# About That Sales Cycle…It Will Kill you

By [William Mougayar's Blog](https://wamougayar.xyz) · 2013-10-08

brad-burnham, david-skok, enterprise, marketing, saas, sales, tomasz-tungunz, union-square-ventures

---

Here’s why this frontal approach doesn’t work for a startup. The long sales cycles inside an enterprise will kill a startup. To sell a $60K service inside a company, you will easily need a 6-12 months cycle, if not more. You just can’t do it. The only way a startup can make a dent into the enterprise is via a low-end consumerized approach, or a low-cost SaaS product, which requires at the most a “light touch inside sales” approach. David Skok explained this very well in [How Sales Complexity impacts your Startup’s Viability](http://www.forentrepreneurs.com/sales-complexity/). And Tomasz Tunguz put some numbers behind this, suggesting that you need to “[price the product between $1K to $25K annually to optimize growth](http://tomtunguz.com/saas-startup-benchmarks)”. And for some real education on the economics of acquiring a customer, David Skok’s 2009 piece is as current today, as it was 4 years ago, [Startup Killer: the Cost of Customer Acquisition](http://www.forentrepreneurs.com/startup-killer/). So, what if you have latched on to 4-5 prospects that have a potential to give you that $60K per year. You might think, that’s $300K in revenue, wow. But what you’re not thinking about is the time it will take you to close them. Would you rather have 4-5 prospects that take you 6-9 months to close, or 20 of them at $500-2K/month that will close in 2-4 months? That’s why Boris Wertz prefers enterprise startups that [“Sell to many” vs. those that “Sell to few”](http://versiononeventures.com/selling-enterprise-sell-vs-sell-many/). If your startup looks like a traditional enterprise sales model, don't go there. If you have an immature product that hasn’t reached [product/market fit](http://startupmanagement.org/lexicon/product-market-fit/), the onboarding costs and efforts required will kill you, because not only the product isn’t perfect yet, its implementation will be bumpy. I have written about [The Fallacy of the Easy to Use SaaS Product](http://startupmanagement.org/2013/08/13/the-fallacy-of-the-easy-to-use-saas-product/), explaining that a difficult onboarding process adds to your customer acquisition costs, and you will have fewer implementations because of the time factor. In addition, a larger enterprise sale will come with the following burdens, all them being time-sucking activities:

*   Negotiations on the terms and conditions
    
*   Approval levels
    
*   Education of several people
    
*   Support requirements
    
*   Meeting delays
    
*   Changes in agendas
    
*   Budgetary cycles
    
*   Resource allocation to run your product
    

I will end this post with this paragraph that Brad Burnham wrote in 2006 on the [Union Square Ventures blog](http://www.usv.com/2006/08/scalability.php), and that still resonates today:

> We are not afraid of investing in a web service that does one thing well. If anything, we are more skeptical of a young company that claims to do many things well. When a young company presents a matrix that shows them doing everything that well established competitors do only better, we rarely ask them back.

Unless you have at least $10M in the bank, don’t mount a frontal assault on the enterprise. You can’t get to that mountain that way. Break it up into smaller hills.\]\]>

---

*Originally published on [William Mougayar's Blog](https://wamougayar.xyz/about-that-sales-cycleit-will-kill-you)*