B2B is the new Black

By Cara Hoy

Everybody’s doing it. Back in November, Fred Wilson summed up the waning interest in consumer and the growing interest in B2B nicely with his blog post on what has changed.  With the maturation of the consumer web, and later stage money focused on investing in enterprise, droves of 2014 and 2015 business school students will jump at the next hot thing (remember the school wide pep talk from the start of the year about how its okay to just do what everybody else is doing), and enterprises should brace themselves for the onslaught of startups that are coming their way.  Or will they? Does Enterprise have the same appeal to would-be B-school entrepreneurs as Consumer?

One of the big debates on campus is whether successful founders need to be fundamentally passionate about the problem they are solving, or whether it’s enough to jump at a well-studied opportunity.  I don’t think it is important to pick sides here, as I believe Enterprise has something for everyone.  For opportunists, the concept of innovating for the Enterprise is not a hard hill to climb given that it has been estimated to be a $500Bn opportunity.  Sticky customers, big budgets, strategic acquirers…. If you can get it right, what’s not to like?  On the passion side of the coin, Enterprise has long been knocked for being less relatable.  How are we even supposed to know what issues enterprise face?  Yet, many of us have spent at least a couple years behind a desk or in the field, slaving for big brother.  Remember trying to email out an enormous powerpoint deck, only to have it bounce back because it was too large? Remember all the video conference calls that never were because IT could not get two different systems to sync? Hello Box and Blue Jeans Network. Given that many of us have spent more time in the office than outside of it, shouldn’t we feel passionate about resolving outstanding business needs? Seems like the Enterprise should appeal to both passion-based and opportunistic would-be founders. 

We’ve all been taught that product market fit is the holy grail of a startup. Sure it doesn’t guarantee success, but it signals that you’re onto something that’s definitely worth investing more time and capital into.  Which leads to another big question that B-schoolers grapple with –in the 2 years we are in school, how will I know if the startup I am working on is worth giving up my lucrative (insert name here) offer? In the Consumer space, response times seem quicker.  You can (not always) launch a work in progress and get some pretty immediate feedback on whether or not at least some people like it. In the Enterprise space, few companies are going to willingly adopt an unproven product –classic chicken and egg problem.  RentJuice spent much more time than many of our other case studies perfecting their product before formally launching.  So in two years, how are you going to figure out if an enterprise idea is worth pursuing?  Something that has changed in the enterprise space is that more and more IT innovations are user driven. The end users (same people that are consumers) find and adopt the product, and when sufficient mass has been generated, it gets pushed up through the organization and adopted.  Obviously not all enterprise solutions work this way, but for many enterprise software use cases, there is an opportunity to reach end users first.  Seems like the barriers to entering the Enterprise space for the average b-schooler have decreased, and we very well may see Enterprise being the new black on campus.