What's 🔥 in Enterprise IT/VC #187

Narratives/Playbooks from enterprise sales transcripts

Not all cloud stocks are going up and to the right. While, I’m far from an expert on our current crisis, I strongly believe that there is more bad news to come and despite many enterprise companies crushing their Q1 numbers, I still worry about a softer Q2 and a constant on and off economy for 2021. Given that, if I were an enterprise founder, I’d track what the largest public companies are reporting and saying as they are great signals for what lies ahead. Also many of these CEOs are great storytellers and listening to their narratives, perhaps, can help you shape yours.

Salesforce announced its Q1 numbers and while up 30% YOY, they opted to lower guidance for the year. I think this quote from Yun Kim, analyst at Rosenblatt, sums it up well.

“We believe that when the enterprise IT spending environment returns, the pace of large-scale business application deployments is likely to lag other initiatives with higher priority,” Kim wrote. “Our most recent checks indicate that many of these SFDC initiatives have been pushed out indefinitely or have been downsized significantly.”

Interestingly despite this growth, Tableau (owned by Salesforce), which is on-prem BI software, is lower year over year. Not sure if it is just the product or market, but in a cloud first world, on-prem is much harder to sell and get up and running.

Tableau, which gets much of its revenue from software implementations taking place in on-premise (rather than cloud) environments, was a weak spot. Its April quarter subscription/support revenue of $273 million was below reported calendar Q1 2019 revenue of $282.5 million.

Along those lines, Aneel Bhusri, CEO of Workday, recently said during his Q1 earnings call:

“But I’ve talked to lots of CIOs who said, ‘I wish I had everything in the cloud right now. I’m struggling with my on-premise both because of the labor required and people required to be on-site and because of systems that are really not very agile or flexible…’

So how does an enterprise software company navigate? What’s the playbook? If you are into earnings and transcripts, then I highly suggest reading Aaron Levie from Box’s earnings call. He’s been a thought leader on work from home and digital transformation and lays out a compelling narrative to the public. Of course it also helps that Box was born in the cloud from day one. Pretty straightforward but it is working for them: focus on existing customers and seat expansion, add on product strategy, larger enterprises driving new logos vs. SMB where there is softness…

As always, thanks for reading and please share any ideas and tips and of course, the newsletter!

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Scaling Startups

  1. For those SaaS founders looking for a better Excel operating model, Kenn So from Shasta shares his with a nice balance between detail and flexibility

  2. For those founders worried about raising their seed round, check out this thread from Kate Clark at the Information. Lots of comments on what is and isn’t getting done now.

  1. 👇🏼💯Sales - don’t overcomplicate it

  2. Difference between “all remote” and “partially remote” from Sid at Gitlab

  3. Another gem from Dan Rose who used to head up Partnerships under Zuck at Facebook and now at Coatue - punchline - “Sometimes it takes an outsider to change the rules of the game”


Enterprise Tech

  1. Can Docker get its groove back? It’s going back to its roots as a developer first company with a successful Dockercon this past week. As we all know, Docker still has a huge developer community and it is a great way for other developer startups to partner and leverage that reach. To that end, Scott Johnson, CEO of Docker, recently said that “Docker only succeeds if the ecosystem succeeds.”

    Along those lines, here’s an interview from DockerCon with Scott and Peter McKay (CEO of Snyk, a portfolio co) talking about their partnership, how Snyk will be integrated into the CLI, and the importance of developers and digital transformation.

  2. I find it fascinating how even large Fortune 500s like Goldman Sachs, Capital One and the Pentagon are embedding product management in their tech teams. This is an ongoing trend which will only accelerate as companies invest more in delivering software faster. This will be a HUGE opportunity for all of the collaborative product startups like Figma and Loom and Cycle (a portfolio co) and others to spread into large scale enterprises from startups.

    Goldman's recent hires also provide some clues to how it thinks about technology and how it plans to position itself in front of clients. For example, Casey's role of head of product is not one commonly found at a bank.

    "A lot of banks have been very internally focused with software for many years," Argenti said. "Now as you actually start building the financial cloud, start to build products that are targeted to external developers, targeted to end consumers, etc., those product management skills are absolutely necessary and absolutely crucial."

    "The technologists feel that they are in the front seat and our message has been that developers are in the front seat," Argenti said. "They are absolutely at the center of our strategy."

    The firm's tech-first ideology is one that's been echoed by CEO David Solomon since he took the helm in 2018

    Capital One is also a thought leader when it comes to large enterprises and embedding designers and product managers with engineers is one of their key initiatives as well.

