Hey guys these are excellent feedbacks! I discovered too late this behaviour was typical, and you confirm it even more… I wish we had sought this kind of trustful insights beforehand.

We actually thought our lawyer was helping us but you know, he was a "close friend" with the CEO so the game rules were a bit faked.

Thanks for the book reference as well!

Yeah, it can be hard to know some of the core things like market entry strategy without having been burned before. Even if you get the strategy right, setting up your sales and marketing plan (compensation, market profile, etc.) such that it implements your strategy is also a challenge. My belief is you should never have commissioned sales people in a young software startup; always pay them on a salary + bonus structure with bonus targets that reflect your strategic priorities (i.e. number of customers, revenue per customer, etc.) These can and will change frequently as you "pivot" your product development.

It's not impossible to sell software to enterprises, but they shouldn't be your first target customers for a number of reasons. First, any enterprise problem that is valuable to your potential customer probably already has a solution available from their ERP vendor (e.g. Oracle, SAP or IBM). If your prospect chooses not to go with that solution, price is likely the issue; so you are selecting price-sensitive customers. Second, you will likely have to integrate with an ERP system, which will likely confuse your Rails developers because ERP systems are ass-backwards and make no sense.

It also becomes a lot easier to sell your product to a big customer if you already have a lot of little customers. But selling software to big customers will require a lot of custom integration work: you need to have the scale to be able to provide integration services to them while still supporting your existing customers.

Enterprise customers should absolutely be a goal of any B2B software startup, but not early on. Early on you want to focus on the customers that are easier to please, and make a kick-ass product for them. Once you have built that product, you can start to scale it up to larger customers and get the feature integration right. You also shouldn't be afraid to say "no" if approached by a potential big customer because your product isn't ready for them.

In my experience working on an enterprise software product, it's not so much that price drives them away from Oracle/SAP/IBM/..., but a perceived lack of value or ROI. Competing on value instead of price is definitely possible in a B2B context (although to be fair some companies are just cheapskates and will always buy the cheapest product).

Well, all other things held equal, most customers would prefer to buy from an existing vendor (one throat to choke and all). Given the nature of most RFPs for this kind of software it's hard to win on value since the requirements are laid out in advance; so you almost have to win on price. The danger of winning one of these contracts is that SAP/Oracle/IBM all know how difficult their ERP systems are to integrate with, and if you can under-price them, you're likely underestimating that cost.

Basically, there's a lot that can go wrong and you need to have a certain scale before you even attempt to go after the big whales. You shouldn't be trying to work with them while building out the basic version of your product.