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The cloud and the “sneak attack” for enterprise sales

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Avery Lyford (Churchill Club), Michael Goguen (Sequoia Capital), Satish Dharmaraj (Redpoint Ventures), Ping Li (Accel Partners), John Vrionis (Lightspeed Venture Partners) - Structure 2011Once upon a time, getting a promising new enterprise-software tool into the hands of actual enterprise customers was a daunting task that required a lot more than great technology. It required a huge sales team and a love of the cold call (and the rejection that comes with it).

Enter the cloud. The popularity of easy-install applications and the increasingly blurry line between consumer and enterprise products has changed the game entirely.

“For me, its all about the sneak attack,” said Michael Goguen, a partner at Sequoia Capital, who funded Dropbox, a company that went from consumer to enterprise without ever making a sales cold call. Satish Dharmaraj, a partner at Redpoint Ventures, talked about the strategy of entering a company by selling directly to the customers themselves. “All of a sudden ten percent of the office is already using it so the IT manager buys it,” he says.

Goguen and Dharmaraj were among an all-star group of VC’s gathered at Structure on Wednesday to discuss how the cloud has changed their investment strategies.
The group discussed how the cloud is changing what they’re investing in and what areas of technology entrepreneurs should focus.

Ping Li, a partner at Accel Partners, pointed to opportunities in mobile web. “IOS and Android are just getting started in a meaningful way in enterprise,” he said. “That’s all going to be powered by cloud infrastructure.”

John Vrionis, the managing director of Lightspeed Venture Partners, sees opportunities everywhere from big data to network virtualization. “There is opportunity up and down the stack,” he said. “This is a great time to start a company.”
So what kind of companies should they bring to pitch meetings with these guys? According to Dharmaria: “Money makers.”
Though that was (mostly) a joke, Goguen says he is seeing more early-stage companies come to his office generating profit than ever before. He attributes this all to the cloud. “You can spin up companies much more quickly,” he said.

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