Primary lesson: the old school enterprise sales process is as painful as hell.
Dropbox does tons of sales into the enterprise by doesn't need to resort to political gambits, because their product is chosen by individuals and spreads virally.
Ping Li of Accel has an excellent paper on this alternative way to sell into the enterprise. It requires a careful approach to choosing and designing your product, but it makes your business more scalable and less painful:
If you expect accounts to go from $0 to $1MM in a single deal, yes you need to send in the field sales cowboys. Your revenue will be chunky and hard to predict, and your business will grow slowly based on long sales cycles.
Dropbox will have million dollar enterprise accounts. They'll get to that size gradually, with a nice smooth revenue ramp, and without a financial model based on sales heads. The negotiation will be easy, because the customer will call them after too many people are expensing the product
Quantcast gets million dollar customers over the phone by starting with a $20k test buy. Less elegant than Dropbox, but not too shabby.
Nerds should be all over this stuff. These decisions get made in the earliest days by the founders. That's us, here. Investors love companies like Dropbox, and get a sick feeling in their stomache when they see a company based on field sales doing big deals.
Whoa there! It appears that they indeed had this in the bag, but the IT department wanted ultimate control. I've seen this sort of thing before. In this case, all they could really do is indeed pull out. While it was a smart play, in actual fact if AutoDesk had run with it and let them go, then they would still not have been any worse off.
Given that the CIO did the keynote for their conference, I'd say that it was outplaying the dreadful politics at the company. I can't see any real backstabbing from anyone but the CIO on this one!
It was a matter of understanding how politics plays a big role in these decisions, more so than which product is best. I agree with you, it didn't have to do with "cut throat sales" or anything like that... just understanding your customer, even their internal struggles.
I see there being two kinds of sales - the one where you just need to build a better mousetrap, and market honestly and clearly, and the kind where you force your sales people to get the names and phone numbers of the board of directors, and take them all out for lunch
One is Instagram style sales, one is Oracle sales.
Oracle Sales might not be best categorised as cut throat or stab in the back, but the game Steve Blank played was not fluffy - it was hardnosed and fully engaged with the politics of the world.
What, understand the internecine politics of big organisations fully? Do you know what you are asking? Some organisations have politics that they aren't even aware of!
Anyone who has ever played Japanese Reach Mahjong can tell you with some certainty as to the astuteness of the point made.
Ignoring any aspect of the other player's discards (or, more to the point, telling signs emanating from any of the players in a company with the power to reject your product) is a certain path to failure.
When you have 3 other skilled players (or X number of competitors) - all of whom can deal triple damage to you if you aren't careful - you learn to avoid losing.
"But what if we added a third choice? What if we formally, publicly and noisily withdrew from the account? The worst case was that we could tell our engineering team that we should have won but the game was rigged."
No, the worst case would be actually going through with "publicly and noisily" withdrawing. If you want to scare away future large company prospects I can think of few better ways than letting everyone know you will raise hell if your product isn't chosen in a competitive procurement. I respect Steve...but this portion of the advice seems a little shortsighted. Go ahead and withdraw and explain it to your team and the customer. But, there is not a good enough reason to publicly shame the customer.
The public was the stakeholders at Autodesk and the employees at E.piphany. Noisily was letting that public know the rationales for withdrawal.
Incidentally, a quiet private phone call solved the problem and I suspect that the current post is the most noise ever made over the issue - Blank retired from E.piphany in 1999 and E.piphany was acquired in 2005 (according to Wikipedia).
I find that understanding 'big company' politics is one of the most challenging ideas for developers to understand. One of the thing that Joe, the E.piphany sales guy could have done to head this off, would have been to immediately suggest an audience with the CIO the minute the VP of sales stated that her problems were ones that IT was working on but could was taking a long time to solve.
The politics of big companies can get really crazy and just like Steve, internal IT believes that 'not losing is as important as winning'. To IT, having a new company come in and solve a problem that they were spending months to solve would be the same is losing. The end result is that they are now perceived as not being a true partner to the business. They are just the people who plug in cables and who make sure the lights are on. For the AutoDesk IT department, this would be the same as losing.
Kudos to everyone for making this work if it solved AutoDesk's problems.
To everyone else, make sure to discover and get in front of all key stakeholders. Some of those stakeholders can be the person vacuuming the floor as you walk into the building.
Great post - really brilliant tactical thinking, and it's always a delight to see smart moves pay off.
I feel like it should be noted that it's quite dangerous to threaten a move like this unless you're actually prepared to follow through with it if the gambit fails. If this move hadn't worked and the prospect had responded with something like "please reconsider, we believe there is still a good chance things can work out," I think it would have been disastrous for this company's credibility going forward if they had actually continued working on this prospect. Part of the reason this was a great move for them in this situation is that they were legitimately ready to cut their losses with this prospect and move on. When that's the case, even the smallest chance of jamming a sale through is pure value over their best alternative.
Not losing also explains much of legislation politics and campaign debates.
Survive this round of the contest, you get another bite at the apple. Maybe, just maybe, you'll work up enough courage to grab for the brass ring. Such as reach for higher office. Or pass some important legislation.
In politics, any position you take will offend someone. So you become cautious. "Keep your powder dry" for the imagined future contest. Only jump on board the bandwagon when it's crystal clear, so then when it goes bad you can use the safety of the herd to avoid repercussions.
Watch political "debates" sometime, you'll see that frontrunners play to not lose, because the person left standing wins.
Dropbox does tons of sales into the enterprise by doesn't need to resort to political gambits, because their product is chosen by individuals and spreads virally.
Ping Li of Accel has an excellent paper on this alternative way to sell into the enterprise. It requires a careful approach to choosing and designing your product, but it makes your business more scalable and less painful:
http://www.accel.com/assets/resources/files/17/original_rena...