A focus on enterprise, mobile, or biotech presents the biggest opportunities for startup founders and investors, according to Y Combinator president Sam Altman.
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While announcing the resignation of Reddit CEO Ellen Pao on the site, Altman, who is also a Reddit board member, answered some questions about the future of industry.
In what was probably a welcome distraction from the controversy that Reddit has been embroiled in recently, one user asked Altman what he thinks the next big trends in startups will be.
“I think the enterprise startup trend will go a lot further,” Altman answered. “I think this would be a good time to start a new social product that is mobile-focused. I think biotech, AI, and energy are likely to be big.”
Altman’s comments come as rostering software startup Ento just secured a $1.2 million investment from Airtree Ventures.
Ento enables enterprise clients to coordinate the rosters of hundreds of employees from mobile devices, and was founded in 2009 by Aulay Macaulay, who says they’re ready to expand.
“We’ve been bootstrapping for so long, and that can be such a struggle,” Macaulay says. “We feel like we’ve got a really good product market fit, and it’s time to get big.”
The funding will go towards marketing the startup internationally, and growing the Ento team, Macaulay says.
Airtree Ventures co-founder Daniel Petre says the firm was particularly keen to invest in an enterprise startup.
“We liked the category of software-as-a-service, and it’s a disrupting desktop solution,” Petre says. “There’s no dominant player globally or locally, and we think they’ve got the best product.”
“They’re a super interesting mix. They’re super product-focused guys, and they’ve grown very fast with little sales effort.
“They built a great box but weren’t selling it as much as they could.”
Petre agrees with Altman that enterprise-focused startups will continue to thrive, and says Australia is in a good position to capitalise on this.
“There is this opportunity in enterprise at the moment,” he says.
“We’ve got as good a chance as anybody, there are very low barriers for entry. Young Australian companies are focused on global success more so than in the past.”
Macaulay agrees, saying there are huge opportunities for Australian entrepreneurs in the enterprise sector.
“Even just watching over the history of our business – five years ago software as a service was something no-one understood, now it’s accepted,” he says.
“The next trend is enterprise, and it has absolutely massive potential.”
Adventure Capital co-founder Darcy Naunton agrees and says it’s a trend Australian entrepreneurs should pay attention to.
“We’ve got a bias towards startups that do focus on SMEs, SMBs and enterprise,” Naunton says.
“You can do it on a lower capital basis, and you can beat the US at their own game in terms of leveraging proximity and the network that comes with it.”
Altman believes biotech, artificial intelligence and energy have plenty of potential too and these are industries that the Australian startup scene is already excelling in, Naunton says.
“We’ve seen a lot of stuff around software and energy startups, like demand management and electric cars,” he says.
“There is a huge amount of competition in Victoria in these areas, so startups need to find ways to differentiate from each other.”