One of the first challenges any B2B company faces when they think about how to initiate or accelerate growth is which market to target: the enterprise, the mid-market (MM) or the SMB. This is a question you want to answer before you start building product, or maybe when you are prioritizing your roadmap for future product directions. Because the product needs of an enterprise vary vastly compared to the needs of the SMB for pretty much all products.
In my experience as CEO and CMO for B2B tech companies that sold to the enterprise, mid-market and the SMB, I would choose the enterprise as my target market every time. Why?
Follow the Money
When you look at B2B tech companies that reached $1B in sales, a success by any measure, you’ll find that the great majority of them get the bulk of their revenues from sales to enterprise accounts. Of course, many companies like Apple, Google, Amazon and Facebook serve all B2B markets well, and often have significant B2C businesses. But very few companies have been able to scale to $1B+ on the MM or SMB alone. It is not impossible, as Intuit has shown. Microsoft and Salesforce in their early days were primarily SMB and MM focused, before expanding to the enterprise. But the majority of $1B+ tech companies found that the successful path to rapid growth leads thru the enterprise.
10 Reasons Why You Should Target the Enterprise
So I decided to come up with 10 reasons why you should target the enterprise if you want to grow quickly. Unfortunately, I could not come up with less than 15. (Sorry, but I keep thinking of more!) Why is the enterprise a better market to target? Let us count the ways:
The enterprise is a great market to target if you want to grow fast. But that does not mean it is going to be easy.
Their demands and expectations of service are high. Prepare for a long and difficult slog that will tax your sales, marketing and customer success teams. But if you persevere, you can find success in the enterprise. It will be well worth the investment and can drive growth for many, many years.
If you are not convinced, or not able to sell to the enterprise and want to succeed in the MM or SMB, follow my next post on How to Succeed Selling to the MM and SMB.
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