How David sells to Goliath
Can I really sell my app to Zuck and Bezos?
⚔️ David selling to Goliath
Me - a bootstrapped solopreneur with a laptop and a dream.
Them - a billion dollar unicorn with 10,000+ employees.
Will I really be able to sell into their corporate web of bureaucracy?
💸 From idea to revenue
I’m a solo, bootstrapped founder building a SaaS startup in public.
This week I create a strategy for selling HelloHailey into companies of all sizes - from small startups to billion dollar unicorns.
I’m sharing all my product decisions, metrics, successes, and failures in public.
Next Monday, I’ll (finally) describe the product I’m building. Want to read it in your inbox?
🚀 Land and expand
The traditional SaaS sales process follows a top-down approach. A sales rep targets a high-level decision maker for a high-priced deal.
After a long sales process, a company slowly integrates a piece of software. The command comes from high in the org chart and makes its way down.
But I’ll be selling bottom-up
I’ll scale the corporate walls via product managers (PMs) and engineering managers (EMs).
I’ll look unintimidating - a low price product that eats up a small chunk of a budget these team leads control.
Then I’ll spread through the company like wildfire via growth mechanisms built into the product.
One team will adopt me.
Then the entire department.
Then the entire company.
I know what you’re thinking - all this sounds great on paper. But how are you so confident it will work?
I’m not 😳
Honestly, I don’t even know if I’ll be able to “land”, much less expand.
It’s time to test out my landing gear
…so I don’t build a product that crashes and burns on the runway.
This week I’m focusing on the bottom of the funnel - converting those eyeballs into paid users.
Here’s what that funnel looks like for a PM or EM:
Discover through top-of-the-funnel distribution channels.
Try for free with their team.
Get value - signaled by high engagement and retention.
Convert to paid tier - to unlock premium features or exceed maximum number of seats (users) in free tier.
Expand - add more seats within their company.
My go-to-market strategy fails if I can’t convert free users into paid users.
But I know very little about B2B purchasing processes for low-ticket ($25-$50 / month) SaaS products:
Will users have to fight tooth and nail for approval?
Who has a company credit card?
What budget will the money come from?
To avoid this suc-SaaS story turning into a dis-SaaS-ter (🙄 sorry, couldn’t resist), I’m going to invest a few days now into understanding what the purchasing process will look like.
💰 How low-ticket SaaS products get purchased
I probed into my network of EMs and PMs for answers.
Big shoutout to all those who helped me! 🙏
It turns out that my fears of a long chain of approvals with stringent criteria were unfounded.
The approval and purchase process is just two steps:
1. Ask a manager
Approval is loose and informal. PMs and EMs briefly mention it to their managers over email or their regular check-in.
Managers won’t require much justification for approval. Why? Its an immaterial amount of money and they trust their employees’ judgment.
2. Find a credit card
With very few exceptions, PMs and EMs (at the levels I’m targeting) don’t have company credit cards. So how do they pay after getting approval?
Pay with personal credit card
This is a common practice for team meals, social events, and one-off software purchases. A senior team member will pay with a personal card and file an expense report.
But people are more hesitant to pay for a recurring team subscription with a personal card.
Find a company credit card
This varies from company to company, but the most common places people go are:
Finance (manages budgets)
IT (manages access to company subscriptions)
Lowest person above them in the org chart with a company card (usually a Director or VP, depending on company size)
😁 Why my strategy will work
✅ Loose approval process
I mentioned this before, but it’s worth restating. This means that the PM or EM using HelloHailey is the primary decision maker.
No bureaucracy. No long, complex sales cycles.
I just need to build a great product.
✅ Fits into an existing budget
It’s my hypothesis that teams will pay for HelloHailey using their team “social” budgets. These budgets cover expenses like meals, games, or team events.
✅ Takes a small percentage of that budget
Team social budgets range from $10-$100 / person / month, with a median somewhere in the middle.
With a price of $2-$3 / person / month, HelloHailey would eat up only 5% of that budget on average.
✅ Social budgets have been underutilized with sudden shift to remote work
Half the people I talked to haven’t used their social budgets at all since being forced into remote work.
Most of the other half has used it sparingly for virtual team events.
😢 Why it might not work
Until companies actually start paying me, my strategy will be full of uncertainty.
Here are some ways it might fail:
💩 Doesn’t fit into an existing budget
Maybe companies don’t think it’s appropriate to pull from team social budgets for this kind of purchase.
If it doesn’t fit nicely into any existing category, it’ll be much harder for companies to buy it.
💩 Hard to budget for a product with expanding price
HelloHailey will get more expensive as more users and teams are added within a company.
💩 What happens when a product purchased with Team A’s social budget adds users from Team B and gets more expensive?
I don’t know 🤷♂️ (Do you? Share your wisdom and help me out 🙂 ).
But I’m not the first person to face this problem. There are precedents in place and I’m confident I’ll figure it out.
💩 Approval process is more difficult than expected
The people I interviewed could be outliers. Maybe a typical manager requires more convincing to approve this kind of purchase.
What about expanding?
I now feel confident about landing. So how will I expand?
I have some ideas for how I can build growth mechanisms into a product like this.
But if I’m being honest, I’m not sure yet 🤷♂️. And I’m OK with that.
With a successful “land” strategy, and low to moderate expansion revenue, I can build a great business.
Intra-company virality would be a must if I wanted to become a VC-backed rocket ship.
But that’s not my goal.
I want to build a small, profitable company that solves a problem I’m passionate about.
I can sell to unicorns. But I don’t want to become one.
What did I get wrong?
I learned a lot this week, but I’ve never done this before.
Do you have SaaS sales experience?
Don’t pull your punches! Help me out on my Twitter thread:
Don’t have any tips for me? Maybe you could help me out with a like or a retweet.
As a solopreneur with no funding or income, I’ll take all the help I can get 😁
🤔 Reducing uncertainty one week at a time
I’m finally feeling confident about my go-to-market strategy. Now it’s time to define the product I’ll be going to market with…
Over the next two weeks, I’ll define my product vision and finalize requirements for an MVP (minimum viable product).
Curious to find out what I’ll be building?
I’ll tell you next Monday:
I’ll be documenting my startup journey from idea to paying users over the coming weeks and months. I’d love to have you along for the ride.