Transcript excerpt of a discussion advising startups to choose between targeting SMBs or enterprises. The speaker recommends deciding (often around $10–20M ARR) to focus on one segment because enterprise customers impose long sales cycles, compliance and product 'table stakes,' while SMBs require high-volume PLG investments like ease-of-use, onboarding, and documentation.
Number two, also a choice. So it may be the case that your product is equally good at serving people inside of SMB and people inside of enterprises. And up until we were probably 20 million in ARR, we just catered to whoever's going to come knock at the door and you know, we're fine taking on both. And what we realized is these are materially different certainly from a go to market perspective. So enterprise has much longer sales cycles, a lot more checkboxes, a lot more compliance kinds of things that actually ends up driving product significantly. So you end up doing a lot of stuff inside of your product that is undifferentiated. Users won't understand the difference, but that is table stakes for the enterprise. Whereas with SMB you tend to have a more high volume game, which means the product investment depends more on learning and good documentation. Like in product learning, ease of use, everything around the PLG motion. And that PLG motions are also very different than the enterprise motion. So my advice here would be, you know, probably somewhere around 10, 20 million, if not sooner, you know, depending on how clear you are about who, who's going to buy your technology and where, what's going to fund the growth of your business to a larger stage to just make a decision, focus on one and then, you know, it doesn't. It's always possible to make small investments in the background to handle the other one. So it, in our case we chose enterprise. We're like our go to market is entirely enterprise. We won't say no. However, if an SMB comes in and we want those people to succeed, we just don't have all the motions in the company to do that. But we would, you know, it kind of had this slow burn on making the product easier to use, easier to self onboard, et cetera, et cetera.
