Principal Product Manager at SAS Software
Co-author of Building Products for the Enterprise
How Building and Selling to Real Enterprises is Different Than "Regular" B2B
Blair Reeves: Okay. Bye. Well, I'm the last talk of the day. So, my name is Blair Reeves. I actually don't have a bio slide up here cause uh, I'm pretty boring. Guy Does. How much do you need? You need to know about me? My, uh, my, my session here, I actually changed the name a little bit in my presentation because I think one brochure sounds a little dry. This isn't really about selling to the major leagues in B2B. Um, and let me play a little bit about why I'm the kind of guy talk about this. So, um, I've never worked for a startup and I've never worked in Silicon Valley. Um, I kind of wound up in tech in sort of a kind of an untraditional way, uh, but I spent a number of years at IBM or, uh, then I was at Demandware for a number, a number of years or which is now the, uh, uh, the Salesforce commerce cloud.
Blair Reeves: Uh, and I'm now at SAS, which is the, uh, uh, you probably may not have heard of this world's largest privately held software company. Um, a lot of things I can say about, um, IBM, but I can tell you what to tell you one thing about them that they sell software. Um, they make $18 billion a quarter selling software. Um, they make numbers in terms of revenue and in terms of profitability, I'll, I'll all the time in terms of revenue, uh, that just make everyone else kind of embarrassed. Um, and what I see a lot in the, um, product management area, especially around starting to what we call the enterprise segment. Our catalog, kind of misconstrue this comprehension's about how the tell it so it really works and how we sell to it. So I want to talk a little bit about that today. Um, I should also point out that, uh, my, uh, my friend Ben Gaines and I, uh, he's at Adobe Analytics.
Blair Reeves: He's a group product manager there. We can't, where the book a little bit earlier on this year, uh, about product management and enterprise software. Um, it's not a very large book because it's everything we know about product management. But yeah, a big came up from O'Reilly. We have a couple of them here. Um, I got them for free. I'm not going to bring them back with me on the plane to North Carolina. So, uh, there's a whole bunch of them here if you guys want some. So, uh, we'll have those at the cocktail hour or right back there with Mr Chain. So that's great. So let me tell you about this first. So the enterprise software segment is a, is dominated by the large players. This is not something that anyone is going to come as a big surprise to anybody. Um, but um, IBM, oracle, SAP, Symantec, Microsoft, um, is a huge chunk of the market.
Blair Reeves: You expand that to 10 different companies. It's a full half of the entire enterprise software, uh, enterprise software segment. Um, if you actually, the drop off between SAP and Symantec is a pretty big one from Symantec to the, to number six. Uh, it, it pretty big as well. So, um, it's really the big four, but we just call them big fives to be charitable. Uh, this is a big players game. Uh, like I said, they make a, just a ridiculous amount of money doing this and they is largely because not only cause they're incumbents not only cause they've been around for a long time, but also because they know how to sell to very large, um, enterprises, um, that are usually not tech companies and do not share a lot of the kind of, uh, uh, common characteristics of companies that are kind of more fun to sell to.
Blair Reeves: Um, this is not to say that you know, that large companies are better, is any better than small companies. It's not really a judgment like that at all. But I think it's actually kind of instructive to think about this as an evolutionary state because the large company is kind of the logical conclusion of what a small company aspires to be. So much like, you know, like our chimps, uh, you know, way back in the day, um, you know, no worth or anything. But they are, they're, they're nimbler. They're more agile. They can fit more niches and fit more ecological niches that you know, large, you know, organisms can't. Um, but you know, human beings are the most dangerous animal on earth. And the reason is because we are big, we are strong. Uh, we can go into any ecosystem and, uh, kind of transform it into for, for our own purposes.
Blair Reeves: And we can use tools in ways that, you know, chimps really can't. And the same as the same principle kind of applies in a lot of ways to, you know, a Microsoft or an IBM or Oracle moving into you're moving into your segment, uh, startups and smaller companies, you know, or can certainly find a niche, can certainly find, um, opportunities there that a large company cannot. But a large company also has resources and, and frankly, sales wherewithal that a lot of smaller companies don't. So let's talk a little bit about how large companies make decisions. Cause I think this is actually going to be, um, you know, kind of the basis for, for, you know, how they choose a vendor and how they choose, you know, what kind of software to buy. So, uh, in a very large company, they're basically, there's a couple of different ways which they, which they made the decision on how to make, choose a software vendor.
