The Better Customer–Startups or Big Enterprise?

Some products solve problems that mainly appear at larger companies, such as Snowflake’s data warehouse and Workday’s comprehensive HR suite. Selling to startups that lack the problem can create misleading interest without a viable market.

Startup customers can be just as demanding to support as enterprise users, while paying less. They may also churn as they grow: HR tools, Heroku, and lightweight CRMs can stop meeting a larger organization’s needs when the buyer or end user changes.

The speakers describe a belief that self-serve signup, ads, or friendly introductions to other founders can replace sales. They argue that founders still need to reach prospects, earn replies, explain the product, and change customer behavior.

Gusto used startups to refine payroll software before expanding into the broader small-business market. AWS used developers at startups to build adoption and advocates who could help introduce its cloud services to larger companies, though enterprise sales teams were still needed.

The closing advice is to decide which strategy fits: retain companies as they grow, as Stripe did; use startup customers to refine a product for another market, as Gusto did; or build bottom-up adoption that can support enterprise sales, as AWS did. Founders can study companies that have already followed the path they want to take.