Lecture 12: Building for the Enterprise
startupclass.samaltman.com
startupclass.samaltman.com
Am I supposed to learn from him or worship his personality?
EDIT: I finished the video. Here is a too long; didn't watch as asked.
The first 18 minutes he is telling Box' history and justifying its existence. The first advice come at 7:40 - pay attention of the technological changes that are happening in the world.
He try to sell you the idea that is better to do business with enterprise because there is more money on it. Kind of the opposite as advised before about why to start a startup. And even the numbers he shows are shady. He says there are only two ways to make money on consumer tech. Consumers paying you or advertising. That sums up to a total 170 billion dollars market. Note that he leaves Apple and all sort of consumer tech that is not ads or mobile apps purchases. And then he compares that with corporate IT market of 4.7 trillion dollars. But here he includes servers and all infrastructure. Very shady sales technique comparig apples to oranges.
Then at minute 21 he finally cuts the bullshit and start to deliver content. Great content by the way. Worth watching after minute 21. If only he wasn't so Stan S. Stanman at the beginning.
One thing that we should all consider is that, first and foremost, this lecture was for the Stanford students in the room whose attention span ranges anywhere from 0 and 15 seconds on the topic of enterprise software. I am pretty sure the required reading is a twisted, self-deprecating joke, and the theme song is to get the audience's attention.
[1] http://kellblog.com/2014/03/27/burn-baby-burn-a-look-at-the-...
[2] http://tomtunguz.com/box-ipo/
[3] http://www.businessinsider.com/heres-why-boxs-aaron-levie-is...
[4] http://kellblog.com/2014/05/15/the-box-s-1-delayed-ipo-and-t...
Can recommend http://www.forentrepreneurs.com/saas-metrics-2/ as a good starting point.
Please, let all the Stanford kids building startups go after the consumer space... the world needs more solomo-dailydeal-catpicture-ridesharing-airbnbForX apps. What it doesn't need is any more vendors selling software to businesses, who, you know, actually pay, like, money, for software.
No, really, I mean it. There is absolutely NOTHING interesting about selling enterprise software. It's boring, dull, unexciting, unprofitable, gives you bad breath, causes cancer, kills puppies, and is bad for the environment. If you are thinking about an enterprise software startup, forget it. No joke. Really. Just. Don't. Do. It.
[1]: Because I'm greedy and don't want more competition!
I've found more recently that this isn't always true, and it really depends on what sort of enterprise you're dealing with. Bottom line is you can't listen mindlessly to what customers say-- you have to think about the plan/vision and the where the overall market is going.
Enterprise knows what their problems are, and you should listen to them slavishly. The issue comes in when you listen to them for what solutions to build for their problems.
They don't know what the right solution is, but they do know what the right problem is. If they knew what the right solution was, you wouldn't have a (good) business.
In finding the solution, you will sometimes address a problem enterprise wasn't even thinking about, but is much larger and solves their initial problem as well.
We (https://www.tinfoilsecurity.com) started as a website security scanner - we're now a developer-focused website security scanner that focuses on DevOps integrations and automating the testing process earlier, rather than later. Nobody would have asked us to build that (nobody did), but that is what sets us apart and why we're beating our competitors.
So very much true. In the company I work for this principle applies to inhouse development as well. I.e the problems are obvious but the solutions not so much. We are an independent software vendor, but ownership of code is so scattered that essentially a huge portion of development is handled as if it would be done by external service providers - i.e. the driving force in development is business who know exactly what the pain points are but would want only quick hacks.
Except, those pain points are so acute that if there are ready solutions available they will authorize purchases of ridiculous amounts of cash to have them solved. I imagine this is the situation in most businesses.
Now, out of those problems some are really hard to crack, while others are just an artifact of lack of inhouse knowledge of the particular technical field. Those consultants that manage to offer viable solutions for these well known problem domains probably can earn their bread quite nicely.
In areas with high impact areas where transformation of the business is a priority, enterprise moves fast and can drive innovation.
These people are not looking for the lowest cost option, they're looking for maximum upside. Don't get stuck in a situation of selling incremental improvements with reduced costs, but work out how to spend the same you do today (or more) and get more back for it.
The more companies that move to an agile work flow the better enterprise software development will become.
IMHO, I don't get the same enjoyment from consumer-facing projects.
The numbers don't lie: "Box’s average customer value (ACV) is $3,653, much lower than the median of 59,600." [1]
They're selling "enterprise" software at SMB price points.
Setting aside security concerns, getting a big enterprise to move a substantial part of their IT infrastructure to the cloud is a logistical nightmare. Perhaps they underestimated this.