The Consumerisation of Enterprise IT is now the Standard

I was reading the book “Super Founders” by Ali Temaseb in which he breaks down the data behind billion dollar startups. When he asked founders and investors of billion dollar companies what spaces they thought will create the next billion dollar companies, he received a very diverse set of ideas.

Some said synthetic biology, the future of food, healthcare, but one theme that struck me, suggested by Neha Narkhede of Confluence was ‘the consumersation of the enterprise’. As we at Remagine Ventures invest in consumer tech and the suppliers (b2b) to the biggest consumer trends, I became instantly curious about the convergence of the two.

The consumerisation of enterprise was a big investment trend in 2011-2012.

In this Techcrunch article written by Aaron Levie of Box, he refers to it as the rise of enterprise ‘toys’, citing the acquisition of Yammer by Microsoft for $1.3 billion. “Toys” are new startups attacking a narrow or unattractive segment of the market. They are predictably dismissed by the incumbents as lacking key features or being too narrow.

“Students of the Innovator’s Dilemma know that a new technology starts out being just “good enough.” Often, an early solution only serves a niche part of the market with limited requirements. This naturally shields it from the incumbents’ radar, but what starts out as a nascent product attacking an unprofitable or unattractive market segment can quickly mature into a disruptive solution that becomes more than adequate for a broader population”

The idea of the niche, or wedge is well articulated in Lenny Rachitsky’s recent post and in the graphic below:

But even in 2012 it was pretty obvious that in Enterprise tech, a field that was known for long sales cycles, boring/safe UI and on-prem enterprise installations, things were about to change radically:

Today, nearly every internet-connected, employed individual is a potential user and buyer of enterprise tools. And by making these tools accessible to users with just a few clicks, enterprise software providers can reach markets at a scale and speed that were impossible in the client-server paradigm. Across mobile and web, new solutions will emerge that help workers connect and communicate better with their customers, analyze business data, gain new clients, manage their payroll and expenses, and more. 

The rise of enterprise “toys” – Techcrunch, 2012

What changed since 2012

If you think about it, the consumerisation of enterprise tech is now the standard.

  • Employees got used to working with the best tools and expect them to be available
  • Good UI/UX for B2B software is now table stakes
  • Anyone can purchase the product with a credit card
  • Freemium model used to onboard new users
  • Mobile, remote access is key

As evidence, consider how many billion dollar companies have been started in this space that many of us use on a regular basis:

  • Notion
  • Monday
  • Slack
  • Airtable
  • Calendly
  • Zoom
  • Figma
  • Superhuman
  • Canva

Aaron Levie put it nicely in 2019:

Many more startups are still growing and on their way as you can see in this future of work landscape:

The future of work landscape (Source: Digital Native)

The opposite is also true – the “enterprisation” of consumer software

Equally interesting is the ‘enterprisation of consumer software’, especially when it comes to the creator economy – where creators are a small business of one. Readers of this blog are aware of my research in this space, which centres on the ability of creators (experts, hobbyists, influencers, etc) who create various formats of content (courses, videos, streams, newsletters, etc) and build an engaged community around their areas of passion and monetise them.

The creators are suddenly in need of tools that were previously mainly available to companies at the enterprise level:

  • Manage payroll
  • Hold virtual events
  • Edit and create quality content
  • Advertise
  • Sell
  • Customer success
  • Loans/ insurance/ Financing needs

I touched on this topic in “opportunities for startups in the creator economy“. I also recommend Rex Woodbury’s take on this in the “Blurring lines between consumer and enterprise“.

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