Enterprise or Consumer?

We’ve built an enterprise platform and API to serve data that helps carriers, OEMs etc. to add a layer of security to their devices. To demonstrate how they can make use of our data we built a bunch of consumer apps. We haven’t seen huge downloads (about 35K weekly active users) but we’re confident that traction by way of stickiness is good (admittedly we haven’t looked at the numbers in a while because we were never focused on the “consumer” per se). Customers are very passionate about our products. But again, we’ve always had our eye on the enterprise solution as the consumer route takes too long.

We have learned the (very) hard way, that the enterprise sales cycle is just too long for us to last. In fact, we haven’t sold a single enterprise solution. What’s worse is that some of the biggest companies in the world evaluated us against our competitors and we won. But they put implementation on hold.

Our inability to close an enterprise deal could be down to the fact that we haven’t closed the first one in order to encourage others to follow.

So, we’re running out of money very fast and we don’t have “traction” (huge increases with hockey curves) to demonstrate that we have what it takes to raise the next round. And it’s taking too long to close an enterprise deal.

We have a third approach. We have a solution to make apps more secure. Not sure who would buy it though. Senior technical people in some large companies think it’s a great idea. But I’m not convinced if app owners would pay and developers are almost certainly not going to pay – at least that’s what we’re told. I’m not sure. I know they don’t like paying for stuff, but this could help them generate a rev share on something that requires only a couple of lines of code.

Any feedback would be greatly appreciated.

  • Enterprise sales cycles do take time. If you are the way to a few sales, but not there yet – see if you can get some formal votes of confidence – like LOI’s, or letters of support outlining why they chose you vs your competitors and their belief in your solution and plan to implement it when their decision cycles permit.

    Also, knowing why implementations are put on hold is key. You will be asked, and not knowing is a problem. If you do know – is there something you can do about it? If the reason they’re not implementing is that it is a low priority, you should be worried about the channel or work on new positioning that would raise it up the value chain.

    Good luck.

    • The security arena is a tough and technical one to compete in, there’s so many big names and trusted companies. I’m shocked that you undertook such a big challenge without having at least ONE client contract, just for proof of concept. Good Lord! That’s so shortsighted, you have to have proven demand for your product BEFORE you invest the time, money and effort in producing it.

      I think so many financial failures are a result not of bad software or bad execution, but of leaping before you look and believing that if you build it they will come. At HP Enterprise Services we required 30 fortune 500 companies to literally buy into a product/service before we would commit to building it. And even with that commitment many were ultimately retired for lack of profitability.

      Before you launch the product, launch the idea and get firm commitments from at least a few companies, even small companies. Once you have some firm client testimonials and you can show that your product performs it’s function, then you can build on that success.

      In the same way that kindness begets kindness, success begets success. Have the first few clients in your pocket before you build such a large software solution. That’s your tiny success, then acquire more small clients and achieve more tiny successes. Eventually if the product adds real value, you will land your first big client and from there the sky’s the limit.

      Good luck, I hope everything turns around for you.

  • tl;dr: can your company afford long cycles? how active is the sales team?

    I’m not in a security company, but the one I work for has staggered for years after unsuccessfully trying to enter the consumer space–marketing costs, we soon learned, would be orders of magnitude beyond what we could fund. Likewise we targeted a retail market that, by the time we had a product ready, turned out to be a flash in the pan.

    So we shifted to attempting corporate sales. We’ve got one six-figure deal, and the rest are embarassingly small. To be honest I would mostly blame this on the nepotism, cronyism and politics masking the sheer incompetence and negligence of the sales team. But another problem (admittedly smaller) stems from the fact that we do lots and lots of tests and pilots, which our CTO deludes himself into thinking is part of “getting in front of the customer”. These test cycles may only take three people’s full-time effort for two weeks to produce, but even if successful they only result in a deal worth a few thousand dollars a year.

    The problem is we’re small, we’ve blown our seed money, and now just collect a little bit of money from an unofficial parent company, but we spend about a quarter of our available labor capital on these smoke-and-pocket-change tests for would-be corporate clientele.

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