Startups Serving The Enterprise

Startups Serving The Enterprise Navigating the Quest for Successful Innovation

\\ 01 Table of Introduction 02 Recruiting Partners in the 04 Contents Swamp of Marketing Fog Maintaining Faith through the 08 Galewinds of Cost and Risk Bridging the Gap of the Four S’s: 12 Scale, Security, Spend & Supportability Avoiding the 16 Quicksands of Customization Surviving the 19 Desert of Procurement & Approvals Crossing the Ocean of Early Execution 21 The Golden Fields of Innovation 24 Closing 26 Startups Serving The Enterprise

\\ 02 Introduction Greylock devotes significant operational resources to In an effort to crystallize some patterns of collaboration our CXO Program, which invites C-level leaders at large — both the missteps and successes — we conducted enterprises to discuss tech trends with our investing team, dozens of in-depth interviews with C-suite technology and brokers meetings with relevant companies in our leaders from Fortune 500 companies, our CXO Program, portfolio. This program was developed in response to a and startup founders and CEOs from the Greylock network. wave of inbound interest from large organizations who We drew a map to guide the way through some common wanted to harness emerging technology, and buy from challenges that startups and their customers have to more innovative vendors. Through this program, we’ve navigate together. had the privilege to meet with hundreds of C-suite executives and customers across industries. Sarah Guo Why are large enterprises so interested in startup tech? General Partner It’s a matter of survival. Every company is undergoing a Greylock Partner digital transformation. Farsighted executives see the pace [email protected] of change in business accelerating. These executives @saranormous know that the companies who more rapidly adopt advancing technology will run their companies better, faster, cheaper, smarter. Technology is a weapon used to defend against competitive threats, and achieve and preserve market dominance. Similarly, for an enterprise technology startup to survive and thrive, they must understand how to effectively work with large companies. Within large enterprises are most of the employees, data, workflows, industry and institutional knowledge, assets, customer relationships, intellectual property, and budgets in the world. Still, we have found even enterprise-focused startups and self-selected “early adopter” customers often struggle to work together. Very few technology leaders are saying, “I don’t want to innovate.” And few startups are saying, “I don’t want to help the biggest companies.” But the obstacles to innovation are real, and failure to overcome them leads to an inexorable slide into irrelevance for big companies, and a rapid death for early enterprise startups. Startups Serving The Enterprise e

\\ 03 The Startup Enterprise Quest Startups Serving The Enterprise

\\ 04 1. Recruiting Partners in the Swamp of Marketing Fog Before enterprise executives and startup founders are ready to set sail together, they need to identify the right partners. Startups often feel they need to blast their message through a foghorn to be heard, while enterprises are bombarded with a barrage of marketing noise. As a startup, it’s hard to recruit fellow quest-goers when the landscape is crowded and executives are busy. Our community had three suggestions for navigating out of the quagmire: Shine a Bright Light Paint a Clear (and Easy) Path Out Seek the Right Stakeholders, at the Right Time Startups Serving The Enterprise

\\ 05 “It’s important to make it easy for the customer to say yes — e.g., a launch plan that does not create an overwhelming amount of work for your partner, the ability to tap into an existing budget, meaningful success metrics that can be evaluated rapidly. You need to figure out quickly what your customer cares about and pitch to that, while staying true to what your solution can actually deliver. One challenge is that it’s a very noisy marketplace, and getting customer attention can be hard. Best is a warm introduction — ideally from people in your network who are really willing to go to bat for you. That can make a world of difference.” — David Ebersman, CEO of Lyra Health Startups Serving The Enterprise

