Many CEOs have no prior experience selling products and services.
When it’s time to approach initial customers, it’s tempting to fall back on the same skills honed during the fundraising process, but this is a mistake: enterprise software buyers don’t want to be pitched — they’re looking for stable, long-term partners who can literally take their pain away.
Some AI startups will first need to build a client roster with several medium-sized businesses before presenting themselves to Fortune 500 customers. Others may gain access to the C-suite via the strength of their network or the promise of their tech, but either way, the first few minutes of that conversation are critical: skeptical execs only need to ask one or two questions to sniff out whether your team actually understands their business.
For episode 5, I interviewed Maria Latushkin, GVP of Technology and Engineering at Albertsons, the second-largest grocery chain in America, and Jack Berkowitz, Chief Data Officer at Securiti (previously with ADP), to get their insider's perspective on how enterprise-level customers buy software and services from AI startups.
The most surprising thing I learned came early in the chat: spinning up a pilot program or a partnership creates tangible risks for enterprise customers, which means they can only afford to work with a few startups at a time.
Maria and Jack each have startup experience, but their time as C-level execs inside public companies gives them a unique perspective on breaking into enterprise sales.
In this episode, we'll talk about sales strategies, navigating the procurement process, how to run a proof of concept or pilot program, and other essential topics.
Episode breakdown:
The challenges and rewards of being an early-stage company's first customer (3:00)
What one former Fortune 250 software buyer thinks about your GTM strategy (5:52)
How to keep the whale you landed from pulling your boat under (7:33)
What it looks like when a pilot, POC or partnership goes south (8:49)
Customer discovery: “you can talk to me, but don’t sell to me.” (10:55)
Enterprise software buyers already know your tech isn’t “bulletproof” (12:59)
Red flag: don’t talk to customers like they’re investors! (14:21)
“How can I get that domain expertise before I show up to that buyer?” (16:56)
Partnerships, intellectual property, and procurement for AI startups (20:23)
Turning a pilot program into a long-term contract (23:26)
Proof of concept, opportunity costs, land-and-expand strategies (27:09)
Managing pilot programs and prioritizing one-off feature requests (29:18)
Common mistakes founders make while spinning up their sales motion (31:33)
How success fee agreements work (35:50)
For my next episode, I spoke to Laura Bisesto, global head of policy and privacy at Nextdoor.
We discussed the regulatory landscape facing AI startups in 2024, and how small companies should start the work of developing their own ethical frameworks. We got into how to recognize when you need legal help, recapped some data governance best practices, and also talked about why it's so important to create a buttoned-down process for rolling out new AI features.
Fund/Build/Scale is sponsored by Mayfield and Securiti.
