How to avoid ‘pilot purgatory’ in enterprise sales — Monica and Joe series
Why enterprise customers want to test first, and how to qualify their stakeholders to successfully develop pilots into contracts.
The scream of the siren from Jackson-Square resonated in Joe’s head.
Is that an ambulance or the police? - Joe wondered. Either would fit his distressed mood. He’d just finished a lengthy call with Brothers Corp about five additional features they want for their pilot.
How did they get us into that situation? - he asked himself. Joe wasn’t sure how to share the news with Monica, his company co-founder.
The dynamics with Brothers Corp frustrated Joe. On one hand, he knew that closing this opportunity would signal a key milestone for the young company. “Deliver a successful pilot” was his main engineering OKR for the year.
Pilots are a justified stage in the classical B2B procurement process and are an opportunity to get alignment with the customer. Corporate customers take significant risks with startups, ranging from wasting employee time to jeopardizing internal processes or their assets. Even if Monica and Joe’s product was successful with another customer, there is always a risk that the integration with the new customer’s product or process will not be. So, pilots are necessary.
On the other hand, pilots can open the door to customer abuse to the startup. It doesn’t come from the ‘evil’ nature of big corporations, it is just ignorance and inconsistencies in the minds of the people at your target prospect.
The dynamics of a big corporation generate a very different sense of urgency to that of a startup. For Brothers Corp, wasting a year on a ‘failed’ project is next to nothing. They see such failure as part of their learning process and they hope you also get a valuable take-away, other than their cash! For Monica and Joe it’s a matter of extending the runway to keep the company onboard, and get enough commercial momentum to advance their next round of financing.
In the last few decades, the media has cultivated an image of startups and technology that has increased the perception that everyone understands the ‘rules of engagement’ with young companies. Inconsistencies can happen when large corporates embark on a pilot, even if they know that the likelihood of it turning into a commercial success is low. Abuse takes place because of cognitive dissonance rather than misdeed or malefaction.
Monica came back from a morning coffee with one of her Board members, Albert. “Joe, I had an interesting talk with Albert. He ran me through different types of pilot cases — the pet pilot, the innovation theater pilot, the matryoshka, the spaghetti wall, the acqui-hire, the copy & paste, and more”.
“That sounds like a fancy new range of coffees!” said Joe, “Tell me more”.
“OK, let me explain the different pilot purgatory types and you tell me which one fits Brothers Corp” Monica replied with a smile and set out the following.
‘Pet Pilots’ thrive when you are the latest shiny object of your prospect. Your contact is curious, intrigued by your solution, you may help them score a few points in front of their boss, but your contact does not have the necessary authority even if the pilot is successful.
A great filter comes when they have the budget to pay a meaningful sum for the pilot and can tell you what the post-pilot plan is.
‘Innovation Theater Pilots’ thrive when the pilot is part of a ‘concept car’ type of project. They are throwing money to inspire internal and/or external audiences about a certain vision they have. Many companies work with startups to get the freshness of view and innovation brand by association. Depending on who drives the pilot this may be a one-off experiment with little intention for large deployments. If the company is an industry reference, you may collect a nice logo for your website and investment deck, but only recurring revenue will drive up the valuation of your company.
‘Spaghetti Wall Pilots’ thrive in projects driven by a corporate innovation with the wrong incentives. This happens when your contacts are mainly compensated by the number of projects (or pilots) they deliver, as opposed to the ones that make it into their company’s products or processes.
Corporate Innovation people are useful to startups because they contextualize the company needs to the startup ecosystem, and they contextualize the startup ecosystem back to the company. They do not manage technology, but the transfer of technology.
In order to succeed, assess the legitimacy of your contact within the large corporation and how much the actual ‘product’ people are involved in the pilot. Avoid people that ‘throw spaghetti to the wall to see what sticks’ and rather strongly partner with those that have a strong thesis and alignment with their business ‘soldiers’. For large corporations, you need the right people to help you interface with the internal machinery!
