When you are getting your SaaS company going, first time founders may sort of Fear the CIO. Or at least, want to stay away. Isn’t it better to go around the CIO, with a sale directly to an operational group within a large company? Sometimes. Aren’t you going to fail whatever SecOps audit the CIO does in the early days? Probably. Isn’t it basically impossible to get the CIO’s attention anyway? Yes. Aren’t sales cycles incredibly long at the CIO level? True enough.
I didn’t expect to sell to a CIO myself in the early days, either.
But we ended up selling to several in Year 1. When our product was feature-poor, and the team was tiny.
My uber-learning is this: Don’t Fear the CIO. Even in the early days, even if you have just a few customers — the CIO can be your key ally if you play it right.
The panel was a good reminder of what so many CIOs are doing these days and have been for quite a while now: looking to bring value into their enterprise. And one of the best ways to stand out in the CIO’s office is to bring in some up-and-coming SaaS vendor that can provide huge ROI that same year, change a little bit of the game, and build a successful collaboration together.
And all three CIOs talked about very early stage start-ups they took risks on, using their SaaS products very early, in some cases serving as the very first customer for some SaaS vendors.
Key takeaways and reminders:
- Cold calling doesn’t work well with the CIO. Everyone cited 300+ in-bound pitches a week, with the number seemingly going up every week. You probably have to get to the CIO through other channels — VC forums, someone on their staff, or a preexisting relationship. A great cold email can work, though, if it’s really carefully crafted to solve their problem. And sometimes, they will find you.
- CIOs are willing to bet early on a few SaaS start-ups (x) if the value proposition is unique, (y) if the app won’t bring down the business if it fails in a pilot or production — and (z) if they trust the founders. No one is going to replace a proven enterprise solution with a start-up that is only 20% better than an existing, implemented, hardened solution. But if you do something truly unique, and you aren’t mission critical on Day 1 at least (i.e., you won’t be a Career Ending Move for the CIO) … they’ll take a bet on you if it’s a potential game changer and they trust you. All three CIOs cite key, trusted relationships with the CEO/founders. I found this myself. I had to build personal relationships of trust with all our early CIO (and other key) enterprise customers. Trust is so key here. And you (probably) will need to get on a plane. Don’t fear the plane, either. 😉
- CIOs don’t expect perfection on Day 1. But They Do Expect Continual Innovation. They know you haven’t checked all the boxes in the early days. You may well “fail” their security and tech audits at first. What they need to know is you’ve got most of the boxes checked, and have a plan to address gaps and improvements here.
- CIOs don’t expect you to build truly custom features. Many entrepreneurs fear CIO and pan-enterprise level commitments because they’ll be taken down a rat hole with custom feature requests. Yes, you’ll probably get these requests. Even Salesforce still gets them. But most CIOs understand you can’t build custom software in SaaS. What they will ask for instead is some reprioritization. A feature you might have planned to build 12-24 months out, they think they need now. And they’ll ask you to pull it up in time. Which may be absolutely fine if you were going to get there anywhere.
In the end, to me, the key to closing the CIO’s office in the early days is just understanding The Social Contract you have with your champions and the CIO in these early, pan-enterprise deals:
- The Social Contract is that the founders will be there — personally — for the CIO and the key sponsors. Not someone on the team. You.
- The Social Contract is that you will be highly innovative — and the CIO gets input on the roadmap. You will keep delivering great features and functionality at 4x the pace anyone else could. And the CIO gets input — not control, but input — on the roadmap.
- The Social Contract is that you will deliver a very high-level of transparency and honesty. You will make mistakes. Some big ones. You need to be honest back when they happen. Or that trust will be lost forever.
- In return — the CIO will take the risk on you. But it gets better than that. Ultimately they will pay it back 10x. As you’ll see on the panel, the CIOs are all willing to be case studies for the start-ups they took risks on that delivered for them. They recommend you to other CIOs. They became a super champion. That can really make you in the early days.
I’m not saying you have to sell to the CIO. Maybe you want to be 100% SMB, or focus on functional silos in the enterprise.
But be open to it. Because closing 1 or 2 CIO-level, pan-enterprise deals in the early days — can really make your company.
And the CIO can also often write the largest checks as well. 😉
(note: an updated SaaStr Classic post)