The Hollywood version of startup success usually involves a rags-to-riches B2C startup that struggles until it hits on a massively popular app. We think less often about a much more common scenario, where operators working in large corporations feel a huge pain point, and end up leaving to launch their own startup to solve that deep pain they felt first-hand. From there, large enterprises integrate that startup’s software into its workflows, allowing the startup to achieve slow, steady growth. These enterprises often make things most people have never heard of, because they too are making products for businesses.
Such outcomes may be less sexy than headline-grabbing consumer startup successes, but they can be just as lucrative. Work-Bench co-founder and General Partner Jessica Lin makes a strong case for collaborating with the enterprise as a B2B startup’s primary goal. Founded in 2013, Work-Bench has made more than 30 venture capital investments — and achieved 10 exits. Its portfolio companies include cloud infrastructure, cybersecurity, and artificial intelligence and machine learning startups. In particular, Lin focuses on solutions for the future of work, including productivity, HR, and collaboration software.
Lin joined Scarlet Fu, Bloomberg Television and Bloomberg QuickTake host, for a talk on Thursday, August 12, 2021, as part of the Cornell Tech @ Bloomberg Speaker Series. She shared how she got her first taste in the tech world as a soccer ball designer, eventually becoming an enterprise technology matchmaker, and much more.
In a classic reflection of the American dream, Lin’s father immigrated to the U.S., working at a gas station before becoming a software engineer and later a lawyer. These experiences led her father to prize education, laying the foundation for his daughter’s being accepted at Harvard University, where she studied government and African studies. While she had visions of working in international development, she took a software engineering class as an undergrad that inspired her to pursue a career in tech.
She spent the year after graduation merging these interests in South Africa, working on the sOccket, a soccer ball that captures cheap, clean, off-the-grid electricity when kicked, rolled, or otherwise played with. This kinetic energy is then stored and can subsequently be used to charge a cell phone or battery. This was an interesting attempt to bring an unconventional energy source to areas with limited access to an electric power grid.
After returning to the U.S., Lin spent two years working at Cisco, a tech company that builds critical telecommunications and networking infrastructure, among many other things. While there, she developed an understanding of the unique needs of large enterprises, which often possess the resources to build exciting new technologies at a massive scale, but lack the speed and agility more commonly associated with smaller startups. She shadowed engineers as they developed software using Agile methodologies, hoping to better understand and help improve their processes.
From there, Lin jumped headfirst into investing, co-founding Work-Bench, an enterprise technology-focused VC firm based in New York City. With 50 of the Fortune 500 in their backyard, Work-Bench connects large enterprises with B2B startups that are building next-gen platforms and products to help address and tackle massive technology pain points. With her background in enterprise technology, Lin can personally relate to the pain points that enterprises are experiencing, which makes her ideally suited to play such a matchmaking role.
The backyard advantage
“We’re really proud that we’ve built this New York City ecosystem, brick by brick,” says Lin. Work-Bench hosts around 200 events each year to bring the “suits” on the enterprise side together with the “hoodies” on the startup side.
Most VC firms are located in Silicon Valley, but Lin believes that Work-Bench’s being situated in New York helps them capture a lot of attention from the city’s many enterprises who are looking to partner up with emerging technology startups. Thanks in part to Work-Bench’s efforts, New York’s startup footprint is expanding to meet the demand.
“Just this year alone, the first half of 2021, there are $7 billion in venture investing going into New York City enterprise startups. Just a year ago, a quarter of that went into early-stage startups. What that means is that there’s more and more early-stage startups. These startups are then also going out to raise Series As, Series Bs, or pre-IPO…There’s no better time to be investing in early-stage and enterprise here in New York.”
Work-Bench’s matchmaking role often boils down to simply bringing people together. Lin cites their flagship NY Enterprise Tech Meetup, which meets monthly and now has over 10,000 members, as well as CEO dinners, sales workshops, women in enterprise breakfasts, summits, and other events that they help put together. Work-Bench creates opportunities for social connections to form, strengthening NYC’s tech community. This results in a bigger pond in which Work-Bench can cast its net.
“It’s been just incredible to see how the ecosystem continues to grow and give back,” says Lin. “We have founders mentoring and advising and supporting one another. That is so unique and something that really touches us every day.”
Because of the vibrancy of this social scene, Lin does not anticipate the launch of a West Coast Work-Bench branch. “This geography is why we will always be beating the drum for New York. You just don’t have this proximity to customers anywhere else. The fact that I can be uptown, downtown, within minutes. We can do a customer happy hour and also do a recruiting dinner the same day.”
Buttoning up for the suits
Enterprise sales cycles can be long, stretching well over a year. With products that may span multiple business units, involve many stakeholders, and have protracted procurement and implementation periods, it can be expensive to take on new software. This means that startups need to have connectivity among these corporate stakeholders.
Startups are structured to build great software, but they aren’t always able to navigate the procurement, legal, compliance, security, and other hurdles that enterprises must necessarily place in their path in order to safeguard their businesses. Work-Bench helps startups navigate these byzantine processes. They’ve seen and experienced it all before.
The enterprise allure
Enterprises will pay handsomely for good software, and that capital can then be used to make the product even better, and make startup life a little more livable. “If you want to do enterprise software, the reason why is you’re building a product that provides so much value to an end customer who will then pay you predictable revenue back,” says Lin. She also argues that the enterprise market can be more predictable than the consumer market. Enterprises have a singular goal—they need software that helps them get smarter, faster, and bigger. The psychological motivations of the buyer are less complex than the fickle consumer market, which chases and abandons software fads with equal speed.
“You can build a great product, you can have great traction, but if it falls out of favor or something, if the market changes, it’s largely out of your control,” says Lin. “And with enterprise software, there are a lot of things that are not in your control, but there are a lot of things that are.”
Earlier this month, Work-Bench announced a new $100 million fund. By educating more young entrepreneurs on the benefits of targeting the enterprise market, Work-Bench is nourishing the next generation of B2B success stories and helping to cultivate an even stronger tech culture for New York City. With this fundraise, they are also looking to expand the team and hire a Senior Associate.
You can watch the entire discussion below: