Never Start Before You Get Paid

I have 10 years’ experience on the startup side of the enterprise/vendor delivery boundary (or technical onboarding, or customer ops, or PS, whatever you want to call it) and even more than that on the enterprise side. I have horror stories you wouldn’t believe and I can’t tell you anyway. But if there was one piece of advice that I could give to startups chasing enterprise clients, it’s this:

Never start before you get paid.

Real commitment at large enterprises is only ever expressed via purchase orders. It is easy to get excited, no matter if it’s your first big logo or your 20th, when you have genuine interest from powerful allies inside a big financial institution. The CTO is on board. The business is champing at the bit. Your sales team is calculating their commission. Why not get started, show you are a team player, and wow your client with your preparedness, your alignment and your dedication to the partnership?

Because it’s not real until you get paid. The excitement from your client stakeholders may be real, their desire to execute the plan that brings you into their world may be real, but the deal is not real enough to spend your own precious time and money on. Not yet.

Firstly, you will be faster than your client at every step. You don’t need a head start.

Secondly, unlike when selling to fellow startups, and many small and midsize organisations, you are not dealing with the principals. Divisional executives, even with C-level titles, have lots of influence, but less absolute authority than you might imagine.

Thirdly, it is very unlikely that your product is the most important thing a tier 1 bank is doing this year. If it is, you don’t need my advice; you need to start your acquisition preparations.

Finally, there is a real risk that your project gets delayed, reprioritised, or pushed to another department. Your sponsor might move on, the target department might get reorganised. The CFO could wake up tomorrow and pause all discretionary spending until the board is happier. Or some other calamity could happen beyond anyone’s control between now and an actual purchase order.

So, before you start building on spec, understand the risk. And don’t do it. You don’t need to. It might impress your client champion, but if they don’t have the influence to get a PO cut before you start, they won’t have the influence to get one cut after the stormy enterprise weather arrives.

Have any horror stories you are legally able to share in the comments?