Overcoming viability objections as a startup

I have had the privilege of working for a number of young companies selling complex technical solutions into major enterprise accounts. I love the pace of startups and the challenge of delivering these types of solutions to big companies. It seems the first concern (voiced or not) I run into when approaching a large prospect is viability. Will the company be around in a year to service the solution? Are there resources to properly implement and launch the solution? If the company folds, what happens to the code and implementation? These are all fear-based responses from your prospect that, with a little effort, can be overcome.

The first and best response to concerns regarding viability is to point to other prime logos that have already made the decision to buy from you. See this post on getting your first sale. Getting your first prime clients may not be enough to overcome the viability objection – here are a couple of other ideas:

• Many startups refuse to share financial information with prospects – whether or not an NDA is in place. Not only do you not want that information getting into the hands of your competitors, frankly they are often not very impressive and won’t inspire confidence. In lieu of financials, you can provide a letter from your prime investors (assuming you have Angel or VC backing) stating their commitment and support to your company.
• Consider partnering with a more established industry player that can bring credibility before you have established yours. Note that you may need to contract through the partner as opposed directly with the client to provide the sense of security the client is looking for.
• If you have a traditional software product, you can offer to put the code in escrow, reverting to the client if the company folds. Be careful with how this agreement is worded and what triggers the reversion.
• Ask your prospect to become an investor. Doing so allows them to more directly control the product roadmap, gives them insider knowledge (if they are on the board) and puts them in prime position pick up the pieces if the company begins to fail. Be careful about offering clients too much control over the company. Your company needs to remain independent – able to move with the market whether or not your client is moving in that same direction. Remember, you are (probably) not a custom dev shop and need to focus on creating a product that scales into the market.

Even if you ask all the right questions (“Now that it looks like we have a solution that addresses your challenge, what are your top three concerns about working with us?”) you may not hear the viability objection. If your Spidey senses are activated around this concern, I encourage you to ask directly (“Do you have any concerns working with a young company like ours?”). At least this allows you to uncover and address the objection if it exists.