Blair Reeves: Um, the ideal situation for, uh, for any enterprise event enterprise vendor, whether you're small, medium size or large, is that it's driven by a practitioner group. So this is very common in like in, uh, in marketing technology, in a lot of kind of like emerging technology areas. Uh, there might be a, a, a practitioner group of number of users within that organization who are tasked with finding a vendor or choosing a vendor or choosing a particular tool to use. Um, in the last several years, you know, we've heard I worked a lot in marketing technology. Uh, that's where I am now and we've heard a lot about how, like, you know, the chief marketing officers, CMOs are going to be the drivers of the most enterprises are the fastest driving, fastest growing drivers of enterprise software spend a for the next 10 years. And to a certain extent we've seen that.
Blair Reeves: And no, much like the, you know, the human versus chimp example, you know, the human has a much broader set of needs. Uh, they have a much broader set of activities that they participate in. Again, it's not really a better or worse kind of situation, but you know, a large company does have actual needs that it has to, uh, has to fulfill a, that a smaller company doesn't. And some of those do go back to things like audit and Regulatory, which we can get to in just a second. All the influencers, uh, to, you know, to, to that, you know, the vendor choice then come down to, you know, pretty typical stuff like personal relationships and brand, brand power. Um, so for example, if you've ever worked in digital marketing, uh, software, um, almost no matter what, where in digital marketing you've, you've, you've worked at some point or another, you have been compared to Google analytics, right?
Blair Reeves: And Google Analytics is a great product, don't get me wrong, but it is completely inappropriate for a large company that has actual needs for its online marketing. Um, but, but nevertheless, we are all compared to Google Analytics because they're Google, right? And there they have a brand power that basically eclipses anybody else's in the market. Um, and the brand power is kind of an inescapable person. Relationships are of course a whole sales thing. You can really can, can ever get away from them. Um, but then also the RFP requirements had talked about before. Uh, our, our key, the, the secret power that every, all the, all the big five have there is that they've already written your RFP. Um, you know, the, the, the, the, the, uh, rule for the case at IBM, I suspect the same is true at Microsoft or Oracle, is that if we didn't have an influence on the RFP, we didn't write the RFP.
Blair Reeves: We didn't even compete in a sales cycle. Right. Because we knew that why bother. Right. Um, so the, you know, and the reality is that you can break out of their RFP cycle and in certain cases in certain deals, uh, but most of the time the RFP is driven by a, again, those audit, you know, regulatory compliance cycles that I talked about before and checking boxes from every different part of the company. And the part, the point where you're, you're competing in a solution space where um, uh, the technology and the need is known well enough to have a, you know, boxes, boxes to check that's already a place where you are systematically, um, you know, a good fight of very difficult, um, entering into that market. Almost like with distribution for a second. So, um, what does distribute distribution in a large, large organization look like?
Blair Reeves: Um, there are two ways you can distribute your co your product within a large organization. Uh, you can, uh, you can do it yourself, uh, which looks a lot like this. Um, because large organizations hold the keys to the kingdom. They don't want no a non-approved a non product proliferating in their environment. There are companies that do this. And I actually took out a slide in my presentation here about, um, you know, providing a disclaimer about slack. Slack has managed to do this right, and they managed to distribute their product pretty effectively across very large organizations, almost ubiquitously now. Um, so it can, it can be done. The problem is that distributing your product without the help of your a customer company requires you burn a mountain of cash and marketing. And that is essentially what slack is doing right now is burning a mountain of venture capital cash to eek out growth.
Blair Reeves: Um, but, uh, they're still not profitable and they are clinging to number three, uh, on the, uh, in, you know, in terms of market share against very entrenched competitors like market, Microsoft teams and confluence and even Skype. Right. Um, and I'm gonna get, I'm gonna return to that point just a, just a little bit here. I love Skype and things. They're a great company. I, excuse me, I love slack. I don't love Skype. I think they're great company. Uh, and I, and so the key is to get to get distributed, uh, distribution inside a large organization really requires you get a cooperation and, uh, you get the company themselves to do it. So how do you get a company to distribute your product for you? Well, it's a, it's a matter of a commitment that that company makes to you and that you made to the company.