    At the same time, empowering engineers “to build great products for our customers” has involved “people and culture,” Hansen said. “We have been building a culture of continued learning and development. We’ve been reimagining our operating model,” Hansen said. “We want to have designers, engineers, product managers and business partners. They all work together,” Hansen said. “We’re trying to continue to create the shared experience across the board and shared responsibility and accountability. Because, ultimately we’re all in this together, trying to create a better customer experience.”

    And the Pentagon is thinking the same

    Mulchandani said it is now the only organization in the Pentagon to have product managers and an AI product development approach reminiscent of Silicon Valley startups and enterprise sales teams.

  3. Stack Overflow is out with its annual developer survey, completed pre-COVID in February. All the data is here but of note, DevOps and SREs (site reliabilty engineers) get paid the most, automation scripting software from Puppet and Chef amongst the most dreaded frameworks, and Github, Slack and Jira still dominate how devs get work done. BTW, there is a new resurgence of investments in tools to help SREs/DevOps do more faster and many are trying to replace Jira like Clubhouse and Linear .

  4. Thoughtworks has its annual Technology Radar out which highlights trends and tools and techniques in the developer community. This year themes are around infrastructure as code becoming more mainstream, data meshes, and kubernetes as a platform. It’s well laid out and worth a read. 🎩 Gareth Rushgrove who writes DevOps Weekly

  5. Francois Chollet, creator of Keras and head of deeplearning at Google has a great thread on challenges with AI (click through for full thread) - “But now, we're at a stage in the development of AI where generalization has become, inevitably, the bottleneck to skill acquisition.” So it really comes down to unsupervised vs. supervised learning.

  6. Wow! That’s an impressive ARR per employee ratio!

  7. Voice as an interface for computing has a long way to go and James Cham highlights the difference between Google and Apple

  8. Another tech company announces permanent work from home, Walmart! All kidding aside, they do have 10,000 tech employees

    “We believe the way of working in the future, particularly in tech, will be fundamentally different than it was before,” he wrote in the email. “We believe it will be one in which working virtually will be the new normal, at least for most of the work we lead.”

  9. Who are the next billion startups? Some enterprise companies like Tray.io, Cockroach Labs, Gong, and Moveworks. Also huge congrats to portfolio co Superhuman!


Markets

  1. Resiliency matters! Cisco buys ThousandEyes, network performance monitoring for applications running on cloud providers, for a reported $1 billion

  2. Not a shocker as ZScaler which replaces VPNs with cloud based access control beat its Q1 but more importantly to note is how larger tech cos are playing the consolidation game to capture more budget and what that means for startups of course!

  3. What’s ahead for real estate

What's 🔥 in Enterprise IT/VC #186

Winning ❤️ and 🧠 of developers to win the enteprise - 50 million devs on Github 🤯

First of all, I want to let you know that I’m working remotely from my new home office. If you’re looking for some quiet, this is a much better place than working from your car.

Ed Sim @edsim
The new WeWork? We set up in your backyard, wifi, laptop, and all the coffee you need.
Amazon.com : Allwood Escape | 113 SQF Cabin Kit : Garden & Outdoor buff.ly/2Trwp5i

If you’re an infrastructure founder or investor, I highly recommend listening/reading the Enterprise Ready interview with Grant Miller’s (co-founder Replicated, a portfolio co) and Mitchell Hashimoto of Hashicorp. There are so many nuggets of wisdom here for starting, building and monetizing an open source company which is now worth $5 billion. Here’s an excerpt (17:24) that quite resonated.

And our investors, for about three or four years of the company, every board meeting, they were like, "what's this company ever going to do?"

They were very concerned that would be nothing more than just the money pit where we built some great things and R&D came out of it, but it wasn't a venture success and there was a lot of fear.

From a non venture standpoint, making half million dollars a year on a VMware thing is great, because we could pay three people, four people with benefits poorly, I guess, you could do that but from a venture standpoint, if that 500 is not turning into a million, turning into 2 million, and so on, like, it gets stressful on that side, and we didn't do that for a very long time.

5 years ago…

We have a couple open source projects now that you might call de facto industry standards and they look like overnight successes but Terraform was actually a very long burn. (21:58)

I ❤️ it when founders share their “real” stories as there are very few overnight successes. Adding my tweet from last month to remind us all that while these developer first companies are super exciting and en vogue now, patience in building community is 🔑.

