Selling to startups

• Make a list of standard expenses for a startup (analytics, HR, productivity, cloud infrastructure, etc).
• Look for non-software expenses flowing to legacy business that could be turned into software services (accounting, compliance, legal, procurement, support, recruiting, etc).
• Look for expenses in categories served only by obsolete software. There aren’t many these days because the strategy of selling to startups is well-covered.
• Look for expenses that only later stage startups spend money on – is it something that earlier stage startups could want too? (This is kind of like the idea of taking what rich people have and making it available to everyone – but for companies instead of consumers.)
• Look for new categories of expenses that only bleeding-edge startups will have, but everyone will have soon.
• Look for really high margin service providers – can you eat their margins?

Many, many successful startups from the past decade followed this playbook, starting with small businesses, growing as their customer grow, and eventually moving upmarket to enterprise sales:

Observability

• Datadog

Analytics

• Heap
• Mode

Support

• Zendesk

HR

• Gusto
• Zenefits
• Rippling
• Stripe

Compliance

• Vanta
• Drata

Accounting

• Pilot

Recruiting

• Greenhouse

Logistics

• Flexport

Data labeling

• Scale
• CrowdFlower