Blair Reeves: And the way you do that as a smaller company that may not be as well known as an IBM oracle of course it's do the tried and true method of a POC, uh, pilot and early adopter program, which no one wants to do because you know, companies don't like to pay for those. Uh, and of course you should never ever do a free POC or free pilot because it sucks up your resources and it costs you a lot of money and re and time and then you have no real commitment to it. So let's talk about paid POC for a second here. And this might be a little bit right here, but this is a, is a large part of, uh, was a large part of my life at one point or another. A couple key things to keep in mind for a paid POC.
Blair Reeves: If a company is, is pushing you to, to, to not pay for a POC, you know, proof of concept or pilot program or early adopter program, they want to do it for free. I would push back on that and I can't really think of a case where I would do a free POC unless they were, you know, some sort of, you know, lighthouse customer that you really couldn't do without it and you had the resources to do that. Assuming that they will pay for your proof of concept or pilot program though, um, a finite timeline of 66 to three months is completely sufficient to prove the value of your product. Uh, focusing on a small specific team with a specific stakeholder within the organization who you can work with, who is receptive to you and who understands the, the value of the problem that you're trying to solve.
Blair Reeves: Uh, concrete KPIs. So he usually comes down to building it and building it and his feelings are kind of like, you know, I kinda like pro, you know, Acne Co. Uh, they're Nice, you know, that's not going to get you sold inside of, you know, any kind of organization that I've ever dealt with. So if you can distill this into some sort of, you know, quantifiable KPI, even if you have to really stretch it out, um, that's absolutely critical. And then of course, all the normal kind of like, you know, customer success and support stuff. So, you know, they have to have a throat to choke, as the saying goes, they have to have a contact person, a success person that you know, is invested in making sure their companies successful in your pilot or your or your or your or your POC if you can.
Blair Reeves: If you can check all these boxes here, then your chances of having a really successful pilot program are going to be way, way, way better. And frankly, once you've, you know, become ingratiated in an organization like this and built a number of stakeholders, your chances of landing a paid customer are much higher. So, um, paying for distribution is really tough because companies pay for what they value and they the, if you don't value you, they can't tell you something you don't understand. Um, so I want to talk about three different kinds of kinds of problems that large companies face. And really I think these are kind of um, applicable to smaller companies or midsize companies as well. Um, but this is, you know, my focus is on very, very large companies and their sorts of problems never really change. Um, the first problem is problems.
Blair Reeves: They understand, right? So these are tried and true problems that have been around since forever and that are the solutions to which are fairly well known. So examples of these are going to be, um, email, you know, data storage, security stuff that people have been dealing with for 10, 20, 30, 40 or plus years. Um, the technology changes in those, and I'm going to get back to that point to submit here, but problems they understand our are, where are you going to find the most entrenched sort of competitors, the problems they don't understand. And this is where we all would like to think we are and places the places where most of the opportunity is. Uh, and, and, but you know, your customer's perception of the prompts they don't understand may vary a little bit. I'm going to get back to this in just a second.
Blair Reeves: And their problem is they may not really have, um, and this comes up far more often than you would think this is like 99% of like you're blushing applications, right? Like companies that say they need a hybrid cloud blockchain be it pull shit like app for whatever. Right? And there's almost no reason they ever need this sort of thing. 90% of the GDPR, um, freakouts that we dealt with earlier on this year where from companies or customers who weren't really effected or didn't really have the kind of issues, something they heard about in the news. And there are a whole lot of executives out there. These usually don't come from here, like hardcore it users, they come from executives who are, you know, just not their area of competence or their area of interest and really understand this stuff. And they sent an email on some and I said, follow up on it.
