Lately, I've encountered more B2B startups. I think it's a sign of the times, where B2B startups can provide some early revenue much sooner than for consumer startups who have to chase dollars out of elusive internet surfers.
However, I've noticed that there is no lack of frustration in the length of time it takes to close a B2B client. This is definitely due to the fact that many entrepreneurs are young and have not worked in big companies before, or certainly not in their current clients' organizations.
Having worked at IBM, Apple, and Yahoo!, I can tell you that big orgs have their peculiar quirks with respect to doing deals with service providers. Let me take you now into the mind of a big company person whom you're courting to buy your service...
Meet Mr. Big Company. He might be in any number of occupations, but let's talk about two types of Mr. Big Company: the IT guy and everyone else. Why do I separate IT guys? They have special anxieties about signing up with your service over and above anyone else in the org. More on that later.
Let's say Mr. BC (for Big Company) is not the IT guy and discovers your service. He loves what you're doing; he sees instant value in making his job easier, better, faster, stronger, whatever. But typically, he has no engineering at his beck and call. So he is forced to either sit frustrated or go outside the company to find help. But if he decides to try to implement you, here's what he's working with...
Based on where he sits in the management hierarchy, he has the ability to pre-approve up to a certain amount of expenses before having to get approval up the chain. Ideally, whatever your service costs is under that amount, or else he needs to go to his manager, and potentially his manager has to go to his manager, and so on and so on.
Mr. BC's department has a budget, and the budget is broken out into several categories of expenditures. Woe to he, if he did not ask for the money at the beginning of the quarter, or even potentially at the beginning of the year! If it can be fit into some category of his budget AND he has funds in that budgeting item, then he can potentially spend money for you.
Funny thing is, if he has a budget for something and he didn't spend it the last year, he may lose the ability to gain budget for it in the next accounting period AND even have a reduced ability to argue for it! So if you can find someone who has to spend his money or lose it, you're in luck!
If it's not in his budget, then he has to go through a potentially vigorous process of asking for more money. This can be an extremely time consuming process as he convinces his manager, and then they go and try to convince their manager, and then even potentially the finance person who oversees their department, or even the CFO if it's a small org.
The more levels of approval it takes, the higher the chance it will get killed. The more skilled the person asking for the money is, the higher the chance that it will succeed. All of this presupposes there is a bucket of money to pull from when they do get approval. Also, the more levels of approval it requires, the more time it takes. This is why it can take the better part of a year to get approval to do seemingly something small.
If Mr. BC is part of a matrix org which depends on other departments to cooperate, then he must also sell all the other department heads on implementing the service. If some marketing guy wants to implement some traffic driver onto the web pages of their website, then he must convince the web team to take some of their valuable time to implement the service. If the visual design of the service needs to be customized, then the design department and brand management may need to review it to make sure it is done to standards.
This will inevitably cause delays both in approval and in implementation.
Mr. BC is excited about your service, but he is also paranoid about you making him look bad. Thus, he will do some due diligence to ensure that you are reputable and that you won't screw him later on, and that you'll be worth all the time he put into fighting for budget and other parties' agreement to implement the service. At any moment, he feels like he doesn't trust you to do well, he'll bolt and not bother with you.
However, it can and will take time to build his trust. He may drag his feet to see how your service performs with other clients. It's no loss to him; he's not any worse for NOT implementing your service.
OK let's say he's a special class of Mr. BC called the IT guy. He's both the go-to guy and the guy people yell at when things go wrong. He's never fast enough to fix anything, and he gets blamed for everything that goes wrong. So after a couple months of this he says f**k this and he becomes ultraconservative simply for job preservation.
Along comes you and your awesome service. He may be the one who wants to implement your service, or worse he may be the guy whom SOMEONE ELSE wants to implement your awesome service. If he wants your service, he's at least like the other Mr. BCs and has to go through items 1 thru 4 above.
But if he's being asked by someone else to implement your service, then that raises the level of conservatism. Now if you fail, he gets to fail AND gets yelled at by a whole bunch of people.
So he takes his time in evaluating you and your awesome service, tapping into every little bit of your business and product, trying to find any small reason to say you guys suck and that his company shouldn't implement you. This means more delays, which just overall increases your frustration as your bank account runs lower, and increases the chance that it will just die through the approval process in the company.
If it dies, he's still OK; problem averted - he's covered his ass and doesn't have to take a chance on risking his career and his blood pressure on supporting and implementing you.
But IT guy isn't done with you after launching your awesome service; he's gotta watch you forever or at least until your contract ends. He gets to be stressed about you for the life of your relationship with the company. So he's not only doing his due diligence on you to ensure good service at launch, he's worried about you providing good service for years to come. Otherwise, it will fall to him to fix whatever mess you got him into by screwing up.
Hopefully by now you can see why the Mr. BC you're dealing with seems to be dragging his feet. It sucks and it is very, very rare that you encounter an org that moves differently.
How do you combat this?
First you must sell well. The basic benefits must be bought into and hopefully you're good at this or else your company is doomed anyways.
Second, you gotta go in with the attitude that you will do everything you can do not make your benefactor look bad. How this happens is by:
1. Creating a service that is bulletproof. It doesn't crash, and will work 24/7 for years, even after a nuclear bomb hits your building. Remember that if you become a key part of someone else's business, every second that you are down could mean that you are losing another company thousands, if not millions of dollars in revenue. (If you don't believe this, consider that whenever the Yahoo ad server went down even for a couple of hours, it meant huge swaths of revenue not recognized because ads were not delivered. It could affect quarterly earnings outlooks and incur the wrath of your best customers who may not come back!)
2. Delivering on what you promise and what the service promises. There are two things here. You, as the company rep, are make some assurances that your product is going to deliver to Mr. BC's expectations. He's going to buy into this based on his relationship and trust to YOU. Then it's up to the service itself to deliver to whatever expectations you set for it.
3. Providing great customer service, 24/7 if need be. If a problem happens at 3am, someone needs to get up and do whatever it takes to get the service up and running. You must answer emails and phone calls ASAP. Responsiveness on all fronts is key.
4. Building a reputation of trust, which can be through happy existing customers but also through your own personal handling of the relationship.
Third, you can also do other things like providing as much ammunition for Mr. BC to use within his org to get it approved as fast as possible. Help him sell it within his org! Case studies, stats, referrals, whatever info he needs - you should gather it and send it to him ASAP.
Doing all of the above and having a sensitivity towards the issues that Mr. BC faces within his org will result in better understanding of the issues and hopefully a speeding up of getting your B2B client to sign up for your awesome service as soon as possible.