch of interested parties inside your customer’s business who get involved for the first time. You know people who might use your product, that sort of thing. It can be a painful journey.
 
Contractual questions tend to dominate. But never lose sight of the need to deliver value to your customer organisation. A beautifully framed contract has an ARR of Zero.
 
Move after: The contract is signed AND you have a clear plan to install your SaaS with the customer. 

Keep the customer name on the column for a little while to remind yourself of success. But don’t think its over.  Now is when real customer relationship management starts. Procurement's job is to sign contracts. The buyers are the users, managers and leaders who see the value your SaaS delivers every day. 
 
Its become fashionable to call this Upsell. In reality its plain good business. Selling more to your existing customers rather than spending money acquiring new ones. A fundamental since forever. 

​For many B2B SaaS enterprise sales are the key to growth and success. There is a tremendous quantity of bad advice available in this areas. And the whole process is often built on the worst named IT category ever - CRM.
 
Despite the apparent complexity and the repeated insistence on structure, process and experience, its quite simple: Listen to the customer; Learn how your SaaS can add value; Remember you are always dealing with people not companies.

Am I alone in finding something a bit weird about the rise of equity markets since Brexit/ the election of Trump? Its true there are financial dynamics at work. Increased spending on infrastructure and the fall in the pound have some immediate benefits for some large companies. 
 
But this window dressing obscures a fundamental underlying message. A big part of the populism that is driving today’s political agenda is rage against multi nationals. In the US the talk is of trade barriers that will disrupt low cost global supply chains. In the UK and Europe Governments and citizens demand “fairer” tax contributions. Extracted from the profits generated by global companies. Used to prop up public spending. 
 
In every country and all sides of the political debate, inequality is seen as the defining economic and social challenge. And nothing represents that inequality more vividly than the pay of Fortune 500 CEOs and their ilk.
 
2017 will be the year when some of this anger translates into real challenges. Corporate giants are right in the cross hairs. The US President’s remarks about the pharmaceutical industry are a straw in the wind. The actions of the new US administration and the fallout from the UK leaving the EU will have consequences for big companies. 

In a sense these are symptoms of a wider trend. Anger and frustration at the profits of global corporations is widespread. Business practices and networks are also in the spotlight. This is an issue which appeals to all politicians. One of the few areas of common ground between left and right, populist and technocrat, democrat and dictator.
 
Expect meaningful action in areas like: 

• Taxation. Nominal corporation tax rates will fall. But linked to a much more determined effort to bring profits within the tax net.  The overall tax burden will rise.
• Regulation and disclosure. Red tape will be back in fashion. There are new targets such as high/ low income ratios, immigration and new tax rules. But the solution will be familiar.
• Competition policy. While startups grow and disrupt at the edges, established business has been consolidating. A big part of the world economy now lies in far fewer hands. 
• Trade. The most talked about area of all. Yet, my guess is that changes to global agreements will have less impact than the other areas on this list. May well get more press coverage though!

The mechanisms for change in all these areas are misunderstood. By politicians, by so called experts and by the general public. So the impact will be hard to assess. But the narrative targeting global fat cats and inequality is seductive. More rather than less will be the temptation. 

​Your view on the politics and economics of this is not important. Enterprises large and small are entering a period of unprecedented disruption. At a time when there is also severe pressure on profits. For a B2B SaaS company this is a once in a generation opportunity. Global corporations need to change. Improved adoption of digital technology must be part of that change. This broad theme was reinforced by McKinsey this month in Measuring B2B’s Digital Gap.
 
The enterprise software landscape is also shifting on the ground. I was fascinated by Tom Tunguz’s $100m ARR Deal. The headline number is eye catching. His analysis of the implications for Workday is interesting in its own right. But for me the big message is that this was a straight fight between the SaaS alternative ERP company and SAP. No better sign that SaaS will be a big part of the solution for enterprise companies. 

These trends are important for setting the scene. Yet the big picture offers no direct link to revenue growth. Generalisation can help you identify targets. Winning deals depends on specifics. Enterprise sales depend on three things:

• Finding organisations where there is an appetite for change and a trigger to make it happen. Perhaps because of a change in leadership or significant market setback.
• Understanding the change needed for the individual organisation. Then being clear how your solution helps the customer execute that change.
• Building value adding business relationships with multiple people in each customer. Recognising different priorities and agendas for each individual.

