Photo: TechCrunch Disrupt
Venture capitalist Jim Goetz says he’s floored that so few entrepreneurs are focusing on building products for businesses, given how successful those startups have been.”It’s shocking we don’t see more engineers and entrepreneurs interested in enterprise,” the Sequoia Capital partner said earlier this week at the TechCrunch Disrupt conference in San Francisco.
Twice as many enterprise startups have become billion-dollar companies compared to consumer startups, he says.
“At Sequoia, upwards of a hundred entrepreneurs a week present and if we’re lucky, maybe a dozen of them are focusing on the enterprise,” he told Disrupt attendees. “In the last 10 years, there have been 56 IPOs in the enterprise space that have gotten north of a billion [dollars in market capitalisation] and just 23 in consumer.”
Recent IPO hits include ServiceNow, Palo Alto Networks, Jive, and Splunk.
Goetz said the enterprise IPO market will stay hot for at least a couple more years.
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.
“We believe most will be disrupted in the next decade,” he says.
He didn’t name names, but he’s clearly thinking of the likes of SAP, which is urgently trying to figure out the cloud; Oracle which is seeing its classic database challenged by new technologies; Cisco, which is facing a technical threat called software-defined networking; EMC, which now faces startups with faster, cheaper storage; and so on.
“The business model, thanks to Marc Benioff, is now a weapon for all of you,” he said, referring to cloud software and subscription billing.
In enterprise, there are fewer competitors and they are “large, slow and flatfooted,” Goetz said.
“If you compare that to consumer, all the interesting ideas often have a couple of dozen companies that are well-funded,” he said.
Sequoia Capital is known for backing companies like AdMob, Jive, and Palo Alto Networks.
Don’t miss: The Next 25 Big Enterprise Startups >
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