Most SaaS startups begin with SMBs for faster sales cycles. Nexla did the opposite, targeting complex enterprise problems from day one. This forced them to build a deeply capable platform that could later be simplified for smaller customers, rather than trying to scale up an SMB solution.
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SaaS companies scale revenue not by adjusting price points, but by creating distinct packages for different segments. The same core software can be sold for vastly different amounts to enterprise versus mid-market clients by packaging features, services, and support to match their perceived value and needs.
Startups often fail to displace incumbents because they become successful 'point solutions' and get acquired. The harder path to a much larger outcome is to build the entire integrated stack from the start, but initially serve a simpler, down-market customer segment before moving up.
Square's product development is guided by the principle that "a seller should never outgrow Square." This forces them to build a platform that serves businesses from their first sale at a farmer's market all the way to operating in a large stadium, continuously adding capabilities to manage growing complexity.
Jumping to enterprise sales too early is a common founder mistake. Start in the mid-market where accounts have fewer demands. This allows you to perfect the product, build referenceable customers, and learn what's truly needed to win larger, more complex deals later on.
A common PLG pitfall is assuming the user base will naturally springboard into enterprise deals. Often, the enterprise buyer is a different person with different problems. This oversight can cost companies years, as they have to build a second, separate sales motion from scratch.
Enterprises are comfortable buying services. Sell a service engagement first, powered by your technology on the back end, to get your foot in the door. This builds trust and bypasses procurement hurdles associated with new software. Later, you can transition them to a SaaS product model.
To avoid the customization vs. scalability trap, SaaS companies should build a flexible, standard product that users never outgrow, like Lego or Notion. The only areas for customization should be at the edges: building any data source connector (ingestion) or data destination (egress) a client needs.
To find enterprise champions with no track record, Nexla's founder looked for signals of an "early adopter mindset." This included identifying employees who had recorded case studies with other startups or were publicly passionate about innovation on platforms like LinkedIn, indicating a willingness to bet on new technology.