Good products from small companies are starting to break through in the enterprise

We all know the old enterprise software joke that “no one ever got fired for buying a Microsoft product”. But one of the important points in Auren Hoffman’s post on how Zoom is beating much larger competitors like Google Hangouts and Slack is that larger companies are not that unpleasantly predictable any more:

One of the biggest trends that is driving Zoom’s success is that companies are forgoing the full stack and buying the best-of-breed. The number of vendors the average company is buying from has increased almost 10x in the last 12 years. Companies are happy to buy from many different places. They are even happy to buy from new start-ups. […]

In fact, it has never been easier to sell to large companies. Large companies are open for business. They want to be sold to. They are sick of having a third-rate solution. They want to use the best product. If you can show them your product is superior, they are excited to buy.

This is an exciting development for product managers, especially if you’re building something in the B2B space at a smaller company. With a really good product it’s becoming so much easier to sell to larger companies without the need for the bureaucratic checklists that used to be an impossible barrier to break through (“Are you ISO 9001 certified?”).

That said, in most cases it’s important not to start there. As Box CEO Aaron Levie points out in this article about Slack’s move into the enterprise:

[Slack] have had a methodical process of continuing to drive strategy up market. They started with individuals and small teams, and then departments and bigger teams, and now broader enterprises. It’s been a very thoughtful strategy.

There are many reasons to start your product growth with smaller teams. One is that it will help you make incremental improvements very quickly. But it’s also really dangerous to end up in a situation where most of your revenue comes from a few large customers. So start small, get better, move into larger markets, and then just keep going…