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Comment by rythie | Hacker News Reader

You can only save people time if they are short of it and can spend money easily.

Hobbyists and big companies have lots of time and are reluctant to spend money.

Sell to small businesses who don't have in house expertise.

Agreed on small companies, though big companies do spend a ton of money on software, including software that compares poorly to open-source equivalents. Think of commercial source control.

In both cases, the author is right on. Focus on installation, documentation, support, and usability. Each of these things can make paid software less expensive than free software, assuming that [paid cost] < ([free setup hours] - [paid setup hours]) * [hourly rate].

And more importantly, maybe, businesses will pay a premium for decreased risk. If they think your paid software with good support/installation/usability/documentation is less risky than another tool, you've got a shot.

I've been involved in the buying end of these types of projects numerous times for both hardware and software in U.K. Universities. For £100k+ projects it typically goes like this:

Companies get a invitation to tender, usually europe wide. Companies submit an overview of what they want to do to solve the problem. Companies that have been in business less than 3 years or don't have a sound financial background are weeded out.

Then it's typically it's narrowed down to 3-6 companies early on. Each submits a 100-150 page tender (on paper or MS word - often with heavy copy+paste from previous bids) with prices (blind - you don't know the competitor's prices), different options etc. Each company gives a talk with a sales person and a technical person at least - are grilled by half a dozen people who all know their stuff from the customer and have different technical requirements and beliefs + management people with their own ideas. This goes on for about 6-12 months where no money changes hands and seller incurs travel/staff etc. costs.

Then it's narrowed down to 2-3 for extra implementation details and more meetings with other key stake holders - many of which have just heard of the project and often don't approve of the direction.

If you win the tender, you start getting paid in a schedule (4 or 5 big payments) depending on implementation of the project, with the final payment often 3-6 months after it's all working and live.

I would suggest if it is your business model to sell expensive products to large companies, that you have someone in sales who has done this all before.

Agreed. I've never personally sold to big companies, but I have a consulting client who has/does. Ugly process.

What about getting through the back door via consulting? I know some people who have taken this route, and it seems to work at least some of the time. Basically, you sell a license to your software wrapped in consulting time (setup, customization, support). This has potential, at least, to be a leaner sales process.

basically in u.k. universities there are barriers at £12k and about £100k. £100k+ is like I said. £10/12k+ initial cost is easier and something like three quotes, justification and head of finance sign off but that's internal - so is specific to the insitution but it's fairly common and quite straight forword.

If the project starts looking to buy a big product it will go through the process. There is probably a way in with consulting if you start small but that wouldn't really suit product start up.

If a company that sold implementations of and support of open source products were subjected to this kind of sales cycle for its services, then it wouldn't cost any less than closed-source products.

IBM Global Services will happily rip out your "legacy" infrastructure and replace it with nice shiny Linux. But not for free... And when the dust settles, it's not going to be any cheaper than if they did the same job with AIX (why would they leave money on the table?)

This is what MS has been doing for years, no one uses MS products for a stable quickly recoverable environment. Not Google, GE, or any other big company. MS thrives on small to medium businesses because of it's dominance in the market, and it's ability to offer every product a business would need. They make their products so easy a monkey could set them up, but so profitable that only MS employees can manage them efficiently with inhouse tools.

As I recall, a lot of large companies use MS Windows and MS Office for their standard user desktop. They might not use it for the software that runs their enterprise but they are still paying MS lots of license fees... In this sense, I think MS also "thrives" on large companies...

I'd argue that the bulk of data which is valuable is on the enterprise. However you do have a point.

The largest private company in the world, Walmart, uses Microsoft software from their servers down to CE on their Telxons. I suspect you are confusing primarily IT companies with companies more generally.

Wal-Mart is a public corporation.

I'm not saying big companies don't buy software. What am saying is the process is very long and it's better if you are a big established company selling to those big companies. This by definition is not a startup.

As a startup you could spend a whole year with everyone working on a deal with a big company and have it fall through - then what do you do?

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