youtube.com/@ycrootaccess

30 Oct 2014 · Business

46 min watch → 1.5 min

Enterprise software startups can win by using cloud, mobile, and user-led adoption to enter companies through a narrow product wedge, then expand with security, scale, and better design. The talk maps the market shifts and tactics that make this possible.

Cloud computing, mobile devices, and user-led adoption lowered the cost and friction of selling software to businesses.

Businesses spend about $3.7 trillion on enterprise IT yearly, versus $35 billion on mobile apps and $135 billion on digital advertising.

Cloud computing let startups deliver software online, instead of each customer buying servers and installing software in its own data center.

That cut deployment from months to immediate access for developers and employees.

Standardized cloud platforms let one startup serve a two-person company and General Electric, with 300,000 employees.

That expanded the market beyond only the largest enterprises.

In 2004 and 2005, online file sharing was painful because storage was expensive, browsers were weaker, and institutions often gave users tiny storage limits.

That created an opening for cloud file sharing.

Box started in 2005 as a consumer file-sharing product, then shifted to enterprise customers.

It had too many paid features for consumers and too little security and control for businesses.

Mobile devices shifted enterprise software from IT-led buying to user-led adoption inside companies.

Employees could introduce tools before central IT formally approved them.

A startup can enter the enterprise by letting individual users adopt the product first.

After usage spreads, sell the company on security, control, and scalability.

Enterprise startups should look for asymmetries, advantages incumbents cannot or will not match.

One example is platform-agnostic products when suite vendors prefer closed integration.

Business-model asymmetries can work too.

Zenefits gave HR software to startups and earned commissions from insurance companies instead of charging customers directly.

Early customers should be outliers at the edge of their industry.

Companies already operating in the future reveal new use cases first, including drones in construction, farming, and oil and gas.

Customer feedback should be translated into a simpler product vision, not copied literally.

Customers describe problems well, but often not the best product design.

Enterprise products should be modular, not heavily customized.

APIs, application programming interfaces, let other software connect without rewriting the core product.