I’ll be completely forthright about this – this article is inspired a lot by Atlassian, an industry leader for products frequently used by software development teams. Atlassian boldly entered, and captured, a market for software development tools – bug tracking, code management, testing, project management, agile, etc. – by a completely “hands off” approach (or shall we say, without the classical sales handshake).
Building products that automatically sell
However, more important than the adulation is the analysis of the strategies and tactics Atlassian used to achieve the goal. They started off by evangelizing the market from the ground up through a classical freemium approach – by targeting end-users (in this case, software developers) with completely free offerings. They did a good job of preventing access at critical points (number of users and so on). By the time a developer had reached these limits they would be completely ‘sold’ on the product; indeed, they were typically hooked onto them in a way that made daily professional life impossible.
The groundswell in demand for the product would percolate up to the development manager, who typically was more than delighted to make a purchase to keep his/her team productive. An important twist here was also the price point – Atlassian did a great job of harvesting discretionary budgets, ones that did not require cumbersome approvals from centralized purchasing departments.
To circumvent the need for sales managers, Atlassian did a fantastic job of online education through website messaging, blogs, educational videos, in-product messaging, user groups, and lots more. This focus on user education completed eliminated the need for demos, and by extension, for sales engineers to help drive usage. Admittedly, targeting groups of smart engineers with technical products is easier than other situations but even given that, Atlassian’s efforts were nothing short of extraordinary.
Finally, they scored a few more home runs by a classical ‘land and expand’ strategy – first, by expanding into other software development groups within an organization, and then into adjacent groups like product management, quality assurance, devops, and project management via products tailored to their needs. Atlassian also leveraged similar user education and evangelical tactics as ones used in preceding offerings.
Lessons for enterprise startups with cloud-based offerings
First, endeavour to get grounds-up support for your product – that is, by users who will be using them on a very active basis. Their voice counts a lot in situations, especially in today’s world of flat organizations and egalitarian decision making.
Second, pay maniacal attention to user education through relatively inexpensive media. Create buzz for your products through community evangelism and conversations with peer groups globally through self-created communities and social media tools like Linkedin.
Third, design your product in a way that makes an end-user instantly latch into it, to a point where at the end of a 30-day trial, they cannot function without it. Alternatively, make it free for a longer period, but restrict access/functionality at critical, teaser points that in a subtle, but telling, way reminds the user of the immense value your product is bringing to them.
Fourth, make your product inherently viral, to a point where some kind of network effects start developing even within an organization. If, for example, you are building a collaboration tool, find innovative ways to increase adoption among different groups at your customer site, so that it eventually becomes the centralized repository of all content within an organization and by extension, the starting point for all content search, or sharing, for every employee within the organization.
What all the above activity does is obviate to a great extent the need for a larger sales organization to increase sales. A lot of ‘sales-y’ activity – educating users, judging satisfaction, and encouraging adoption – can be done by a savvy mix of content, product features, and community evangelism. Negotiation becomes unnecessary for smaller deals or can be communicated through a simple pricing page. The traditional quote/PO/invoicing process is circumvented by credit cards and online sign-ups. In such scenarios, only large enterprise-wide deals require the traditional sales involvement, and even in these scenarios, a lot of the evangelism and selling has been done by the product itself.
Startups that master the art of selling in this fashion can dramatically alter the economics of running their operations. Any in the process make themselves more attractive to investors and corporate development groups alike.
Devang Mehta is a Partner with Anthill Ventures.