6 Behaviors Large Enterprise Software Firms Can Learn From Startups

Being in Silicon Valley, working for a large software company, and conditioned to be paranoid about the next big thing, I often reflect on what large software providers can learn from the startup mentality.  Tech startups are a truly admirable bunch, a critical part of our fabric and a great source of inspiration for creative ideas.  Yes, they do lack a lot of critical ingredients that large enterprises look for in a technology company; but there are several areas where large enterprise software companies can benefit from the startup thinking.  Here are a few:

  1. Experience and Design Obsession:  The past few years of Apple’s success has had a profound impact on not just technology, but society at large.  It isn’t just their financial success, or the introduction of great products.  Appple has changed culture.  It has sensitized technology users to demand a degree of excellence in user experience and design.  Consequently, every major company must possess a well-tuned “User Experience Gene.”  No longer will companies that ignore user experience be considered as long term viable entities of the future.  Users will revolt and find an alternative that suits them better.  Most enterprise software companies have erred on the side of complexity in the past.  In contrast, startups such as Flipboard, Evernote, etc. have nailed thinking of user experience as a work of art rather than a means for users merely getting the job done.
  2. Mobile-first Mentality:  We all know thatEvolution of IT mobile is the defining aspect of the Post-PC era.  But many startups are going Mobile-first before building products for the PC.  This is clearly a matter of time before the concept gets mainstreamed.  Today and for the forseeable future, enterprise customers need both PC and Mobile optimized solutions.  However, a mobile-first approach has the potential of inherently creating cleaner, simpler and more usable products.  Enterprise software firms could benefit by identifying projects where the first client built for certain technologies is on a mobile device as a native or HTML5 based app.
  3. Short, Iterative Product Cycles:  Have rapid code releases that are no more than 3 months apart, that follow an iterative development model, and tried out with control groups in a phased rollout.  Many SaaS companies have weekly builds, and almost all have at least one code release every quarter to ensure continuous innovation cycles that are being tested with customers.
  4. Unwavering Focus on Scaling Usage and Adoption:  The new generation startups have an explicit goal of making something so intuitive to use, that millions flock to it.  Most startups are inherently looking to take advantage of the network effect in the use of their technology.   They believe that money will follow if the user problem is solved.  Freemium models are gaining in popularity.  And broad usage creates better opportunities.  Enterprise software needn’t always be built for the power user, but also for the casual user.
  5. You Can Fail, But Fail Fast:  It’s important to take risks.  When risks are taken, failure at times is inevitable.  But one has to fail fast.  Your worst enemy is a slow and drawn out decision in these rapidly evolving markets.   Some of today’s startups are factoring a percentage of failure into the model, thereby assuming a level of risk.  But they have a model to test out whether an idea holds water.  If it does, they double down on it, and if it doesn’t, they quickly exit. 
  6. Gamification:  Dropbox is a great example of a company that has used gamification to incentivize behavior.  If you recommend a friend, you get additional storage.  If they recommend other friends, they get additional storage.   The effects on human behavior are profound when gamification is well thought through.

Truth be told, most startups lack the scale, support, reliability, stability and functionality to meet mission critical enterprise requirements.  However, some of the startup philosophies could greatly benefit large enterprise software providers accelerating their usage and financial growth trajectories.

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