I just saw that Yammer landed a cool $25 million in new funding. While that says a lot about the economy and the interest and expectations VCs have for the social space – it kind of scares me a little.
What I mean is that while the cash is certainly good to keep a company running, VCs tend to invite the dreaded enterprise sales conundrum. While “social” apps are best when they grow virally and through a natural adoption pattern or “ground up” approach to use inside the enterprise – selling usually takes a “top down” approach.
In my opinion, the best applications will have a freemium model of sorts – creating amazing market penetration and relevancy simply by the fact that they work, are easy to use and generate value for employees. I think InsideView has a great application of this model. This concept rings true in my opinion for all internal social apps, and even for some external-focused applications. Lithium, for example, sells by an enterprise sales model – but succeeds because the actual platform is easy and intuitive for customers in the community, and generates clear value for Lithium’s customers.
I even think Salesforce.com gets this – as it has started to make noise around a freemium version of its Chatter social tool. And when the one company that has probably mastered the art of the modern enterprise sales model thinks freemium…well, then you know there is something to the concept.
Just as open source allowed smaller players and upstarts to enter the market in the past, small and nimble social players must have great ideas, super usability and a clear value proposition to the enterprise – NOT a slick team of sales people banging on the doors of CIOs and VPs of Sales and Marketing.
I hope Yammer keeps these ideas in mind as it expands its market reach with its new funding.