Amit Ashkenazi, CSO of Artlist.
Many consumer-focused companies start with a self-service, product-led growth (PLG) model, allowing customers to convert with minimal interaction. This approach prioritizes consumerization and provides valuable insights into product-market fit. However, to sustain growth, you’ll eventually need to expand your total addressable market (TAM) and cater to a broader range of customers, including those with more complex needs, such as enterprises.
In my experience of helping organizations upmarket, I’ve seen that enterprises can be harder to sell to (given the longer sales cycles), but they can bring great benefits like higher ticket prices, more upsell and cross-sell opportunities and better retention.
The largest B2C organizations in the world have made this transition. A few examples include:
• Google: From consumer-focused products like Gmail and Drive to G-Suite and Google Cloud, Google now serves companies at all stages, supporting remote collaboration and offering robust enterprise solutions.
• Apple: Leveraging its unique brand, product design and connected ecosystem, Apple has increasingly catered to enterprises with its MacBooks. In the five years since 2019, Apple has gained almost as much enterprise market share as it had in the previous 16 years, growing from 17% to nearly 30% today. This upmarket expansion is considered a major growth driver even for a company the size of Apple.
• Airbnb: Airbnb identified an opportunity in business travel and shifted its focus to allow curated homes, team-building experiences and collaborative spaces. This required different tools, go-to-market strategies and product offerings (e.g., Airbnb for Work).
When considering going upmarket, several factors need to be addressed—from product adjustments to new marketing efforts, revised goals and KPIs and shifts in organizational structure. For businesses starting with a PLG mindset, expanding upmarket should unlock new client segments without cannibalizing the existing consumer base.
When Is The Right Time To Go Upmarket?
Timing is critical. Moving upmarket can become a significant growth engine, but if done prematurely, it can cause organizational defocus and operational strain. Before making the shift, ensure your company has achieved strong product-market fit and established scalable, stable operations. Use insights from your existing client base to identify demand from larger companies and conduct thorough research on what it will take to meet their needs.
Once the timing feels right and management and the board are fully aligned, start small. Test the waters to prove the opportunity before committing significant resources.
Key Points To Consider
• Leverage your consumer insights. Your initial PLG strategy provides valuable insights into your customers and product-market fit. Use these lessons as a foundation for expansion. In my experience, when companies start moving upmarket, they often already have B2B-qualified clients within their existing customer base. By analyzing these clients’ behavior—such as their feature usage, growth patterns and frequency of purchases—you can identify signs that they may be ready for a more sophisticated solution. Interviewing these clients can reveal needs they’d be willing to pay a premium for, such as dedicated features like collaboration tools, single sign-on, APIs, custom integrations and admin and governance capabilities. Additionally, they may value VIP support or other advanced services. These insights are invaluable; they enable you to shape your enterprise offering around actual customer feedback, ensuring your product is tailored to meet the complexities of an upmarket audience before you fully commit to expansion.
• Identify barriers for upmarket users. Some clients may struggle to use your product due to limitations like unsuitable payment methods, a lack of high-touch services or bureaucratic requirements like ISO or SOC2 certifications. Identify and address these obstacles.
• Refine your offering and business model first. Focus on resolving pain points for upmarket users before worrying about pricing. Test different business models and pricing strategies to see what resonates with these new customers.
• Shift your product messaging and marketing. As you go upmarket, ensure your messaging evolves to attract this new audience while maintaining appeal for your core consumers. Place the “Enterprise” offering subtly on your pricing page and add a CTA to contact sales. Be careful not to cannibalize your existing user base.
• Expand your target market strategically. Enrich data on your current client base, as you may find a lot of qualified leads to upgrade to your new “Enterprise” plan. Try reaching out to those qualified clients and seeing what they would need to upgrade their accounts. This will also help you identify the Ideal Customer Profile (ICP) faster, which will mean your marketing team can work more efficiently to generate new leads.
• Assess your organizational readiness. Serving B2B upmarket clients requires different skills and levels of service. Make sure your team has the right B2B experience and background to make this effort successful. You’ll need people who know the KPIs, methodologies and best practices.
• Build for scale, but stay scrappy initially. Avoid large enterprise tools like Salesforce at the beginning. Instead, use nimble solutions like monday.com, Notion or even Google Sheets until you’re ready for more complex systems.
• Hire hands-on, adaptable team members. Don’t rush to hire expensive executives. Instead, bring on versatile team members who can handle multiple roles and are willing to get their hands dirty.
• Prioritize new business over renewals. Focus on scaling your account executives and securing new customers before worrying about renewals. Fine-tuning retention strategies can come later.
• Don’t worry about quota and pricing. Focus on building the right business model and the go-to-market strategy at first. Start testing different pricing strategies, and don’t push for quota too early. Only at later stages can you develop a pricing calculator and set goals for which you can start having a clearer quota and commission-based compensation.
To conclude, going upmarket offers significant growth potential for consumer companies, but it requires careful planning, the right timing and a deep understanding of both the product and new customer needs.
The transition should be approached gradually, testing the waters with small-scale initiatives and maintaining a sharp focus on scaling sustainably. By leveraging the insights gained from a PLG model, addressing the unique challenges of enterprise clients and ensuring organizational readiness, companies can unlock new opportunities without compromising their core business.
Ultimately, the key to success lies in staying agile, building strong relationships with upmarket customers and continually refining your offering to meet the demands of an evolving market.
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