Strategic Pilot Programs: How Arch Systems Turned “Pilot Hell” into Enterprise Success
Most B2B startups try to escape pilot programs as quickly as possible. But what if embracing extended pilots could be the key to enterprise success? In a recent episode of Category Visionaries, Arch Systems co-founder Andrew Scheuermann revealed how they deliberately extended their pilot phase with key customers – what he calls “Ultimate Pilot Hell” – and emerged with a winning enterprise strategy.
The Pilot Program Paradox
The problem started with their initial go-to-market approach as a modular IoT platform. “All of them would say, ‘I want to build my own AI models,'” Andrew explains. “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 disconnect: enterprises were expressing interest and running pilots, but none could successfully implement the solution. As Andrew describes it, “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 Strategic Gamble
Instead of trying to minimize this pilot phase, Arch Systems made an unconventional bet. They decided to embrace what most startups fear – an extended pilot program with a key customer. “We worked early on with Flex,” Andrew shares. “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.”
Why It Worked
The strategy worked because it solved three critical challenges:
- Data Access: Extended pilots gave them unprecedented access to real factory data, enabling them to build a truly valuable solution.
- Deep Understanding: They gained intimate knowledge of customer needs. “We were going into the field with the enterprises,” Andrew explains.
- Strategic Relationships: The approach built trust with key customers. By the time they had a solution, they already had strong champions within target accounts.
The Results
The impact of this strategy has been dramatic. “Just recently we got through Pilot with two multibillion manufacturers into recurring revenue deals in four months,” Andrew reveals. “Went from three years to about eight months on average as we’re starting to sell the motion. The most recent ones were about four months.”
The Enterprise Navigation Strategy
Their success wasn’t just about patience – it required sophisticated enterprise navigation. As Andrew explains, “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 understanding of enterprise dynamics proved crucial. “It is surprisingly common that they do have to go all the way up to the CEO COO, even for a pilot approval,” Andrew notes. “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 Broader Lesson
Arch Systems’ experience offers a compelling alternative to the conventional wisdom about pilot programs. Instead of viewing pilots purely as a validation step to be completed as quickly as possible, they saw them as strategic opportunities to build deep understanding, strong relationships, and ultimately, a better product.
For B2B founders targeting enterprise customers, this approach suggests that sometimes the fastest path to success isn’t about rushing through pilots – it’s about using them strategically to build something truly valuable. The key is having the patience to invest in understanding, the sophistication to navigate enterprise complexity, and the focus to turn those learnings into actionable product improvements.
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