The impact and evolution of small businesses
Small businesses are the backbone of our economy. Over 90% of the business population in the US is represented by small and medium-sized businesses and the 32.5 million small businesses in the US account for 54% of the country’s sales. All told, the Business-to-Small-Business marketplace is worth over $800B.
As we witnessed over the past year and a half, the pandemic forced 31% of small businesses in the US to shut down. Those that remained had to adapt quickly by moving from brick and mortar to digital, adopting modern tools built for an uncertain and rapidly evolving environment. Almost overnight, these digital solutions shifted from being part of a long-term growth strategy to an ‘implement now’ survival strategy for many small businesses.
This seismic shift created a huge opportunity for organizations that sell to small and very small businesses (SMB Tech, or B2SMB or B2VSB) and develop products designed for their specific needs. These tools—built to bolster business productivity—range from payments, SMS and email marketing, scheduling, employee training, and more.
Enter SMB technology
The market has taken notice of this shift and the small business buyer is becoming a theme and growing trend in the venture community and the broader technology ecosystem. The consumer propensity has shifted to buying small and buying local. Meanwhile, more investment is going towards tech companies (large and small) that are focused on the small business market. The market valuation of SMB tech companies has increased more than 15X over the course of the last decade and we’re seeing these activities play out almost daily in industry headlines. Here are just a few examples of why more investment and venture attention is going towards B2SMB companies:
GTM leaders are driving small businesses forward
There are endless tools out there in the SMB tech space. And while companies are building these tools, there is a special group of people making them tailor-made for the market and driving adoption — Go-To-Market (GTM) leaders.
In order to successfully sell to small businesses, it’s critical to understand their pain points — and, more importantly, articulate why a given tool, service or solution will position them for long-term growth. This is where a skilled and specialized GTM leader can make an immense impact.
In this article, I focus on the influence that GTM leadership can have on helping small to very small businesses, merchants and entrepreneurs grow to their fullest potential. These leaders are allowing SMB tech companies to become more accessible which, in turn, is allowing small businesses to compete more effectively in today’s digital-first environment.
How to identify the right GTM leader for your SMB tech company
Small business buyers need the tools to compete with bigger brands and optimize their own revenue. Fueling this are the executives behind companies with an SMB motion, and having the right leaders in place is one of the biggest factors in being able to compete with the big players and dominant brands.
Sales, marketing, and customer success (CS) execs must be able to land, grow, and sustain their small business customers in ways that are more nuanced than with an enterprise customer, comparatively.
So, what factors are most important when hiring an experienced SMB Go-To-Market leader?
Sales (the LAND)
A VP Sales or CRO at an SMB tech company should look like the following…
- A revenue leader with the belief and ability to sell long-term sustainability (i.e. strong conviction in the product and its ability to support the customer’s growth).
- Ability to understand and resonate with the buyer persona. In an SMB play, the profile of the decision-maker is a lot different. A successful sales leader must build rapport and empathize with the buyer.
- There must be a willingness to spend significant time with the customer, especially since it is often just one individual or decision-maker, and therefore these interactions are more individualized than can be the case with the enterprise buyer.
- Experience and comfort selling new products or creating a category.
- Familiarity with a velocity, lower touch sales motion.
Marketing (the GROW)
A VP Marketing or CMO at an SMB tech company should have the following characteristics…
- Someone with strong product marketing and story-telling expertise, coupled with the ability to drive lower touch sales through the online funnel.
- The ability to drive content-education via the web until a customer is ready to buy.
- Strong brand chops with the ability to build buzz.
- Internal communications and employee engagement – get people excited about the mission of the product, as the culture often reflects the community and mission-driven orientation of an SMB tech product.
- Of note – the line between consumer and SMB talent is blurring here, almost becoming one in the same, especially if we are talking about a marketplace product or PLG motions.
Customer Success (the SUSTAIN)
A Customer Success leader at an SMB tech company will look like this…
- This person comes in to ensure that a paying customer continues to buy the product, which again, is much more nuanced than in an enterprise environment. A CS leader should ensure a smooth hand-off between sales and getting a user ramped up.
- Someone who can promote frictionless renewals.
- Emphasis on customer loyalty; stop churn in its tracks with multiple and thoughtful touchpoints. This is essential in order to build a sustainable business for the SMB customer.
- This leader should have a strong data orientation and capture how users are using the product – i.e., bring a multiple touchpoint mentality to create repeatability.
When hunting for GTM execs across these three functions, direct parallels from a product experience standpoint are less important as long as there are similarities or parallels in the audience and buying profile. For example, I recently recruited a VP Sales for a growth-stage transportation SaaS company, and very few of the candidates I spoke with had experience selling technology to vehicle drivers. The sales leaders who best understood the motion were ones with experience selling to local businesses, restaurants, merchants and owner/operators.
I imagine we will see more and more of these tools pop up, and increasing amounts of funding towards the SMB tech trend in years to come. Getting the right GTM leaders in place can be the ‘make or break’ factor when it comes to emerging winners in the B2SMB market.
I can’t emphasize enough that this is a special breed of leaders — all of whom are in high demand! If you’re looking to add to your SMB tech executive team or seeking general advice on GTM leaders, please contact me directly or visit spmb.com.
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