"Sell the alpha, not the feature": The enterprise sales playbook for $1M to $10M ARR | Jen Abel

Overview

This episode dives deep into the art and strategy of enterprise sales, focusing on how startups can scale from $1M to $10M ARR. Jen Abel, co-founder of Jellyfish and GM of Enterprise at State Affairs, shares her expertise on navigating the complexities of enterprise sales, including targeting tier-one logos, pricing strategies, vision-casting, and hiring the right salespeople. The conversation is packed with actionable insights for founders looking to master the enterprise sales game.

Notable Quotes

- The market doesn't want to be sold to. They want to buy. – Jen Abel, on the importance of vision-casting over traditional sales tactics.

- If they're sitting there nickel and diming you, they're not fully bought in on what you're selling them. – Jen Abel, on why founders should avoid low-value deals.

- Don't be better, be different. – Jen Abel, on standing out in enterprise sales.

🛑 The Myth of the Mid-Market

- Jen Abel argues that the mid-market is a misleading concept. Companies should focus on either small businesses (SMBs) or enterprises, as the strategies and needs for these segments are vastly different.

- Selling to a 100-person organization is not the same as selling to a 1,000-person organization. Blurring the lines between SMB and enterprise can lead to failure.

- Founders should clearly define their target market and align their sales approach accordingly.

🏢 Targeting Tier-One Logos

- Contrary to popular belief, tier-one logos like Tesla, Walmart, and Stripe are often the best early customers for startups. These companies are early adopters because they need to maintain their leadership positions and are willing to take risks for even small competitive advantages.

- Securing a tier-one logo not only validates your product but also attracts other customers, investors, and top talent.

- Founders should focus on selling to these companies by vision-casting and demonstrating how their product delivers unique value or alpha.

🎯 Vision-Casting vs. Problem-Selling

- Traditional sales focus on solving specific problems, but Jen Abel emphasizes the importance of vision-casting for enterprise sales.

- Vision-casting involves selling an opportunity or future state, rather than just addressing a current problem.

- Founders should focus on how their product will transform the customer's business, making them leaders in their industry.

💰 Pricing and the Danger of Low ACVs

- Founders often underprice their products, opting for multiple small deals instead of fewer, larger ones. Jen Abel advises aiming for $75K–$150K annual contract values (ACVs) as enterprises are accustomed to these price points.

- Starting with low ACVs (e.g., $10K–$20K) can create long-term challenges, such as difficulty justifying price increases and being taken less seriously by enterprise clients.

- Founders should avoid playing the small business game with enterprise clients by anchoring pricing to enterprise expectations from the start.

🤝 The Role of Relationships and Design Partners

- Building strong relationships is critical in enterprise sales. Deals are often closed through personal connections, with trust and responsiveness being key.

- Design partners can provide valuable feedback but are often difficult to convert into full-paying customers. Founders should set clear expectations and avoid over-customizing their product to meet a single partner's needs.

- The founder's role is to maintain a clear vision and resist the temptation to deviate from it based on feedback that aligns with outdated ways of working.

🛠️ The Art of Enterprise Sales and Hiring the Right Team

- Enterprise sales is more art than science, requiring creativity, adaptability, and the ability to craft unique deals.

- Founders should hire salespeople who can cosplay the founder—individuals who can sell the vision, build trust, and navigate complex enterprise sales processes.

- Avoid hiring senior salespeople from large companies who may lack the scrappiness and creativity needed for early-stage startups.

- Compensation for salespeople is typically structured as 50% base salary and 50% on-target earnings (OTE), with commissions around 8–12% of the deal value.