In this new SaaStr series called “What’s new at…,” Jason Lemkin chats with WorkOS CEO and founder Michael Grinich about what it takes to be Enterprise ready in SaaS, building vs. buying, and who the stakeholders are in a B2D motion.
A problem many founders are trying to solve right now is going upmarket to Enterprise, and Lemkin and Grinich have a passionate perspective that every startup should take steps to check those Enterprise boxes in their first year.
Let’s look at how big WorkOS is today and what they’re solving for.
Who Is WorkOS and What Do They Have To Do With Enterprise Readiness
WorkOS is a developer platform designed to make it really easy to become “Enterprise ready.”
They offer all the features you need to sell to Enterprise customers.
- Single sign-on
- SAML authentication
- SCIM provisioning for user management
You can sell to 20-30-40-person companies all day, but if you want to sell to hundreds of people in a company, you will need this stuff, and WorkOS helps you do it fast.
WorkOS is 4.5 years old with 400+ customers. The likes of Loom, Modern Treasury, Brex, Webflow, and many others are all powered by WorkOS, so they can go upmarket and go after those Enterprise customers.
Can You Get Away Without Single Sign-On When Closing Bigger Customers In 2023?
No, you can’t. Not having these things when trying to close with really big companies is a nonstarter.
You can’t just use Google login. It has to be true single sign-on to close 5-6-7 figure deals.
While these features are often associated with the really big Enterprise companies, they’ve started to move downstream.
Smaller companies have become more sophisticated in the tools they use, the IT systems, and automation for onboarding and offboarding, and all of that has resulted in needing to plug stuff into the tools you’re using quickly.
Which is why it’s almost a misnomer to call them Enterprise features.
These are YEAR 1 features today unless you’re an extremely small business.
What’s The Minimum Feature Set For Multi-Factor, Single-Sign-On?
In a space that’s continuously changing, there’s still a desire around augmenting passwords to reduce or hopefully eliminate phishing. Apple introduced passkeys natively generated in IOS recently. Thumbprints are being used in Whole Foods.
But what’s the least founders can get away with that’s still secure, easy to use, and checks the box for Enterprise?
“When you actually sell to the Enterprise customers, you need to go into their systems and integrate with whatever they’re using,” says Grinich.
There’s a huge fragmentation of identity solutions, so instead of trying to provide them with your own custom home-baked solution, meet them on their turf.
A fundamental mindset shift as a founder is that you don’t necessarily know everything.
Sometimes, you just have to meet customers where they are and plug into the systems they have, even if that’s not the most bleeding edge of what’s available technology-wise.
Developer-Led Growth Differs From Product-Led Growth
WorkOS is a developer platform. Do developers own everything through the buying decision, or are there multiple stakeholders?
Grinich calls this developer-led growth, or DLG.
This is very different from PLG freemium because when you’re selling to developers, you’ve got to throw a lot of the typical SaaS best practices out the window.
Some are the same in terms of ease of use.
But developers notoriously don’t want to talk to anyone ever, and they’ll still spend six figures and beyond without ever talking to sales.
That’s unheard of in other SaaS categories.
WorkOS’ operating principle is developer joy, which is ease of use to an extreme degree.
If the company wasn’t built around this purpose, it would be hard to scale.
Who are the stakeholders in a DLG motion?
Developers:
- Most developers will sign up for WorkOS and plug it in. They don’t want to learn what any of it means.
- If you want payments, sign up for Stripe. If you want to send SMS, use Twilio.
VP of Product:
- Head of Product has an Enterprise roadmap around real functionality they want in the app. They don’t want to derail their roadmap because of user provisioning stuff.
Head of Sales:
- They don’t understand what SAML means and don’t plan to learn it. They become stakeholders because they’ve heard the objections from customers, know that they need these features, and that WorkOS can unlock their next stage of growth.
This doesn’t include the compliance or security teams.
WorkOS is evolving, so how can they build a Go-To-Market function that satisfies all these people? It’s not just the developer anymore, although it always starts with them.
Two Secret Superpowers To Beat The Competition
If you’re launching a new B2B application today, you can equip yourself with two secret superpowers to win the deal or, at minimum, not lose the deal.
- Go Enterprise early.
- Localize early.
In today’s world, you can get all this stuff from your API, go to WorkOS and other vendors, get SAML and single sign-on, etc. You can have all of this, the entire Enterprise pricing column, on day one of launch.
And you should.
In a new category, you’d win the deals. In an existing one, you won’t lose them.
The fact that you can get this through an API is a gift for founders, and you only pay for what you use.
You don’t have to wait to go Enterprise. You can go sell to the Fortune 500 tomorrow!
That’s the biggest difference from ten years ago.
The big companies are excited about SaaS and know that it’s transformative to their business.
But they have to have these features in it. It’s not an option.
50% of SaaS sales are outside of North America. 80% of the revenue is in the Enterprise.
So, if you can, do this in year one instead of year seven. Check all the boxes, and you’ll beat 95% of folks.
Build vs. Buy
Some folks think they can cobble together solutions, yet you can deploy WorkOS in a week. So why would anyone consider building vs. buying?
If you go back 10-15 years, when people ask about build vs. buy for the long-term, people would consider building their own data center if they were spending $100k/month on AWS.
Now, the goalposts are constantly moving, and it’s challenging to forecast when making this kind of decision.
Today, companies spend over $10M/month on AWS — companies like Lyft, Pinterest, and Stripe.
It removes the need to hire engineers, executives, and talent to keep pace with it.
When you choose to buy vs. build, you’re essentially de-risking your business around the component of having the best infrastructure in the world.
The takeaway?
It’s hard to forecast if building would move the needle of your business. And 99.99% of the time, it won’t.
About WorkOS
WorkOS is helping companies close deals. People are saying, “We can’t coast on bottom-up consumer revenue. We need to go after Enterprise.”
For so many companies, the Enterprise roadmap was a nice-to-have. Now, it’s a must-have, and WorkOS is the answer to that.
You can’t skate by. You have to have it in the first year.
So, if you want to cross the Enterprise chasm, WorkOS helps you go from a PLG bottom-up motion to Enterprise really fast.
You’ll beat every vendor that doesn’t have it. WorkOS has seen people put it in their product and make a million more in revenue the next month.
Don’t open up the opportunity for someone to come and take that from you.
You can be the Enterprise version of your app.
WorkOS isn’t just this API for SAML and SCIM. It’s an API to increase your TAM and ARR.
