At Segment, it was especially important to have full backing from both the CEO and the board for this initiative.
It’s critical to align the entire organization on this product value framework because it lays the foundation for understanding your enterprise customer. We emerged from the process with a crisp product value framework: we were the only customer data platform (CDP) built on data that you could trust-data that was clean, verified, de-duplicated, and continuously updated. Combining this discovery with market research data to help us answer key questions about our customers’ pain points and how Segment solved them.Interviewing both our own customers and target prospects to better understand their current and future pain points, and.At Segment, we partnered with an external consultant to define this in two steps: More importantly, this didn’t lead to customer success-so we had higher levels of churn in the enterprise space.īefore you sign enterprise deals and even begin to consider enterprise product-market fit, you should clearly outline your product’s value framework.
GET READY TO MOVE YOUR PINGAS FREE
Customers, however, wound up using this as free support, and we ended up carving this consulting out of our ACV. We often gave away free consulting to enterprise customers to help us close deals. Implementing Segment was relatively straightforward for an early-stage startup, but much more difficult for enterprise customers. At Segment, one of the ways we knew we needed to revisit our product-market fit was when we were giving away services to enterprise customers in order to cover up gaps in our product. Just because you have product-market fit for startups, SMBs, or mid-market customers does not mean you’ll automatically find product-market fit in the enterprise space-even if you’ve already closed enterprise deals. So how do you prepare to move upmarket? Get crisp on your product value framework, use that framework to define your enterprise ideal customer profile (ICP), then align your product roadmap and sales motion to make sure you can service that ICP’s needs.
I learned a lot of lessons working with the Segment team to turn things around in two years-lessons that I’m excited to share here. In fact, the single biggest mistake I’ve seen companies make when moving upmarket is mistaking initial enterprise interest for product-market fit when, in actuality, your product usually needs to be much more robust to address the complexities of a large enterprise company. This problem wasn’t limited to Segment, though. As much as 20% of our ARR was coming from enterprise use cases that weren’t the best fit for our product, we were spending too much on sales and marketing chasing too broad an upmarket segment, and we had a glut of one-off feature requests that stymied engineering innovation. When I joined Segment as CRO, the company was selling to a wide customer base, from early stage startups to some of the biggest enterprises in the world. So how do you prepare? Understand the unique value-add of your product, define the customer who would benefit most from that value-add, then assess if you can service their needs. But get it wrong, and you risk losing focus, increasing burn, and stifling product innovation. Get the move upmarket right and you can unlock new users, use cases, and revenue streams.
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