\\ 06 Shine a Paint a Clear Bright Light (and Easy) Path Out A warm introduction can be vital. Customers told us that Startups need to clearly explain the problem they are they paid attention to companies introduced to them by solving, their value proposition, and their differentiation. VCs, their peers, or other trusted thought partners, in A marketing message is only clear if enough customers addition to strong analyst support or unique PR coverage. think it’s clear — so test your messaging, listen to the feedback, and iterate. Companies also look for vendors that have “lighthouse” customers similar to them in terms of scale and industry. When looking at new technology, whether from a startup “ or a more established company, it has to fulfill an unmet With any company, I pay attention to their track record of need. We’re not interested in tech for tech’s sake, but want “ delivery. And as part of that, we are always interested in to know — does this do something new that will help our understanding who their customers are. Seeing the right business? Will it make us more productive, save us money, names on that list can go a long way in speeding up the or allow us to replace a more expensive or less functional process.” —Diana McKenzie, CIO of Workday incumbent?”—Marc Frons, CTO News Corp [We are looking for a] product that solves a distinct “ problem. We’re a medium sized company, and can’t afford to run a lot of experiments that are cool but don’t align to a pressing need. [Next considered] is difficulty of integration: How difficult is it to get the ball rolling and implement the technology into our broader ecosystem?…We like companies that have figured out where they fit relative to the incumbent.”—Michael Baresich, CIO of Ally Financial Startups Serving The Enterprise

\\ 07 Seek the Right Stakeholders, at the Right Time For some startups, the CIO, CTO, or Chief Digital Officer It starts with the CIO, and that is usually the first point of may be a good channel in. In the age of noise, leaders “ entry. But the true influencers are usually other leaders drive strategy and focus for their teams. But many of in the organization on whom the CIO relies to guide their these leaders told us they’re not the final decision-maker. technology decisions. When a startup can establish relationships with those leaders, that’s when they will often While they lead the technology organization and give get the most traction.”—Diana McKenzie, CIO of Workday their teams air cover, much of the decision-making People can be risk averse so the best thing you can do (and buying) power is distributed. Decision makers can “ is provide senior management support to help push what include the CIO’s direct reports, the head of application you’re trying to accomplish. If I suggest to a team to look at development, a business unit leader, the head of security, certain companies, then they feel like they have cover from the top and it helps to actually make a change.” a departmental VP, or even an end user or developer who —Stephanie von Friedeburg, COO of International has picked up business software on a credit card. And Finance Corporation those other technologists and leaders are structurally more aggressive in technology adoption than the CIO. As the CIO, I empower my team to make purchasing “ decisions based on our goals. I don’t make those decisions in isolation and I don’t often veto the decisions that the team has made.” —Ted Colbert, CIO of Boeing “ Getting more people involved in new technology is essential, finding the right mix of domains who ultimately will own deploying and using the technology can really help with adoption. For example, when we looked at a new cyber [tech], we had to not only get the right cyber domains involved, we needed to also get members of our operations and infrastructure teams engaged and explore if legal and audit needed a seat at the table. This is because cyber has become such a multidisciplinary domain now… almost any valuable tool will require you to cut across several organizational boundaries within IT and the broader company.” —Rich Adduci, Advisor at Esito LLC, former CIO of National Grid Startups Serving The Enterprise

\\ 08 2. Maintaining Faith through the Galewinds of Cost and Risk Even once your team has cleared a path out of the swamp, it can feel like you’re fighting against a galewind. There’s a lot of natural resistance to bringing in new vendors, because a new offering needs to be valuable enough to overcome inherent cost and risks of working with a startup. Startups Serving The Enterprise

\\ 09 “I depend upon insights from quality VC’s like Greylock and referrals from peers to help me discover startups. There are a lot of ‘me too’ start-ups out there—far too many for one person to sort through—and the analyst community we’ve depended upon for years typically won’t include innovative startups in their reports. Greylock’s ability to pick winning technology that both matters to me as a CIO, and can win as a business stands apart in Silicon Valley.” — Rich Adduci, Advisor at Esito LLC, former CIO of National Grid Startups Serving The Enterprise

