Wed · Jan 13

The Counter-Intuitive Pricing of Enterprise Sales

In this episode of startup school radio, host Aaron Harris sat down with Yuri Sagalov.

Sagalov is a partner at Y Combinator and also the founder of enterprise file sharing and collaboration platform AeroFS. Also in this episode is Aaron Glazer, the founder of mobile testing platform Taplytics.

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In the below excerpt, which begins at around minute 51:40 in the episode, Sagalov talks about pricing at the enterprise level, and how it's often counter-intuitive for first time founders in the space:

Aaron Harris : Is there something that you have learned in selling to very large enterprises that surprised you?

Yuri Sagalov : I think that the biggest surprise is how consumers are very price sensitive, and enterprises are actually significantly less price sensitive. So a lot of it is around actually asking. People get very embarrassed to ask companies, like if you doing a trial or a pilot, to ask them to pay you. But in a lot of cases they actually prefer to pay you because then they know that you are on the hook for something.

And so that's a little bit surprising, because you get these agreements and you're very shy about it. And you really have to actually say, no, my product is worth money, even at the pilot phase, so you could go out and say, 'You should pay me.' And companies don't blink an eye at it when they are serious. If they are not serious, that's what you are going to find out as well.

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