From Platform Provider to Manufacturing Problem Solver: How Arch Systems Cracked Enterprise Sales

Getting enterprise customers to adopt new technology is notoriously difficult. Most startups try to minimize pilot phases, rushing to show ROI and secure contracts. But in a recent episode of Category Visionaries, Andrew Scheuermann shared how Arch Systems took the opposite approach – intentionally extending their pilot phase with key customers to build something truly valuable.

The Failed Developer Platform

Arch Systems' journey began with what seemed like a promising idea: a modular IoT platform that would enable enterprises to build their own AI applications. As Andrew explains, "All of them would say, 'I want to build my own AI models.' But they didn't necessarily have the capacity, they didn't have the team... talent is so hard to come by."

This created a fascinating paradox. Enterprise customers kept expressing interest and running pilots, but none could successfully implement the solution. "Your customer is telling you, 'yes, you're doing the right thing,' but we're stuck industrial. Everybody talks about POC hell, proof of concept hell, where your big customer that is hard to understand tells you you're doing something good and you're just stuck in pilot mode and you can totally die."

The Pivot Point

The breakthrough came when the team realized their customers weren't failing because the technology was wrong – they were failing because the approach was wrong. While enterprises claimed they wanted to build their own solutions, what they really needed was a complete solution to a specific problem.

This led to a critical decision: rather than providing generic tools, Arch would focus exclusively on manufacturing optimization, specifically in electronics assembly. As Andrew describes it, "When we finally got that focused on a vertical specific solution, we built the whole thing right. We built the analytics and the intelligence and were able to start providing awesome optimizations inside of our customers."

The Counterintuitive Path Through "Ultimate Pilot Hell"

Instead of trying to escape pilot phases quickly, Arch made an unusual strategic bet. "We hacked this Pilot Hell that everybody talks about," Andrew explains. "We went into the most Ultimate Pilot Hell you've ever seen with some key customers, but by doing so, got access to all their data."

This approach meant sacrificing short-term revenue for long-term value creation. "We worked early on with Flex... We almost did free work for them for a long time and they essentially gave us access to all of their factories worldwide. Really kind of incredible deal for both sides. Both took a really big risk on each other."

The Results

The strategy paid off dramatically. Andrew shares, "Just recently we got through Pilot with two multibillion manufacturers into recurring revenue deals in four months... went from three years to about eight months on average as we're starting to sell the motion."

Navigating Enterprise Complexity

One of the most valuable insights from Arch's journey is their approach to enterprise sales complexity, particularly around what Andrew calls the IT/OT convergence. "In our sales, we have pretty sophisticated playbooks to be able to identify in a given customer who are the digitization champions... Are they in IT? Are they in OT or are they both? Finding your initial champion to run the pilot, working with them to spider across the organization and build a collection of stakeholders."

This sophisticated understanding of enterprise dynamics has been crucial to their success. As Andrew notes, "It is surprisingly common that they do have to go all the way up to the CEO COO, even for a pilot approval... You can't be just playing around and get in the door at the Flex, Jabil, Foxconn, Honeywell, Medtronic, Apples, et cetera, of the world."

The story of Arch Systems offers a masterclass in strategic patience and enterprise sales strategy. Rather than optimizing for short-term metrics, they invested in building deep relationships with key customers, using those partnerships to develop a product that delivers proven value. For founders navigating enterprise sales, particularly in manufacturing and IoT, this approach offers an alternative to conventional wisdom about minimizing pilot phases and rushing to revenue.