Latest / Cyber Go-To-Market Talk: The Cybersecurity Podcast About Cyber Sales, Marketing & Revenue Growth / 99: 6 reasons security leaders buy from startups

Transcript

99: 6 reasons security leaders buy from startups · Cyber Go-To-Market Talk: The Cybersecurity Podcast About Cyber Sales, Marketing & Revenue Growth

• 0:43
  Andrew: Welcome to the sales Bluebird podcast.
• 0:45
  Andrew: If you're a seller or a sales leader at a B2B startup, especially if it's a cybersecurity company you're in the right place today.
• 0:54
  Andrew: I'm your host, Andrew Monahan.
• 0:57
  Andrew: And welcome to episode 99 of the podcast.
• 1:01
  Andrew: It is a beautiful blue sky day here in college.
• 1:05
  Andrew: Cold as anything.
• 1:06
  Andrew: When I woke up this morning, it was minus two Fahrenheit and it's warmed up to almost tropical 25 degrees right now, inside.
• 1:15
  Andrew: Uh, so I'm glad I'm inside and not outside.
• 1:19
  Andrew: Uh, before we get going on the topic for the day, uh, I'd asked for the listeners, if you have any questions that you want answered on the podcast, or you've got some ideas of topics to cover things you've been thinking of.
• 1:34
  Andrew: Just please email me at Andrew at unstoppable dot D O.
• 1:40
  Andrew: So that's Andrew at unstoppable dot D O just remember the deal at the end, uh, or you can send me a voice recording or a video at the link in the show notes.
• 1:52
  Andrew: Um, if you're not looking at the show, You can go to zip message.com, zip a Zed or Z.
• 1:59
  Andrew: I P message.com/on stoppable.
• 2:03
  Andrew: Uh, and that allows us to have a asynchronous video or audio conversation where you can ask questions.
• 2:09
  Andrew: And I want to take some of the best questions, the best suggestions, and start covering those things on the show, going from.
• 2:16
  Andrew: But today's episode is all about the six reasons why executives buy from startups, you know, as sellers at startups, we know we are not the easy option for our prospects.
• 2:30
  Andrew: They don't know who we are.
• 2:31
  Andrew: Often.
• 2:32
  Andrew: The company name is new.
• 2:34
  Andrew: Um, it's not something they recognize in the cybersecurity space where there's literally thousands of companies, all vying for attention in a prospect's mind, one name from the next just flies by, and they don't remember one from the other.
• 2:49
  Andrew: So when we try to think about how we resonate, how we get going, we're just one of the many that they come across.
• 2:55
  Andrew: Right.
• 2:55
  Andrew: So they don't know.
• 2:56
  Andrew: Who we are, we get a build trust, right?
• 2:59
  Andrew: The there's no track record.
• 3:00
  Andrew: They're delivering that they go to fall back on.
• 3:03
  Andrew: Um, our product is probably very early, right?
• 3:06
  Andrew: So this is not a product that's been around for 10 years usually, and is baked.
• 3:11
  Andrew: And it's got a bunch of customers.
• 3:12
  Andrew: That means that a couple of things, one is it's probably not all that feature rich.
• 3:17
  Andrew: It doesn't do very much.
• 3:19
  Andrew: Right.
• 3:19
  Andrew: Uh, the.
• 3:21
  Andrew: The list of the things that we want to do is probably pretty long, but the things that we can deliver on right now and actually allow our customers to use in their enterprise or even mid-market it infrastructures list of features that we feel comfortable with is probably.
• 3:37
  Andrew: Right.
• 3:37
  Andrew: So when someone's thinking about working with us, there's only a small subset of problems or situations or use cases that we can address.
• 3:44
  Andrew: And finally, because it is so young and so early stability is often a problem as well, right?
• 3:51
  Andrew: It's it's, uh, we're going to install it in environments that are a lot bigger usually than we've tested in.
• 3:57
  Andrew: And therefore we need to make sure or the prospect needs to make sure that what they have is actually going to work for them.
• 4:02
  Andrew: So there's all these reasons why it's, it's not that easy for them to want to work with us in any situation.
• 4:10
  Andrew: There's going to be 55 reasons why the prospect shouldn't buy from the software vendor.
• 4:15
  Andrew: Uh, there just happens to be more of them in the startup environment than there are.
• 4:19
  Andrew: If the company is being around from.
• 4:21
  Andrew: So when that happens, your competitors might actually loop pretty good, right?
• 4:25
  Andrew: Even if they're only partial solutions are not all that elegant or they send a kind of, sort of work, but not that great that for many that might become a much more viable solution than our one, which is new in the market, uh, relatively untested and with the problems that we talked about, but people do.
