If you’re a startup, you could rush after the same customers as every big tech player–or look for your own market that’s much more vulnerable. Sounds simple, right?
So goes the thesis of Box CEO Aaron Levie as he unpacks his story for Charlie Rose. How Levie decided to go after enterprise over the consumer market unspooled after Rose asked him how mobile changed the game.
First, Levie sets the scene: If you were a CIO in a 50,000-person organization a decade ago, you were running the company on Windows-based PCs. Then the desk became unmoored: More than tower machines, the C-suite is now powered by iPhones, iPads, and Androids, meaning that you “need a whole new set of technologies to run your company.”
And some other scene-setters happened: The cost of storage plummeted, meaning technology could be put together on the cheap. The crucial question of “why now?” had obvious answers.
But a more decisive question still lingered: for whom?
For Levie and for Box, the choice was clear: Rather than charging into the hyper-volatile and crowded consumer fray, they gunned for the comparatively ossified enterprise space. And that has made all the difference.
“We decided we could compete against Google and Microsoft and Apple on the consumer side and probably not make any money,” Levie says, “or go after Microsoft and IBM and Oracle on the enterprise side.” By going into enterprise, they had the ability to be “a little more innovative, a lot faster, (and) be able to work with a new set of technologies that they weren’t implementing,” allowing the startup to enter a market where customers were accustomed to the most peculiar of behaviors–paying for, and sticking with, the technology. As a bonus, corporations were thrilled by the speed of a startup versus the typically long product-development cycles of established software vendors.
Bottom Line: Innovation isn’t just about the product–it’s about business strategy. You can distinguish yourself in a crowded space by counterintuitive thinking about your end market.