\\ 10 One enterprise tech leader said that talking to his team simplicity and removing the challenges with infrastructure, about bringing in a new technology inevitably triggers an which enabled customers to shift the dollars to their “immune defense” reaction: business objectives…But Greylock’s [customer program] gave us the opportunity to get in as we were aligning to the When you go out and see new technology and then right message.” —Chadd Kenney, VP & CTO “ come back home and talk to your team about adopting Americas of Pure Storage it, there’s this phenomena that kicks in — a sort of immune Our offering can help companies save money in lots of defense system. Not because they don’t like you or the “ different ways. It’s important for me to ask early on in all new technology, but because their own priorities and risk customer meetings what problems are most pressing and tolerance puts them at odds with the new technology you how she or he defines and measures savings — or it can have brought home… Encouraging adoption can be tricky, wind up being a giant waste of time for both of us.” it’s sometimes tempting to just say it’s my call, I’m buying —Chris Cook, CEO of Delphix this and we’re using it… as you’d imagine this approach is rarely successful. What I’ve found to be helpful is bringing a Enterprise customers told us they think also about the cross section of my team with me when I visit Silicon Valley “hidden costs” of vendor management, user training and (cutting across levels and functions) to stimulate interest and engagement. If they’ve seen and touched a new technology adoption, integration, implementation and administration, with their own eyes, met the founder, and believe it has and the risk of the startup dying or getting acquired. potential, then they can pull it into the organization for me and I don’t have to push it.”—Rich Adduci, Advisor at What startups don’t understand is that I may easily have Esito LLC, former CIO of National Grid “ budget for an $100K contract with your company, but it’s literally going to cost me $200K to assess, onboard, pay Startups should be empathetic to this risk aversion and and manage a new vendor. My people’s time is valuable. understand that, on the customer side, someone’s career There are huge hidden costs, so it has to be important for is often on the line. us to take on. Nice to have won’t work. ” —SVP Technology, Fortune 10 Bank New vendors need to understand how customers are If we select a startup, we do due a fair amount of diligence measuring return and cost. If you’re on different pages “ on the financial side. Where are they in their funding? How about this — for example, the enterprise is measuring well funded are they currently funded and who are their backers? That will tell a lot.” —Ravi Malick, CIO of return on investment differently or more narrowly than Vistra Energy you are — you’ll be in trouble in the future. We went in with an infrastructure pitch. It didn’t resonate “ with most CIOs……so we adjusted our message, we focused on simplicity and the impact that simplicity had on the reduction in costs and reduction in headcount to manage infrastructure. We would ask for their list of objectives, then ask how many of those objectives were are being met with your spend today. [Customers] quickly realized that the majority of their IT spend was going to infrastructure challenges and management, not the things helping their business objectives. So, we hammered on Startups Serving The Enterprise

\\ 11 Because of these many “hidden” costs, smart technology CIOs need to feel comfortable you (the startup) are not buyers are projecting out the landscape of vendors, “ going to go out of business, get acquired and disappear. and looking for startups that not only offer tactical It’s risk mitigation, because that’s what happens to most startups. That’s what causes most Fortune 500 CIOs to benefits but have a chance to endure as longer-term balk.” —Michael Keithley, CIO of United Talent Agency partners — disrupting an existing category or creating an When companies work with early stage startups they often important new one. “ worry about the viability of the company and the longevity of the technology. Before we acquired a significant I want to see how a startup performs in a platform space. number of customers among Fortune 50 enterprises, it was “ Otherwise I’m waiting for them to be acquired and become important for us to highlight that we had strong backers who part of a broader portfolio, which is a major risk for me. So I had a proven track record of funding innovative companies try to understand the startup’s end game — are they thinking that went on to successfully disrupt established markets.” about a customer like me or trying to build a solution for a —Amit Pandey, CEO of Avi Networks larger company [to acquire]?” —Bijoy Sagar, CIO of Stryker Another key theme was the need to build personal Advantages for disruptor companies include innovating relationships with early customers and commit to your on the experience of purchasing and using the technology, partners’ success. and the total cost of ownership. It’s extremely important for early startups that senior “ leadership, if not the CEO, be personally engaged. The We spent a lot of time on understanding all the challenges personal level of engagement and commitment helps “ in purchasing a product from [incumbent] companies. In overcome some of the concerns about the company’s storage, customers buy the same array every three to five ability to scale. It’s about a human relationship; I want to years. There was no ability to get trade in credit or keep the know I have your cell number, that I can call you any time gear without dealing with increased costs. The maintenance of day and you can rally the resources I need to make the is more expensive than buying new. We changed that tech work.”—Otto Chan, EVP of Wells Fargo model and introduced a seamless business model There are two things I tell every customer to help them called Evergreen Storage, which changed the industry “ overcome hesitation about working with us a startup altogether.” —Chadd Kenney, VP & CTO Americas — First is to acknowledge that something will go wrong. of Pure Storage The legacy folks and others won’t say that. And secondly, To de-risk their decisions, enterprise tech leaders want we’re going to be here to respond to it quickly and transparently. Because it’s tech and stuff does go wrong, to work with startups that have raised capital from top-tier and when you acknowledge that, and say ‘We’re here and investors, because it’s one sign they’ll go the distance. we’ve got your back,’ you’re going to be more effective. As a startup you have to get companies comfortable with ‘you’re CIOs need to feel comfortable you (the startup) are not going to be there for them.’ The reality is that startups “ going to go out of business, get acquired and disappear. often support enterprise better than legacy — because It’s risk mitigation, because that’s what happens to most it’s your first set of customers. They’re all big fish to you, startups. That’s what causes most Fortune 500 CIOs to vs another, older, larger enterprise company — Salesforce balk.” —Michael Keithley, CIO of United Talent Agency releases software 2–3x a year, and if you need some features, take a number. We release every week, and if the customer needs something, we can do it.” —Joseph Ansanelli, CEO of Gladly Startups Serving The Enterprise

