Short overview: Why don’t more startups target the enterprise

After the TechCrunch Disrupt interview with Sequoia’s Jim Goetz, saying that “shockingly few startups are targeting the enterprise” (12 out of each 100 they see), the question appeared on Quora and received many good answers so far. But the following response by Saeed Khan provides a good and short overview of the reasons, as to me 😉

Hmmmm….lets see:

Enterprise requirements:

  • solve tough problems
  • have real revenue model
  • need to navigate legal and finance organizations
  • long and complex buying cycle
  • huge aggressive competitors like Oracle
  • 3-5 year minimum time investment
  • potential valuations of 10x revenue

Consumer/Social Media requirements

  • create something simple and “cool”
  • no revenue model required
  • buying process simple or non-existent
  • competitors are small like you or non-existent
  • 1-2 year time investment
  • potential valuations of 100x revenue (if you have revenue) or stratospheric in general if you’ve got buzz

Gee, which one would you choose?

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