Speaking of developers, Microsoft Build was this past week and Satya and team clearly understand that “winning the hearts and minds of developers is key to winning the enterprise.” Along those lines, I love this mission statement from Satya’s keynote: “To empower every person and every organization on the planet to achieve more” and it starts with empowering developers! Watch the 20 minute keynote below. It covers dev tools like Github with now 50mm developers, Visual Studio Code with live sharing and collaboration, and Power Platform automation for citizen developers (3.5 million users) to create applications and workflows in a low-code, no-code format.

I hope you all have a great long weekend, and let’s not forget those who valiantly fought for our country.

As always, please like and share if you find this interesting!

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Scaling Startups

  1. Founders, here’s what 11 enterprise VCs are excited about as per Ron Miller at Techcrunch. Here are some of my thoughts that I shared with Ron on what I’m most interested in (notice a theme?):

    "We’ve been heavily focused on developer-first startups, anything helping developers be more productive from better tooling in their pipelines, security shifting left, abstracting infrastructure and teams working and coordinating better."

  2. If interested in what’s top of mind for Fortune 500 CIOs and how startups can navigate sales in this environment, then read 6 Takeaways from our Boldstart CXO Connect with CIO Dean Del Vecchio from Guardian Life and CTO Marty Brodbeck from Priceline. If you have more time, the full video is here.

    “I think what sets a startup apart is having a really great idea that can solve several business problems. And so the people that I’ve partnered with in my career have always been people that understood my business and had a unique way to solve a problem, whether it was in the infrastructure or software engineering space.

    Marty Brodbeck, CTO Priceline

    Great thread from April Dunford along those lines - don’t pitch features

  3. Thought provoking thread from Dan Rose at Coatue, formerly head of BD & Partnerships at Facebook - click through and fascinating how long into the future Bezos looked…


Enterprise Tech

  1. Microsoft’s Softomotive purchase brings automation to the mainstream and will set up for some interesting battles with UIPath and Automation Anywhere. Tom Tauli has a great writeup in Forbes with many industry vets quoted including Pankaj Chowdhry from FortressIQ (a portfolio co):

    It was a classic wrap and roll strategy: Wrap the product in with other adjacent offerings and roll it out through your channel. Microsoft turned that second-tier code base into the SQL Server juggernaut that we know today.

    As for Softomotive, the deal sets up the company even better. In addition to the technology, they get an engineering group intimately knowledgeable about the ins and outs of legacy Windows automation, and an installed base of 9,000 customers. Combine that with Microsoft’s vast reach in the enterprise, and you have a turbocharged strategy to get competitive in the RPA space, quickly.

    Forrester’s Craig Leclair has a more detailed writeup here but needless to say, this will be big!

  2. Is Facebook a consumer company or enterprise company? Hard to tell with launch of Facebook Shops (in partnership with Shopify and others) and more features for Facebook Workplace, it’s Teams/Slack competitor. And of course they’ll be 🐶fooding all of these services as Zuck announces permanent work from home for employees.

    Today, Facebook announced a number of new products coming to Workplace, its enterprise-focused chat and video platform, including Workplace versions of Rooms (its Houseparty video drop-in clone), Work Groups (a feature it launched on Facebook itself last October to create informal Groups for co-workers), more tools to make video conversations more interactive and enhanced tools for its Portal video hardware.

  3. What is resilience in security? Kelly Shortridge of Capsule 8 lays out what it is and why despite claims by many vendors, it doesn’t exist.

    I’ll repeat my definition again: Resilience in security means a flexible system that can absorb an attack and reorganize around the threat.

    I firmly believe resilience is the future of information security. Alas, the term is actively being bastardized by some vendors to serve their pestilent purposes. To the practitioners reading (whether you build systems or secure systems), remember that attackers are continuously evolving their methods based on changing context, and it is imperative for you to evolve your methods, too.

  4. Due to the economy and focus on preserving cash, are we going to see more open source projects released into the wild from some of the leading tech companies? Uber is open sourcing Piranha which automatically scans code and removes stale feature flags.

    Pete Hodgson @ph1
    Piranha is a tool specifically for managing feature flag debt in Uber's mobile apps:
    eng.uber.com/piranha/ They also have a really interesting academic paper describing it, along with lots of interesting details on feature flagging @ Uber in general:
  5. Speaking of feature flags, I’m excited for Manifold (a portfolio co) and their new release of their SaaS pricing platform. It’s awesome that someone is finally treating pricing and packaging as a product and will allow you to optimize and test pricing with integrations into feature flagging and more. Reach out to jevon@manifold.co if interested in being a beta tester and shaping the vision.

