Nothing is as difficult as securing your first big deal as an early stage startup. Last week, I talked to a founder of one of our B2B SAAS portfolio companies and we discussed a challenge I see many founders struggling with, which is to close a real inflection point contract in the beginning of their journey. It’s a tough job as a founder to sell your product to very large corporations mainly when it affects their core operations, but it’s not impossible. It’s only a matter of figuring out how these people think and operate, and adjusting your sales strategy to that.
In my early days as co-founder & CEO of Xpenditure (now Rydoo), we used a simple but powerful method that we still propose during sessions with Pitchdrive portfolio companies, we called it the Reverse RFP (Request for Proposal).
As an expense management startup, it was very important to have a ‘big 4 four player’ in our customer base as quickly as possible. We approached all of them and showed the power of digitizing their expense management expense processes. Within 6 months, we agreed on a deal with Deloitte BE using the Reverse RFP technique and implemented our solution with success. We hyper focussed on an extraordinary customer experience and started to prepare grounds for land and expand within other countries. In the few years that followed, we closed all the other big 4’s + Mckinsey global.
The idea behind reverse RFP is to maximize the value of the partnership for the small startup. It involves approaching numerous organizations in the same market/geo and offering a limited in time/exclusive partnership to the one that has the best offering for your startup. By approaching multiple organizations, the organizations will have to compete for the strategic partnership enabling small startups to ensure that they are getting the best possible deal (and this is not price). This tactic gives the startup more bargaining power and creates a sort of fomo, as the organizations know they are competing against each other.
Reverse RFP is one of the best sales strategies I’ve encountered for early stage B2B startups. Here’s how to put this strategy into practice:
→ This creates momentum for your startup and gives the corporate customer the benefit to receive new insights, show innovation for marketing & PR purposes and, above all, gain time and money thanks to your solution.
I distilled 5 clear advantages for the startup when applying Reverse RFP:
It’s important to understand that this tactic works best in the first 2 years of your startup life, and can give you a massive head start that you will benefit from for the rest of your startup journey. Best of luck!
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