

Why The Enterprise Space Needs To Build Companies Like The Consumer Space - jasonlbaptiste
http://publictivity.com/education/2008/09/29/why-the-enterprise-saas-space-needs-to-build-companies-like-the-consumer-space/

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dmix
I'm a young founder building an "enterprise" SaaS start-up and I agree with
most of this.

One important fact that is often overlooked in terms of SaaS+capital is the
need to have a basic infrastructure in place in order to get customers. It's
not, as the author says, as simple as building a product quickly and getting
customers.

Your customers will usually be big companies who invest in software very
conservatively and your competing with massive billion dollar enterprise
software businesses.

To get customers requires sales reps, 1800 numbers, basic technical support,
knowledge base, very secure servers, implementation support, etc. When your
app is mission critical, theres no time for beta.

~~~
lnguyen
If you're the startup, then you have to be beyond beta.

But if you're the billion dollar enterprise company, then that's not quite
true. All you have to do is sell a checklist of features on some glossy paper
and throw in some "services" which basically gives you cover for trying to get
a functional (or maybe even just installable) build out the door.

And here's an article talking about Waste Management suing SAP for playing
that game:

<http://www.itworld.com/waste-management-sues-sap-080327>

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auston
I agree with Jason on his points on "Why Angel Investing In the
Enterprise/SaaS Space Isn’t 'Hot'".

But I believe that getting a foothold in the market would also require an 800
number with people who understand the product very well on the end of it.

Also I think the most important point he makes is this:

"Focus on User Experience"

I can't tell you how hard it has been for me to use some business apps in the
past! I personally believe the application should really be an extension of
their routine, not an entirely new routine.

I'd bet this is the key to success in the enterprise space, make people do
less work and they will appreciate it.

Taking a picture of a business card and save the info automatically instead of
saving, putting it in a rolodex and also manually entering the info into your
phone and/or outlook.

Click to call buttons so that they dont have to dial a number.

Having word docs/pdfs templated so they can be filled in automatically using
the persons info instead of having to fill it in manually.

Make the format easily exportable for re-use in another system (salesforce to
basecamp or salesforce to calyx or basecamp to blinksale or harvest to less
accounting).

These are all things that can be done but arent available to the mainstream
SaaS user.

~~~
callmeed
Not sure if user experience really matters that much in the enterprise. I say
that because, in the enterprise, person making the purchasing decision isn't
the person using the software. I would say they are more concerned about
security, compliance, and integration with existing systems.

My last enterprise job was with a large shipping company (that drove brown
trucks). Their internal software for call centers was far from easy to use. I
offered to write apps internally but could never get anything green-lighted.

I'm not discounting user experience-I just don't think an enterprise startup
can win on that alone.

~~~
auston
I get your point. I guess I mean SaaS offerings in general. Because small
businesses use them as well.

~~~
callmeed
absolutely. I think there are tons of opportunities for saas offerings
targeted at small biz (the kind that use QuickBooks, not Oracle; that do $6M
in revenue, not $6B). For them, user experience will go a long way.

~~~
jasonlbaptiste
Amen. Mind if I use that quote "Quickbooks, not Oracle".

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tptacek
I don't get this; "nobody wants to talk about enterprise intrusion detection"?
Enterprise security is one of the most _overfunded_ sectors in technology.

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callmeed
I'm curious how many YC-funded startups are considered to be in the
"enterprise" space. Anyone know off hand?

~~~
jasonlbaptiste
good question. i also think it should be a little bit looser than
"enterprise". PG, what are your thoughts on funding enterprise plays with YC?

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crxnamja
enterprise is where the $ is but not as sexy.

~~~
gamble
Sure they have money, but it's not like you'll get any. Larger companies are
much harder to sell to than small companies or consumers, and they hate
dealing with startups. You might make $1 million on a single enterprise sale,
but you'll have to spend 90% of that on your sales and support staff, and that
one sale could take a year to close.

~~~
acgourley
My employer is a 20+ person startup selling to the enterprise market. We don't
feel that they 'hate' dealing with us, although, our only competition is other
startups. Even so, we get rave reviews about the level of service we bring to
each contract. They are not used to seeing that from their large company
vendors.

It's true that selling is hard, but that is why we have an experienced sales
staff. And yes, sales can take 6-12 months in the worst case, but I think you
underestimate the number you can have in the pipeline at once and overestimate
the cost to support each sale.

One more note in defense of enterprise oriented startups: as a hacker, I don't
find creating enterprise software to be less palatable than consumer software.
The selling is compartmentalized in a sales dept, so it's not as if I'm the
one jumping through the enterprise sales hoops. Obviously, if you're hoping to
keep your company so small that you don't have a dedicated sales department,
it's a much different story.

~~~
gamble
My feelings on this subject were less jaundiced before I'd been working with
large customers for a few years. The first year or so was much easier - you're
hitting all the easy sales, the ones that are geographically close, and the
technically-sophisticated early adopters. After a while you've plucked the
low-hanging fruit and each sale becomes progressively more difficult and
expensive. Meanwhile, the support costs for existing customers accumulate and
competitors proliferate.

As a startup, it's easy to differentiate yourself from competitors by offering
better-quality service. The difficulty lies in scaling up to a large number of
customers.

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rokhayakebe
*There is a lot of Red Tape". Touche. You could not have said it any better.

~~~
jasonlbaptiste
Glad you agree. Seriously, software should be sign up, get on, get use out of
it. Red tape and long sales cycles irritate me more than rolling around in
poison ivy.

