Datameer Blog post
Big Data & Brews: Ben Fu Shares Some Entrepreneurial Advice
by Datameer on Nov 24, 2015
Ben has seen first-hand common mistakes committed by entrepreneurs trying to break into the enterprise technology space. So, I thought I’d ask him about it.
What are your lessons learned or advice?
Stefan: Why would I even go into enterprise software and not in consumer products?
Ben: I’d say that it really depends on passion and expertise. I think that we’re very enterprise-focused, all of our investments are enterprise. I think it comes from all of our experience, being deep enterprise investors. At least how I’d frame it if I were speaking to an entrepreneur, is, say that you have an equal opportunity to be able to go consumer or enterprise, which usually you won’t depending on your experience, but you’ll know that your barriers to entry are much lower, because you can just create an app and go.
Stefan: For everybody?
Ben: Yeah, for anyone who knows how to do iOS. Your unique competitive advantage. There’s going to be, in some cases, more luck involved, or timing or whatnot, versus an enterprise company where you say, “There’s a large pie to go after.” Remember, we’re to talk 30 billion, 17 billion, just in big data, does not even include SasS. You say where’s the passion in there, and do I have the domain expertise? Quite frankly, why we love enterprise space is, it is a big market. You can build sustainable competitive managers in the technology or product itself, and (2), unlike the consumer market where consumer sentiments change, maybe I love this app one day, next year I hate it. In enterprise software there’s a very, very tangible use case. Also, the architecture differences, like I mentioned from before. Like data stacks. It’s 10 times faster, 100 times more scalable, 10 times or 100 times cheaper than the highest end of Oracle – that competitive advantage doesn’t go away overnight. It doesn’t go away over years even. That’s the way I see it. It’s a big prize to go after.
Stefan: In a company, so you said, you’re mostly investing into the expansion stage. What are some of the most common mistakes some of those companies making?
Ben: It’s a good question, because back to the earlier analogy of just being able to get a team and TAM, and try to go to the first point of product market fit. The value there is unlocked for an investor as well as the entrepreneurs, of, “Can you get something to market?” Is there some sort of market validation? Can I have a cohesive team that can actually build product and get something out there that generates a million in revenue or a million uniques, or whatnot. For us, we focus on companies that typically have a product in place, actually, almost always have the fully product in place in GA. The technology’s been de-risked, the market has been de-risked. For us, it’s really the go-to-market side.
To answer your question of these companies that we’ve looked at that where I’d say there’s a common mistake is, maybe I’ll just cite two things, is knowing the evolution of the company and the team. Just like, I would say, certain athletes that you have out there, some people can run the short sprint really well, some folks can run the mid-distance, and some can run the long distance. Sometimes a person can do all three and they can be a gold medalist in all three, but usually not. You have to think of at what point in time do you have to add to the team? Do you have to add great board members? Do you have to add great advisors? Be able to take a hard cold look and say …
Stefan: What do I have to subtract?
Ben: What do I have to add and what to I have to subtract, exactly. That’s one big thing and it’s not the easiest thing to do, because it requires a real conversation. There’s the business side of things and the human side of things, and sometimes it’s not the easiest to combine those.
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