Blair Reeves: So I'm talking about these three. So problems they understand, um, this is why Skype exists, right? Uh, this is why a, a good example. I like to use any other IBMers in the room here. So again, I left the company number of years ago, but um, I use lotus notes, right? Lotus notes is the example of this. And guess what? Lotus Botes is still a 1 billion - billion with a B - dollar business for IBM. They make a buttload of money off of that terrible piece of software. And the reason is because it checks all the boxes, right? It checks regularly, you know, audits box, it checks the regulatory box. It's a hardened, reliable, secure database, distributed database program with like an email client sit on top of it and it's, it's awful, but it looks, it works and there are no ups runs on it. The large parts of the u s government run on it, other governments run on it.
Blair Reeves: It is a completely integral part of many, many, many companies. Um, you know, it infrastructure and the reason is because a, it's a problem that most companies understand, right? And trying to convince them of the value of doing, doing, you know, iterating on that or changing their approach that those kinds of problems can be really, really hard. Again, this is the problem for a company like slack, so everyone loves slack. Um, but again, the problem is that your buyer, the software, it doesn't check any of their boxes. You know, we've, we've, we've fixed this problem. We have Confluence, we fix this problem. We have IRC or Skype or whatever. Uh, and even if the users like it, it, it checks, it doesn't check any of the, the, the buyer's boxes to pay a lot of money for a new, a new new solution to that.
Blair Reeves: Or in the cases where, you know, overwhelming user popularity does drive, you know, a company to experiment with paying for slack, um, their willingness to pay US fairly low. Uh, and that is why Microsoft teams doesn't, you know, have the pressure to go to no bunkers growth or bunkers profitability that like a slack dies. And so again, I think slack is a great product, but you know, I think it'd be permanently a three or four, you know, uh, market share player. So those prompts, you understand, um, buyers, always Trump users, uh, because this is the problem. You're never going to convince the company that what they're doing is wrong or how they're doing it is wrong and that you provide a better solution. Uh, there tend to be broadly applicable problems. So they're very cross industry across different nerve verticals. And your competition is really, really tough.
Blair Reeves: These are, these are entrenched competitors who've been there forever. You're the oracles and IBM's and Microsofts of the world. And um, and breaking out of this category is really, really tough. So the best approach to this is getting buyer focused strategy. Um, go for the boring stuff that administrative users and buyers love to check boxes on, logging, security, audit, customization, all this stuff, which is really a pain to build Busch, you know, large enterprise users absolutely demand, um, stuff like UX glossy design, um, are, are probably less important only because user experience and user delight is just not, um, gonna move the needle. So the second problem here, it's a problem that your co that your customer doesn't really understand. Um, and, and this is a really more exciting kind of category cause this is the kind of stuff where we have new markets we want to move into or there are new technologies we want to take advantage of or we have all these assets.
Blair Reeves: We're not really sure how to take advantage of them, right? So, um, I've all this on-premise workloads on premise workloads, I want to put them in the cloud, saves some money. I'm not sure how or I'm not sure, you know, in what, what the process is to do that with steps we take to do that. Um, I want to reach new customers, how many internationalization I want to internationalize my business in different markets, different countries in the world. There are a million different examples of that, of this. Um, if you have a really valuable product in this kind of case, then this is the really exciting category for you. I'm framing the problem from the, from the, uh, from the get out is the most important step of addressing a problem like this. So, um, some of the most interesting, you know, companies that have kind of, you know, gotten really big and then that last decade or two decades have claimed the problem like this and framed it in a very novel way.
Blair Reeves: So you think about like a salesforce, right? CRM is not new. It's been around forever. Um, but what salesforce was able to do is they were able to frame the problem of, you know, customer relationship management, uh, with a new technology and, and, and frame this problem as a way to help companies grow in a new way using new technology and apply this to different parts of their business. Um, same thing with Mulesoft, right? So a making different parts of your company or different parts of your it infrastructure or software, talk to one another. Very old problem, very well understood and kind of, uh, you know, a huge hornet's nest and Mulesoft, you know, had a new approach to that problem and framed it in a very different way. They made it into a, an entrenched point of view. Companies spend millions, billions of dollars trying to establish a point of view around this.
