# Enterprise startups should budget time for bureaucracy

Markdown copy of https://realalpha.app/s/enterprise-startups-should-budget-time-for-bureaucracy/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Alexandr Wang](https://realalpha.app/builders/alexandr-wang/) · Alexandr Wang is founder and CEO of Scale AI. · Dropped out of MIT to co-found Scale AI in 2016; Meta invested $14.3B in it in 2025 and hired him to lead Superintelligence Labs.
- Host: [Aditya Agarwal](https://realalpha.app/people/aditya-agarwal/) · General partner, South Park Commons · One of Facebook's first engineers, he helped build its first search engine; later CTO of Dropbox.
- Show: Minus One
- Episode: [Scale AI & the Startup Hunger Games with Alexandr Wang](https://realalpha.app/v/CEebe451GZs/), Dec 13, 2024
- Moment: 49:45 to 53:16 of the episode (4 min), playing on https://realalpha.app/s/enterprise-startups-should-budget-time-for-bureaucracy/; the episode from there: https://realalpha.app/v/CEebe451GZs/?t=2985

## Quote

> “you'll have to spend let's say **30 percent of your time** navigating the bureaucracy and bullshit of an organization.”
> — [Alexandr Wang](https://realalpha.app/builders/alexandr-wang/) at [51:32](https://realalpha.app/v/CEebe451GZs/?t=3092) · Minus One

## Takeaways

1. Budget roughly 30% of time for enterprise bureaucracy.
2. SMBs offer more direct customer feedback.
3. In crowded markets, consider a less crowded fringe.

## About this segment

Alexandr Wang puts enterprise bureaucracy at roughly 30% of a startup's time, versus more direct SMB feedback. The host adds that crowded markets can make a fringe idea a better opening.

From “Scale AI & the Startup Hunger Games with Alexandr Wang”, Dec 13, 2024. [Watch the full episode](https://realalpha.app/v/CEebe451GZs/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[49:47](https://realalpha.app/v/CEebe451GZs/?t=2987) target small to medium-sized companies. You shouldn't go for enterprise. You're likely to fail. So what would you say, especially if I understand correctly, from an early stage, you focus on enterprise. Why did you choose enterprise despite the advice that said even from Y Combinator? And yeah, just any advice for entrepreneurs who want to go straight, you know cater to enterprise and not small to immune uh businesses so the issue with most enterprises is that you can't even believe what they tell you because um because there's like then i mean it's just like this it's like this most large enterprises are these cancers and most of the people you'll talk to um have nothing to do with the success of the company but they have some job where they're sort of like, you know, responsible for a thing. And, and so you're

[50:45](https://realalpha.app/v/CEebe451GZs/?t=3045) like, it's, it's like this whole, uh, rat's nest that you have to learn to navigate and figure out exactly how you leverage it to, to work. And, uh, but if it works, then obviously, you know, it can be incredibly, it can work incredibly well. All the largest, um, all the largest companies in the world are either enterprise companies or consumer companies. So, um, the sort of like small this is like a really a comment about like very large-scale businesses but small medium businesses you know you tap out at some point now this is not really a statement for startups um so i think i think for like i think for a startup if you want there are some startups that focus on enterprises we were one of them there's there's some others i think have been successful but if you want to do it you have to know that you'll have to spend let's say 30 percent

[51:36](https://realalpha.app/v/CEebe451GZs/?t=3096) of your time navigating the bureaucracy and bullshit of an organization. Whereas if you work with small and medium businesses, then they don't even have time to lie to you. So they're just going to, you know, whatever they tell you, you can take at face value, which I think is a great benefit for startups. Yeah. I mean, I think the general advice probably is that like focus on small and medium business.

[52:00](https://realalpha.app/v/CEebe451GZs/?t=3120) I think if you want to like get liftoff and success as a company, small, medium businesses is definitely the obvious gradient. But I think depending on whatever the ecosystem is like, like if you're in a startup ecosystem where 99% of companies are focused on small to medium businesses, then maybe there's less opportunity there. And I think this was kind of the, this is the thing that I notice. um if you think if you look at longer themes with startups they're kind of this is what kind of ends up happening which is that um so a bunch of companies start uh half of them are trying to model themselves against the the companies that are successful at that time they all end up being in like perfect competition with one another so none of them get traction then some company those focus on some fringe idea ends up having no competition but that idea ends up working

[52:52](https://realalpha.app/v/CEebe451GZs/?t=3172) and so then two years later that's the hot company and then all the startups try to copy that you try to model themselves over that company and so on and so forth and so you never want to be like if you look at like all the companies around you you never want to be exactly where all the other companies are focused you want to try doing something that's a little bit fringe because um it's kind of you avoid the the perfect competition so to speak