High-resolution slides available here: https://docs.google.com/presentation/d/1MygsJoOjQutdO116xvXHqLNThcwQ9eswyN38YDLjLVk/edit?usp=sharing
As the impacts of COVID-19 continue to reveal themselves across the industry, there are some things that we can say for certain: enterprise software budgets have tightened, and the procurement teams who oversee them are showing preference to “tried-and-true” solutions in an effort to minimize risk. As an early stage B2B startup perceived as higher risk by these large organizations, how can you continue making deals and maintain your revenue?
In this session, Donnie Berkholz will walk us through the often convoluted enterprise procurement and budgeting process so that you may better understand how to reposition your product, and possibly your pricing, in order to help your enterprise prospects hedge risk and sign new contracts. In addition, Donnie will talk through changes you can make to your overall go to market, including redoubling bottom-up efforts in order to decrease CAC and increase both product adoption and purchase on the ‘low end’ of the market.
2. @dberkholz
Today’s goals
Explain
Explain a typical example of enterprise
spend approval & procurement.
2
Know
Know how the enterprise budgeting cycle
works, as well as its relevance to Covid-19
impacts and responses.
1
Apply
Apply new knowledge to decisions such as:
● targeting timing to engage with prospects,
● investing in bottom-up vs top-down adoption,
● when and where to form partnerships,
● and more
4
Understand
Understand how Covid-19 changes
enterprise adoption.
3
3. @dberkholz
Did you do your homework?
RedMonk: What is packaging? It’s all about the barrier to entry.
a16z: SaaS Businesses Weather Hard Times by Focusing on Efficient Growth
SaaStr Summit: Sales & GTM in uncertain times with Salesforce
DoD Defense Innovation Board: Detecting Agile BS
5. @dberkholz
How enterprises budget money
May/Jun
Budget planning begins
Finance sends out spreadsheets
to everyone, leaders start to
figure out the new format & ask
their teams for ideas
Jul/Aug
Planning firms up for initial
submission
Numbers start to get more real,
with business cases
Sep-Nov
Executive negotiations & cross-
functional alignment
Top-down setting of dollar
amounts & priorities based on
proposals
Dec
Board approval
Board of directors meets
quarterly, approving next year’s
budget toward the end of the
year
Jan/Feb
First spend approved
First “project” goes through the
submission process — reviews for
architecture, security, operability,
financials, etc
Feb/Mar
First deal closes
Following formal approval of
funding, vendor negotiations &
purchase occur
Illustrative example, shown for fiscal year aligned with calendar year
18. @dberkholz
451 Research: Impact of COVID-19 (free set of reports)
Stack Overflow: 2019 Developer Survey Results
Donnie Berkholz: How much influence do developers really have? (video or slides)
… and the homework shared at the beginning
Resources
Notes de l'éditeur
Budgeting
Buying
Changes
Adapting
Where do vendors first get engaged? Could be at #1 to as late as #4!
OSS, opex, low-cost adoption changes the dynamic significantly
Q. Which, if any, of the following strategic plans has your organization delayed, reduced or halted as a result of the situation surrounding the coronavirus outbreak? Please select all that apply.
Impact is clearly industry-specific
Q. Which, if any, of the following technology products or services do you expect your organization to spend more on as a result of the circumstances surrounding the coronavirus outbreak? Please select all that apply.
34% expected to spend more on technology, with 63% having no change. [Q. For each of the following expense categories, please indicate whether your organization is spending more or less money as a result of the coronavirus outbreak. - IT resources/assets (n=642)]