• 4:45
  Andrew: Right.
• 4:45
  Andrew: Executives in the, it organizations do work with startups and all of them.
• 4:50
  Andrew: And then by, by far not the majority, but there are people that do.
• 4:54
  Andrew: I remember I was working with a large financial company and the CSO at that large financial company.
• 5:01
  Andrew: Used to set aside budget every year in the low millions of dollars to enable him to buy software from early stage startups.
• 5:10
  Andrew: And his view was that's where the innovation was.
• 5:13
  Andrew: He wanted to encourage those startups.
• 5:16
  Andrew: He wanted to give them a chance to test that their software in his bigger environment is part of what he did.
• 5:21
  Andrew: So he had the appetite for doing it.
• 5:23
  Andrew: There's another CSO at.
• 5:26
  Andrew: Uh, can a health insurance company and he became well-known as someone who would buy and try early stage software.
• 5:36
  Andrew: In fact, I went to one sales call with a different company.
• 5:39
  Andrew: And when they asked the question, you know who your existing customers, before we can even answer the question, they said, oh, and don't say, Yeah, this person, because he just buys everything.
• 5:49
  Andrew: Right.
• 5:50
  Andrew: Uh, so that, that one system, I had a reputation I was working with early stage companies.
• 5:55
  Andrew: I'm not spending a ton of money with each one, but you knock that.
• 5:58
  Andrew: He could try it, their stuff and see what value it would have and giving them feedback and, and things like that.
• 6:02
  Andrew: So here's two examples where you've got CISOs, who almost go out of their way to want to work with securities companies that are early stage.
• 6:11
  Andrew: So for the.
• 6:12
  Andrew: Ones that do buy from early-stage companies.
• 6:14
  Andrew: What are the reasons that they do that?
• 6:16
  Andrew: What is it that causes them to say, you know, this might not be natural, but let's go and work with this company.
• 6:23
  Andrew: And I've got six reasons for us, uh, in my experience about why this happens.
• 6:27
  Andrew: The first one is they have a pressing problem and they can't find a good or a great solution for it from the existing vendor base.
• 6:38
  Andrew: They're used to.
• 6:40
  Andrew: Right.
• 6:40
  Andrew: If they have their big partners, they spend a lot of money with that.
• 6:43
  Andrew: Have a lot of products, but they've got something that's going on that they can't solve.
• 6:47
  Andrew: Then they naturally have to go and look at it.
• 6:50
  Andrew: Right.
• 6:50
  Andrew: And if it's a new challenge, did you shifts in the market or things like that, then they're looking for the innovation.
• 6:57
  Andrew: That's going to tackle that problem.
• 7:00
  Andrew: And that innovation is going to come from the smaller players as opposed to the bigger players.
• 7:05
  Andrew: So they've got a pressing problem that they want to solve, but they just can't find an elegant solution.
• 7:10
  Andrew: Their companies that used to dealing with second line.
• 7:13
  Andrew: The Cisco themselves or the executive has an appetite for the risk of working with an early stage company.
• 7:22
  Andrew: They don't get freaked out if things aren't working perfectly, right.
• 7:26
  Andrew: They don't get freaked out if there's aspects of the product that don't work yet, or even haven't been released yet.
• 7:32
  Andrew: Right.
• 7:32
  Andrew: They just know that's going to happen.
• 7:35
  Andrew: Uh, they know there's gonna be bumps in the road and they're not feeling in any way.
• 7:38
  Andrew: Let them, or internally to their organization, they don't feel threatened or they don't feel like people are looking at them going, what the heck are you doing?
• 7:46
  Andrew: Right.
• 7:46
  Andrew: So they have an appetite to work with early stage companies.
• 7:49
  Andrew: Three is, and I've seen this.
• 7:52
  Andrew: They want to work with the startup community, right.
• 7:54
  Andrew: They want to be involved in that community.
• 7:57
  Andrew: Um, it might just be the, the good feeling they get from supporting innovation.
• 8:01
  Andrew: Often what it means is that looking for advisory board positions, they're looking to get LinkedIn to the VC community or the private equity community.
• 8:10
  Andrew: They're looking for, uh, the chances sometimes to invest in startups, right?
• 8:14
  Andrew: Either directly as an angel or through the LPs, as an LP of the VC funds themselves.
• 8:21
  Andrew: So it's a community they want to be part of.
• 8:23
  Andrew: And they view working with some vendors as part of that effort that they have to be part of that committee.
• 8:29
  Andrew: Thirdly, they liked the idea.
• 8:32
  Andrew: They're going to have much more control over the features and functionality of the product that you're building.
• 8:39
  Andrew: Then if they're working with a much bigger.
• 8:42
  Andrew: Right.
• 8:42
  Andrew: If they're one of the first five or 10 design partners or early adopters, or they're coming in pretty early, they know that the vendor will want to get their feedback, will want to sit in that and say, this is what we're thinking, which direction should we go in?
• 8:58
  Andrew: Should we do this first or, or that first?
• 9:00
  Andrew: Which cloud providers should be.
• 9:01
  Andrew: Support first, right?
• 9:03
  Andrew: Which type of identity should we support first do, should we prioritize this feature set versus that feature set the vendors, looking for that, that input, the startup, looking for that input and they themselves as buyers know they get the shape, the product, and that helps them because they know that this can be more suitable and more, adapted for their environment than if they just went with a bigger.
• 9:27
  Andrew: Fifthly is responsiveness, you know, and I recently I had Mike Baker on the podcast and Mike is the CRO at no-name security.
• 9:37
  Andrew: And one of the things that Mike was talking about that he was so impressed with, with the engineering team at Noname was their ability to deliver things.
• 9:45
  Andrew: So.
• 9:46
  Andrew: And he gave the example, you know, they had something recently where the engineering team delivered it in two sprints.
• 9:53
  Andrew: Right.
• 9:53
  Andrew: And if it was a much bigger company, you know what, that would probably take two years, right.
• 9:57
  Andrew: It'll have to go through the evaluation process and does it get on the roadmap?
• 10:01
  Andrew: Does it not, or the other customers want it?
• 10:03
  Andrew: Uh, then they have to go through the planning process and then to scope it out and then they have to actually build it.
• 10:08
  Andrew: It just takes so long.
• 10:10
  Andrew: To do that.
• 10:11
  Andrew: Right.
• 10:11
  Andrew: Whereas if you're working with a early stage startup with a small number of customers, the decisions that they make are they're able to much more agile in terms of what the product actually does.
• 10:25
  Andrew: And the reason this is so especially important in our world in cybersecurity is the attackers and the adversaries don't wait two years, right.
• 10:34
  Andrew: Their ability to adapt and change and, uh, And come at us in different ways is done in days and weeks as well, not in two year cycles.
• 10:43
  Andrew: So you're thinking about the suitability sometimes of an early stage cybersecurity company.
• 10:49
  Andrew: It actually fits better than some of the big players because of their ability to be nimble and respond to things that are going on in the marketplace.
• 10:56
  Andrew: So so-so executives like the fact that the much more responsive partner with an early stage startup than they do with the bigger players.
• 11:04
  Andrew: In the industry.
• 11:06
  Andrew: And then finally, an and frankly is often the last thing is they know they're going to get a great deal, right?
• 11:11
  Andrew: Uh, it's pretty hard for an early stage company to re command high value ad pricing.
• 11:18
  Andrew: Right.
• 11:19
  Andrew: It's, it's harder for them to do that because the, you know, the are just trying to get the ball rolling the alternative, get those customers the first 10, 20 50 in play.
• 11:28
  Andrew: And they're willing to.
• 11:30
  Andrew: And sometimes, you know, get very creative to make sure that they get these customers on board.
• 11:35
  Andrew: It's much more important often for an early stage startup to have customers.
• 11:41
  Andrew: As opposed to maximizing deal value, right?
• 11:45
  Andrew: It's better to have 50 customers all paying us some money rather than five or 10 customers paying us, you know, bigger amounts of money, right?
• 11:53
  Andrew: You want to learn more and develop the product faster and get the, the flywheel going.
• 11:59
  Andrew: With more customers as opposed to higher deals.
• 12:01
  Andrew: Now don't get me wrong.
• 12:02
  Andrew: Right?
• 12:03
  Andrew: We want to get maximize our deals as much as possible, but generally speaking, you know, customers has a higher value than, than deal size.
• 12:10
  Andrew: And if you're a prospect, if you're a Cisco or an executive, you know that, and you appreciate that, right?
• 12:15
  Andrew: They're gonna construct a, an offering for you where you're coming in at a lower price, because the, the value's not there yet.
• 12:23
  Andrew: The features that is not built out.
• 12:26
  Andrew: And then you get to ride the wave with that startup as they grow over time, knowing that your pricing might go up along the way, but you're not starting off at a, at a really high value than if you came in as, as a customer, a hundred or 200.
• 12:40
  Andrew: So they know that they're going to get a good.
• 12:42
  Andrew: So those are the six reasons, right?
• 12:44
  Andrew: First of all, it's, it's a pressing problem that can easily be solved with the current vendor set.
• 12:49
  Andrew: Secondly, they have themselves an appetite for risk of starting with and working with these startups.
