Steak might have been on the menu 10 years ago when a sales lead took a CIO to dinner to close on a software deal. At the time, CIOs controlled every piece of software their company purchased. They were the gatekeepers to adoption, and the sales cycle was designed to capture their influence over the budget for software procurement.
Today’s CIOs have democratized their purchasing power to the rest of the C-suite, executive leaders and the individual users of software. They might not even be aware of all of the software applications that employees are using — a huge shift in visibility into the adoption of tech and information-sharing with third parties.
With this shift, end-users now hold the power when it comes to influencing software purchases and renewals, and the SaaS startup landscape is adjusting accordingly.
SaaS sales cycles vs. instant gratification
Gen Z and millennials make up nearly half of today’s workforce. Their expectations for productivity-driven business software are informed by their reality which has been shaped by delightful user interfaces and instant gratification. They want predictive, user-friendly solutions that are best in class for their role, delivering instantaneous ROI without material implementation effort.
Considering this demographic shift along with the transformation of the CIO role, SaaS startups are compelled to understand how they can reach individuals to drive product-enabled growth and virality. Slack is an example of a company that pioneered this model, selling to individual users first and then making its way into the enterprise.
Today, 58% of B2B companies have a product-enabled strategy in place. As this pattern continues, SaaS startups are forced to meet Gen Z and millennials’ desire for seamless software adoption.
SaaS startups need to nail the data
With instant gratification in mind, SaaS startups need to put the right data in front of end-buyers. Data on every software vendor is available to users through a Google search, making it easy to compare vendors in every software category.
Given the information at their fingertips, users can identify the functionalities that fit their needs without engaging with a salesperson during the discovery phase. While the role of a salesperson is still critical to catalyze a sale, transparency among product, pricing and packaging is changing how software is purchased.
Incorporating data and ROI calculators to underscore the value of the solution early in the sales cycle is imperative to attract and retain the attention of the modern user.
More startups will tackle security
Although CIOs are no longer front and center in sourcing the software stack, they are still involved in cybersecurity management to prevent enterprise vulnerabilities. According to a 2023 report, security management was the most common responsibility CIOs were tasked with.
The rise of generative AI is giving way to a Pandora’s Box of cybersecurity concerns. Attack vectors and security vulnerabilities have dramatically changed within the past five years, and we have more data to protect than ever.
This ties back to the SaaS landscape and transformed CIO role. When each employee is requisitioning software, it becomes more difficult to guarantee your company’s data is protected. This reality and the emergence of generative AI safety concerns will give way to more startups tackling security, compliance and identity management.
Oftentimes, software sales cycles at the enterprise level entail complex procurement, information sharing and security questionnaires that slow down the sales cycle. Navigating company vulnerabilities is becoming more complex, yet employees are seeking more transparency than ever. This year, we’ll see a new category of software companies emerge to reconcile the two conflicting priorities.
Priya Saiprasad is a general partner at Touring Capital. She co-founded the firm after 13 years in venture capital, M&A and enterprise technology. She was most recently a partner at SoftBank Vision Fund, where she led investments into category-defining software companies including Pixis, Vendr, Observe.ai, CommerceIQ, Sendoso and Skedulo. Previously, Saiprasad was at Mayfield Fund1 focused on early-growth investments, and a founding member of M12 (Microsoft’s Venture Fund), where she led investments in Go1, Workboard, PandaDoc, Element AI (acquired by ServiceNow), and Bonsai (acquired by Microsoft). Prior to that, she was a deal lead in Square’s M&A team leading acquisitions at the intersection of software and machine learning.
Illustration: Dom Guzman
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