The other day, a VC asked me about a founder he was thinking of investing in.  He asked me if this founder had, quote, ‘F You Money.  {I learned how this was spelled when a Businessweek article this week used the term, btw}.

I wasn’t really sure if he meant this as a negative, but I assume so. I assume the assumption was that if the founder had made too much money in his last start-up, he’d somehow be uncontrollable or disaligned from the investors’ interest.

And also, intuitively we all want to root for the young kids doing the scrappy start-up.  It worked at Facebook.  It worked at Yahoo!  It worked at Google.  It worked at Microsoft even.  At all the winners of consumer web.  With only ramen to eat, a borrowed laptop here, an AWS instance there, out come the best consumer internet companies.

But with Workday going public at an epic $4 billion valuation, it’s time to step back for a minute, and note that many of the most successful SaaS companies were actually started not only by “old” people — but by rich people:

  • Salesforce: Marc Benioff was already plenty rich as a very successful Oracle VP and protege of Larry Ellison.
  • Workday: co-founded by a billionaire and a super-rich VC.
  • Yammer: a big success as an exit, founded by ex-COO of PayPal.

Why?  I think to do a true, pure enterprise SaaS play from Day One, you really have to go big the whole way.  You need an enterprise salesforce, and field reps, and field offices, and client success reps, and user conferences, and boots in the street.  You need product marketing and a marketing budget.  You need an engagement team and sales engineers and a pro serv team.

Certainly there are other ways to go.  The freemium-or-SMB-migrates-to-enterprise (i.e., tilt upstream) can be a way to defer some of these expenses.

But true success with true enterprise from day one requires going big from day one.  It’s hard to do that on ramen.

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