[chrismarlow9]

Beware of step 2 to step 3. I call it "chasing the whale". The problem is the "whale company" knows they are a whale. You'll slowly watch your entire development timeline and features shift to benefit only them. Your company basically becomes a contractor for them to get X feature working (and nobody sees this feature being helpful to any other customer). You can't get rid of them because it looks terrible for funding that you dumped such big potential. Technical debt piles up from priority shift and then the whale is gone. You were only a POC for them, and in the wake of being side lined as a priority other customers leave.

I've seen this happen multiple times.

[xnorswap]

I've also worked at consultancies who let their software product strategy be effectively doomed by this.

The sales team were always underselling the software (often just giving it away for free to land consultancy contracts); promising the moon to "large" companies because it looked amazing to get such a name on our homepage and looked good at the monthly company meeting.

But the reality of large companies is that they are a many-headed beast, and just because you've sold some software to "BigCompany", doesn't actually mean much if you've actually just sold to the 4 person HR department of a local branch of a sub-division spin-off.

That department leverages their "BigCo" name to get the world at a knock-down price, while the small company is throwing everything at chasing the promise of huge future revenues "when BigCo roll out fully" which never materialises, or happens in name only.

Very often it turns out it's only ever "Dave" that had even heard of your small company / product and was just using it for some other BigCo political games. As soon as he leaves BigCo, because he leveraged "his HR transformation project" into a better job offer elsewhere, you struggle to even get a single person at BigCo to pick up the phone. To be fair, they'll happily keep paying your invoices for the contract, but remember you sold at a loss for the promise of future revenue which is now never coming.

But hey, it's okay, because your own sales team have also moved on and are now promising that if you just rush in feature Y then we're sure to get a sale with MegaCorp. ( Repeat endlessly, to the stress of the rushed development team whose time has just been undersold again. )

[user_named]

This is accurate. We even underpriced the consulting and custom work. Didn't charge for project management, Product management and rarely design. Only for Dev and QA.

Every weekly the sales team had the same bigcos "in the pipeline" as six months ago and they weren't replying to emails. But you have to help us get that SOW ready by tomorrow so we can send it to them.

[superfrank]

I work for a multi-billion dollar publicly traded company and I've watched this happen to a new product that our org launched last year. One big customer set the direction early on and got used to us building exactly what they asked for. As we've gained more customers we're having to tell them no more and more often and they're getting less and less happy. We're locked in to a long contract so they're not leaving anytime soon, but it's turning into a constant battle with them.

[quickthrower2]

Such a lose lose. Even for the “spoiled brat” customer who would have been better off with well set expectations

[mlhpdx]

Or, you get past the POC and “land” the whale. You take a deep discount on price to lock in the revenue. Now you have revenue, but insufficient to hire and grow. Rinse and repeat. All the debt (technical and financial) and a dim future.

[AndrewKemendo]

This happened to me and my company with a F10 retailer in the US long long ago

The reality is, most times you have no options and that whale is your highest likelihood exit

The reality is, this is what being in a market with what are effectively monopolies looks like. You either bully your way to the top or have to deal with being bullied till you can get out.

[yowlingcat]

This is why you need to actually say no to giant enterprise clients until your company is ready enough to weather the multi-year sales cycle with a strong revenue base outside of it, even if those enterprise parties are interested. I think a lot of B2B executives forget this lesson. A sales cycle your company is not ready for could kill it if attempted prematurely, even if it could theoretically close.

[moneywoes]

Any other reading on sales cycles, very interesting

[user_named]

It just means spending 12-24 months of time, from everyone including ceo, vps, Product, cto, devs, designers, marketers, to get th contract signed. 24 months of these people's wages is a lot.

[lennysan]

Very important insight. Thanks for sharing it.