Building for the Enterprise

Part 11 of Stanford’s How to start a startup class. Presentation by Aaron Levie (CEO of Box) on building for the Enterprise. All notes are consolidated on a single page here.

– Box was founded in response of founder’s need to fix file sharing on the internet
– 3 forces contributed to Box emergence: cost of storage dropping dramatically, more powerful browsers and networks, and people wanting to share more and more and from more locations
– after product launched, was in between a consumer product (too many features) and an enterprise product (not enough features)
– consumer looks really fun, enterprise looks really hard. But in consumer space, it’s hard to monetise. Only two ways: people either pay for the app, or you sell advertising.
– to measure the opportunities, let’s look at global market sizes:
$35b = money spent on apps
$135b = global digital advertising
$3.7 trillion spent on enterprise IT per year…
Should you fight with millions of people for a bit of money, or with few people you charge lots of money?
– Enterprise software: building is slow, expensive, complex, and sales process is also very slow (and usually involves an intermediary, which internet people hate)

Everything has changed in the past 5 years, most magical time to build an enterprise software company
– on-premise computing -> cloud
– expensive computing -> cheap, low cost computing. Barrier for client introducing a product to their enterprise is lower.
– customised software -> standardized platforms, that the client customises themselves
– large enterprises -> every business can be sold an enterprise software. Makes the market much larger for enterprise software
– regional -> global, people will buy enterprise software from anywhere
– IT-led -> user-led, bring your own devices etc

– every company needs better, faster, more secure technologies
– retail: will need technologies to reach customers across all channels. No current solution addressing this [totally true, huge but complicated opportunity]
– every single healthcare company needs to personalize its services to the patients, electronic health records, assistance for doctors, etc
– media: from linear to on demand experiences, new forms of distribution and production need to appear. Need for big data analytics for marketing, etc

– spot technology disruptions: look for new enabling technologies that create a wide gap between how things have been done and how they can be done. Ex: iPad disrupting blueprints management and collaboration,
– intentionally start small: start simple and expand over time. What are the gaps in the incumbents solution that customers will want to use? Expand to the larger solution at a later time. Incumbents will overlook you [or buy you if they notice you get traction?]
– find asymmetries: do things incumbents can’t or won’t do because the economics don’t make sense to them, or because technically they can’t.
Ex: software suites have a hard time being on multiple platforms, so go multi platforms [lesser service across more platforms]
Find the fringe/extreme customers: go after those who are working in the future without totally losing their minds
– Listen to customers, but don’t always build exactly what they want, build what they need
Modularize (openness, APIs), don’t customize
– Your product should sell itself, but you will still need sales people to help clients navigate the competitive environment and your product

I am an entrepreneur and researcher passionate about understanding the social implications of digital technologies.
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