Published on September 19, 2014
Everyone is familiar with the typical sales structure at technology companies. A product is developed, a herd of salespeople is brought in,given headsets and lead lists, and finally unleashed on the unsuspecting populace.
Last year Box spent $171 million in sales and marketing and ended with $124 million in revenue. This is a common theme in today’s technology companies, but two have chosen to buck the trend. Atlassian, a software company based in Australia and Palantir, the most well known secret company on earth, have chosen not to employ salespeople, preferring instead to employ marketing teams (Atlassian) and forward deployed engineers (Palantir).
Atlassian spent less than $32 million in sales and marketing last year and ended with $160 million in revenue.
Palantir, on the other hand, has no official marketing or sales people. In fact, everyone on their team is an engineer. They are predicted to do $450 million in revenue in 2014, up from around $300 million in 2012.
How have two companies without traditional sales teams entered highly competitive spaces where sales numbers rule all, and become tremendously successful? They are meticulous about their product and maniacal about their customer service.
Atlassian opted early on to make a few bold decisions.
Atlassian chose to simplify dealing with their company. Rather than going through painstaking back and forth between prospective customers and Atlassian’s sales team, Atlassian opted to give out free software so people had a chance to understand their value at which point the customer decided whether or not the non-negotiable price had value or not.
Are you a Lord of the Rings fan? If so, that name should be familiar to you. Palantir is the hottest company no one has ever heard of and is, in fact, named after the seeing stones from Lord of the Rings.
Fresh off a $9 billion valuation, Palantir employs exactly zero sales people and is so engineer-centric they don’t have other employees (literally). They have created an unrivaled company culture and have a product that is changing the world. Like Atlassian, they rely on word of mouth, but unlike Atlassian, for the first few years of their existence, Palantir had a single customer: the government. Beyond the unusual one client model, Palantir has some other quirks.
In the past five years, Palantir has gone from being solely a government contractor to having 65% of its client base in the private sector. Their average deployment is $1 million.
Palantir does employ “forward deployed engineers” who are engineers embedded within companies using Palantir to optimize the adoption and usefulness of the solution. Some have accused them of being salesmen and, though certainly socially competent and relationship focused, they are in fact software engineers acting as onsite support staff for an expensive and complex solution.
Rather than develop a sales team, Palantir has chosen to develop an unrivaled company culture where people genuinely love their jobs, and are obsessive about having the best product on the market. Brilliant people, a brilliant project, and unquestioned passion have made Palantir far more valuable than most sales driven organizations.
Atlassian and Palantir have become spectacularly successful without traditional sales teams and relatively small marketing budgets ($0 in Palantir’s case).
Though certainly not the right choice for every company, these companies’ respective successes are worth thinking about as companies make decisions on how to build our their product and their teams.
Know about other unusual sales organizations? Tell us below or @helpdotcom.