8 Principles Behind a Successful Enterprise App Company

PRINCIPLES BEHIND A SUCCESSFUL ENTERPRISE APP COMPANY 8

INTRODUCTION An enterprise app company is a company that typically builds and sells B2B application- specific software. And more often than not, they aren’t just building an app, they’re also building a business. While there’s no magic formula for ensuring your company hits milestones such as adding customers, becoming profitable, and even filing for an IPO, there are best practices to consider that will get your organization on the right path to becoming a successful company. This e-book will take you through eight principles that can help you build a more successful app company: 1 t Choose One Direction 2 t Get Started, Fast 3 t Build the Product Quickly 4 “The app economy has created at least t Don’t Compromise for One Customer 5 500,000 U.S. jobs and will grow from t Hire Engineers 6 a $25 billion marketplace in 2013 to t Choose the Distribution Channel 7 t Hire for Customer Growth 8 $46 billion in 2016.” — Mobile Future t Utilize Technology Partners

principle one CHOOSE ONE DIRECTION Most companies explore multiple identities. When determining your vision, you need to clearly choose one business focus. This choice will define your decisions moving forward. For example: you can’t be on- premise and cloud. You can’t be an app company and a service company (systems integrator). Failure to choose a single focus can lead to distraction and misplaced resources. Consumer vs. Enterprise: “In the last 10 years, there have been 56 IPOs in the enterprise space that have gotten north of a billion [dollars in market capitalization] and just 23 in consumer.” — Jim Goetz, Sequoia Capital

principle two GET STARTED, FAST Sure, you should make a point to be in-the-know and to gather as much information as you can before launching your company. But remember, there’s no substitute for biting the bullet and getting started. Research the market and the customers’ needs as much as you can, but execute quickly and continue to gather information to make it perfect as you move. If you’re building with the right technology or cloud platform, you can push changes pretty quickly along the way. Don’t get beat by spending six months in design.

principle three BUILD THE “Focus obsessively on getting to PRODUCT QUICKLY product / market ﬁt. Do whatever Once you have taken the leap and launched your is required… including changing product, focus full-stop on building it out. Avoid being out people, rewriting your product, distracted by other priorities. Your primary goal is product-market fit, and to do that you need product moving into a different market, to test with. Once the initial product portion is locked telling customers ‘no’ when you down, you can shift your focus and test how it fits within don’t want to…” — From the blog your desired market. Building the product first also of Marc Andreessen, a leading allows you to fail fast, and with failure, comes the chance to make changes that lead to a win. Make a point to VC and co-founder of Netscape recognize quick failure as a part of your path to success.

principle four DON’T COMPROMISE FOR ONE CUSTOMER Every company is lured towards closing a deal with that one big logo. This can be especially true for companies in the early stages of growth. Be careful not to fall too deeply in love with the idea of this customer, as it can lead you away from your initial focus and vision. Tailoring your product to meet that one customer’s specific needs can undermine its overall success. In general, users want applications that are simple to learn, easy to get addicted to, and offer the same experience on all devices. When wooing users, give them the option to try before they buy. If they offer feedback, take it into strong consideration as you build and release new iterations.

principle five HIRE ENGINEERS New companies should hire for where they see their business LevelEleven built an app in 12 to 18 months, not where they are today. Hiring for your to increase gamiﬁcation present needs is expensive and tricky, but remember, it’s the across sales reps using best app, and not the app from the biggest company that is Salesforce Sales Cloud — a going to come out on top. One of the top apps on the perfect example of a small Salesforce enterprise app marketplace, AppExchange, comes from LevelEleven, a company with around a dozen employees. company that made it big.

principle six CHOOSE THE DISTRIBUTION CHANNEL Now it’s time to decide how you want to get your application into the market. In addition to selling it directly with salespeople, consider the ecosystem you want to align to. One option is listing the app in an enterprise app marketplace, such as Salesforce’s AppExchange, which is used by small businesses as well as Fortune 100 companies. App marketplaces offer additional places to showcase your app and help customers see reviews from their peers. AppExchange customers want to run their company on the Salesforce1 Platform and they seek industry speciﬁc apps that will dramatically beneﬁt their enterprise. 63% of Salesforce customers use at least one AppExchange app. 23% use more than ﬁve.

principle seven HIRE FOR CUSTOMER GROWTH Selling to the enterprise requires a bigger sales and marketing team than selling to consumer companies does — including sales reps, marketing, and customer support or success staff. As with engineers, hire based on your vision for where you want to be in a year or so, knowing that expertise takes time to acquire. Be especially careful not to underinvest in customer success staff. If you are making your app a subscription-based app, which has proven to be the most successful model, you’ll need a post-sales team to ensure the customers are happy enough to renew. If there is one axiom that is true in Software as a Service (SaaS), it is that it’s cheaper to keep a customer than to acquire a new customer. Given how much sales commissions can cost, it’s key to focus on keeping customers — in addition, it creates a truly rapid revenue growth model, each year compounding on the previous.

principle eight UTILIZE TECHNOLOGY PARTNERS When building an app company, you don’t have to go it alone. In actuality, there is a huge ecosystem of successful cloud-t echnology companies, willing to create partnerships with new software vendors. Collaborating with these established companies can bring tremendous opportunities to scale and attract customers by pulling “The global enterprise your company into deals it wouldn’t mobility market will rake normally see. This scale will help your in $140 billion a year by app company grow and gain credibility much faster than it could on its own. 2020.” — Visage Mobile

CONCLUSION Building a new business is an exciting and nerve-wracking time. The eight principles detailed on the previous pages will help you lay a solid foundation for your enterprise app business and set it on a path for growth and success. Key Takeaways: t Pick a single identity t Don’t compromise your t Hire as many customer for your business. product to please one customer. success staff as salespeople. t Value execution over t Hire engineers for t Partner with other cloud perfect information. the present and future. technology companies. t Build your product first t Choose how you will get your and fail fast. application into the market.

B UILD APPS FOR T HE APPEXCHANGE A ND TAP INTO A $110 BILLION OP PORTUNITY. The Salesforce AppExchange is the business app marketplace where you can sell your app. With more than 2,500 apps, AppExchange helps Salesforce customers be more productive, The information provided in this e- book is strictly for connected, and mobile. Visit the AppExchange to see the apps the convenience of our customers and is for general informational purposes only. Publication by salesforce. being built today. com does not constitute an endorsement. Salesforce.com does not warrant the accuracy or completeness of any information, text, graphics, links or other items contained See how you can become a partner and build apps. within this e- book. Salesforce.com does not guarantee you will achieve any specific results if you follow any advice in the e- book. It may be advisable for you to consult with a professional such as a lawyer, accountant, architect, business advisor or professional engineer to get specific advice that applies to your specific situation. Visit our partner page > © 2014 Salesforce.com. All rights reserved.