On Monday, I spoke with a wonderful founder we’ll call Jim. He was telling me how he sells to big companies. His approach was totally different from most startups — and brilliant.

Why Startups Fail to Sell to Enterprises

Most startups try to get big companies to use an out-of-the-box product. They don’t want to customize it much because they’re afraid of becoming a dev shop.

The enterprise buyer takes one look at this product and says “I need these 37 changes.” The startup says “Sorry, we don’t do that.”

End of meeting.

Jim was doing something different.

He was willing to make changes if a huge customer needed it. He even brought engineers to the customer site to make changes on the fly and ensure the product worked for the customer.

This is the level of service the giants expect. If you won’t give it to them, someone else will.

Simple Software vs. Complex Software

“But enterprises use off-the-shelf software all the time!”

I bet you’re yelling this at the screen right now.

That’s perfectly true. Big companies use products like Notion every day. And Notion doesn’t customize the product for a big customer.

But Notion is also a pretty simple piece of software. It stores documents — not a lot to it.

Let’s compare that to a company like Palantir.

Palantir sells large-scale, complex software to governments and huge companies. They expect white glove service, and they get it.

This software runs their operations. The ACV’s are in the tens and even hundreds of millions.

How Palantir and Epic Do It

Palantir sends deployment engineers to customer sites. They learn the customer’s workflows, customize the product, and make sure it works for them.

Epic is the largest producer of Electronic Medical Records and one of the biggest companies in SaaS. Despite operating in a different field, Epic’s approach is the same as Palantir’s.

They send staffers to customer sites to customize the platform. Every hospital does things a little differently, and selling them a one-size-fits-all product is impossible.

I actually used to be one of those staffers. Epic called us “implementers,” Palantir calls them “deployment engineers,” but it’s pretty much the same job.

I worked at Epic right out of college as my first job. Then, I worked in consulting in the same field for many years after that.

Based on that experience, I can tell you that if you think you’re selling a big hospital system some out-of-the-box solution, you are wrong. It’s their way or the highway.

But It Doesn’t Scale!

Startups are schooled in the one-size-fits-all approach.

They’re told to avoid customizing their product. If they do, they’ll become a dev shop, and dev shops don’t get venture funding and fat revenue multiples.

This approach works fine if you’re selling a simple product and/or selling to smaller customers. In fact, it’s the way to go.

But if you’re selling complex software that will run a massive organization, one-size-fits-all will not work.

The Fortune 500 are used to being catered to. You either roll out the red carpet or go home.

Despite all the cookie cutter “It doesn’t scale!” advice from VC’s, the bespoke model has scaled just fine for Palantir and Epic.

Palantir is worth $169 billion in the public markets. Epic is private but I estimate the valuation around $50 billion.*

Notion is a great company, but I doubt it will ever be that size.

Wrap-Up

Unlike most founders, Jim has figured it out. He knows the big boys demand white glove service, and he’s giving it to them.

And lo and behold, his little startup is starting to close huge contracts.

I told Jim about my experience working on Epic’s software and how it worked just like his:

“A lot of startups probably tried to sell one-size-fits-all products to big hospitals. They’re dead and Epic is still here.”

Jim ignores the usual startup advice and goes with his own judgment. That’s the kind of independent thinker I look for.

Once a couple more of those sales close, I just might have to slide a little check in here…

How do you approach enterprise sales?

More on tech:

Why It’s Easier to Raise $3 Million Than $300,000

Lessons From My 3 Most Challenged Investments

Learning From My Top 3 Investments

*Epic is private, never raised a penny of venture capital, and has no plans to go public. So, coming up with a valuation is difficult. But the number two company in EMR’s, Cerner, was acquired by Oracle for $28 billion in 2022. Given that Epic is number one and valuations are much higher today, I’d estimate Epic is worth around $50 billion. This would make it the 14th largest SaaS company in the world if it were public, just behind Datadog.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

Misfits Market

I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $15 on your first order.