Archives For business cofounder

Many new entrepreneurs, especially those located in Silicon Valley / Bay Area, are drawn to the allure of consumer focused startups.  It’s easier for entrepreneurs (particularly ones with little business experience) to imagine using consumer products and they are typically simpler to design.  In addition, consumer focused Minimum Viable Products (Eric Ries’ The Lean Startup) can be enough to draw widespread attention from target customers and news feeds like TechCrunch or PandoDaily.

Enterprise focused startups are a tremendous opportunity because 1. there are fewer competitors and 2. most enterprise customers are already paying for a legacy product that is likely not web-based (SaaS).  According to Jim Goetz of Sequoia Capital, “Enterprise remains an ‘enormous opportunity’ because companies are spending  about $500 billion a year with legacy enterprise companies and those budgets are  ripe for the plucking.”

Consumer based startups may go from zero users to 100 million users virtually overnight only to fizzle out when interest wanes.  Most never figure out how to make money and have a tough time raising funds.  Enterprise startups, on the other hand, take longer to get going but have a clearer growth trajectory with real revenue.  Most venture capital firms prefer to back enterprise startups because there is a more manageable growth trajectory and usually a more lucrative exit.

Yammer, Workday, Box, Cloudera, Lithium Technologies and Nicira are a few examples of recent enterprise successes.

If you learn to program you’ll have a superior sense of the true cost of software development and will be a much more successful non-technical cofounder.  The most precious resource is time and many non-technical cofounders get tripped up by a false sense of how long things should take to implement.  Learning to code has never been easier and you can check out my earlier post on how to get started.

Business cofounders shouldn’t get lured into thinking that they don’t need technical skills when looking at the CEOs of multi-billion dollar tech companies.  Guys like Zuckerberg, Bezos, Steve Jobs and Bill Gates all started out with a solid foundation of technical knowledge, which contributed to development efficiency.

This article from Rob Spectre over at Fast Company points out that Donald Trump’s success is the result of his knowing the costs associated with real estate development better than any of his competitors.  In the end, running a successful startup is about out competing your competition in the pursuit of limited resources: funding, advice, talented engineers, time, etc.  Having a basic understanding of coding makes entrepreneurs better competitors.