“Set the tone, establish trust and then inch your way toward large-scale operations.”
That advice comes from the Yariv Bash, chief executive of Flytrex Aviation Ltd., a company providing the first on-demand urban drone delivery service in the U.S. Bash’s statement illustrates how enterprise technology entrepreneurs are thinking today, but it does more than that: It offers a roadmap for how smaller companies can achieve success in the new era of enterprise computing: Enterprise 4.0.
“Be patient with the process as you establish yourself as industry leaders,” Bash added. “Begin on a local level. Prove yourself in a hyperfocused setting where you can more easily understand niche needs and fulfill them.”
You might think that a drone company would be completely engrossed in its technology, but Flytrex, a BGV portfolio company, isn’t like that. The company is laser-focused on the customers it serves and works side-by-side with them to solve problems that are specific to their business. Flytrex’s solution helps retailers, e-commerce marketplaces, restaurants and delivery companies solve the “last mile” problem of delivering their products to consumers who live in suburban and remote areas outside big cities like New York and San Francisco. This is the market where the traditional approach to delivery by couriers is simply not economical and Flytrex can make ultrafast deliveries at one-sixth the cost of traditional couriers.
That’s what it takes for startups to succeed in this new era of enterprise technology, when technology giants are making both horizontal and vertical moves. In a field so crowded by technology giants and startups alike, it’s no longer enough to offer a great technology.
Enterprise 4.0 startups need to build full-stack solutions, get to know their customers’ pain points and offer professional services to smooth over any friction that comes with the adoption of new technologies.
The phases of enterprise tech
There have been four waves of enterprise technology innovation since the early 1990s. Much of the conventional wisdom that came from the first three phases will need to be challenged in order to prosper in the era of Enterprise 4.0.
Enterprise 1.0 witnessed the birth of Silicon Valley, primarily driven by mainframe and personal computing hardware and software companies. The 2.0 and 3.0 phases saw the emergence of the internet, the web and cloud computing with a focus on innovation around infrastructure, data centers and application programming interfaces. That led to successes such as Cisco Systems Inc., 3Com Corp. and Hewlett-Packard Co. in the Enterprise 2.0 era and the likes of Splunk Inc., Box Inc. and MuleSoft LLC in the next wave.
In the past, companies built elaborate, horizontal platforms that a variety of different enterprises could use to automate some of their operations and move certain critical processes to the cloud. But with this infrastructure built — and new, horizontal platforms still being built by Salesforce.com Inc., Google LLC, SAP SE and other giants — the opportunity for startups has shifted.
Unlike in previous eras, enterprise customers today are not building the internal competencies to adopt and integrate complex technologies. That’s because of a scarcity of data scientists and DevOps teams and the complexity of integrating new systems.
Startups embracing Enterprise 4.0 will develop full-stack solutions that leverage existing systems of record to capture novel data sets, while making it easy for the customer to consume this technology with superior user interfaces and user experiences coupled with automation of workflows.
There are no shortcuts. Building products for industry verticals means innovating near the customer and building and integrating the technology side-by-side. This means that, in Enterprise 4.0, product purists will go the way of the dinosaur. Competitive startups today offer solutions, meaning the integration of all technology products and services needed to solve a specific industry problem, requiring little or no integration from the customer with other existing products.
The best enterprise technologies in development today run on unique data sets. Startups can get access to this data only by building trust with customers, and that’s something that can no longer be accomplished from an office in Palo Alto or Menlo Park. The trust will be built by innovating near the customer.
How to do Enterprise 4.0 right
There are a lot of industries that have been laggards when it comes to adopting new enterprise technologies, including manufacturing, transportation and healthcare. Solving problems for these industries will involve working closely with the customer.
These are good verticals to focus on – but not with the mindset that was forged in the first three waves of enterprise technology. It’s time to think in terms of adding value that goes beyond a new product or service.
For example, Drishti Technologies Inc. conducted research on manufacturing during it spoke with more than 100 Fortune 1000 manufacturing companies, said CEO Prasad Akella.
“The resounding feedback was that humans are still critical in the manufacturing process,” he said. “In fact, 72% of tasks in the factory are still done by humans, not machines. So, any manufacturing transformation that doesn’t include the human being — and, unfortunately, that is where the bulk of the technology in the space is focused today — falls perilously short of having a truly transformative impact.”
That’s what prompted the company to work with some of the largest manufacturers in the world to digitize human actions and provide insights into how companies can increase productivity and improve quality. It pointedly refers to its customers as partners.
That approach doesn’t come from the Silicon Valley playbook for launching enterprise tech companies. It comes from the Enterprise 4.0 playbook, which is being written by outliers such as Drishti today.
New era, new mindset
Successful Enterprise 4.0 companies will innovate near — and with — the customer. They will also share some other traits, including:
- Embedded AI or AI inside, meaning voice, computer vision or robotics
- Unique datasets with proprietary access
- Intelligent automation for high-value workflows
Delivering on those traits requires that enterprise tech startups be built and grown differently than they were in the past. For one, because of the competition for programming talent in Silicon Valley, many successful companies will be founded in technology hubs such as India and Israel.
For smaller companies, success also will come down to using techniques that larger companies struggle with, including staying nimble and making use of a workforce that is increasingly distributed and mobile. Technology companies such as Slack Inc. and Zoom Video Communications Inc. are enabling the maximization of productivity from distributed enterprise teams going far beyond the legacy applications designed for desktop or mobile workforces.
With a mindset that reflects Enterprise 4.0 — and not the earlier phases of information technology — startups won’t need to fear competition from rivals with far more people and far more resources.
