Disclaimer: I’m not preaching below, just an observation – I’m living through this and hoping to learn from others!

Over the past month, as a mentor at 500 Startups and while attending AppNation Enterprise, I’ve met a number of startups focused on enterprise mobility targeting the “prosumer.” A pretty consistent theme among these mobile apps is the focus on trying to achieve a direct-to-employee sales model. This makes absolute sense; investors are looking for the next Evernote or Dropbox where an app develops organically and is used by prosumers (whom have money) without the need of developing an expensive sales organization.

What I have fond ironic is that many of these startups are having to hire that “one” sales rep because their traction in a direct-to-employee model hasn’t panned out. This is the result of a multitude of reasons:

  • Employees organically connecting Salesforce via OAuth is great in concept but hasn’t really materialized (en masse) – it still requires awareness and “selling-in” of the product into the organization (and you can certainly argue that the apps just haven’t been compelling enough)
  • Other prosumer-facing OAuth enabled enterprise apps (eg Yammer, Basecamp) are just too small in marketshare. You effectively need to support a vast array of different enterprise cloud services to cover a large enough segment but also resulting in an app that may become less focused and have a painful on-boarding process
  • Although most SMBs do not customize their enterprise cloud services, some do, creating unfortunate scenarios where a user can’t use your mobile app and/or you ultimately have to customize for the user’s company
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    And the real bummer with all of this is the company keeps trying to add horizontal features to target the prosumer instead of doubling-down with vertical-specific features for the segment their app is succeeding within. They are doing this because because investors won’t invest unless they can get rid of that “sales rep,” ultimately putting the startup in a perpetual state of “straddling” where straddle = FAIL.

    I’ve concluded that you can’t straddle between prosumer and enterprise. You either double-down on enterprise and choose a specific vertical or you actually target the consumer. I know that sounds completely left-field but the reality is that Dropbox and Evernote, being the representative prosumer success stories started as consumer apps that were widely adopted in the enterprise. Targeting the prosumer may be the ultimate goal but the aha moment for me was that the use cases need to appeal to the consumer.

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    • http://mention.net Andrew Mello

      This is a great article, and really describes what a prosumer is! The marketplace is riddled with them today, and for SaaS success – channel/enterprise sales are a thing of the past. Onward and Upward!