Lecture 12 - Building for the Enterprise (Aaron Levie)

Key ideas

Levie argues enterprise software is a better target than it looks and in hindsight sees patterns: exploit technology shifts, start with a narrow wedge, do what incumbents can't.

From a machine transcript of the audio. Quotes link to the moment they are said.

1. 1

   Compare the prize before choosing customers

   Levie says Box ended up with more features than consumers wanted and fewer than enterprises needed, which forced a choice. He set a few dollars a month from consumers, with big tech likely to make storage free, against enterprise buyers who he says judge technology by the productivity it brings and not only by what it saves. His figures at the time of the talk were about $170 billion across mobile apps and digital advertising against $3.7 trillion of enterprise IT spending.

2. 2

   Look for the widest technology gap

   Levie calls this the one point that holds for consumer and enterprise alike: find enabling technologies that widen the distance between how things are done and how they could be done. For Box that meant cheaper storage, faster internet and better browsers while people still shared files awkwardly. He adds that many ideas were tried decades ago and failed on cost or usability, so it pays to ask what has since become feasible.

3. 3

   Enter through users, sell to IT later

   Levie argues that mobile devices made enterprise IT more user-led, which weakens the incumbent's advantage of an existing relationship with the CIO. Employees bring a tool in, and the company buys when it wants more control, security and scale. He says the business model stays that of a traditional enterprise software company, and only the way in changes.

4. 4

   Start with a wedge incumbents can't copy

   Levie advises starting small on purpose, with a sliver of the problem, because an incumbent will always go for the full solution, and then expanding to larger customers or more use cases. He points to a payroll startup that took the most painful slice for small businesses. He also tells founders to look for asymmetries, such as being platform agnostic against suite vendors, or Zenefits, which he says is paid by insurers and not by the startups using it.

5. 5

   Distill requests, and still hire sales

   Levie says customer requests should be heard as problems and then reduced to the simplest product that solves them, with APIs and a platform handling custom needs. He suggests working with customers at the edge of their industries as early adopters. He admits Box was wrong to fear salespeople, arguing a product should sell itself but will likely still need consultative sales to help customers deploy it, as long as sales doesn't stand in for building a strong product.

In Aaron’s words

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