  6. There has been lots of buzz about AIOps, especially as IBM focused their annual meeting on the promise of it. Here’s a great read from the New Stack on what it is and why it just won’t work. TLDR, you need to train models on data and that is where the problem starts. 🎩 Gareth Rushgrove

    AIOps, then, seems like a logical next step. Clustering algorithms could bring together spurious alerts, realizing that they have nothing in common, and remove them. Perhaps a sharp-eyed AI system could find correlates across these large and varied datasets: it could notice that user failures happen often when a particular process uses all available memory, and not at other times; or notice that certain user paths are linked to failures.

    The promise of AIOps is threefold: an end to alert fatigue, a rapid process for narrowing down the causes of failures, and a way to detect and predict failures before they impact users. The problem with the vision is, very simply, that it is largely intractable for an artificial intelligence system. In fact, AI is precisely the very worst technology for this sort of problem.

  7. Age of the SaaS Decacorn from Jason Lemkin at SaaStr - when I started in the VC industry, investing early in an enterprise startup that was worth $1 billion was a magic number, super hard to do but possible. Now the $1 billion is $10 billion - the opportunity is that big!

  8. Another week and another mention of VR for business. There’s Spatial which has been garnering some interest around VR based conferencing and Facebook which released Oculus Quest for Business with over 400 ISV Partners already building enterprise software. Check out the insane hand tracking tech below and imagine the business use cases. Will this ever happen?

    On the AR side, here’s Hololens 2 from Microsoft…

  9. Random - Jared Diamond who wrote Guns, Germs, and Steel has a great essay which puts the current pandemic in historical light and pretty much allows you not to read the book. The net result, like times in the past, is that this will “increase inequality within and between countries.”


Markets

  1. 😲 “we are sitting at the all-time peak of public SaaS valuations in the midst of a global pandemic” Alex Clayton from Meritech has a superb breakdown here:

  2. 👇🏼Some serious public market returns

  3. Target invested $7 billion starting in 2017 in software and infrastructure to be ready for the Q1 they had. Once again, every Fortune 500 is a tech company and infrastructure software is more important than ever!

  4. Security still hot - Palo Alto Networks beats Fiscal Q3 Earnings:

    "The world will likely be in a state of transition over the next 12 to 18 months due to the COVID-19 pandemic,” Nikesh Arora, chairman and CEO of Palo Alto Networks, said in a statement. “We believe this will prompt key trends to accelerate, including remote working models, shift to the cloud, and focus on AI/ML and automation to drive effective cybersecurity outcomes," he added.

  5. More of the same digital transformation story from Splunk as stock was up quite a bit this week

    "COVID-19 has transformed the world into one that requires rapidly accelerated digital transformation to keep organizations moving -- we are seeing some resilient customers complete three-to-five year projects in just months," CEO Doug Merritt said in a statement. "As customers continue to adapt to this new normal, data matters more than ever, evidenced by our continued strong momentum this quarter."

What's 🔥 in Enterprise IT/VC #185

🌆 NYC Enterprise is real and rocks!

I’ll focus on some positive vibes this week 😃.

It hit 85 degrees yesterday in the NYC area and thanks to my friend Shai Goldman for reminding me that NYC had its first enterprise software company hit a $20 billion market cap in datadog. MongoDB is no slouch either at $11 billion.

Once upon a time back in the mid 90s when I was starting my VC career (you can call me 👴🏼), enterprise software companies would only come to NYC for two reasons; to meet with Fortune 500 customers and to meet with Goldman Sachs or Morgan Stanley to go public. 25 years later, and now it’s not a bad place to start and scale an enterprise software company either. After all we have over 73 Fortune 500s who call the NYC area home and as we all know, every Fortune 500 is a tech company or it won’t it be in the Fortune 500 for long (change accelerating, from Innosight).

Yes, I know, most won’t work with startups but believe me, that’s not true. You see, many of the more forward thinking CIOs/CTOs are leaning on startups to fill gaps that they can’t fill quickly enough or to commoditize existing infrastructure.

Case in point: we held our first CXO Connect Webinar this past week with the CIO of Guardian Life, Dean Del Vecchio, and CTO of Priceline Marty Brodbeck to discuss this and more. While I’ll have a full report next week to share some of our learnings, here is one for startups to reflect on.

