Paid Pilots: A hard lesson about selling into Enterprise customers

I’m starting a new series at Second Opinion called “The Operators’ Manual” where I’ll co-author pieces or publish guest pieces written by operators sharing first-hand insights from scaling and running health-tech businesses. These pieces will be written for the benefit of our paid subscribers.

This first piece was written with Ankit Jain, serial entrepreneur and CEO of Infinitus Systems, as to why most entrepreneurs should only do paid-customer pilots. As part of the discussion, we’ve included a downloadable PDF which provides a check list fore evaluating your pilot strategy. Following his column, I included some additional perspectives via friends at health systems and health plans. Most of the experts I spoke with directionally agreed with him, but a few folks had some additional nuance to share. Jain’s company is an AI healthcare company that automates phone-based workflows, and his customers are providers, including health systems, payors, pharmacies and pharmaceutical manufacturers. His advice may be less relevant to companies with a different GTM, including those who sell to smaller provider offices or build up a big customer base through patients first.

Stop Doing Free Pilots: Why They Kill Health-Tech Enterprise Deals

By Ankit Jain, Infinitus AI

Ankit Jain, CEO of Infinitus AI

As a serial entrepreneur, there’s a mistake I’ve made more than once while selling into enterprise-sized clients. I agreed to free product trials that didn’t result in a sale. And now I’m here to tell you the hard truth: Free pilots in health tech are almost always a bad idea — especially if your goal is to land enterprise deals. Don’t do them (generally).

I also recognize that you won’t necessarily sell a multimillion-dollar contract overnight. Doing a paid-pilot for anywhere from $50,000 to $250,000 gives you the essential signals:

• Does your internal champion have budget authority
• Is the problem big enough to justify real investment
• How big are the legal and procurement hurdles you’ll face
• Can you survive the customer’s buying process

The bigger the amount you can contract for with the potential customer, the better, as larger amounts require higher levels of approvals ensuring strategic alignment. The key question you need to answer through the process is this: Do you have the right champion and do they have the political capital needed to push through the enterprise bureaucracy and get a deal done? If both of those things are true, then a deal can get done if the product meets a real need. If one of these things or neither is true, then a potential customer might be lost because of reasons of bureaucracy or process management, which may not have any bearing on the quality of the product itself or the need. Either way, it’s important to find out and get ahead of the problem as quickly as possible.