\\ 12 3. Bridging the Gap of the Four S’s Once you’ve linked arms and fought your way through the galewinds, you reach the Gap of the Four S’s. And this is often a rude awakening. Value may outweigh the costs and risk, but will the product work in their environment? Startups can reassure enterprise leaders by demonstrating an understanding of the world outside of Silicon Valley. We see these four core issues repeatedly come up. Scale Security Spend Supportability Startups Serving The Enterprise

\\ 13 “Startups often miss how complex an environment can be in a large organization. We have 120 country offices all over the world and there are a lot of layers and startups don’t typically come in with the understanding of that complexity. I think figuring out how to bring their tech into an environment like ours is tough.” —Stephanie von Friedeburg, COO of International Finance Corporation Startups Serving The Enterprise

\\ 14 Scale Security Can the startup support the scale of the customer’s user Startups told us this is #1 on everyone’s list. It was base or infrastructure? Increasingly, we see customers mentioned in every interview we did with a CXO. The need want to validate that scale rather than taking it on faith. is often driven by regulation such as GDPR, or internal “Scalability” is defined not just as technical (e.g. can requirements for sophisticated access control, and the your software process transactions quickly, or handle key thing here is to have a clear approach to customer thousands of concurrent users) — but in deployability- data. Where does it reside, who owns it, who manages it, in-practice. This includes ease of use, rollout plan, and what protections does it have? What vendor risk does reporting, integrations into existing technology, the startup itself have? Startups should get the “security administration workflows, SLA’s. Customers are also checklist” early from large potential customers, and evaluating who is going to help them deploy — for address it proactively. example, the existence and quality of the startup’s sales engineering or implementation team, if needed. We see startups repeatedly miss on security and “ resiliency — they have the functionality and agility we want These small companies spend so much time selling us on but they don’t understand the rigor around security we need. “ amazing technology and what it can do. They should be And it’s not a choice we have, it’s regulatory.”—CIO, Large telling us how easy it is to get it into our legacy environment Public Payments Company and not belittle us for having legacy. Our newest system A lot of [large customers] will also go through extensive due is twelve years old. It’s not just in banking: that mismatch “ diligence — being able to go through that with ease will set between startups and larger companies is the biggest you apart. It’ll show that you’re ready.”—Robert Kim, barrier.” —Thomas Nielsen, Chief Digital Officer of Co-founder of Ritual Deutsche Bank Startups Serving The Enterprise

\\ 15 Spend Supportability Pricing models that are appropriate for the first thirty Is the startup prepared to offer the kind of support developers or first hundred users might not work for (often 24/7) that enterprise customers need, at scale? broad deployment. Startups must offer pricing models Can they handle the reality of legacy technology that that are feasible at scale, aligning with the value they large companies are often saddled with, and make their create for their customers. customer successful? A CIO from a Fortune 500 in the retail space shared Startups who proactively investigate and shrink the organizational reasons his team can’t just charge new “Gap of the 4 Enterprise S’s” are more likely to succeed. software to a credit card, even if some startups prefer this. Accounting rules, tech sprawl and compliance mean its better for the customer to cut a purchase order — and a startup that supports a seamless purchasing workflow will have an advantage. Startups Serving The Enterprise

\\ 16 4. Avoiding the Quicksands of Customization The quicksands of customization are an especially tricky neighborhood. When you’re solving one problem for a customer, it’s easy to want to solve all problems. But getting sucked into customization can mean company death, or at least, derailment. Startups Serving The Enterprise

