The team you need as you transition from PLG to enterprise sales

At this point, we know that many of the greatest tech companies toe the line between PLG businesses that grow like gangbusters and enterprise sales-driven businesses that big companies are willing to pay a lot of money for. For example:

• Datadog has over 27,000 customers, but just 12% of them spend above $100,000 per year. Many of these customers were sold by the enterprise sales team. However, this relatively small population of customers represents 86% of Datadog’s ARR.

• MongoDB has a very popular cloud product that is sold via self-service, but also lands large enterprise deals with its significant sales team. MongoDB has nearly 48,000 customers, with a little over 2,000 paying $100,000 or more per year. 

• Zendesk didn’t hire its first salesperson until it had millions of dollars in ARR, but it has steadily been moving upmarket with a large sales team for many years.

• While Figma, Notion, and Stripe all started with PLG, they’ve all built at-scale sales teams to position their products to large companies. These efforts have been essential to their continued growth.

I’ve personally experienced both. When I joined Zendesk in 2016, we had a healthy self-service business and were in the early days of our long march upmarket. This involved building out our enterprise sales motion and getting our product ready for broader adoption by the enterprise. When I joined Grafana four years later, we had a lot of awareness from our open-source project (which was leading to enterprise deals), but the actual credit card self-service business was still nascent. 

We also know that most technical founders gravitate towards PLG at first. Why? Because technical folks can both understand the depth of a problem and imagine its solution—so they lean into PLG by building products they would use themselves. A pure PLG motion can continue to grow into a sizable business, but eventually, bigger companies will use the product. These larger companies typically have more complex needs like:

• Payment via invoices

• Custom contracts 

• Enterprise security requirements

• SLA requirements

• Professional services for implementation and training

These companies also have enterprise budgets. Founders tend to quickly realize that one large enterprise customer can pay as much as thousands of self-service customers, and the next growth channel becomes clear. From there, founders adjust their habits, build out an enterprise sales team and the business begins to evolve into one that embraces both PLG and enterprise sales. 

So how do you do it? 

You assemble the right team to get you to the ideal state of a business that leverages both PLG and enterprise sales in tandem. 

Who you need when you start with PLG and move upmarket

If you have a strong PLG flywheel in motion, you may find yourself being pulled upmarket. When this happened at Zendesk, some of our larger PLG customers (notably, Twitter) were growing quickly and needed more from us. These asks could include relatively simple things like better pricing or signing a custom MSA, to more complex requests like enterprise-grade security and compliance. 

You should entertain some of these asks—they were essential for Zendesk’s growth from $100M to $1 billion in revenue—and work to understand how common they are across your customer base. Even in the enterprise, some tasks are more repeatable than others. As a founder, you should also encourage the customer to pay more (via a plan upgrade or some other fee) in exchange for stepping outside of the mold. 

As your enterprise ambitions grow and your motion solidifies, expect to add some or all of the following people to your team. Keep in mind that there are small, medium, and large versions of all of these, so don’t think you have to make 20+ hires to start your move upmarket. 

1. Salespeople (AEs) and leaders: Much has been written about hiring your first or second AE, but as you have more enterprise prospects and customers, you’ll need to hire these people. The best early salespeople are adaptable and comfortable with the ambiguity that comes with being an early salesperson at a startup. Keep in mind that a key job of AEs is to help your customers navigate their own buying processes—not just take orders from your customers. Note: Many PLG companies resist calling early AEs “sales” or assigning quotas or commissions. This is fine as you’re learning more about your GTM motion, but eventually, all companies move on to more traditional structures over time.

2. Technical sales counterparts. As you hire salespeople, they will need technical counterparts to help answer detailed product questions, lead demos, etc. Some companies call these roles Solutions Engineers (SEs) or Solutions Architects (SAs). The ratio of AEs to SEs will depend on your product and deal complexity. For technical products sold to enterprise, a ratio of two AEs for one SE is fairly common. If your product is less technical and more SMB focused, you may be able to have just one SE for up to three or four AEs. Note: Many early stage GTM teams over-rotate towards hiring very technical salespeople instead of an AE/SE combo. This can be fine, but finding a salesperson who is also very technical is difficult, which will increase time to hire. 

3. Enterprise marketing: Marketing for the enterprise involves some similarities to PLG marketing (content, paid search, SEO, larger events), but also some new motions (targeted/smaller events and workshops, ABM, etc.) that your marketing team will either need to learn or hire for. The more enterprise-centric marketing motions will likely require specialists for field marketing and ABM that your PLG marketing team doesn’t have today. Your marketing metrics will also evolve as you move from self-service to more enterprise deals and your pipeline becomes more complex. As part of this, you’ll want to focus more on defining and tracking marketing and sales-qualified leads (please reach out if you’d like to debate this). 

4. Ops: Over time, salespeople, enterprise marketing, and other functions will require sales and marketing ops support. The implementation of a good CRM and marketing automation tool, along with the habit of keeping them up-to-date, will be critical for understanding the ROI and impact of your enterprise sales and marketing investments. In the early days, ops is probably a Salesforce admin reporting to your first sales leader. Over time, it will evolve to be a more robust revenue operations function that either reports to your CRO (or equivalent), or sometimes to finance.

5. Enterprise support and services: Your post-sales experience will look different as you scale your enterprise motion. Large customers may expect enterprise support, professional onboarding, and customer success. This involves hiring more sophisticated support team members, customer success managers, and early versions of professional services.

6. Security and compliance: Larger companies will have various security and compliance, ranging from SOC2 to FedRAMP (even if you don’t sell directly to the government) to company-specific policies. Be prepared to answer these questions and have a plan for the compliance levels that make sense for your product. As your volume increases, you’ll want dedicated security and compliance team members to help answer customer and prospect questions.

7. Legal: Whether in-house (once you achieve some scale) or with good outside counsel, you’ll need lawyers on standby to help draft and negotiate agreements. Try to lead with your paper if you can - it’ll save you money and put you in a better negotiating position. Common Paper has good resources and templates.

With the right hires, it becomes much simpler to create a mutually beneficial flywheel that will help accelerate sustainable growth for the long term. If you would like to discuss any of this further, please don’t hesitate to reach out.

Doug Hanna is a revenue and operations executive who is a GTM Advisor at TheGP. Prior to TheGP, Doug was the COO at Grafana Labs, where he led all of go-to-market and operations as the company scaled from pre-Series A to post-Series D.

Anthony Kline and Joshua Hernández contributed to this post.