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Viaweb was targeted at small businesses which is a completely different market from large enterprise sales. I'm not talking about off the shelf business product

by ig1 17y ago

Viaweb was targeted at small businesses which is a completely different market from large enterprise sales. I'm not talking about off the shelf business products that solve a standard problem, but if you're bringing a new unique solution to the market you really need a dedicated sales force. Things like industry contacts can be critical (it can often be impossible to even get in to a company to pitch without an inside contact), lead times are very long, etc. The challenges you face are often vastly different to most web 2.0 apps. Crossing the Chasm is a good book on the sort of challenge. In those sort of circumstances you may well be better off finding a consortium of angels who are from your industry than joining a generic incubator style scheme (although obviously they have their own value).

SwellJoe 17y ago
Ah, yes. YC has never (to my knowledge) funded an enterprise service-oriented company, as you've described, and probably wouldn't. pg has also disclaimed having much good insight on enterprise businesses of this sort. So, yes, if you're building that kind of company, YC is probably not the right choice of investor. The scale of investment is also too low...enterprise sales guys with specific industry experience cost more per-month than YC invests. So unless they're also a founder and not drawing much of a salary, the math isn't going to work out.
webwright 17y ago
Just because YC doesn't fund companies like that doesn't mean that they don't fund companies that BECOME that. Listen: You don't launch an enterprise product in 3 months. You launch a consumer product. MAYBE you launch a product for SMB, because that's what you are ( http://blog.asmartbear.com/blog/youre-a-little-company-now-act-like-one.html http://blog.asmartbear.com/blog/youre-a-little-company-now-a... ). In a few years, eventually you have enough market smarts and momentum to confidently sell stuff to big companies. YC funds companies that can reach ramen profitability OR reach the point where they are worth investing in (angel or Series A). The B2B path is a longer (but maybe safer?) one. Eventually, you'll either get profitable, stall out and/or prove that it's worth spinning up a sales team (which may well require add'l funding). Note: we are a 1.75 year-old YC company and we have lots of 5 and 6-figure deals in the sales pipeline. 12 months ago, I NEVER used the phrase "sales pipeline". b2b YC companies include (off the top of my head): RescueTime, Frogmetrics, Xobni, Virtualmin, Snaptalent (deceased), etc.
- SwellJoe 17y ago
  You're quite right. Righter than my reply, actually. We didn't have, and still don't have, a "sales pipeline", but our new cloud computing management product turns out to be exactly the sort of product that does need such a pipeline...and it could very well turn out to provide a majority of our revenue (it's already at about a quarter to a third of our revenue each month). A sales guy is probably not our next hire, but it'll probably come pretty soon after.
- ig1 17y ago
  Sure you can go to b2c -> b2b, but there's a huge market for software that only makes sense in a enterprise b2b market. Plenty of startups exist solely targeting large enterprises, it's not something you have to "grow into". For example: * Adapters to connect Hospital ERP systems to Pharma companies * Financial market liquidity masking servers that combine internal trade books with market trade books. * Industry specific databases * Warehouse logistics management * Ultralow (microsecond) latency middleware None of these are particularly sophisticated, and are all areas with active startups. But they're all in areas where the only companies who the software is useful to are large enterprises.

by ig1 17y ago

SwellJoe 17y ago

Ah, yes. YC has never (to my knowledge) funded an enterprise service-oriented company, as you've described, and probably wouldn't. pg has also disclaimed having much good insight on enterprise businesses of this sort. So, yes, if you're building that kind of company, YC is probably not the right choice of investor. The scale of investment is also too low...enterprise sales guys with specific industry experience cost more per-month than YC invests. So unless they're also a founder and not drawing much of a salary, the math isn't going to work out.

webwright 17y ago

Just because YC doesn't fund companies like that doesn't mean that they don't fund companies that BECOME that. Listen: You don't launch an enterprise product in 3 months. You launch a consumer product. MAYBE you launch a product for SMB, because that's what you are ( http://blog.asmartbear.com/blog/youre-a-little-company-now-act-like-one.html http://blog.asmartbear.com/blog/youre-a-little-company-now-a... ). In a few years, eventually you have enough market smarts and momentum to confidently sell stuff to big companies. YC funds companies that can reach ramen profitability OR reach the point where they are worth investing in (angel or Series A). The B2B path is a longer (but maybe safer?) one. Eventually, you'll either get profitable, stall out and/or prove that it's worth spinning up a sales team (which may well require add'l funding). Note: we are a 1.75 year-old YC company and we have lots of 5 and 6-figure deals in the sales pipeline. 12 months ago, I NEVER used the phrase "sales pipeline". b2b YC companies include (off the top of my head): RescueTime, Frogmetrics, Xobni, Virtualmin, Snaptalent (deceased), etc.

SwellJoe 17y ago
You're quite right. Righter than my reply, actually. We didn't have, and still don't have, a "sales pipeline", but our new cloud computing management product turns out to be exactly the sort of product that does need such a pipeline...and it could very well turn out to provide a majority of our revenue (it's already at about a quarter to a third of our revenue each month). A sales guy is probably not our next hire, but it'll probably come pretty soon after.
ig1 17y ago
Sure you can go to b2c -> b2b, but there's a huge market for software that only makes sense in a enterprise b2b market. Plenty of startups exist solely targeting large enterprises, it's not something you have to "grow into". For example: * Adapters to connect Hospital ERP systems to Pharma companies * Financial market liquidity masking servers that combine internal trade books with market trade books. * Industry specific databases * Warehouse logistics management * Ultralow (microsecond) latency middleware None of these are particularly sophisticated, and are all areas with active startups. But they're all in areas where the only companies who the software is useful to are large enterprises.