\\ 17 “Give us complete transparency about what your technology can or can’t do. If we like what we see, we will often ask you to come back and see us when you can get X/Y/Z capabilities on your roadmap. Being open to and taking us up on that type of feedback, in my experience, is how a lot of these relationships become successful.” —Diana McKenzie, CIO of Workday Startups Serving The Enterprise

\\ 18 Just as customers will choose to work with a particular points, with similar technology maturity or even attitudes. startup based on ability to scale, durability, and other It feels risky to turn away potential business, but it’s just factors, startups should also choose their early customers as risky to spread yourself too thin. The first 10, 100 or carefully, balancing customer requirements against 1000 customers, which can be a much narrower set than strategic priorities and limited company resources. Being eventual total addressable market (TAM). A startup’s too accommodating or diffuse in strategy can be a recipe target customer and go-to-market motion can evolve over for mediocrity in multiple categories. As our former partner time, just as product does. and former CEO of ServiceNow Frank Slootman used to say, “Most opportunities are threats to your focus — so you Be strategic about who you go after. Startups are have to choose your customers carefully.” “ scattershot on who they pursue, and often its whoever will take a meeting. Often that’s getting a meeting with people who have no viable need for the product or need A lot of it is relationship. Building chemistry with CIO/team, for that company. Focusing on getting customer wins [in an “ ensuring that you’re executing well but pushing back. industry or community] and using those customer networks Bending over backwards trying to appease every customer to expand and decide who you go after next, that’s the way request or solve every problem is a disastrous strategy for to do it.”—Sven Gerjets, CTO of Mattel a startup. I like it when the entrepreneur says — ‘Yeah, great functionality but we can’t do it — you should look elsewhere, Giving potential customers realistic visibility into your short or that’s lower on our priority list, or have you thought of and medium term roadmap is also a pattern for success. this.’ That’s a meaningful dialogue for us because we are sometimes wrong too, we can learn from a startup if it helps Beyond choosing early customers carefully, startups should us get out a better solution — without trying to jerry-rig our existing technology — it forces us to change our thinking. also take a pragmatic view of what feature requests to That balance is also important.” —Naveen Zutshi, CIO of field, and when. Palo Alto Networks Customization and customizability are a significant We take every one of the prospective ‘Statements of Work’ “ pushback we get. We are a fast platform, and so we “ we receive, and divide up the requests into two buckets; don’t have the ability to completely customize everything. things that are already on the product roadmap (though it Generally, we don’t want to be a heavily customizable may be a year out) and things that are not. Often customers platform because that will slow down the entire industry… bring us really good ideas — ‘now that you mention it, a lot we help overcome the concern about not being able to of customers are going to need this, so it’s reusable,’ but fully customize by showing them how heavily customizing some things are totally custom. We play a delicate dance, something means you’re taking on a huge amount of where we track things that are on the SOW that would need custom codes. It’s an investment that they have to make to be done once the deal is signed, and we rank them in forever. Customization is not actually what they want. We the order of most-to-least common in terms of what we’re get them to understand why customization is actually bad. likely to encounter again, and we don’t like that bucket of We work with two of the biggest banks in the world, and we project to exceed ¼ of deals signed. We won’t do that for have a pretty strong POV on what the right end state looks pure custom work — a limited amount of that happens only like and where the world is going.”—Nima Ghamsari, CEO after deal is signed. We will insert things on the roadmap of Blend tactically — so if we signed a deal, what the customer felt they needed wouldn’t take it longer than a quarter to implement. It Disciplined customer segmentation is key — for example feels weird to let prospective deals to influence your product timeline, but when you are trying to balance bottom up needs targeting companies of a certain size, in certain verticals with enterprise progress, you do what you have to do.” or geographies, that require only certain integration — Danny Leffel, CEO of Crew Startups Serving The Enterprise

