A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Wednesday I showcased tech careers that have nothing to do with startups, consumers, or social media.

If you plan to spend the sweat, blood and tears it takes to start a company isn’t it best to start one with the greatest chance of succeeding?

Then why not follow in the market steps of Palo Alto Networks, Jive, and Splunk, instead of Facebook and Groupon?

According to Sequoia Capital’s Jim Goetz, the $500 Billion market for enterprise software is ripe for disruption; doing so makes you far more likely to succeed.

“At Sequoia, upwards of a hundred entrepreneurs a week present and if we’re lucky, maybe a dozen of them are focusing on the enterprise. In the last 10 years, there have been 56 IPOs in the enterprise space that have gotten north of a billion [dollars in market capitalization] and just 23 in consumer.”

I have a somewhat cynical take on why there’s a shortage of enterprise startups.

• Enterprise solutions rarely start in a dorm room.
• You need to have some familarity with a market to disrupt it.
• It’s difficult to create a solution to problems of which you are unaware, haven’t experienced and wouldn’t know how to solve if you had.
• It’s easier to create something jazzy and fun and give it away than it is to solve a real problem that must be bought (with real money).

Appearances can be deceiving, but looking at the management of Palo Alto Networks, Jive Software and Splunk it seems that only one founder (Jive) was actually “young” when the company started.

Another thing is that they didn’t fast-track to their IPO based on hope and hype; instead they IPOed on revenues and real growth.

These are the kind of companies that grow, add value and help create a new middle-class.

Be sure to join me next Wednesday for a look at founder Henry Ford’s thoughts on that subject and why you should care.

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I took last week off, but today I want to wrap up the final chapter in IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy)

Chapter Five is called Genuine, Not Just Generous and refers to “an emerging generation of socially minded customers, workers, partners, activists and investors” who are demanding—through their wallets and their feet—a new commitment and level of corporate social responsibility (CSR) from companies.

It’s not an accident that three of the nine drivers that continually moved higher over the last three surveys are all part of CSR—socioeconomic factors, environmental issues and people skills—CSR reputation is critical to attract and retain scarce talent.

According to one electronics CEO, “Corporate identity and CSR will play an important role in differentiating a company in the future;” one consumer products CEO said “Consumers will increasingly make choices based on the sources of the products they buy, even the ingredients and processes used in making these products.”

But, like a leopard, these corporations are having problems changing their spots, “They’re very interested in new product and service opportunities for socially aware customers, however, transparency is not currently a top priority.”

Still, “CSR investments will grow by 25 percent, which is faster than the other trends…”

There are five key points to CSR

• “Understands CSR expectations;
• informs but does not overwhelm;
• starts with green;
• involves NGOs (nongovernmental organizations) as part of the solution;
• makes work part of making the world a better place.”

and five key questions you need to ask yourself

• “Do you understand your customers’ CSR expectations? How are you involving them in solutions?
• Do you know which NGOs your customers listen to and are you collaborating with those groups?
• Have you gained insights from current green initiatives that can be applied to your broader corporate social responsibility strategy?
• Are you offering employees the opportunity to personally make a difference?
• How do you ensure that actions taken throughout the enterprise — and the extended value chain — are consistent with your CSR values and stated policies?”

Finally, “The CEO s we spoke with are upbeat — not just about opportunities for their organizations (important as that is), but also about a bright future for business and society.”

Are you?

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Image credit: nookiez   CC license

Continuing the focus on disruptive innovation as discussed in chapter four  from IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy) begs the question as to what is being disrupted? What are companies really doing to drive financial performance?

The most common approach is “revenue model innovations, nine out of ten are reconfiguring the product, service and value mix. Half are working on new pricing structures.”

Changes include offering more services; moving to recurring charges (as opposed to one-time payments); bundling or unbundling depending on products and industry.

The major change in pricing is being driven by more knowledgeable customers who can tap into global choices. “More are starting to price based on value to the customer, rather than on cost plus.”

The truly disruptive innovation, i.e., industry model innovation, you may have been hoping for isn’t as likely.

“CEO s mentioned several reasons for not pursuing industry model innovation. But most can be summed up with: it’s tough to do. For similar reasons, industry model innovators are more focused on redefining their existing industries (73 percent) than on entering or creating entirely new ones (36 percent).”

Not surprisingly, it’s the outperformers that usually focus on industry model innovation—think Apple.

So, what can you do to embed innovation in your MAP (mindset, attitude, philosophy™) and strategic planning?

“Think like an outsider; draw breakthrough ideas from other industries; empower entrepreneurs; experiment creatively in the market, not just the lab; manage today’s business while experimenting with tomorrow’s model.” (See the details I the doc.)

And be sure that you can answer the following four questions with a resounding “Yes!”

1. Is a disruptive business model about to transform your industry? Is it more likely to come from you or your competitors?
2. Do you spend time thinking about where the next disruption will come from?
3. Are you watching other industries for concepts and business models that could transform your market?
4. Are you able to create space for entrepreneurs and innovative business models while continuing to drive performance today?

If you can’t, then start working on them today!

Is your MAP in tune with disruptive innovation?

Your comments—priceless

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Image credit: nookiez  CC license