The CEOs of the Hottest SaaS Startups Gather Once Again

Where can you find some of the hottest CEOs all in one place? Each year, Emergence Capital Partners’ CEO Forum brings together the CEOs of some of the most successful B2B companies to share their experiences and expertise, learn from one another and talk about exactly how they’ve successfully made B2B, SaaS and enterprise sexy once again.

While the Emergence CEO Forum is always a must-attend event, this year, it was truly something special. Not only did we welcome new members to the Emergence family, but we heard from some of the most innovative leaders of our time exactly how they’re revolutionizing the B2B digital services landscape.

It was a rare opportunity to get inside the minds of these visionaries and hear their perspective on the issues, strategies and opportunities they face. With blockbuster speakers like Jim Corbett, Geoffrey Moore and David Sacks, the agenda for the event read like a who’s who in the B2B enterprise technology start up space.

Even though most of the value is generated by the behind closed door conversations that take place among the CEOs, we wanted to share some of what Geoffrey Moore presented to our CEOs.

The Perfect Storm is Actually a Tornado!

We hear a lot about how market forces, business opportunities and stellar teams often converge at just the right moment to create a “perfect storm” for success. But have you ever considered that the “perfect storm” should look more like a tornado?

Geoffrey Moore has made the understanding and effective exploitation of disruptive technologies the core of his life's work. A best-selling author, his books Crossing the Chasm, Inside the Tornado, The Gorilla Game, Living on the Fault Line and Dealing with Darwin are required reading at leading business schools.

During his talk, Geoffrey captivated the CEO Forum audience with his assertion that entrepreneurs must harness the tornado effect to reinvent enterprise IT. Sharing his thoughts on the waves of disruption and the keys to digital engagement, Geoffrey masterfully wove every-day examples into the discussion of his macro theories and trends, making it easy for the audience to relate.

According to Geoffrey, these waves of disruption are watershed eras in the evolution of the way we work today: from the 1980s revolution in Digital Office Work with personal IT to the 1990s Digital Value Chains in Enterprise IT, the age of personal Digital Consumption in the 2000s and back to the enterprise IT focus of Digital Engagement in the 2010s.

Needless to say, the audience was thrilled to hear his prediction that the pendulum is swinging back to enterprise IT and it’s once again time for us to shine.

When Crossing the Chasm became a best seller, it made us think about our own technologies. The challenge for us then as early innovators was to transform into industry visionaries and finally to become the pragmatists and conservatives who would build a big business. Today, crossing the chasm is not enough for this new breed of lean startups. Inside the tornado is where magic happens. But, exactly what’s happening inside that tornado? And what enables these companies to turn a mild breeze into an unstoppable tornado?

The model Geoffrey described is simple, yet insightfully brilliant and extremely applicable. In order to generate a tornado, like the one created by Yammer, 4 key drivers must be present:

• Acquisition:  This is probably the most critical area of focus. Bringing in new customers or users generates an initial critical mass that makes everything else possible.
• Engagement:  Once you have customers/users flowing into the system, you must ensure they are fully engaged and realizing value from your solution in order to build a strong, sustainable business.
• Monetization:  Once you’ve generated substantial value for your customers/users, the next step is to devise a way to extract money from those interactions. If you’re unable to monetize, your tornado might quickly run out of steam.
• Enlistment:  The final driver is enlistment or advocacy—the synergistic moment when you’ve successfully generated enough value for your customers that they become willing advocates for your brand, raving about your solution and inviting their friends and peers. The ability to monetize and enjoy the viral benefits of customer advocacy is truly golden!

To drive home his theories, Geoffrey shared four examples of companies that have had trouble aligning these drivers to generate a tornado, citing Kiva’s high cost of acquisition, LinkedIn’s engagement issues, Facebook’s clear monetization challenges and Yahoo!’s low enlistment levels.

Now that we have the formula, how should it be applied to our own startups? That’s where the “slowest gear” questions become salient:

• What is your slowest gear today?
• How do you plan to speed it up?
• If you succeed, what gear will then be slowest?
• How far away is your viral tornado?
• If you had more capital, what would you do differently?

As you can see, the model is simple, useful and extremely applicable to high velocity B2B companies. While it seems most suitable for freemium companies, the conversations following Geoffrey’s presentation proved its relevance for almost any company looking to generate its own unstoppable tornado.

So, now that you know what it takes, the question is, “What will YOU do to create a tornado?” As we approach the new year, the market remains primed for the next big thing that will continue to transform the way we do business. Will it be your next-generation concept? Or will yours get swept away by the perfect storm of another big idea? Now is the time to harness the winds of change, create your own perfect storm and chart a new course for the future of enterprise business technology.