Heroku's CEO warns startups against the enterprise mirage: early enterprise deals from VC introductions feel like success but signal nothing about real product-market fit. Don't hire enterprise sales until you hit $10 million ARR and have repeatable systems in place.
And I'll give you my simple cheat code in my remaining three minutes for that. For those startups in the house, if you are. If you're doing two, if you're doing one and two and you're thinking about adding enterprise and you're under 10 million in ARR, don't. The cost and complexity of building everything you need to do enterprise, it's so alluring. Right? Because those customers are right there and your VC just introduced them to you and they're gonna sign $100,000 if you only do X, Y and Z. There's a little bit of kind of what I call the enterprise mirage that startups often fall into because they can get this initial boost of enterprise customers through inorganic or unnatural means. VC introductions, friends or family. But what it doesn't mean is they built all the repeatable systems underneath that. And so they think they've done enterprise when they really haven't. So that's my resource allocation spiel and my kind of last point here. I mean, hopefully most of you know this. I stole this from Saster so you can ask Jason to make an updated version. Cause I certainly couldn't do the legwork. I'll tell you, the good news is I've been doing this for a long time. Right? Right. Salesforce in 2003, Dropbox in 2010. You know, it was very hard to have any shared consciousness about what this model looks like or find people who can bring best practices. Good news. This is becoming more common so you can hire for it and kind of build these capabilities in your organization. And that's reflected in how common it's becoming even in publicly traded companies. And it's still hard, but at least it's becoming more common.