Blair Reeves: And a good example of this is Adobe. Adobe is my favorite example because I think that they are, um, they are the single best company in the, in the, in the enterprise SAS market today. In terms of telling a story, you can tell a story around your product and what you're trying to do. And your solution area and you have successful companies who can validate that story and kind of back it up, um, then, and you can stick to that. You make it into a brand, you create internal recognition around other people in your company. Uh, it makes you into an incredibly powerful juggernaut. Now the way we talk about CRM today is salesforce. The story and the way we've talked about digital marketing and, um, creative software is Adobe story. Uh, and [inaudible] IBM tried this. We try, uh, we, when I was there, we tried a smarter planet, Smarter Marketing, smarter this, smarter that smart.
Blair Reeves: And uh, we were not very successful and it was a, it cost company, a lot of money, but the, the making its own market, like that was the right approach. And this makes you the incumbent if you're able to entrench, uh, your point of view in a company like this. If you can entrench a story and a point of view around something like customer data platforms or around, um, you know, uh, encrypted data storage or communications, um, then that's very powerful. And that is actually what slack is trying to do, which I think is the right move. The better, best approaches for problems that your customer doesn't necessarily understand is storytelling. Um, it's, it's, you know, backing that up, that story with quantitative as well as qualitative, uh, you know, examples, anecdotes, case studies and so forth. Uh, building a strong point of view around that solution area.
Blair Reeves: I'm not really, really sure how you create a point of view around customer data management, but I'm sure there's a way and people are doing it and people are very successful doing it. Um, what doesn't really work very well our comparisons with other products, but because the moment you get into a feature, bake off with a competitor around your solution area, uh, you're implicitly, uh, admitting that you kind of do the same thing. This is a known problem to you. Uh, and now we're, now we're just in a, uh, a tit for tat. Uh, so it doesn't work very well. So the third problem I want to talk about here are problems that your customer doesn't necessarily have. Um, and I, this isn't meant to be a little, you know, tongue in cheek because it's very last presentation of the day, but it's also completely real.
Blair Reeves: This happens all the time. Again, most of the companies who came to us around GDPR, no concerns, uh, or you know, every company looking for, there's a company right now doing a blockchain inventory management for produce. Right? And you know, I'm not an inventory management guy. Maybe it makes sense. I'm pretty sure it's stupid, right? Because it's some executive who, some who got us a thought leader in his ear or whatever and you know, got, you know, got a bug up his ass. It started, you know, trying to buy software to, to address a problem like this. And this is everywhere. I assume most of you are familiar with the hippo acronym, the highest paid person's opinion. This is absolutely everywhere in it. Uh, and if your CEO, CTO, CMO, whoever decides that we really need to look into this blockchain thing, that's going to be your corner, right?
Blair Reeves: So, um, it was problems. Your customer probably doesn't really have, there are a couple of ways I like to approach it. Um, first what are you trying to understand what they're actually trying to solve? Right. So GDPR examples is illustrative about this. Um, in the GDPR example, customers are actually anxious about privacy there and they're anxious about regulatory, um, you know, decisions coming down. They're unclear about what, how the laws are changing, how the law affects them. Uh, these sorts of things. Those are really educational opportunities for you as a, as a vendor. Um, you might be wrong, right? And you might actually be, you know, this customer probably knows their business really well and they met, might know something about their business that you don't, that makes this problem actually pre applicable to what they do. Um, I don't like being, um, super, you know, I don't want to be super arrogant and assume that I know their business better than they do.
Blair Reeves: So it may very well be that your customer actually hit us, have a problem. You don't understand. I'm assuming those are not the case though. Um, this is the case where, um, you want to proceed with caution because at the point where you have established the, you understand their problem, that you definitely know that whatever solution that they're looking at is not applicable to their problem. Um, then you probably don't want to sell them software cause that's dishonest and dissembling and will eventually get you in trouble when the customer actually understands what's going on and realizes he's paid you $1 million for software he's never going to use. So the best approach here is to focus on your buyer, uh, to listen, to understand, to educate, um, to the extent that like educating your user can be, uh, can help you establish that frame and has helped you establish that point of view.
Blair Reeves: You can try, you can convert this into a prompt. Your customer doesn't understand. If you can help them understand that problem and help to understand why your product can actually solve this, this problem over here that you actually have instead of this problem over here, that can create enormous value for that customer and make them love you. Um, on the other hand, it may make them help them understand that, um, the problem that they felt they had is not when they really have. And that also creates goodwill. Um, you also want to avoid a feature bake, offer a quick sale, don't sell them software they don't need because it never really works. Um, I'm running out of time. My name is Blair Reeves. I've got a bunch of books back there. I'm happy to talk about it. Um, and questions, let's talk to the day guys. There you go.
