Venture capitalist Mike Maples Jr. is best known for his early stakes in consumer companies like microblogging service Twitter, which will probably IPO in the next few years, and mobile game company Playdom, which was acquired by Disney for $763 million in 2010.
But he actually thinks enterprise companies are a safer bet.
"Consumer internet entrepreneurs are wildly naïve about how easy it is," says Maples. "How many have there been in last 10 years -- Google, Facebook, Twitter? It drops off fast after that. If you are one of those daily habit companies, returns can be asymmetric and astronomical .... It's a very capital efficient model when it works. Which is rare."
Enterprise companies require more investment up front, and may result in smaller exits, but are more likely to succeed on average.
"The customer says I have business problem, here's my process today, here's how you could streamline or transform it, here's where and how you fit into my business. For that to happen, you can't just throw something out there and hope for the best. Usually a business software company spends more time dialing up the value proposition, so there's less risk of failure."
This is one reason Maples and his firm Floodgate just led a $4 million investment round in DoubleDutch, a San Francisco-based mobile apps company with a strong enterprise bent. A perfect example is Hive, released in September, which gives salespeople an easier way to enter data from mobile devices into CRM systems like Salesforce.
It's a classic consumerization play, and it fits into where Maples thinks the tech world is going.
"Five years ago, it was a pretty simple Internet world. You had Windows as your primary access device. Google as your primary search engine. One World Wide Web. Then a bunch of corporations with private internal networks."
The first big change was the iPhone and the subsequent smartphone revolution, which turned Microsoft from the dominant force on the client to one of many players. "When a monopolist goes from more than 90% to less than 50% in five years, it has a whole lot of unexpected ripple effects."
When you combine the mobile explosion with the rise in acceptance of cloud computing, he believes companies are going to redirect their old software spend toward new services that can be accessed from any client -- and all the various bits of "glue" that hold these disparate services together.
"Companies will say hold it, maybe we should take the money we spent upgrading Windows and Office and buying [PC] apps, and redirect it toward an emerging world of billions of nodes and millions of clouds .... What used to be monolithic apps being deconstructed at the back end, and what used to be monolithic OSs deconstructed on the front end."
DoubleDutch fits into this thesis nicely. "We look at it and say, tablets and smartphones are going to enable people not just to consume business data in new ways, but also to contribute to business data in new ways."
Floodgate also has investments in a wide variety of other enterprise companies that fit this mold, including cloud-based business apps like file-sharing service Egnyte, and cloud infrastructure providers like Okta, a unified sign-on system for multiple cloud services used by a single company.
So is Microsoft on a long slide to an out?
Not at all -- "If they leverage things like Skype and Yammer the right way," says Maples, whose father was a top Microsoft executive back in the 1980s and '90s.
As Microsoft moves more customer value into new cloud services, it can deconstruct its traditional software stack and create new cloud-based replacements. "It creates a lot of opportunities for Skype, SharePoint, Yammer, and a whole new generation of Microsoft apps. The question is, does Microsoft know what they have yet with Skype?"
The other possibility is tablets. "If they make Office run well on tablets, and make back-end business apps run well on tablets, that's pretty interesting."
But he hopes that Microsoft won't sacrifice its services business in its efforts to create a successful smartphone platform.
"The risk of Microsoft being in the phone market, I think, is that they will not take full advantage to create cloud services for all devices. Microsoft is very naturally positioned to do that."