The other day someone asked me who some of our customers are at BrightGauge and I rattled off a few names quickly (some being local names). Not surprisingly, this friend had never heard of any of our customers. He was expecting big corporate names like those who we service at our other company, Compuquip Technologies. I told him that although their logos would look awesome on our customer list, we’ve made the decision NOT to market BrightGauge to the Fortune 500. We want to go after the Fortune 1,000,000!!!
In a quick Google search, I was able to find US Census Statistics for Small & Medium Businesses (SMBs) in the United States from 2008. It highlights that the number of organizations with 10-99 employees in this country is about 1.1 million. When you have at least 10 employees, I think you cross a threshold where you’re an organization with a legitimate payroll that requires real third party products and services to be successful.
The “SMBs”, as we call them, are known to be a large group of businesses that most people don’t understand and big companies can’t figure out how to sell to, mosty because there are so many in so many different industries. More challenging that just the diversity, most small business decision makers are just like you and me… we are all way too busy to look hard at a product or implement a product (we are busy running our businesses and wearing many hats). To add to that, most of the time SMBs don’t have a lot of money to afford high margin products or services either. Sounds intimidating doesn’t it? Lets look at the other side.
Larger organizations (or enterprises) aren’t a cakewalk by any stretch of the imagination. These organizations require very, very long sales cycles (and pay cycles) with many people involved in the decision making process. Susy Q in procurement may put a hold on your order if she doesn’t like the way Bob treated her at the department happy hour last month. That’s not good for your business needing cash flow now. There are also fewer large companies and since they are so “sexy” with their well recognized names and logos, most of the time they are being serviced well already. Lastly, if you are fortunate enough to sell into a few of these big companies, be careful they don’t leave you either… because if they do there goes 10-20% of your revenue overnight!!! Now that’s scary!
Both markets are a challenge but the SMBs, in our minds, are the prime opportunity. Why? The Internet!!
The Internet is an unbelievable distribution model (hence why there are so many new Internet companies) so its possible to sell, service, and scale with 1MM small businesses from a small office in Coral Gables. The popularity of Internet based SaaS products has also made developing, scaling, and supporting products much easier which has translated into lower prices. This means a B2B product (business to business) could now be in budget for those SMBs whereas 10 years ago prices were very high to buy important software platforms. The Internet has become not just a global force for consumers and individuals, but an incredible “playing field leveler” for Small Businesses (but thats another topic altogether!)
The Fortune 1,000,000 is a very exciting market. They are everywhere and they need your product!!! Good luck!