The "Consumerization" of Enterprise

Slack, Dropbox or Zoom have applied specific strategies to win customers – tactics that resemble those of consumer companies rather than enterprise firms.

The go-to-market playbook for early-stage B2B founders:

  • Taking a consumer approach to enterprise
  • Product positioning through category-creation
  • Generating repeatable and non-associated revenue (e.g. “crossing the penny gap”)
  • Building a strong sales organization

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How David Sacks built the first bottom-up playbook for enterprise

wfh.substack.com

Create a Category and Evangelize It

Don’t compete head on with a category leading incumbent, create your own category. Category creation and becoming a “category king” allows new companies to bypass rivals and build in an uncontested space.

The one who defines the category, wins the category. No one cares about your features. You have to talk about the larger problem that you're solving and how the world will be different if what you're doing works. Explain the change that you're bringing about in the world and why that's important.” This can be done through content, PR or community.

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The Wilderness Period

Is a period of internal struggles after the early enthusiasm of an MVP: “You try to sell your minimum viable product, encounter objections you hadn’t anticipated, race to code the new requirements (the new MVP), and repeat. The Wilderness Period can take two months, two years, or forever.

Escaping the Wilderness Period requires clearly reverse-engineering your buyer and concisely answering the following questions about your product:

  • What immediate pain do you solve?
  • Who exactly is the buyer?
  • What is the sales motion?
  • How does the team and its belief system need to evolve?

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SaaS companies typically choose between two product pricing strategies:

  • A freemium model uses a functionality-based paywall. The benefit is that you may get lots of users & virality. The cons are that it reduces urgency to buy, paid marketing is hard and churn is big. 
  • A free trial comes with more urgency, easier to do paid marketing but it's harder to scale.

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