Speaker 1: [inaudible] some of those things.
Blair Reeves: Yeah. Um, so that's a very good point. So one thing you always want to do is of course, if you, if you understand that there are, there's an incumbent competitor can come and vendor at the company, you can often kind of tell, uh, what, which, which, which vendor has helped them write the RFP. It's pretty rare. It does happen, but it's fairly rare, especially with non tech companies, older companies that are, they're not super savvy that they've written the RFP themselves. So there's a whole class of consultants out there, some idiot and McKinsey or Accenture or whatever, gave them a RFP, you know, control [inaudible] into a excel somewhere and they've used it a dozen others, uh, or alternatively, if you know, Oracle, IBM, Microsoft is the incumbent. Maybe they have basically written that RFP. There's sometimes ways you can kind of tease that out. And if you're really, if you really understand your market segment very well, there's often ways you can kind of guess, you know, who is kind of had input into this because that can help you understand kind of what no, what solutions they already have, what kind of solution areas they've, they've no been working on before.
Blair Reeves: Um, certainly, you know, RFPs can give you great intel about what, what a customer individually in their customer segment generally cares about. Um, because you know, sort of like a, like a, like a Forrester wave or something like that. Like the, the, the big questionnaires you get, um, you know, if they have obviously like 25 different questions on, you know, event types or whatever is the solution. The particular feature set is relevant, your solution space. Then of course, that's kind of a signal that like this is the thing you've thought a lot about. In other cases they may have like, you know, two questions. Like, do you support single sign on? Yes. Do you support, are you GDPR compliant? Even though that doesn't make any sense? Yes. Right. Um, in which case he pretty a single that they may not have really thought thought that too much.
Blair Reeves: Um, I don't, I don't worry about it too much when we say we don't do something right because, uh, it's rare that any company is gonna say we do everything on your RFP perfectly. And if they do, they're lying. Um, and sometimes, uh, as soon, sometimes the customer will understand that, uh, oftentimes they'll kind of like, guess it. Um, what you'll find is a lot of very large organizations that have had relationships with those big five vendors for a long time. Um, I hate them. They absolutely, they don't trust them. They don't like them. They, uh, they, they think, they think they, you know, snake oil. Um, but they keep using them because they have no choice, uh, or they feel they have no choice. So a good way to, to establish credibility is to kind of enter into use that he's RFP as a jumping off point into discussing and doing some more than educating, setting the frame around a problem set. Um, I've seen some success it using that you the lesson than or right though. So anybody else? Alright. Yes.
Speaker 1: [inaudible]
Blair Reeves: so that's really so, so that's interesting. So, um, it's funny, I just listened to Doug Landis talk over there and he was talking about the, the box partnership with IBM, uh, which, you know, they announced a great fanfare and then I've even just didn't sell anything. The bucks, Dropbox is costing zero, right. Or Gusto next to zero an no new IBM seller wants to sell that. Right. Um, as a, um, as a pride measure myself, I would never, um, count on a partner to distribute my product. I don't, I've never seen that to be super helpful. Um, I don't want to, um, yeah, I just don't trust them. I mean, so there's resellers is channel partners, you know, that's a little bit different, especially if you have an internet internationalization strategy or something like that. Um, and they're, you know, certainly like if you're a very large, you know, Accenture or whoever, they're effectively reselling your products through their engagements with different partners. That's usually the only very applicable if you're one of the big five, right? If you're a smaller company, um, that's rarely going to be a really effective way you get in there. Um, so as a product manager, I would never, I wouldn't say, I hate to say never. I would rarely kind of, you know, think about the partner channel when I'm, you know, designing features or designing a distribution strategy for the product.
Blair Reeves: Okay. Well, it looks ready back there. I'll come back there and happy to talk and, uh, I'm hope I'm saying, I'm seeing you guys in cocktail hour, so I understand the deal.
Keep me posted on Empower 2019.