How to Build a Startup That Supports Enterprises

Administrate, a leading enterprise training operations platform used by some of the top companies in the world, is pioneering the way for learning tech startups and was recently named a top 40 Learning Management System. Talented Learning and John Leh recently published a “2023 Commercial LMS & Learning Systems Report”, a benchmark for insights into the current landscape, analyzing and comparing the top 40 organizations driving progress in this sector.

“One of the most interesting trends we’ve seen as we continue to sign up larger customers is the desire to ‘break out’ from a cookie-cutter experience and heavily customize some aspects of our platform,” says John Peebles, CEO of Administrate. “The way to do that at scale, for enterprises, is to embrace a ‘headless’ strategy where customer engineers can use our APIs and platform to quickly build out functionality that fits their desires and complex environments.”

Managing clients that serve ten customers is very different from a client that serves ten thousand. Therefore, a platform must evolve to solve its client’s problems, which may result in complete rewrites and redevelopment. 

In addition to new product considerations, an entire security and interfacing challenge exists within the enterprise space that is unknown in SMB. 

Most enterprise buyers don’t control IT, for example, and these companies expect platforms to adhere to their standards and plug into their existing, very complex tech stacks.  Features like SSO, a public API, and multiple ways to interface with other products are essential for large customers.

Avoiding ostracizing the small companies that a startup worked with at the beginning of its life is also critical for success and scaling. Transparency and clear communication go a long way, and explaining why the company is moving upmarket and how that can benefit legacy customers can make the relationship even more robust. In the case of Administrate, they found that over the last three to four years, their legacy SMB customers benefited from their platform enhancements, increased stability, and significantly increased professionalism of their offering in unexpected ways. As a result, small businesses may grow to the point where they can directly benefit from enterprise offerings.

Not all companies are meant to scale in this way. Costs and risks are at an all-time high, and it’s important to take the time to understand where and how the business operates now and if it will be feasible to transition. If the software is complex and important enough, it can add significant value to large organizations looking for a new product to address their needs. 

“Despite hearing from many CEOs who had gone through this transition that it would be difficult, we still underestimated just how invasive the changes would need to be,” shares Peebles. “Enterprise customers are gratifying, but they are a completely different ball game requiring a separate approach.”

Why Enterprises Should Take a Chance on Learning Tech Startups

Startups are typically founded to solve a known problem not being addressed with existing technology or because they have a new incremental use case or idea that adds measurable value. Additionally, startup providers are more inclined to go above and beyond with customer service as they try to develop measurable proof points of their impact.

“For enterprises that are focused on using employee, customer, or partner education as a competitive advantage in their core business, utilizing startups allows experimental use of low-cost, cutting-edge ideas long before larger, more-expensive, well-known brands replicate the ideas,” says John Leh, CEO and Lead Analyst at Talented Learning and the Talented Learning Center. “This approach provides a two to four-year competitive head start with relatively little risk.”

Some vendors are in the estimated $35 billion global learning system market. The vast majority of these solutions are specialists based on use case support, functionality, technology, location, industry, cost, and services provided. Buying organizations often see more value when they can find specialist, lesser-known experts in their use case because these solutions offer the product, thought leadership, guidance, R&D, and experience that is relevant and in demand.

• Global software companies often use traditional live training classes to instruct internal and external sales forces. Courses are delivered via hundreds of trainers in dozens of physical and virtual locations over short periods. The ability to forecast, schedule, staff, provision, and track these events goes well beyond the capability of most well-known learning systems.
• Many high-brand-conscious enterprises often want to deploy “headless” learning technology solutions where they build a custom learner interface and choose the design, functionality, and content they want to display to learners. The displayed content can originate from a variety of the enterprise’s commercial and proprietary software solutions requiring a technical infrastructure and expertise only provided by lesser-known specialists.
• A training company or association that sells continuing medical education to individual professionals and health systems needs marketing, e-commerce, and credit management features, plus professional service help that is uncommon in the industry except with specialist providers.

“Learning tech startups need to be clear on where and how they are providing measurable value and how that is different than what currently exists in the industry,” shares Leh. “With 1000 vendor options, replicating what is already out there or providing nice-to-have features is futile.”

Startups need to help clients build their business case for the new solution, predict, measure, and quantify the change in business metrics, and advise on adjustments as necessary. Enterprises buy for business impact. Helping them prove their value is a wise business strategy.