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Entrepreneurship as Signal: Quitting Facebook to Tackle Enterprise 2.0


In a recent post, Fred Wilson had this to say about Enterprise 2.0:

This is one of the reasons we’ve struggled so hard to invest in “enterprise 2.0″ at Union Square Ventures. We have tried pretty hard to find companies that we can invest in that bring the new web technologies to the enterprise, but often we’ve found what happens is that consumers (ie employees) bring the web technologies they use every day to work and they prefer that.

I understand the sentiment, but I’m not really agreeing with Fred on this one. Corporate employees don’t use their Gmail and Yahoo Mail in lieu of their company’s Microsoft Outlook application. It’s really a matter of making an application that solves some key issues and has an appropriate experience for what it needs to accomplish.

But Fred’s opinion is interesting in the context of Friday’s news that two key Facebook executives are leaving the company “to build an extensible enterprise productivity suite”. They plan to leverage many of the conventions of Facebook for this new company.

Enterprise 2.0? Are they crazy?

Enterprise Software Is So Boring

Robert Scoble set off a firestorm last December when he wrote Why enterprise software isn’t sexy. In that post, he observed a couple things:

  1. “Business software like that from Oracle, SAP, Microsoft etc makes a TON of money.”
  2. “I know that when I talk about enterprise software the numbers of viewers just don’t show up. So, tech bloggers quickly learn that if they talk about enterprise software they aren’t going to get many advertising impressions.”

Michael Arrington of Techcrunch said the same thing in this tweet in April:

“@dahowlett enterprise is boring. no way around it. people just don’t care.”

Nick O’Neill wrote this about the Facebook execs’ departure:

“Apparently Rosenstein and Moskovitz are leaving to create an enterprise level productivity software package. Sounds thrilling doesn’t it?”

Rosenstein and Moskovitz are deeply ingrained at Facebook. They’ve been there for a while, and have seen it blossom as the go-to social network. They’ve were there for the heady valuation of $15 billion. The pre-IPO company still has work in front of it, but surely it’s pretty interesting.

So what do they do? They quit to go start a BORING enterprise software company.

What could this possibly tell us?

Entrepreneurship As Signal

Here’s one clue for why the Facebook guys would quit to start their own Enterprise 2.0 company:

Via ReadWriteWeb

Via ReadWriteWeb

Social networking inside the enterprise is expected to dominate spending in the category. And what is Facebook? The most successful consumer social network.

The Enterprise 2.0 market is still quite nascent and fragmented. Combine that industry profile with projected spending in the category, and suddenly you understand why these guys are striking out on their own.

It’s not an easy market to crack, and working inside the enterprise is much different from working out on the Web. Looking forward to watching their progress.

*****

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About Hutch Carpenter
Senior Consultant for HYPE Innovation (hypeinnovation.com)

9 Responses to Entrepreneurship as Signal: Quitting Facebook to Tackle Enterprise 2.0

  1. With the greatest respect to Scoble and Arrington – they have no clue about enterprise except in Scoble’s case it pays a ton of money via SAP to keep his TV show alive. Nothing’s changed in a year on that one.

  2. Great post Hutch. I do believe there’s a ton of opportunities for Web 2.0 apps on the business side, not just Twitter copies like Yammer, but other innovative ones.

  3. Dennis – you’re right. Enterprise software has an interesting profile. High usage numbers, big revenues. Yet fewer people track what’s happening in the space. If page views are your life, that’s really what Scoble and Arrington are getting at.

  4. Jorge – thanks. There’s a lot of opportunity inside the enterprise walls. And there always will be.

  5. Ken Stewart says:

    Hutch, I think Fred is right in that people bring there personal lives to work with them – but he missed out on the point that they bring their professional lives home as well.

    Signs like this show the blurring lines of business and personal life, and the need for everyone to feel connected.

    Good article, and good take on why the guys at FB left.

  6. Thanks Ken – I wonder if a good way to think about it this…people bring the expectations and experiences of their personal lives to work. But most enterprise software fails to live up those.

  7. Ken Stewart says:

    Hutch, I think you give employees (in general) too much credit. If the average person is any indication of bringing their personal life to work we would never get to the business of business ;-)

    I think you are confusing entrepreneurs with employees ;-) Both do start with ‘e’, but end completely differently!

  8. Pingback: The Top 10 Enterprise 2.0 Stories of 2008 « I’m Not Actually a Geek

  9. anilware says:

    Hello All,
    Also check out cyn.in, an Enterprise2.0 group collaboration software, also captured its space in providing enterprise activity stream refer http://www.readwriteweb.com/archives/new_from_cynapse_activity_streams_on_the_company_desktop.php

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