Posts from enterprise

A Lens Into The Future Of Enterprise Software

I’ve been working with our portfolio company Work Market for four years now. It’s been a real learning experience for me as enterprise and SAAS has never been my long suit. We were attracted to Work Market because, as their name implies, they use a marketplace model to help enterprises get work done. Specifically, they created and are the leader in the Freelance Management System market. We like software that has a network effect built in because it is harder to commoditize. A marketplace of freelance workers inside an enterprise software application seemed to us to be exactly that. And that has been true. But along the way we’ve learned quite a few other things:

1) Mobile matters, a lot. I mentioned in my What Just Happened post that mobile is starting to really impact the enterprise software business.

At Work Market, the freelancers want to get work, accept work, and close out work on their phones. So mobile app development has become a huge part of what the Work Market engineering team has to work on. At some point, the enterprise will likely want to issue work orders on their phones too.

2) Freemium and transactional business models work in the enterprise just as well as they work in consumer. Work Market has a free tier with a transactional revenue model for enterprises that want to try the system or plan to be an occasional user.

WM pricing

We know that “freemium SAAS” works well for horizontal enterprise applications like Dropbox, Slack, Google Apps, etc and I believe we will start seeing freemium SAAS models applied to vertical applications as well. We already are.

3) Enterprise applications must also be platforms if they want to scale into the largest enterprises. Salesforce is the poster child for this trend. They have become a very powerful platform and distribution partner for SAAS applications. But every SAAS application should have APIs that allow their users to plug enterprise software together. Work Market can talk to the other large applications that enterprises use for managing talent (HR, VMS, etc) and that is a requirement for the largest deals. It will soon be a requirement for all deals.

I am seeing a bunch of new SAAS companies get started whose entire value proposition is building on the open APIs that most enterprise SAAS products have released in the past few years. If you are in finance, or HR, or marketing, or sales, you are now using a host of SAAS applications to get your job done and a big trend in the market is new applications that tie all of those together (via APIs) so that you can have a single view into your workflows. This is the “platformization” of SAAS and it is upon us.

The big takeaway for me is that all the things we have seen happen in consumer web and mobile software are happening in the enterprise and the impact of that is already being felt. I am seeing it up close at Work Market and fortunately they got started recently enough that they have been able to take advantage of all of these trends (marketplaces, mobile, cloud, freemium, platform) as they go to market and build their business. That is, among many other reasons, why we recently led a growth round to help Work Market’s new CEO, Stephen DeWitt, scale into the freelance management system market opportunity that they created a few years ago.

Broken Cap Tables

A “cap table” is a schedule of all the shares outstanding for a specific company. Here’s an MBA Mondays post I wrote back in 2011 on the subject of cap tables. If you want to know how much of a company you own, a cap table is the best way to figure that out.

Cap tables are almost always prepared and kept in spreadsheets, usually excel, but also increasingly google sheets. And, it turns out, they are often wrong.

Henry Ward is the founder and CEO of a company that is aiming to fix that called eShares. Last month USV led a Series A round in eShares and my partner John Buttrick wrote a bit about that investment today on the USV blog.

The reason I tell you this is that yesterday Henry wrote a great post about broken cap tables that everyone in the startup world should read. Here are the four big takeaway’s from Henry’s post:

  1. Most cap tables are wrong
  2. Most investors don’t track their shares
  3. Note holders are often forgotten
  4. Employees suffer most

How does Henry know this? Well part of eShares’ business is converting cap tables from spreadsheets into their cloud based application and reconciling everything to make sure it is correct. They onboard about 100 companies a month right now and they see a ton of cap tables.

Tracking everyone’s ownership in companies is a perfect application for a cloud-based network of owners and issuers. If every company used a platform like eShares, and if all these platforms talked to each other, if there was a common identity standard, then as you move from one company to another over your career, collecting equity along the way, you could access and manage all of your ownership interests in a single dashboard.

This is a service that is incredibly useful to startups and angel investors and VCs. But as Henry outlines at the end of his post, it will ultimately help employees the most. And, as we have discussed here before, employee equity is certainly more broken than cap tables are. Fixing that is a worthy mission for a startup and that is what Henry and his team intend to do.

NY Enterprise Technology Meetup

Next tuesday evening, I am giving at talk at the NY Enterprise Technology Meetup. I will talk about networks in the enteprise. I plan to use USV investments like WorkMarket and Pollenware to discuss how entrepreneurs can use networks to build powerful enterprise oriented businesses.

If you plan to attend that meetup or if you are interested in networks and enterprises, I have created a hackpad where you can introduce suggested topics for me to touch on in my talk. This hackpad is totally open and anyone can contribute to it.

I know that the meetup is almost completely sold out and that many of you who might want to attend will not be able to. I hope the meetup organizers will record the talk so I can post it here for everyone to see after the fact.