22 May 2018 talk on differences between consumer tech (B2C) and enterprise tech (B2B) companies for Lean Product/UX Silicon Valley meetup. Emphasis on: - dozens of in-depth interviews vs. thousands of market funnel A/B tests - understand both buyers and users - predicable pressure for “specials” on major deals - need for product to deliver against customer's quantitative metrics

1. Understanding Enterprise
Product Companies
Rich Mironov
Lean Product/UX Silicon Valley
22 May 2018

2. • Veteran product manager/exec/strategist
• Smokejumper VP Products
• Organizing product organizations
• 6 B2B startups
• Product management blog since 2002
• Founded Product Camp
About Rich Mironov
@RichMironov @LeanProdMeetup

3. Christoph Janz
consumer
}
SMB/department
}
enterprise
}
@RichMironov @LeanProdMeetup

4. • Projects, clients
• Staff augmentation,
talent for hire
• “Bespoke, custom,
agile, lean,
experienced”
• $: margin by project
Professional
Services?
• Products, customers
• Target market, defined
features, list price
• “This problem, this
metric, our solution”
• $: licenses, seats,
transactions, volume
Product
Company?
@RichMironov @LeanProdMeetup

5. • User = buyer
• Can talk to lots of prospects (with plenty left)
• Can run A/B tests with product variants, sign-up variants,
pricing options, alternate messaging…
• Identifying need > building solution
• User can “buy” before product works
Unstated B2C Assumptions
@RichMironov @LeanProdMeetup

6. 1. Long sales cycles, few data points, weak
pre-sales attribution
2. Buyers ≠ users
3. Strong organizational incentives for
sales escalations
4. Fully working products
Differences For B2B Product
Companies
@RichMironov @LeanProdMeetup

7. • 9-18 month close, dozens of
touches: what moved needle?
• Can’t run live A/B market tests
• Each internal group takes credit
for wins
• Vignettes and recency bias
1. Long Sales Cycles, Weak
Attribution, Few Data Points
@RichMironov @LeanProdMeetup

8. • Validate problems directly with dozens of customers
• You, personally
• Learning interviews ≠ selling meetings
• Dig deep on problems, motivations, quantifiable value,
buying processes, alternatives before pitching solutions
• Identify segments, qualifiers
(then share widely)
• Outside win/loss analysis
(not sales self-inspection)
What To Do?
@RichMironov @LeanProdMeetup

9. • “Closing” meetings
• Organized by Sales
• Goal is to close
• Anticipate/answer objections
• Never raise new issues or ask about new needs
• Listening/learning meetings
• Organized by Product Management
• Open-ended questions
• Dig for blockers, issues, ideas, new concerns
• Trial-close unbuilt products, unproven solutions
Two Kinds of Customer Meetings

10. • Your engaged paying users
interact with your system (SaaS)
• Who logged in this week?
Entered data? Checked status?
Ran a report? Needed help?
Saved money?
• A/B tests, non-vanity metrics
• Predictors of good onboarding,
active users, renewals?
Actionable Data from User Activity
@RichMironov @LeanProdMeetup

11. • Two sets of benefits and
features and success criteria
• Users want great apps;
buyers want great ROI
• Roles and titles vary
• Complex set of influencers
2. Buyers ≠ Users
@RichMironov @LeanProdMeetup

12. • Say “buyer” or “user” instead of
“customer”
• Interview both, understand both
• Users want benefits/features; buyers
want ROI
• Sales-led Customer Advisory Boards
are selling events
What To Do?
@RichMironov @LeanProdMeetup

13. “By using our tech support knowledge automator, you can
reduce your support time per call by 25%.”
Hard Cost Savings for Buyer
Proposed savings 25%
Your savings $65,000
Your support calls/year 22,000
Average minutes/call 16
Total annual support hours 5,900
Current support team FTE 4
Average salary $65,000
Annual staff cost $260,000

14. • High-powered, expensive sales teams
• Long sales cycles, lumpy revenue
• CEO tracks major deals by name
• Sales wins deals; product loses deals
• “How hard could it be to add
this one tiny feature?”
3. Strong Organizational Incentives
For Sales Escalations
@RichMironov @LeanProdMeetup

16. • Don’t be offended or surprised. We love Sales!
• Prepare, prepare, prepare, prepare, prepare
• Identify executives who own trade-offs, feel pain
• Preemptively discuss when no deal is on fire
• Frame all requests as trade-offs. Compare
all options in dollars. Replace AND with OR
• Build trust and working relationships with Sales
Sales Escalations: What to Do?
@RichMironov @LeanProdMeetup

17. • “Show me that your
product delivers
promised savings”
• Complex customer
deployment environment
• “Move fast and break
things” doesn’t excite
enterprises
• Buyers lose face (or job)
for wrong choices
4. Fully Working Products

18. • Bottom-up, land-and-expand, departmental
• Jira, Slack, early Salesforce, campaign marketing,
recruiting, small analytics, travel, events…
• Strategy: start with workgroups
• All-or-nothing major systems
• ERP, finance, corporate HR, security architecture…
• Evaluation process, RFP, references, sandbox trial
Can Customers Directly Try/Test
Your Product?
@RichMironov @LeanProdMeetup

19. • These specific letters (“MVP“) create confusion, not insight
• Sales teams just hear “product“
• So my product managers never say “MVP“
• When enterprise customer shows
interest, Sales and execs turn
“learning” into “early revenue”
• “I just want a perfect product sooner.”
• Use unambigous words: Concept test,
paper prototype, journey map, UX test,
concept validation, technical shakeout
“MVP” Has Been Co-Opted
@RichMironov @LeanProdMeetup

20. 1. Dozens of in-depth interviews replace hundreds of
market funnel A/B tests
2. Understand and serve both buyers and users
3. Intense pressure for “specials”
4. Product must actually deliver on core promise
before we can earn meaningful revenue
Enterprise Product Takeaways
@RichMironov @LeanProdMeetup

21. Rich Mironov
Mironov Consulting
San Francisco, CA, USA
www.mironov.com
+1-650-315-7394
rich@mironov.com
@richmironov