• 12:56
  Andrew: Thirdly, the one to be involved in the startup community itself.
• 12:59
  Andrew: And this is one way to do that for.
• 13:02
  Andrew: They're going to have much more control or say over the functionality and the feature set of the solution because there, the startup has fewer customers fifthly that just much more reasonable.
• 13:14
  Andrew: Then the bigger players, the industry, and finally, there's the deal to be had, right.
• 13:19
  Andrew: They know they're going to get in early, uh, on this technology.
• 13:22
  Andrew: And, uh, won't be paying quite as much as if their customer a hundred or 200.
• 13:27
  Andrew: So these are the reasons and you know, everyone's going to be a little bit different, uh, but we should be thinking about this in two ways.
• 13:34
  Andrew: One is.
• 13:36
  Andrew: Is our offering right now in alignment with the things that these early stage CISO's early stage.
• 13:43
  Andrew: Uh, so buyers of early stage technology, what they're looking for, have we thought through exactly how we not just offer the product, but also offer the engagement.
• 13:54
  Andrew: Yeah.
• 13:54
  Andrew: For, uh, if you're looking for introductions into the VC humanity, can we have that as part of what we do?
• 14:01
  Andrew: Um, do we have our pricing in such a way that we're getting, you know, some, some money, but we're, we're not set up asking for for way more than perhaps we should be doing so is our go to market to these early adopters and these design partners set up in such a way that it fits in with what they're looking for.
• 14:19
  Andrew: And secondly, And this is an important one is when we look at the deals that we have in our pipeline, are they with people and companies that fit with the first three in this list?
• 14:31
  Andrew: Right.
• 14:32
  Andrew: The gut a pressing problem, but he can't find it anywhere else.
• 14:36
  Andrew: Secondly, the gut and appetite for risk, right?
• 14:39
  Andrew: That's an important one.
• 14:40
  Andrew: Do they have the ability themselves to do business with early stage companies and does the company that they work for?
• 14:48
  Andrew: Had the appetite to do that sometimes.
• 14:51
  Andrew: Right.
• 14:51
  Andrew: Some companies just won't right.
• 14:53
  Andrew: It's just not their thing.
• 14:54
  Andrew: They'd much rather deal with a brand name in the industry.
• 14:58
  Andrew: That's got 500 customers and established on the rest of it.
• 15:01
  Andrew: Right.
• 15:02
  Andrew: Um, and some individuals for whatever reason, just don't have the appetite for risk.
• 15:07
  Andrew: Right.
• 15:07
  Andrew: I don't need that in my career.
• 15:10
  Andrew: I don't want to be putting so much risk.
• 15:13
  Andrew: I don't have all these eyeballs on me internally working with it's always taste technology.
• 15:18
  Andrew: And then thirdly, when we're thinking about the people we're working with, you know, do they actually want to be involved in the community?
• 15:24
  Andrew: Right?
• 15:24
  Andrew: Is there some thing about them that says, yeah, this is an area they want to play.
• 15:28
  Andrew: If we don't have at least two of those three things, uh, then we've gotta be careful that we're working with someone that at the end of the day will probably not buy our stuff even.
• 15:39
  Andrew: Uh, when's the, the technical arguments and, and gets the validation from the architects and all the rest of it internally.
• 15:45
  Andrew: So that's how to use this list to validate our, go to market with these, these early stage buyers.
• 15:52
  Andrew: And then secondly, are the people themselves that we should be doing or able to do business with us.
• 15:59
  Andrew: So that was the topic for today.
• 16:01
  Andrew: It was the six reasons why executives are able to buy from startups.
• 16:06
  Andrew: Finally, what I would ask if you enjoyed this episode, please like it.
• 16:10
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• 16:15
  Andrew: And your pub podcast player as well.
• 16:18
  Andrew: Please also go to sales, bluebird.com, where you can sign up for the email newsletter comes out once a week is good.
• 16:26
  Andrew: Other things in it that.
• 16:27
  Andrew: Then the, the podcast content.
• 16:29
  Andrew: So if you're looking for a good, actionable tips and ideas about selling at early stage startups, that's your place to go?
• 16:38
  Andrew: Uh, don't forget to send in your questions.
• 16:40
  Andrew: And then if you do want to chat about your S your startups, uh, go to market, especially if it's in the cybersecurity space, please reach out to me.
• 16:48
  Andrew: If you're thinking about sales strategy, if you're thinking about how the team's performing and ways to improve your execution.
• 16:54
  Andrew: Or your overall go-to-market strategy, please hit me up at Andrew at unstoppable dot D O that's Andrew at unstoppable dot D O.
• 17:03
  Andrew: See you next time.