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Find your Product Market Fit, and Witness the Transition!
Hemant Taneja, Managing Director, General Catalyst Partners
Tuesday, May 19, 2015
The mobile (first) revolution has quickly changed how we live and work. And in recent years, there has been a blurring of lines between consumer and enterprise investing for us at General Catalyst. Prior to the mainstream adoption of iOS and Android based mobile devices, consumer and enterprise application companies looked very different from each other. Selling models, design principles, price points … everything was different.

There are a few reasons for the convergence of expectations for how to build a consumer and enterprise applications company today:

1. The app economy has had a profound influence on the mainstream consumption of technology. Consumers expect an easy to use app for everything in their daily lives. This mainstream phenomenon has accelerated the adoption of software in the small business category that traditionally didn't adopt software. As a result, we expect several category-defining companies to flourish over the next few years. Companies like xero, zenefits, zenpayroll, and others are well on their way.
2. The "bring-your-own-device (BYOD)" trend has accelerated the consumerization of enterprise IT software. Employees expect the same ease of use from their enterprise workflow software that they are used to from their consumer applications on their mobile devices.
3. Employees are used to downloading consumer and enterprise applications from the appstores and distribution models for consumer and enterprise software are converging. These companies scale using similar go to market models.

Now that everyone is effectively connected to cloud applications at all times with their mobile devices, there is a broad-based rewrite of all workflow software because the real time collaboration amongst stakeholders creates new degrees of freedom in application design. For example, in healthcare, patients can truly be monitored in real time for preventative care.

"The Economies of Unscale"
It is a great time for entrepreneurs today because mobility and cloud lead to a fundamentally better way for us to work in all sectors. Our key advice is to build companies with a fail-fast mindset. When companies find product market fit, they are able to grow exceptionally fast and therefore tough to compete with today due to a phenomenon that I call "Economies of Unscale". Innovative technologies and new business models are shattering the old rule that bigger is better. Today, a host of modular services – from the logistics of parcel carriers to customer analytics software and social media marketing – are enabling startups to tackle small yet profitable markets, as well as disrupt or chip away at the market share of industry behemoths. Entrepreneurs should focus their efforts on identifying product market fit fast and not waste time on unproductive parts of company building or someone else will beat you to the punch.

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