Startups Stack Exchange Archive

What’s the definition of an enterprise market?

What’s the definition of enterprise market and are there any common sense guidelines of when to call a company an enterprise?

To give some context: As some of you might heard of, Mike Taber from the ‘Startups for the Rest of Us’ podcast moved on from his product AuditShark after five years due to lack of success. One of the main reasons he mentioned was that he was going after the enterprise market and that selling software to these kinds of markets is mainly driven by relationships.

In this episode co-host Rob Walling said that he hardly know any solo founder who is or was successful in the ‘enterprise market’. Consequently targeting such a market as a single founder might be a red flag.

Answer 7465

In that specific context it does refer to the shift from B2C (business to customer) to B2B (business to business).

The main different is that, when you are a startup, you are perceived more as a small company, and therefore when offering something directly to the customer (b2c) you are perceived more a customer offering a solution to other customers.

The problem with working in a b2b environment is that the company you are selling to wants first and foremost reliability of the service. If you are gone in 1 year time, it will cost them a lot. That’s why they tend to prefer working with consolidated companies rather than startups.

Having more than one funder may contribute to craft a more enterprise identity, even if personally I don’t think it would make much of a different.

Although the observation is theoretically correct, I wouldn’t stop just because of that. The Startup world is full of exception to what was usually considered a theoretical mistake.

Answer 11777

The enterprise market means selling to other businesses. A startup using AWS is buying an enterprise product. Microsoft makes most of its OS money off business licenses for office and Windows, and its an enterprise business. Basically the entire security industry is enterprise. Oracle makes its money selling support for Java to business. SAP has been selling SAP forever. And so on.

The enterprise market is more stable than other markets for a few reasons:

  1. Youre just supporting other peoples schemes. Googles and AOLs can come and go, but Facebooks and Groupons will take their place. There is always a demand for security, cloud services, operating system software, etc. The consumers are not fickle.
  2. Business will buy pretty much anything. There is not a lot of competition in long term relationships.
  3. Because the clients are larger, it takes more capital and connections to start. Note that are exceptions to this, like Elastic.
  4. The SaaS market has a large number of companies, but they are fairly niche and don’t compete.

All in all, enterprise businesses last longer but are harder and slower to get going most of the time.

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