The Enterprise Cool Kids

Posted on Posted in Industry Insight

No, this isn’t a guest column by Aaron Levie. Though he and his startup Box, the poster child of the “sexy enterprise,” are definitely included in the bunch. “You should definitely kick Aaron off the list. Just to mess with him,” Zendesk founder Mikkel Svane commented when he heard what we were writing.

With VCs voting with their feet and eschewing consumer startups this play period, we’re seeing a major shift of sentiment and momentum to enterprise startups. Perhaps the most major in a while, definitely as far as we can remember. Venture money that a year ago was going into consumer dealsis now flowing into enterprise, as the Series A crunch and reticence about Facebook’s lackluster IPO has dampened investor enthusiasm for photosharing apps and their ilk.

In contrast to Facebook, a series of stellar enterprise IPOs like Palo Alto Networks, Splunk and (perhaps the original enterprise cool kid) Workday have fired the collective entrepreneurial imagination. “We see entrepreneurs come in every other day telling us how they’re going to reinvent Splunk,” Sequoia’s Aaref Hilaly tells me. “The successful enterprise IPOs serve as beacons for the companies that come after them.”

Although the VC profits baseline has traditionally come from enterprise deals, they certainly weren’t media darlings. Consumer startups, despite their high beta and tendency to be outliers, were the belle of the mainstream tech blog ball. “Consumer technology tends to create fewer winners. Its easier to keep track of what a Facebook or a Twitter may be doing than myriad enterprise software vendors,” NetSuite CEO Zach Nelson notes. “[There it] may take decades to decide the actual winners.”

Read More:- http://techcrunch.com/2013/01/27/the-enterprise-cool-kids/

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