Enterprise Newsletter: November 2019

What’s the new go-to-market for B2B? How will AI impact the enterprise? Is open source the future of software?

Subscribe to the a16z enterprise newsletter to find out.

This is the second edition of the a16z enterprise newsletter, where we cover technologies, trends, and company building tips for B2B and enterprise. If you missed our first newsletter, check it out here.

IN THIS ISSUE:

  • Why enterprise products must earn “the right to be complex”
  • Security starts with you
  • Field notes from the first No Code Conference
  • How to negotiate 16 sales contract clauses

Why enterprise products must earn “the right to be complex”

In the old world of enterprise, to get the full functionality of an enterprise product you had to make a major capital investment in a big Sun server and Oracle database, deal with complicated deployments, and invest in ongoing professional services to get it (and keep it) working. Small customers couldn’t embrace the best technology due to the upfront investment required. But that’s changing with the new world of bottom-up adoption (as my partner Martin Casado pointed out in last month’s newsletter). Any customer can now get that “big iron enterprise” offering (though sometimes limited in features) and pay only for the amount their organization needs.

Customers have more options than ever, more buying and budget authority lower in the organization, and CIOs are less willing to buy a wall-to-wall solution unless it’s proven with internal champions.

All of this means the product not only needs to be easy to use, at first – but that the most enduring enterprise products earn the right to be complex. These products provide immediate value to a user and then deliver “a crescendo of value” to the enterprise with new capabilities.

I’ve made a very scientific chart to illustrate this point:

crescendo of value

Zoom is a great example: Two people can download it on their phone or computer and be up and running in a video call in a minute. High value, no complexity. That earns Zoom the right to integrate with Single Sign-On services and calendars – a ton of value with a bit more complexity. From there, the door is open for them to sell a complete enterprise video solution where IT is willing to convert all customer meeting rooms into Zoom rooms. Tremendous value, and tremendously sticky. –David Ulevitch (@DavidU)

Security starts with you

Most of us access our work email, documents, and collaboration platforms on our mobile phones as well as our work computers. As a result, enterprises are only as secure as their employees and their mobile devices. The bad news: SIM swapping, business email compromise, and phishing attacks are on the rise. The good news: there are 16 steps you can take for a more secure you and a more secure enterprise. –Joel de la Garza

Field notes from the first No Code Conference

One answer to the shortage of developers is “no code” and “low code” applications. This kind of development provides a platform – often a visual integrated development environment (IDE) – where anyone can develop mobile or web applications with a point-and-click interface. Low code/no code isn’t new; as early as the 90s, large enterprises, such as Microsoft PowerApps, Salesforce, and Quickbase, were developing internal niche apps.

Until recently, agencies and consultants have been the primary users of no code development. But the first ever No Code Conference (November 12-13) highlighted that low code/no code adoption is spreading to small and medium-sized businesses as well as business functions or product teams at mature enterprises. No code adoption is becoming a driver to increase the speed of innovation. Take hackathons, for example. Today, the paradigm is centered on developers rapidly coding prototypes. But with no code tools, anyone who has an idea can prototype it and even launch a functional product. In a no code world, hackathons might be as much for HR and marketing professionals as software engineers.

As no code tools mature (and the No Code Conference website is a great example of a site built with no code tools), the big thing to watch: how quickly do technical product managers adopt no code tools? If they can use these to get work done faster without sacrificing quality, then we’ll really know that low code/no code has come of age. –Jennifer Li (@JenniferHLi)

How to negotiate 16 sales contract clauses

For sales teams, the end of the year means chasing deals to hit annual numbers. But too many startups, especially those not yet established, make the mistake of over-accommodating customers and taking on too much initial risk. Instead, startups should be thinking about the short vs long term goals and risk/reward tradeoffs in their contract negotiations. We drew on the expertise of lawyers, founders, and CROs and what they learned about winning the deal without taking on contractual risk to put together a guide to negotiating 16 sales contract clauses (including limitations of liability, data use, and right of first refusal). –a16z Editorial

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