\\ 19 5. Surviving the Desert of Procurement & Approvals The procurement process can be a bear — you feel like There are also different purchasing processes for different you’re so close to the finish line, but it’s a mirage. You can scales of spend. Building up engagement with a large get stuck in limbo. enterprise partner through a land-and-expand model also changes a startup’s initial experience in procurement. Startups need to have realistic expectations about speed, and plan ahead for sales cycles so they don’t run out of [The purchasing process] depends on the dollar value. resources before they show progress. Enterprises, on the “ Something under $50K is quick, over that it’s a substantial other hand, need to create pathways for the business to decision-making process.” —Jay Dominick, CIO of Princeton University push through important innovations fast. To accelerate their sprint through the procurement and legal desert, startups should find internal champions, arm those buyers with the right business case and other support, and arrive prepared with mature contracts. One of the challenges working with them (technology “ innovation companies) is the difference in the level of agility. The challenge for the enterprise companies is to manage risk management, legal contracts, information security, etc. to work at a pace which fosters innovation while focusing on only the key controls that matter.” —Anuj Dhanda, CIO of Albertsons Startups Serving The Enterprise

\\ 20 “Any large software purchase above EUR 1M is managed by IT org procurement. Anything below that is a free for all, ends up in a very fragmented situation. It sits in 3 big areas. It’s IT procurement, our labs function, and then the digital function which is my arena.. The most successful adoption of new technology I’ve seen…[is when you] have a different path for smaller companies, and do a PoC and can validate [the product] without doing the stupid vendor selection process that many banks have.” —Thomas Nielsen, CDO of Deutsche Bank Startups Serving The Enterprise

\\ 21 6. Crossing the Ocean of Early Execution Finally, quest-goers need to build a strong ship and chart a clear course to cross the ocean of early execution. There are three factors that startups should keep in mind when they reach this stage of the partnership. Startups Serving The Enterprise

\\ 22 First, this means structuring PoCs and initial engagements service agent, take the time to check in on a regular basis. to be short, with repeatable onboarding flow, clear success You may not get actionable feedback 9 out of 10 times but criteria and commitment from partners to that timeline. the one time you do, it will be meaningful.” —Ravi Malick, CIO of Vistra Energy If I was running a startup and engaging with enterprise Large enterprise companies — they’re complicated and you “ companies, one of the very first things I would do is ask “ have to approach them carefully in terms of product quality, ‘is the criteria for the evaluation of the PoC clearly defined’. security, requirements. You have to be very organized and I would want to know — do you want to bring my gear disciplined around product and implementations. You’re not in and play around with it? Is there a specific problem going to just be able to send it over the wall and be done. you’re looking to solve, and is there a specific outcome You’re going to be onsite and watching them. When you go you’re looking to get? The best example of a PoC I’ve ever live — you have to be all over them, responding to feedback, seen was at Greylock company: Rajiv Gupta at SkyHigh demonstrating agility.” —Joseph Ansanelli, CEO of Gladly Networks. There may have been 30 people in his company at the time and we were getting to know each other. I said Most companies are really poor at change management ‘Huh. I didn’t know we had a problem to solve.’ He said “ with new technology. It’s tech, it’s process, but it’s also ‘Most companies don’t know. But if you let us come in and psychology with the people in the organization. Given a do a PoC we’ll show it to you.’ I started thinking this is going choice, people will reject change. It is critical to find those to be months in the making. He said ‘We can do this in a in the organization who can see the positive possibilities of week. These are the three things I need. If you grant them change and enlist them as internal champions.” to me on one day, we’ll be out of there on day seven and —Chris Cook, CEO of Delphix have results a week later.’ And he did. Three months later we became a customer. Great example of how I think a Both groups here were supportive of land-and-expand PoC against predefined targets or goals once validated and done quickly turns into real business.”—Otto Chan, motions. As Bezos would say, “customers are always EVP Technology of Wells Fargo beautifully, wonderfully dissatisfied.” Once you’re successful Second, technology leaders also cautioned against with one initial mission, and begin to build a relationship, “poisoning the well” — damaging relationships and look at their other problems; seek natural expansions, reputation by not delivering on promises. new use cases, and consider signing a Master Service Agreement (MSA) to accelerate internal adoption. Both Third, enterprises need startups to consciously involve sides want to leverage the relationship that has been built. the necessary stakeholders to operationalize technology, Can you get an MSA signed? There’s a great network effect even in planning and deployment, support their change “ in having overarching MSA with other business units in the management, and follow up with discipline, management, same company…[that way] we don’t have to repeatedly and follow up with discipline. do legal work.” —Deep Bagchee, SVP of Product and Technology at CNBC Do not underestimate the need for planning and change We go through a slew of [our top 100 customers] every “ management. There’s always a drive to get it installed and “ week in terms of adoption of the Sumo service, and implemented but the measure of success is adoption and diagnose what we need to consider 6–9 months before usage. It’s important when planning, you identify the right their renewals are coming up. As a platform business, stakeholders, connect to benefits, and understand the we are also trying drive upgrades into other audiences impact to users — make sure it’s not just technology folks and use cases within those customers.”—Ramin Sayar, who want to implement something cool and new…and then CEO of Sumo Logic don’t check out. The relationship and transition needs to be curated and managed. Whether it’s a sales rep or customer Startups Serving The Enterprise

