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I have a working prototype for an enterprise software. It is basically a very niche product catering a subset of the engineering firm. Now, what I need, is to validate the market as soon and as cheaply as possible.

My software is a boring, desktop based application. Due to the high cost of development ( I can foresee that even though all I have is a prototype), and due to limited demand, the software must be expensive, very very expensive. The price could be more than $10K and less than $100K. As a consequence of being very expensive, selling via online is very hard, SaaS business model is completely not practical given the current technology of the web browsers.

This is an off-the-shelf product, and I can't gradually improve the product by doing consulting.

This niche of customers whom I intend to sell to has the following characteristics:

  1. Very conservative and don't like to use software. I would have to employ door-to-door salesman to convince them to buy. It is not enterprisy for no reason :). But like I said, I want to validate the market first before really employing the first salesman.
  2. Don't like to give feedback. This, couples with the fact that we are selling desktop software, means that there are only very limited ways we can get feedback to improve our software.
  3. Not technological savvy, they have no patience for an unfinished product. So anything you give to them, it would have to be fully functional and contain no bugs, or else they won't buy.
  4. Those who are using the solution don't have the purchasing power. Not only that, they don't have the ability to grasp the intention of your software unless and until you have a working, fully functional, bug free software in front of them. Even if I do have such a software, they still won't provide feedback. The one who has the purchasing power simply won't entertain you because you are not solving his problem.
  5. Telling my prospective market what my product is going to do is very hard to pull it off as no one likes to read pages and pages of powerpoint slides or documents. They won't commit anything until they see the final, working product. Yes, a final, working product, even a prototype won't do ( I got a prototype and all they said was "wait until you are finished and only then come back to me, till then, I am not interested"). Such is the mindset of our customers.
  6. My software doesn't really save money/ make more money directly for a company. The benefit is only apparent for the engineers who use it, but the engineers are so low in the corporate hierarchy that they are in limited or no position to influence the decision maker to make a purchase.

What can I do to prove that my expensive, enterprise software do have a market?

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Contact the people you think will be interested and tell them what your product is going to do and ask them to commit to a purchase or to give you money up front to offset the development expenses. – TimJ♦ Jun 5 '12 at 14:50
@TimJ, the problem is that tell them what my product is going to do is a super hard thing as no one likes to read pages and pages of powerpoint slides or documents. They won't commit anything until they see the final, working product. Yes, a final, working product, even a prototype won't do. Such is the mindset of our customers. – Graviton Jun 6 '12 at 11:41
You seem to have locked down fairly accurately what your potential clientbase is. Contact two or three of those and offer them a trial based prototype version and see if they like it. Given it's going to be a free trial the users don't have to justify if to upper management and then can justify it better once it comes time to get it approved for purchase. – Hansi Jun 8 '12 at 1:41

5 Answers

up vote 4 down vote

Your problems are that you are unrealistic about what you can deliver and you don't even have the beginning of a marketing plan.

  1. There is no such thing as bug free software - software by Microsoft has bugs, software by Google has bug and software by you has bugs, if you really believe you can deliver bug free software you are in the wrong business - saying they will only accept fully functional bug free software is like saying that at night they will only light their houses with natural sunlight.

    What does it means for you: A. "bug free" does not exist, deal with it and B. when you deliver your software you must have an update strategy for delivering fixes (and improvements).

  2. Anything sold to businesses has to make money or save money otherwise there's no reason for the business to spend money on it - an enterprise software at that price point that doesn't make or save money is a stupid investment and shouldn't have a market.

    By the way, improving engineers productivity saves money - lots of it - because engineer's time is expensive (making an engineer life easier without improving productivity also has some monetary value due to the high cost of hiring and training engineers but much less than improving productivity).

  3. There's no such thing "they can't grasp my solution" it's your fault you can't explain it to them - you need to be able to explain your software in less than 5 minutes to a potential customer or you won't be able to sell it (not a detailed explanation but at least enough to get the customer interested).

    and that explanation should tie in to your customer's business goals - that is making money or saving money (or at least making the customer look good) - example: "save money by increasing engineer productivity by letting them do X faster".

    if someone approached you and told you "I have a prototype for an expensive solution that won't help your business goals and I can't explain it in a way you understand but trust me it will be good" what would you answer? probably "wait until you are finished and only then come back to me, till then, I am not interested".

  4. Nobody wants to work for you, that doesn't mean you can't get them to use early versions and give feedback - don't offer them to use a "prototype" that sounds bad, offer them an "early access program", tell them that if they use your unfinished software (but don't use the word unfinished) and give you feedback the software will be a better fit to their business.

    and if they don't give you feedback you should do what it takes to get that feedback - follow up, call the engineers using the program on the phone, spend a week at their office and physically look over people shoulders to see how they use the software - whatever it takes.

  5. You can sell desktop apps as a subscription maybe the engineering dept can't pay $10K-100K upfront but they can pay up to $500-1000 per month on the corporate credit card without getting approval.

