Is Enterprise Hyper-Growth the New Normal?

Alison WagonfeldOperating Partner, Emergence Capital

October 13, 2015

2

About Emergence Capital MISSION: To invest in visionaries who are

building the most important enterprise technology companies

OVERVIEW:– Firm was founded in 2003 with the thesis

that enterprise software would move to the cloud

– 2015: Nearly $1 billion under management 4 Institutional funds raised in 2004, 2007, 2012, and 2015 LP base – Leading Endowments, Foundations and Fund of Funds

~40 active portfolio investments ~$50 billion of market capitalization

2

3

Track Record:5 Emergence “Unicorns” in 10 Years

2004 2009 2014

3

4

Strong and Growing Portfolio

5

What do these companies have in common?

6

They all sell to businesses and they are satisfied with nothing less than…

“HYPER-GROWTH”Growing at >100%/year

7

So we asked ourselves…

Is Enterprise Hyper-Growth

the New Normal?

8

9

Why?

10

Three Factors Impacting Growth1. Rapid increase of connected professionals2. Unprecedented access to growth capital– Allows companies to stay private and invest

aggressively without worrying about quarterly financials

3. New sales technology, process, and talent– Cloud based applications enable teams to

operate differently Email marketing, video conferencing, remote

presentations, e-signatures, sales tracking, analytics

11

12

BUSINESS MODEL

Product Driven Sales

New business models: End-users can search, try and buy:– Freemium– Free-trial

Result: Buyers have interacted with product before “sales” comes in, enabling shorter sales cycles

13

TECHNOLOGY

Machine Learning & Predictive Analytics

New technology improves productivity– Online training & simulations– Productivity analytics– Real-time decision making

Not-too-distant future– Voice analysis– Natural language processing

14

PLATFORM

Mobile First Mentality

New cloud platforms host applications that optimize mobile sales experience– Messaging– Mobile CRM– Tablet Presentations– Digital signatures

Not-too-distant future– Geo-targeting– Wearables

15

ORGANIZATION

Deep Specialization

Organization includes specialized Sales Roles– Sales Development Reps (SDR)– Inside Sales– Sales Ops– Customer Success

New “Sales Acceleration” tools for each role– Sales prospecting– Configure, price, quote– Upsells/Customer Success

16

Rise of the “Super-Rep”

Super-Reps equipped with Hardware + New Sales

Applications

17

Impact: Hyper-growth “S” Curve is Increasingly Attainable

Time

$ ARR

18

Success Requires Unprecedented Levels of Sales Execution

Winning teams have company wide focus on:– Hiring, process, training, tools, process,

reporting, analytics, process Did I mention “process”?

Don’t have time to “learn on the job”– Need experienced team, and/or bring in sales

consultants to accelerate learning The good news is that any company can

design for hyper-growth

19

About Emergence Capital@emergencecapEmergence Capital, based in San Mateo CA, is the leading venture capital firm focused on early and growth-stage enterprise cloud companies. Its mission is to invest in the cloud visionaries who are building the most important business applications. The firm's investments include Salesforce.com (CRM), SuccessFactors (SFSF, acquired by SAP), Veeva Systems (VEEV), Yammer (acquired by Microsoft), and Box (BOX). Emergence Capital has over $910 million under management. More information on Emergence Capital can be found at www.emcap.com.

Alison Wagonfeld, Operating Partner, Emergence Capital, @awagonfeld

Presentation references article published by Jason Green, Co-founder & General Partner, Emergence Capital, @jasonegreenhttp://techcrunch.com/2015/09/08/is-enterprise-hyper-growth-the-new-normal/