This takes time and effort from the most important people in your team. Founders, sales leaders and top developers. Each enterprise customer you tackle is a significant investment in its own right. Aiming at the wrong target can kill your SaaS company.
 
Success with enterprise customers is not about a high volume of leads and conversion rates. Nor is a brilliant sales team the key factor. Focus on qualifying which opportunities to go for. Analysis and insight followed by patient pursuit is the winning formula for enterprise SaaS. 

The value of the biggest B2B SaaS companies has been growing. But not at the epic rates experienced by B2C software. At the same time, the number of B2B SaaS startups also keeps rising. Is there enough potential revenue in the market to justify the level of SaaS investment? 


Jason Lemkin wrote a fascinating piece on SaaStr a couple of weeks ago about the SaaS Decacorns we need by 2021. His conclusions were optimistic. He believes both that the market as a whole is big enough. And that there are companies there with the potential to become the mega leaders of the future. 


I am not going to comment on the latter. But I share his optimism about the overall market. We are only scratching the surface of the opportunity for B2B SaaS. Reaching this potential demands great products which solve real business problems. SaaS companies must also help customers execute change to realise the benefits. All in the face of strong resistance from multiple vested interests. 


It will not be enough just to wait for the market to come to you. B2B SaaS companies need to take the lead in finding strategies to overcome these challenges. 

​The simple fact is that traditional on premise, licence based revenues still account for the bulk of the enterprise software market. You can fill your boots with various projections and analyses of this topic. For starters check out this Forbes collection. 


However you look at the numbers this makes no sense. SaaS is an ideal platform for innovation and increases the speed of change. It offers much greater flexibility and agility. Integration allows for rapid adoption of best in class. And its cheaper. 


The question is not whether the market opportunity exists. What bugs me is why progress is so slow. 

The one word answer is change. 


SaaS does not bring any of the benefits listed above to business. It provides a tool or a platform to improve a business. To realise the gains, the business must change. Businesses of any size find it hard to execute change. An established business is different from a startup in two major ways:



• A startup has a bias to action. Established business has a bias towards the status quo. This sounds awful. Yet if it works, why fix it? Remember that the current way of doing business got your customer to where they are. No matter what disruption you offer, you should respect their past success.
  
• A startup pulls in one direction. Larger businesses have lots of different groups and interests. Disparate measures of success. Greater or lesser magnitude of change in each area. The threat of losing the knowledge or the budgets that convey internal power. In every enterprise sale, your customer will have losers to overcome as well as winners to wow.

​Your customers internal opponents are not the only losers. Growing SaaS by a factor more than 20x will do damage to the traditional software business. 


The big enterprise vendors are the tip of a large iceberg. They are the visible part of an ecosystem that includes consultants, systems integrators, lawyers, training providers, independent software vendors, project managers, change leaders, corporate IT careerists and a raft of other specialists who have carved out a niche that is built on SAP, Oracle and the rest.


The strident voices of direct competitors are easy to deal with. Corridor whispers by trusted advisors and “independent” experts are much more insidious. So be careful. Resistance is everywhere. 

​I share Jason’s optimism about the scale of the SaaS opportunity. That’s one of the reasons I love working with B2B SaaS companies. The winners will have great products and fantastic teams led by brilliant leaders. They will also have an effective strategy to overcome the barriers to change.


Each market opportunity and in some cases each deal will need different specifics. The outlines of any successful approach will include:



• A long term commitment to customer success. Help the customer make the change and realise the benefits of your product. This is every bit as important as any product feature.
• This means that a customer signature is the start of the battle not the final victory. Your metrics and incentives should not be constructed around a sales funnel that ends with closing the deal.
• Gathering customer feedback should also be a long term process. With modern technology, why rely on single point in time case studies. Use the dialogue in your customer channels to build a picture of success real time.
• Keep working on reducing friction for your users. An enterprise customer will have a large and diverse population of users. So offer onboarding and help to support these different audiences.
• Consider partner strategies that offer value to others in the ecosystem.  Make your SaaS valuable to consultants and training providers. This will improve your distribution and pick off at least some of your opposition.



And do it all with confidence. The market is moving toward B2B SaaS. Let's help it along.