Business On-Demand: The Next Trillion Dollar Opportunity

Yesterday morning, I took to Techcrunch to publish some thoughts I’ve been working on for a while now: The Trillion Dollar Market To Remake Business Applications.

In my view, the fundamental key takeaway is in the fourth paragraph:

With the enterprise undergoing many fundamental changes – from the Bring Your Own Device movement of the late 2000’s to the recent explosion in cloud software – one additional trend is now emerging: that enterprise buyers act significantly like consumers when purchasing services.

When I shared the article to my friends on Facebook earlier this evening, I did so with the following context: “How those on demand apps you love so much will soon be taking over your business too!” What I really should have said was as follows: “You know all those on demand apps that are becoming second nature in our personal lives? Your corporate life will very soon look and feel extremely similar.” The reason that “enterprise buyers act like consumers when purchasing services” is because enterprise buyers are consumers. The platforms that can realign the motions we’ve become habituated to in our personal lives for the enterprise are going to win much of the $Trillion opportunity that’s up for grabs. I’m convinced of that.

I wanted to open-source the brief slide deck I put together to cover the emergence of these B2B On Demand services. If you have suggestions for companies or categories to add to my market map, please don’t hesitate to let me know in the comments or via e-mail.

Another nuance I find interesting about this space is the convergence between the Enterprise and SMB in adoption of these tools. Because purchasing within these applications is often authorized by a single mid-level manager (or even an executive assistant in some cases) the user experience is decidedly consumerized. What that means is that unlike a lot of enterprise software, these apps will largely be able to bridge both big firms and small and increase their market opportunity – and will increase their moat around the market because an SMB-focused tool, for example, is less likely to steal share. I think this concept is worthy of a post in its own right and I will try to do the near term.

Jeremy Liew of Lightspeed Venture Partners recently uttered a line I found deeply poignant: “It’s hard to predict the future. It’s easier to be open-minded to what’s present.” B2B On Demand is a trend which should not be ignored. I think given the opportunity size and the number of verticals, it is both massively under-innovated and massively under-funded.

Last, another good read is: The Arrival of On Demand in the Enterprise which was sent to me by Bucky Moore of CostanoaVC (and which preceded my article by 2 weeks). Some very nice thoughts on why they invested in Directly and where they see the space going. I can say that Chicago Ventures and Costanoa see eye to eye on this.

Please don’t hesitate to reach out, and if you’re an entrepreneur building in this space, I’d love to meet you.

About the author

Ezra Galston
Ezra Galston

Consumer focused hustling @Chicago Ventures, Young Entrepreneur @Foundation Capital, Class 18 @Kauffman Fellow, and Chicago Booth MBA. Former professional poker player, with 4 years experience doing marketing/biz dev in the online gaming industry. Launched a "poker hedge fund" in 2011, a record label in College, and produced a festival screened short film in 2006.

  • dc

    Ezra, Excellent article on TC and thank you for sharing the slides.

    While you’re right that the enterprise is prime for on-demand services and products, I wonder what the tipping points are? Most likely, I would think that the most likely adopted services will have to be in the areas that are (1) not specifically revenue driving (hard to imagine enterprises giving up the keys there), (2) are problems and tasks that are so mundane and painful to accomplish, they basically require you throw a swarm of bodies at them, and/or (3) the problems require expert knowledge or infrastructure that no one wants to build themselves.

    In the marketing arena, there are lots of these types. VideoBrewery is a marketplace for video production. Boost Media uses crowdsourcing to optimize digital campaigns. Trada (now defunct) provided search engine marketing and optimization services over a crowd. Visua.ly offers graphic design on-demand. I also see things getting more specialized. Where oDesk/eLance or Blur are these vast marketplaces of “anyone with a computer,” we’re going to see more crowd marketplaces open up to specific needs because it’s easier to find expertise that way.

    Incidentally, I work with a company that provides a SaaS solution to enable these marketplaces to pay their global service providers easily and efficiently (which if you can imagine is an immense chore) fraught with regulatory and banking complexity.

    Thanks!

  • Travis O Johnson

    Great article, that validates what we are doing at foodjunky.com. Our service is marketed exclusively to business’s, specifically team leaders, administrators, and executive assistants. Our service is completely on demand with no barriers to entry. And our branding is extremely consumer oriented even through our customer base is exclusively business. This is by design since we do not see the company as our initial customer but a sole person within the organization.

    It is from this single entry point that we grow within an organization until it becomes a silent adopted policy to order all food through the foodjunky.com platform. It is only then that we reach back out to make a more formal arrangement with the organization to make that policy official.

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