Marty Brodbeck noted:

“In certain cases zero customers is actually better because you have a chance to shape and mold the product based on a set of requirements that comes from your company.” He followed up by reaffirming his stance on the importance of how a startup reaches out “any startup company that leads with a licensing conversation is a meeting that I leave within the first 10 minutes.”

Dean Del Vecchio agrees:

“I think you're spot on about spending the time to understand our business so that when you come in, you can talk intelligently about the problems you're coming to try and solve. One of the things we find quite often is, people really don't understand the business that we're in, so there's no applicability. Put in the upfront time, as a little effort goes a long way.” 

“If you're a startup trying to do an enterprise deal right now, it's going to take longer than it would to get a use case (with low use case pricing) in place to just get in and get it off the ground to demonstrate your abilities and your product.”

And here’s a recap in the WSJ from this past week covering more of the talk.

These F500 execs + companies are not holding back and are accelerating many of their initiatives, developer pipelines, customer facing AI - and yes working with startups.

So what’s next? My partner Eliot Durbin will be joining some NYC VC peers to discuss the state of NYC investing on Tuesday, May 19, 1pm ET with friends from Eniac, Lerer Hippeau, Founder Collective and NextView (RSVP here).

As for us, we’ve been investing over the last few years in European startups and helping them build GTM in the states. NYC is closer than the valley, we have lots of customers, and also a great geographical bridge between Europe and the west coast.

Have a great weekend all, enjoy the ☀️, and wear your 😷!

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Scaling Startups

  1. Vivek Saraswat from Mayfield’s tweetstorm on what Hashicorp CEO Dave McJanett had to say about building enterprise startups now (click through for the whole thread!). However, this is pure gold and often forgotten about.

  2. 👇🏼Yes! Founders, you don’t need all of the answers!

    In fact, for some of the older readers who remember and loved Fast Times at Ridgemont High, I wrote a blog post many years ago on “What Founders Can Learn from Jeff Spicoli” and why “I don’t know” is the best answer you can give sometimes in a pitch meeting.

  3. Fred Destin on hype and startups - my two cents it’s always how you capitalize on the initial wave, maintaining that momentum is tough!


Enterprise Tech

  1. Huge congrats to FortressIQ ( a portfolio co) on it’s $30 million raise led by M12, the venture arm for Microsoft, and Tiger Global and existings boldstart ventures, Lightspeed, Eniac and Comcast. I’m super excited as this will help us further leverage our partnership with Microsoft Power Automate, their bottom up automation play. What’s even cooler is the evolution of their pitch from automation to your system of record for work. If you haven’t used the Wayback machine to travel back in time and look at company positioning, I suggest you do as you can learn so much!

  2. Keeping the 💡on 24/7 matters even more now which is why Datadog had a monster quarter and New Relic beat its Q1 estimates. Slack was down for a short period and Epic Games for 8 hours - expect there to be a huge surge in next generation monitoring, incident analysis, and response software in the coming year.

  3. As I’ve said many times, it seems like the strong keep getting stronger in this environment. Brad Birnbaum from Kustomer ( a portfolio co) flexing his mucles by buying reply.ai to further bolster K’s chatbot deflection capabilities.

    Birnbaum says that this is actually "one of the best times to make a deal," despite the pandemic. "I think if you're convinced in your idea — if it's really a game-changing idea — I think this could be your time."

  4. Speaking of acquisitions, security continues to be hot as VMWare buys Octarine to bolster container security and CyberArk buys Idaptive for zero trust.

  5. There are so many data tools popping up every week and Pete Soderling, founder of Data Council, does a great job breaking down 25 of the early stage ones here. Speaking of data, Tensorflow surpassed 100 million downloads this past week and it’s accelerating!

  6. When will it be the VR moment? Thoughtful piece from Benedict Evans, The VR Winter. I still can imagine so many enterprise use cases for conferencing/collaboration (see Spatial’s latest update which does not require a headset!), field service, remote collaboration, etc and we are in the middle of a pandemic so one would assume adoption would accelerate, so what’s holding it back?

  7. Our future? Robots monitoring for social distancing?

  8. Have a great weekend!


Markets

  1. Even Stan Druckenmiller, one of all time great public investors, is long the cloud 🎩 @shomikghosh21

    Transition to cloud and digitization 10 year run, last year was in 1st inning or 2nd inning, long term trend like mobile, been there for 4-5 years and was there in February. When first happened not knowing it would shut down whole economy, why not Amazon worth more not less with rates going to zero, stimulus, move more people to cloud quicker…Amazon has to be worth more not less… What I didn’t know

    Company after company say biggest suprise how unbeleiveably well and seamless they can run their company remotely. Even industrial companies on road to digitization had such an advantage over those that weren’t and bearing down and moving faster to cloud. If you’re a retailer and you’re not online in a year with a strong presence, you’re a goner. The 1 to 10 year runway for cloud transition and jump to 4th inninng now and 2021 and 2022 will accelerate. This trend won’t stop at all…

    Much of these stocks have doubled since March low. Thinks market reaction is rational. If we announced vaccine tonight my guess is these stocks would be down 10-15% but would be higher in two to 3 years.

  2. More on Datadog’s quarter

  3. 😲 No wonder why Twilio is cranking…

What's 🔥 in Enterprise IT/VC #184

Is vendor consolidation in the air? Best of breed vs. one throat to choke

I don’t know about you, but this week seemed to just Zoom by 😃.

And yes, it was yet another week of two different worlds, one in enterprise tech land where digital transformation is accelerating and the other, the real and local world, where jobless claims are now at 14.7%, depression era levels. The Economist has a great article on this (it’s free but need to register).

Back to enterprise tech land, this week we had IBM CEO Arvind Krishna stating that we are only 20% into this cloud journey and what would have taken 5-10 years will take just a few.

As we move deeper into this crisis, one thing I’m starting to notice is the rise of the incumbent software vendors. Many are crushing Q1 earnings, and the question I keep asking if vendor consolidation is afoot? There is always this age old argument of do companies look for “best-of-breed” or “one throat to choke” and frankly in tough times most opt for the latter.

Speaking of the above, come join a virtual fireside chat to discuss this and what else is top of mind for Fortune 500 CIO Deal Del Vecchio from Guardian Life and CTO Marty Brodbeck from Priceline on Monday, May 11, 3pm ET

Register Here - F500 CIO Chat

In good times, it’s easy for large enterprises to “innovate” and try new things out but when times are tough, many look to cut expenses. Which leads to the strong getting stronger as many can bundle add-on or adjacent products and lock out incumbents. Yes, startup founders, I get how amazing and easy to use the product is, but free or close to free is pretty darn good. A great example is Microsoft Teams, just bundled in and who knows what real usage really is. Slack keeps crushing numbers but IMO it’s a matter of time before Microsoft makes a dent.

This week, GitHub had their GitHub Satellite conference online and announced a slew of products including a built-in Cloud IDE called Codespaces and two new security features code scanning and secret scanning. They are going after portfolio company Snyk so this shall be an exciting battle, and one that we are prepped for. Partnerships like the one we announced last week with Red Hat and before that with AWS marketplace helps.

In effect, startups should think about entry point or where in a user or buyer’s journey does your product solve a pain and distribution. In the former, the earlier the better as wouldn’t it be nice to expose your product to a user/buyer before they even got to your competitors? On distribution, how do you outflank your competitors and partner with others? Partnering sounds all well and good, but I would not rely on this strategy early on as it’s super tough to be reliant on someone else for customers. Secondly, press releases aren’t partnerships and investing to drive real $ out of the channel is the name of the game here.

Be well all and look forward to seeing what the next week brings!

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Scaling Startups

  1. to my point 👆🏼

  2. 👇🏼 💯developers need someone to think design first as well! From VP Design Hashicorp…

  3. If you’re wondering whether or not to launch your product during these times, our data says YES, go for it - across the board, our portfolio companies saw a nice surge of visits to their websites, sign ups, and follow up…


Enterprise Tech

  1. Super excited for the launch of Harbr! While data growth is exponential with billions of dollars spent on lakes, warehouses, and analytics to store and make sense of this, much of this data is still siloed and hard to access.

    Harbr is a platform for companies to easily collaborate, exchange, and monetize data and models within and across enterprises.

    Obligatory “Why We Invested” post and Techcrunch coverage.

  2. Open source software is 🔥. Confluent raised a huge round a few weeks ago and CockroachDB just announced an $87mm round this past week. Below is a list of 30 top OSS companies that may thrive in 2020 - super excited to have some of our boldstart cos in the list, namely Optic and Cape Privacy

  3. Interesting data on developer productivity from Github. 2 keys - developer productivity is up and collaboration on open source software is increasing - I wonder what amazing new OSS projects will emerge from this?

    Developer activity remains largely consistent or increased compared to last year. Developer activity—including pushes, pull requests, reviewed pull requests, and commented issues per user—shows slightly increased activity year over year. This suggests that developers have continued to contribute and show resilience in the face of uncertainty.

    OSS Projects created vs. 2019

  4. I know I’m preaching to the choir but more data for why enterprise tech stocks continue to be resilient

  5. And if you are wondering why CISOs don’t need yet another security solution, here’s why (see report from Mandiant)

    on average, an enterprise company will have between 30 and 50 security solutions in place -- but this is no guarantee of their effectiveness.  

  6. Pretty awesome - DevOps conference all in Animal Crossing!

  7. Tobi Lutke, Shopify, on acceleration of digital

  8. 🤔


Markets

  1. Jim Cramer host of Mad Money on the market now:

    “If you make technology that helps businesses cut costs, especially by firing people, you’re doing fine. If you make something that people literally can’t live without, like medicine, you’re in good shape,” the “Mad Money” host said.

  2. Twilio up 25% after reporting earnings - more on the haves and have nots of digital as Jeff Lawson says:

    “Our platform provides three things the world needs right now: digital engagement, software agility and cloud scale.”

  3. Dropbox beat earnings as it benefits from remote work.

    “Certainly, a huge percentage of the world is being forced into a remote work state for the first time, but I think the effects of it will persist well beyond when we typically go back into the office,” Houston said on Thursday’s call.

  4. LivePerson, contact center CRM and one near and dear to me as I was first investor over 20 yrs ago was up 41% on huge increase in Q1

    "The COVID crisis was a wake up call that the legacy call center model is a relic and incapable of supporting a remote from home workforce," said LivePerson CEO and founder, Rob LoCascio. "Whereas the corporate world turned to video conferencing applications to support office workers, LiveEngage is filling the void for the contact center. We are seeing Conversational Commerce adoption trends accelerate with many of our customers, and a new normal is emerging where brands are leading with AI-powered messaging built and managed by work from home agents. Clearly, there are macro-environmental risks to navigate, but our vision is more relevant than ever, and we are well positioned to come through this crisis a stronger company."

  5. Bitcoin is back, esp. before the halving where miners will earn 50% of what they earn today and Paul Tudor Jones thinks about it as a hedge against future inflation

What's 🔥 in Enterprise IT/VC #183

😲 $7 Trillion to be invested in making work more digital by 2023: Bill McDermott ServiceNow

It’s ugly out there. Jobless claims on a rolling 6 week basis hit 30 million, there is still no vaccine, and companies like Ford Motor continue to drop bombshells like losing $5 billion in Q1 while many analysts believed just days before it would be closer to half. While some states and countries are slowly opening up, the Economist gives us a glimpse of what life is like in China post-lockdown, the “90% Economy”.

In many things 90% is just fine; in an economy it is miserable, and China shows why. The country started to end its lockdown in February. Factories are busy and the streets are no longer empty. The result is the 90% economy. It is better than a severe lockdown, but it is far from normal. The missing bits include large chunks of everyday life. Rides on the metro and on domestic flights are down by a third. Discretionary consumer spending, on such things as restaurants, has fallen by 40% and hotel stays are a third of normal. People are weighed down by financial hardship and the fear of a second wave of covid-19. Bankruptcies are rising and unemployment, one broker has said, is three times the official level, at around 20%.

Despite these uncertainties, this was a banner week for enterprise software, the ☁️, and Digital Transformation 🤖 as AWS, Microsoft and Google Cloud all announced Q1 revenue growth of 33-59%, and AWS hit $10 billion of revenue in a quarter for the first time ever. While we all know we are leaning on the cloud in a big way during this pandemic, the numbers are still astonishing.

As I’ve always said, every Fortune 500 is a tech company, or it won’t be in the Fortune 500 for long. And while many companies like Walmart, Target and others who embarked on their Digital Transformation journeys well before, this pandemic is proving to be a massive accelerant for those who haven’t. Just see Satya’s quote below for more validation (thanks TNW for the pic).

This is quite timely as we’re hosting two of the most forward thinking CIO/CTOs in the Fortune 500, Dean Del Vecchio, CIO of Guardian Life, and Martin Brodbeck, CTO of Priceline, to discuss this and more. Dean gave an awesome keynote at AWS in 2018 talking about how he moved the Guardian infrastructure to the cloud in months while Marty has been at the forefront of infrastructure and tech (see his 2018 O’Reilly talk on building 12 factor apps). I’m super excited to hear what they are up to, and how they are leaning on startups to help them realize their goals faster. There will be time for Q&A, so respond to this newsletter with any questions you may have for them.

🔥☁️ Register here for May 11, 3pm ET

Speaking of Digital Transformation, my favorite quote from the week came from Bill McDermott (CEO of ServiceNow and former CEO of SAP) 🤯 as he says, “$7.4 trillion to be invested in making work more digital by 2023.”

“People are going to get much more comfortable working in a virtual world,” McDermott said. “This social distancing is not gonna go away anytime soon, and companies that aren’t already digitally transformed and able to pull this off — they have a burning platform now. They have to lean into this.”

Incidentally, ServiceNow had its best quarter in history, up 48% year over year on $1 million deals at 37. Enterprise founders watch the master pitchman Bill discuss ROI for his product:

Any ROI will give you payback of at least 5x the amount you invest in ServiceNow in any given year, payback in less than 6 mos and always see one in first year greater than 5x anything you pay to ServiceNow. CEOs focused on protecting revenue, business continuity, driving productivity and all want a fast time to value scenario!

So the question is what’s ahead for the economy and enterprise software? The skeptic in me still believes that Q2 will be rough, especially as it captures more of the stay-at-home policies that kicked off in late March. However, there will continue to be pockets of growth and spend, particularly in enterprise infrastructure and applications that jive with Bill’s point above. And founders, if you’re product is not resonating with customers, I’d suggest spending time figuring out a better value proposition for today’s world, one that also drives immediate value.

Be well all, and please feel free to share!

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Scaling Startups

  1. Rahul Vohra from Superhuman (a portfolio co) shares his thoughts on how to manage cash and plan accordingly.

  2. How are VCs thinking? Is it still business as usual? Read Samir Kaji’s First Republic survey analysis from 427 venture firms. More on twitter here as well.


Enterprise Tech

  1. While automation is another of the bright spots in enterprise software, it’s been reported that market leader Automation Anywhere is laying off 10% of its workforce. If you read between the lines, on premise deployments with a long time to value don’t resonate with their existing customers as they want more cloud.

    The restructuring is part of the company’s response to the reduced demand for its traditional products, Dayna Fried, Automation Anywhere’s senior communications director, told Business Insider in an interview.

    “We’re allocating resources to new skill sets in key growth markets like cloud and hybrid cloud, areas our customers are asking for right now,” she said. “Many of them are leaning toward our cloud and hybrid cloud options to manage the variability in their business as well as to respond to future crises faster or even prevent them from occurring at all.”

  2. 🦈 🐟 Lots of action and rumors on software acquisitions this week as Rapid7 expands into cloud security with a purchase of DivvyCloud for $145mm and rumors of Google in talks to buy D2iQ, formerly Mesosphere. On the automation side, Microsoft in talks to buy Softmotive to better compete with Automation Anywhere and UIPath. I only expect more of this to happen in the future as some of the large enterprise companies whose stock has held up will look for bargain purchases as smaller companies struggle.

  3. Disillusionment in the land of GDPR and privacy? Nearly two years in and there has been little enforcement thus far.

  4. This is why I’m so excited about our investment in Env0 where it proactively helps orgs control cloud spend and understand how expenses are tied to applications (more at CIO Dive).

  5. Time for new beginnings - Nick Rockwell, former CTO of NY Times, and new SVP Engineering at Fastly looks back at what he and his team accomplished in 4 years. While there was a lot that he learned, aligning technology goals with the business was key and betting on new tech at the time like serverless, distributed dbs like Google’s BigQuery, and customer data platforms from startups like ActionIQ helped prepare for massive growth in subscribers from 1 to 5 million.

    First, while intermediate metrics like productivity metrics or performance metrics can be useful diagnostics, in the end the business results — in our case, subscription growth — are what matter. And focusing on the core KPIs of the business forces you to think hard about how to tie those intermediate metrics, and the work itself, to real impact.

    Congrats to Abby Kearns as she moves on to become CTO of Puppet! James Governor, an analyst with RedMonk, highlights the opportunity ahead for all in DevOps.

    “Puppet is growing, DevOps is still a hot topic with enterprises, and I have spoken to a few orgs that are particularly keen to significantly invest in automation, feeling they have been somewhat undone by covid-19."

    "Everyone in infrastructure space is always under pressure, but while a lot of buzz has moved onto other platforms and spaces - notably K8s and CI/CD - automation still has a significant role to play.

  6. 🤣


Markets

That didn’t take long - Nasdaq almost back to end of year numbers.

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