Why Chasing Enterprise Broke This CRM

1 Jul 2025 · 1 min

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In this commentary, the speaker examines a CRM startup that initially thrived in the small‑and‑medium business (SMB) market, securing over $100 million in funding and building a product tightly aligned with SMB needs. As investor pressure mounted for faster growth, the company pivoted toward enterprise customers, hiring senior sales executives and expanding its sales force. This shift led to a diluted product focus, misaligned teams, and increased churn. While revenue briefly rose to $20‑30 million, the company soon fell back to around $20 million and now faces strategic uncertainty, with its future prospects unclear.

Chapters

There's a company out there, they raised over $100 million. At first, they were focused on small and medium-sized businesses, got a lot of traction in the SMB space. Their product felt very native to that platform. They were doing really well. But as they were raising more and more money, you get more pressure to drive more revenue, more growth. In the SMB space, one of the problems is you deal with a lot of churn, very hard to grow. What brings great growth? Enterprise-level deals. You can hire lots of salespeople. And force function that growth. And that's what they did. They got forced to hire some enterprise-level executives, big sales team, bring in larger clients. For 2, 3 years, they sharpened their growth curve. The product got more diluted. People were less aligned. The company was saying, we want to serve the small ones, but also the biggest ones. And so it just waters down the product. It waters down the focus. And they started becoming more average. Although they had gone to sort of $20, $30 million revenue, they've declined back to $20 million. And now they're in sort of this space of trying to sell, but they're, they're not as hot anymore. And And it's just not clear what's gonna happen