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Competing with B2B Systems of Record with a Mobile-First Approach – Disrupting Salesforce

App unbundling and mobile first approaches for B2B software are really interesting to me. Awhile back I wrote a post about unbundling LinkedIn. Lately I’ve been spending a lot of time thinking about what it would take to compete with and ultimately dethrone Salesforce (or SugarCRM or Microsoft Dynamics for that matter) with a mobile-first approach.

This is a long post but here’s the gist of you want the TL;DR version. In any enterprise vertical, disrupting the core system of record for a business vertical is really really hard. Those are sticky apps that resist design-focused or user-centric competitive solutions. The reliability and stability of being the status quo makes replacing them very hard. This is especially true on mobile.

The meat of this post is informed by some investments I’ve made, companies I’ve met, and people who have shared their own thoughts with me on this topic. I want to talk a bit about why solving problems for salespeople is a good wedge for many disruptive businesses and what the limitations are in the long run.

Salespeople are a great bottoms up wedge for low-cost B2B tools that boost sales productivity

Salespeople have ways been early adopters of productivity software and tools across many industry verticals. Many of the first people I knew with Blackberries (back in the day) were in sales. After VCs, many of the first aggressive early adopters of LinkedIn in my network were salespeople. In today’s environment, a small investment in something like Yesware, ToutApp, DocSend (a SoftTech investment) or Clearslide can yield meaningful benefits. Even if the modest cost associated with these tools is not reimbursed by the company, the return to the rep in terms of closed deals and increased performance can easily offset the out-of-pocket expense.

Unlike (most) engineers, field sales reps spend a lot of time on the go and away from desktop computers. This makes mobile tools much more valuable in the context of daily workflow.

While it’s probably obvious, it’s worth noting that most field sales people (by definition) spend time outside of the office meeting with prospective and existing clients. In this day and age, the idea of firing up a laptop in between meetings feels quaint – a lot of on-the-go work that happens is done on mobile devices in between meetings.

Why Salesforce (and CRM) Remains so Sticky

Salesforce, or any CRM system of record for that part, tends to be really sticky for a number of reasons. The two most obvious ones for me are the following:

Salesforce is a system of record for management reporting

Regardless of whether you love the interface, Salesforce is the system of record for sales management in many companies. It’s a management reporting tool and compliance is generally mandatory – if you don’t put in the data, your boss doesn’t get the data that he or she needs to forecast or manage the team.

Employees Generally Do Not Choose CRM systems in Bottoms Up Fashion

CRM choice is often a top down decision, not a bottom up decision. Because it’s a system of record, you need to have everyone on the same system in order to have full visibility into the data. It’s not the type of product decision where a corporate-wide decision is made without significant buy-in from senior executives.

Salesforce is Both a Platform and an Application

It’s worth remembering that part of what makes Salesforce so sticky is not just the core CRM and associated apps they provide – they have a very robust 3rd party developer ecosystem that has built a lot of tools to make the core application more valuable and customized to the needs of various verticals and customer types.

The Mobile Opportunity

I’ve met and seen quite a few companies working on sales enablement tools, sales productivity tools, or other tools that make salespeople more productive. But what would it mean to truly disrupt Salesforce or any other large CRM vendor with a mobile-first approach:

A true mobile-first disruption of Salesforce or any other core CRM system would mean becoming the system of record for sales-related data about pipeline, prospects, and sales management.

This is hard. But I think there are some wedges that are uniquely available to people who start on mobile and make mobile the primary entry point.

Email is still the primary communication channel for inter-company communication. Getting email well-integrated into CRM is still unsolved in my opinion.

While you can use a bcc function on many email clients to get important emails into Salesforce or another CRM tool, that’s not what I would call deep integration with email. Despite the rise of great tools such as Slack, a lot of business communication still happens over email, especially communication with external audiences. There is certainly an opportunity to use email as a wedge to make it easier to get email data into CRM systems.

Other mobile tools and tech can provide you with insight into what your prospects are doing

Salesforce is a good platform for storing and logging data. But I think there is a lot of value in having tools like Refresh, Accompani, and others that can give you pre-meeting insight into what the people you are going to meet are doing and have been up to of late. This is a useful, several-times-per-day type of use case that can build a habit and also collects valuable data about with whom you’re meeting and (potentially) what was discussed.

Smartphones have an incredible amount of rich data about contacts, meetings, locations, and notes. Th

This is such a rich set of data about a user’s life and what he or she does during the work day. This is much easier to just grab off of a mobile phone than it is to try to find it on a PC or laptop. And the smartphone is the one device that most of us have with us all day long, which provides myriad opportunities for updating accounts, contacts, opportunities and other activities while on the go.

At the end of the day, I think there are two things that strike me about why it has been hard to do a mobile-first B2B system of record play:

Relatively few B2B mobile-first apps are sold top down. That’s what makes the App Store great for bottoms-up adoption and distribution.

One of the best things about mobile-first apps that distribute themselves via the App Store is that you don’t need a salesforce to distribute them. You upload the app, figure out how to drive traffic to your app, and let user’s download the app and go from there. It’s a pretty low-cost go-to-market strategy.

The missing piece, though, is how you get that bottom-up strategy to work in a category of applications where the sale requires top-down buy-in and integration with major systems.

Integrate-with-Salesforce is the Freemium Unlock for Many B2B Products

I think it’s really telling how many B2B freemium products have a common conversion trigger. You can use the product in all of its glory in single-player or team mode. But when you want to pump that data back into your system of record, which is often Salesforce, that’s where you pay. And I think that makes sense as a trigger. But that’s also what makes it hard to become a new system of record – part of your value proposition is that you funnel data back to the existing system of record. It’s kind of a challenging loop to break.

I continue to believe that replacing any system of record is really hard. That’s why most startups don’t compete with HR management solutions (except for Workday), financial management solutions, or heavy-duty ERP solutions. But the prize is so big if you win, it’s a battle worth fighting.

Perhaps dethroning the CRM incumbents as the system of record is the wrong competitive vector. That very well might be the case. But that is the really big prize. And I have yet to see a company with that plan and positioning to do so. If you’re working on that problem, I’d love to talk to you.

As always, comments are open below or you can send me your thoughts on Twitter @chudson.

Comments (2) on "Competing with B2B Systems of Record with a Mobile-First Approach – Disrupting Salesforce"

  1. In a classic disruptive model, a startup with a novel, but narrow approach to solving productivity challenges for sales, marketing or support will most likely start to acquire customers that have yet to select a CRM platform like Salesforce. The solution may not even appear in a CRM category, but provides unique business visibility or productivity enhancements at lower cost relative to incumbents. This narrow wedge will then be expanded as their initial customers grow in size and complexity.

    The switching costs of moving from one System of Record to another might be so high that the only effective strategy is to target businesses that are just getting started to formalize process in anticipation of scale.

    IMHO, no startup will be successful attacking Salesforce head-on or by deeply partnering in their ecosystem. They’ll need to focus on reconceptualizing a core business need in a novel form and then build an entirely new client base that have never even used traditional CRM.

  2. Good post. Mobile is moving slowly in the enterprise because existing software is sticky and because IT departments put major obstacles in the way. The key is to find a reason and a mechanism to trigger a business change. Adoption of new tech needs to be led by a desire to change. A great new piece of software alone is not enough to create the need for this change.

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