\\ 23 “For big enterprise platform wins, you have to be prepared for sales cycles to be very long and complex, especially if your buyer and your user are not the same. These enterprises are making a strategic commitment and the level of upfront vetting is commensurate with that. Unlike higher velocity, land-and- expand strategies where the commitment on both sides is lower and the user base is initially limited, in these deals, the plan is to invest upfront, establish a common toolchain and rollout broadly. Highly regulated enterprises will require that you pass detailed architecture review, security and financial audits, in addition to completing use case focused pilots with multiple groups of end users. Then, and only then, will you get into the contractual process…eventually the initial deal is signed, you get a pricing schedule, you have an executive sponsor, and things move much faster. Now you have the opportunity to foster significant adoption. You’ve built the bridge, but you need to work together with your exec sponsor to get more and more people to drive over it. Once you get through to the other side, it can be transformative to your business, not just financially, but the learning is tremendous.” —Adam Wilson, CEO of Trifacta Startups Serving The Enterprise

\\ 24 7. The Golden Fields of Innovation In summary, the quest to reach the golden fields of innovation — that is, to successfully deploy new capabilities and technologies into the enterprise — is a journey that requires strategy, careful planning and consistent execution. Once that early execution is successful, this is not a one-time quest. It’s an ongoing journey with each new partner, and each new use case and product line. An early success lays the groundwork for a strong customer reference that will help generate new business — in today’s age of connectedness and transparency, a startup’s best salespeople are its happy customers. Building strong partnerships and capabilities means that getting out of the marketing swamp, through the winds of cost and risk, across the enterprise feasibility gap, through the desert of procurement and over the ocean of early execution — will all be more tenable the second time around, and the rewards even richer on both sides. Our portfolio CEOs and enterprise executive partners realize this is a challenging journey, where the key is finding the right partners and investing in relationships and shared vision. Startups Serving The Enterprise

\\ 25 “I think for a startup that wanted to engage with large enterprise, building relationships with a CIO, what’s really important is that there’s a shared vision around the need to drive innovation. On the customer side, that vision has to outweigh all of the tactical functional requirements that many organizations may raise that a startup won’t necessarily have — if you have a checklist approach to choosing a partner, that’s not going to work. You find a [partner] that sees this as a journey, not a static vision, they have to really believe your startup is a partner that’s going to help us transform a whole area. In the case of Gladly: Eash — the CIO at Jetblue — and Frankie — the VP of Customer Support and one of the founders of JetBlue — made a decision they wanted to transform how they did customer service, and said that’s more important than 10–20 things we don’t do [at Gladly] yet, but having the bigger picture of how we engage outweighs that checklist of things we didn’t have yet. It’s important to find C-suite partners — with a growth mindset vs. a fixed mindset.” –Joseph Ansanelli, CEO of Gladly Startups Serving The Enterprise

\\ 26 Closing As investors and board members, it’s enormously rewarding to see industry leaders take bets on our portfolio, and for those bets to bear fruit into successful, long-term partnerships. We love helping companies navigate this, and brokering the enterprise relationships that can set a company on a path to long-term success. We hope this map will be useful to both startups and leaders trying to drive innovation into large organizations. Contact For large enterprises, we help corporate leaders and their teams understand emerging tech trends, connect to the people and culture of innovation in Silicon Valley, and uncover opportunities for partnerships with innovative startups. If you’re interested in learning more, please reach out to our CXO Program team: Lee Haney Cyrus Pinto [email protected] [email protected] (650) 358-2862 (650) 358-2879 Startups Serving The Enterprise