‘Matryoshka Pilots’ thrive when you discover last-minute requirements. At every project review that there is something new required for transitioning from pilot to commercial deployment. In industries with long product life-cycles or in regulated industries, you may need to go through multiple stages.
Get the right expectations from the beginning. Otherwise, you may wander in this type of pilot hell for years before you know if you have a sale.
‘Acqui-hire pilots’ thrive when the prospect is interested in your team’s skill-set. They’re not there to buy your product, they need a solution or access to a skill-set. They will hire you as a professional services vendor, they may try to poach your team, they may even try to acquire your young company for pennies. The pilot is interesting for them as a demonstrator of what you know, not what you’ve built.
Be aware when your contact is more interested in your team rather than in what you have built so far.
‘Copy-paste pilots’ thrive when the prospect is trying to learn all they can. Their goal is to learn about your product and trying to reverse-engineer it so they can build it themselves. Some big companies and countries are predisposed to this, so do your due diligence in advance! Be wary when too many engineers on their side are involved asking “how” questions, but no discussions about integration or how you fit in their product or technology roadmap.
Joe calibrated his expectations from Brothers Corp based on the pilot purgatory scenarios Monica listed. He diagnosed the situation, and he was thinking about the next steps when the smart speaker tuned to a John Prime song…
Say you drive a Chevy
Say you drive a Ford
You say you drive around the town till you just get bored
And then you change your mind
For something else to do
I wish you happiness
I guess I wish
You all the best
Joe thought, I’ve been down that road myself and it hurts… a relationship falls apart, people wish each other the best, but there’s still a bitter parting.
What type of pilot purgatory do you think Joe had experienced?
Some morals from this story…
Adjust your pilot expectations based on the maturity of your product
What you want to get out of the pilot depends on where you are in your product life-cycle. If you’re still in the initial stages of product development, you will appreciate an environment to test things out. Hence you will look for a prospect with the traits of a partner — that gives you the freedom to try and provides insightful feedback.
On the other side, if you have a product that’s ready for the market, you will look for a prospect with the traits of a customer — somebody smart about what they need, curious about how your solution addresses their problems, and disciplined about their decision making on how to move a pilot into a contract.
Map the enterprise stakeholders in your sales process
A set of stakeholders will determine the ultimate outcome of each opportunity in your pipeline. Each of these stakeholders plays a role — some major, some minor — but all have the potential to raise your win probability or lower it.
In small, simple deals, stakeholders may take on multiple roles. In large, complex deals those roles may be specialized and well defined. In some deals, the stakeholder’s roles will be transparent, clearly conveyed, and easy to ascertain. In others, the stakeholders map is opaque.
According to Jeb Blount, there are five BASIC stakeholders that you’ll meet in enterprise sales:
Buyers — are essentially decision makers, people with the ultimate authority to say yes or no.
Amplifiers — are stakeholders who see a problem or gap that your product can fill.
Seekers — are stakeholders sent to look for information or who do it on their own.
Influencers — are stakeholders that play an active role in the buying process. They can be advocates for you, naysayers who are against you or agnostic.
Coaches — are insiders who are willin not only to advoicate for you but to help you with insider information.
In order to quickly transition your pilot into a deal, you must identify and map all potential stakeholders to understand their roles in the buying process.
Do not leave fate to chance!
If you liked this article, subscribe and take a look at this other story about Monica and Joe and getting the right price: Get your new product pricing right
A note from the author, Albert Vazquez-Agusti: Since I was a teenager working with my father at his engineering office, I’ve seen firsthand how technology and innovation change our work. We have reached a crucial acceleration point where technological change, education, and inequality are involved in a kind of race. I’ve come to realize that the real bottleneck to taking advantage of innovation is the lack of relevant managerial skills to impact business models through new technologies. That’s why I promote the development of people and organizations to support technology adoption to solve small to big problems based on my experience in Fortune 500, SMBs, Private Equity, Start-ups and Venture Capital organizations.
About Monica and Joe series: meet curious Monica and loyal Joe, Albert’s fictional characters in a series of articles about learning lessons Albert has experienced or observed as a founder, executive, VC or Board member.
