Sunday, August 12, 2007
The Secret Relationship between Internet Startups and Enterprise Architects
For CTOs who lead Internet startups, you should attempt to make a relationship with enterprise architects beyond simply thinking of them as sales opportunities...
Many tech startups are bootstrapped with founder's money and need the ability to conserve capital until they turn cashflow positive. In the past, venture capital firms used to provide advice to startups who were part of their portfolio of companies but with the advent of the ability to do startups cheaper, most folks in startups aren't receiving the needed advice as most VCs don't get involved unless they are investing millions.
There are of course folks who dishonestly call themselves advisory capitalists who are really consultants in disguise who are attempting to double dip. Many advisory capitalists don't actually take any risk when it comes to compensation. Some of them want their consulting rates which are still pretty high that they spin into marketing as a living wage and then on top demanding additional equity as a form of compensation. This is simply dishonest.
The question every startup should ask themselves is why do they need to pay an intermediary for advice, counsel, oversight, relationships and so on when they can simply solicit the opinion of their customers who are employed by large enterprises? Enterprise architects have more capacity to give better advice to a startup without any conflicts of interest and will do so for free (in terms of price).
I find it interesting that Internet startups will be aggressive in calling me to do their sales pitch, but won't ask for advice why it failed. Everyone knows that enterprise architects are usually the folks in enterprises with large dollars that not only have the charter to focus on internal projects but also work with those outside their enterprise. Have you seen my contact list or even those of my industry peers?
Another interesting behavior that confuses me is that folks understand that enterprise architects at least have visibility into not only the problems that enterprises face but which ones are unfilled by current software vendors. You would think that the early stage VC firms such as Union Square, Venrock, Dawntreader and others would be busy blowing up my phone attempting to create the next big thing, but this simply doesn't happen which makes me curious...
| | View blog reactionsMany tech startups are bootstrapped with founder's money and need the ability to conserve capital until they turn cashflow positive. In the past, venture capital firms used to provide advice to startups who were part of their portfolio of companies but with the advent of the ability to do startups cheaper, most folks in startups aren't receiving the needed advice as most VCs don't get involved unless they are investing millions.
There are of course folks who dishonestly call themselves advisory capitalists who are really consultants in disguise who are attempting to double dip. Many advisory capitalists don't actually take any risk when it comes to compensation. Some of them want their consulting rates which are still pretty high that they spin into marketing as a living wage and then on top demanding additional equity as a form of compensation. This is simply dishonest.
The question every startup should ask themselves is why do they need to pay an intermediary for advice, counsel, oversight, relationships and so on when they can simply solicit the opinion of their customers who are employed by large enterprises? Enterprise architects have more capacity to give better advice to a startup without any conflicts of interest and will do so for free (in terms of price).
I find it interesting that Internet startups will be aggressive in calling me to do their sales pitch, but won't ask for advice why it failed. Everyone knows that enterprise architects are usually the folks in enterprises with large dollars that not only have the charter to focus on internal projects but also work with those outside their enterprise. Have you seen my contact list or even those of my industry peers?
Another interesting behavior that confuses me is that folks understand that enterprise architects at least have visibility into not only the problems that enterprises face but which ones are unfilled by current software vendors. You would think that the early stage VC firms such as Union Square, Venrock, Dawntreader and others would be busy blowing up my phone attempting to create the next big thing, but this simply doesn't happen which makes me curious...