    Find out how your customers operate and structure your offer according to what you can get them to pay not what it costs you to develop (obviously if cost to develop is greater than what customer will pay you should move to the next project)

    By the way, you can combine 4 and 5 - if they buy and start using the early version now give them a discount that will push the price into the range they can buy without approval.

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up vote 2 down vote

Ideas for enterprise software are validated just like any other ideas: by talking to the people who will be using the solution. Those people will help you determine whether your assumptions about the problem and the solution are correct, which will be your proof of market need. In enterprise setting, you'll also have to talk to people responsible for procurement & deployment of software to make sure that there's the buying power in addition to the need. And when you have those conversations, you shouldn't be asking for feedback on your idea but instead validating the problem you're solving.

You describe your product as serving a very particular niche, which makes me suspect that you have some unique domain expertise and know at least some people in the field. Your network in the industry will be your target for conversations about the problem & the solution.

P.S. The issues with the sales cycle you've identified are very generic to enterprise products. The only unique "feature" of your situation is the potential for no adoption of the tool.

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by talking to the people who will be using the solution-- I think here lies the problem. Those who are using the solution don't have the purchasing power. Not only that, they don't have the ability to grasp the intention of your software unless and until you have a working, fully functional, bug free software in front of them. Even if do have such a software, they still won't provide feedback. The one who has the purchasing power simply won't entertain you because you are not solving his problem. – Graviton Jun 6 '12 at 11:36
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First of all, why are you being so defeatist? Validating market is just one of the problems that a startup will face. Secondly, I told you to discuss the problem not the solution with them. You're saying they won't understand the software, and I'm telling you that they understand their problems very well. Lastly, people with purchasing power will listen to you if you tell them you're solving a problem that can save them money or time. – dnbrv Jun 6 '12 at 15:13
up vote 2 down vote

I understand how difficult it is to "thread the needle" in your circumstance. With that acknowledged, please don't underestimate how important and enlightening it can be to just get even two or three meetings with potential clients, just for the purpose of validating your assumptions. Even though most of your potential customers don't like to give feedback, and want to see a fully-working version, find a way to get to talk to just a few of them - make 100 calls to get 3 meetings if you have to - and get the feedback that you can. I've been pleasantly surprised in the past about how enlightening it can be just to get that small bit of perspective from a customer's point-of-view, even if that perspective was "no, this doesn't work for us." If it's the right customer (and if they're accepting the meeting, they'll be willing to share) you can get a lot of value from just one meeting.

I appreciate how carefully you've thought out why you can't get feedback; now be bold, break through those reasons, and get what you need. Shift your perspective: it is possible to get the validation you need. If it's not worth making enough calls to get those few who will take the meeting, then it's not worth continuing the project anyway, right? Just look at it as an interesting and unique mini-project that's required for your circumstance... many software projects don't have this high of a barrier to get feedback, but yours does. No big deal, just see it for what it is and go for it.

Of course, if your reaction to this is: "no, you don't understand, I can't," then, be honest, you've decided that you can't. Your potential customers didn't decide that; you did. Own it, scrap the prototype, and move on. That's not meant to sound harsh at all... it's just that it seems to me that those are your options: dig in harder, break through your reasons; or forget the whole thing. Personally, I'm rooting for you. Go for it.

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up vote 1 down vote

Practically you denied all the steps that have to be treaded,... yourself.

1) Does not save money that's quite apparent to the decision makers and that tool you want to sell in the range of 10-100K

Ans: Forget about developing this tool
OR
As somebody already told - Just sell this directly to engineers who are willing to pay in subscription. If they are also not ready to buy by not seeing the value, "JUST FORGET ABOUT THIS WHOLE THING". Just move on.

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up vote 0 down vote

Basically, what you have identified there is exactly how all enterprise software are.

Basically any software or tool for businesses need to do one of these things:

  1. Save money Or
  2. Make more money

In my limited experience of dealing with business software, the way to sell it is either to partner with an existing company and build it for them as a service at a discounted price with the understanding that you will sell this as a product later.

The other option is to make a working version - which solves atleast some problem of theirs and give it as a free trial. Then prove to the decision maker that its going to save or make money and get a confirmation of the same from the person using it.

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Hmm.. this is the problem, my software doesn't really save money/ make more money directly for a company. The benefit is only apparent for the engineers who use it, but the engineers are so low in the corporate hierarchy that they are in limited or no position to influence the decision maker to make a purchase. – Graviton Jun 8 '12 at 2:59
In that case, you are dealing with a suPer niche market because you will now have to look for companies that value engineering productivity. For example, in the software space, code refracting tools dont make / save money - but make developers more productive. So all companies that value engineering and developer productivity, purchase these even though they are more expensive. I think, you will need to look for such companies. – saurabhj Jun 8 '12 at 6:59

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