How do startups sell into banks and large enterprises?

“Look, I think that if you're an enterprise software business, unless you're talking about probably 2 or 3 core disciplines, you have to be an international business. Australia is a great first market. You know, we've got relatively mature buying cycles that happen with the enterprise. Enterprises do in Australia give startups a go and like will buy it from a smaller business because of the nature of the geography that we sit in. And yet you're dealing with often, you know, Global 500 companies that are headquartered in Australia. So you do have that opportunity to really test out enterprise software locally, the reality is if you want to build a really big business and you're without using the typical unicorn or decacorn kind of terminology, if you want to build a business that grows to 50 or a million or 100 million in annual recurring revenue outside of a couple of core disciplines in B2B, it's hard to do that just in Australia. You're absolutely going to have to go into other markets. Now that doesn't mean you'd have to necessarily go and move to Silicon Valley to do that. Like you could absolutely be doing that in Australia and then going into Southeast Asia next or the UK next or Canada next. Or Germany next, or wherever it might be. But, you know, you will have to have at least a few markets to get to that $50 to $100 million of ARR, typically outside of, as I said, probably a couple of small categories.”

“But will they be sellers? Yes, of course, they'll be sellers. They'll need to realize some version of the capital stack at some point in time. And there are definitely buyers for much smaller businesses. Just the pool of buyers opens up when you hit those sort of, those rough thresholds. And the simple maths is if you are strategic and you bought 10 million revenue and you already do that same activity, that same thing, that same product, you already have that. And if I just take the telco example from my past, we were a big telco. And if we bought a little telco, we would say, well, we do what you do, but bigger. So can I do what you do, but with less people or with different resources or with resources that I've already paid for, that I can apply my platform across what, what you already do in your business, and I can immediately rate those costs or even maybe remove those costs altogether. At 10, it's really obvious. You don't have to think too hard that there will be costs you can remove to make the business at least break even if not profitable. At five, you have to look much harder. You've got to get the magnifying glass out. At three, you need more than a magnifying glass, right? You need a microscope to work out what surgical changes to make to a really skinny business. And, and then it, there is a, there's a question of what are you buying, right? If you're buying a business that's only making a couple of million bucks of revenue and still, is still run by the two or three founders and doesn't have any infrastructure about it, then you're buying the people. You're really hiring the people and maybe buying the brand, but there isn't a core there that can sustain itself. And so really my point is that, at certain scale, you open up a universe of buyers that you find it really, really hard to transact at the micro. But at the micro, there are, there are definitely buyers for those sorts of businesses that are much, much smaller. It's just a narrower pool. So an example would be, you might have a three, four mill revenue business, and you might sell that business to a search funder. You might sell that to a, if you're a software business, you might sell that to a software aggregation play like a constellation or many versions of their business model that exist. And it's a good business m”

“I think, I think that's a key piece, right? Like, because I think I've seen a bunch of founders do the version, like the bottom-up version, like start small, get bigger, because it gets them into market quite quickly, right? They can start small in a way that allows them to start getting revenue. So this a lot in fintech, for example, you know, that you would get like, you know, a fintech who sells to other fintechs who gets a whole bunch of smaller fintechs and then goes and chases a big bank, for example, because they can get to market much quicker. They can get some revenue, they can show traction and validation, but ultimately like the big fish are the ones that have these really long protracted procurement cycles. If you went after them straight out of the gate, like they probably choke you out in like resources because you just wouldn't have the account managers or the revenue to be able to support.”