Startups are misapplying the "forward-deployed engineer" (FDE) model. This high-touch, embedded-engineering sales approach is only scalable and justifiable for massive, multi-million dollar contracts like Palantir's, not for typical five-figure startup deals.
As its reputation for delivering results grows, Palantir's sales process has flipped. With demand outstripping supply, the company no longer engages in traditional sales cycles. Instead, it requires potential clients to demonstrate their readiness and commitment upfront, making them qualify for Palantir's limited bandwidth.
When selling to enterprises, founders can feel intimidated asking for large contract values. A powerful yardstick is to frame the price relative to a fully-loaded engineer's salary (e.g., 'is this worth half an engineer to you?'). This contextualizes the cost against a familiar, significant budget item.
The forward-deployed engineer (FDE) model, using engineers in a sales role, is now a standard enterprise playbook. Its prevalence creates a contrarian opportunity: build AI that automates the FDE's integration work, cutting a weeks-long process to minutes and creating a massive sales advantage.
If branding dilutes your high-touch founder sales process, the problem isn't the market. The solution is to "scale the unscalable" by creating a small, elite team trained to replicate the founder's one-on-one approach, even if they only perform at a B-minus level.
General Catalyst's CEO notes a change in enterprise AI GTM strategy. The old model was finding product-market fit, then repeating sales. The new model involves "forward deployed engineering" to build deep trust with an initial enterprise client, then focusing on expanding the services offered to that single client.
AI's capabilities evolve so rapidly that business leaders can't grasp its value, creating a 'legibility gap.' This makes service-heavy, forward-deployed engineering models essential for enterprise AI startups to demonstrate and implement their products, bridging the knowledge gap for customers.
At the $1-10M ARR stage, avoid junior reps or VPs from large companies. The ideal first hire can "cosplay a founder"—they sell the vision, craft creative deals, and build trust without a playbook. Consider former founders or deep product experts, even with no formal sales experience.
Chasing ten $10k deals over one $100k deal is a mistake. Smaller deals attract clients who nickel-and-dime you, don't fully buy into the vision, and provide distracting feedback. A single large deal provides a committed partner who will help guide your product roadmap.
In contrast to a lengthy, traditional enterprise sales cycle, a PLG motion with a small startup customer can be radically compressed. For example, at Datadog, the entire process—from identifying needs to agreeing on success criteria with the CTO and securing a commitment to buy—was often condensed into a single phone call, demonstrating extreme sales cycle efficiency.
At a small company, one or two big deals can significantly inflate the average productivity per rep. This hides the fact that the majority of the team may be underperforming. As the team grows and these outliers have less impact, the true, often flatlining, productivity of the sales force is exposed.