So True. "Trendy Start-ups are Hot - Until They're Not"



by ContractRoom


After reading, Erik Sherman’s piece: “Trendy Start-ups are Hot – Until They’re Not” in Inc. Magazine (1), I agree that entrepreneurs should “consider a B2B play” as suggested by the writer.

As CFO and Co-Founder of, a revolutionary enterprise negotiation and contract management solution, our team analyzed opportunities in both the consumer and business markets. Ultimately, because of the four founders’ business management experience and the market’s nascent acceptance of Web 2.0 principles (interoperability, collaboration and ease of use), our mission is to benefit the enterprise by: digitally automating manual, inefficient processes, accelerating the speed of business, increasing profits, and delighting the user.

Like Gordon Ritter of Emergence Capital said, we shied away from consumer applications (B2C), seeing them as too fickle and, for our investment, a riskier proposition. Also, we believe we are in the early part of the enterprise-friendly cycle. According to Mr. Ritter “consumers will be out of favor for the next two years.” During that time we’ll be seeking rapid user adoption and market share with businesses with $100 million plus in annual revenue.

We didn’t pursue the “enterprise-focused business simply to make fundraising easier (1)”. We pursued it because we saw a large potential market and we have the “expertise and background” to deliver a disruptive solution. Since the sales side of the enterprise hasn’t seen a major innovation since web services, and prior to that email, we felt the market was prime for transformation by:

  • Replacing paper transactions with digital processes. That is, we capture all negotiation/transaction and collaborative authoring data for any standardized contract or agreement. This automation eliminates the wasted time, effort and money revolving around the transaction. With control over the process and data, the user gains control over the business.
  • As Marc Andreesen recently stated in TechCrunch(2), “… the most interesting and advanced new technology now comes out for the consumer first” and then migrates to business. Because of groundbreaking web-based consumer solutions like Facebook, Dropbox, and Twitter, users are primed to adopt Web 2.0 solutions at work. This multi-party collaboration enables a fundamental shift in global business. Users can transact anywhere, anytime, they have Internet or mobile connection.

In any start-up, you can experience fierce competition, drained resources, and challenged assumptions. So, in addition to having a “coherent business strategy(1),” the B2B solution must fill a pent up need, an untapped market, and provide a strong value proposition to the user for a fighting chance at success.

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(1) Erik Sherman. “Trendy Start-ups Are Hot – Until They’re Not.” Inc. Magazine, Jan. 29, 2013

(2) Alexia Tsotsis. “Marc Andreesen On the Future of Enterprise.” TechCrunch, Jan. 27, 2013

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