What's 🔥 in Enterprise IT/VC #221

The developer first dilemma, the value of patience, and why going enterprise too early can be hazardous to your health ⚠️

Talk about paying it forward on price? Yes, it’s getting bonkers out there and some folks using 2022 and beyond ARR to justify pricing now.

So top of mind for me this week besides the peaceful transition of power, thankfully, has been the multiple conversations I’ve had with developer first founders and working backwards from their A round to the start of the company. The common theme that really struck me is something I’ll call the “developer first fundraising conundrum.” In particular, what are the metrics to go from first round to Series A? Do I focus on winning the ❤️ and 🧠 of developers or enterprise design partners? Can I do both? The more you spend on one, the more it takes away from doing the other as we must all remember that time, focus and resources are finite, especially at the very beginning. So here goes…

Ed Sim @edsim
2/ Enterprise 1, then Enterprise 2 knocks on your 🚪 They ask for all the
enterpriseready.io features you will need You have limited cycles + need to manage resources appropriately Each new enterprise design partner + feature takes away from user ❤️ Which path to take?EnterpriseReady - Build SaaS Features Enterprises LoveA guide for SaaS companies to build the features that enterprises love.enterpriseready.io

By the way, these are happy problems to have - when a developer finds you and escalates it to the enterprise level in which case you are sent for a security review and you learn the only way a larger company can consumer your service is with SOC 2 compliance and an on-prem version. There are ways around this but as you can imagine this can be a massive distraction and not every customer is the right customer for you.

My two cents is if you can pull it off and if you have a “true” developer first product versus one that is really for operations and you’re trying to shoehorn into a dev first motion is to be patient.

Read the 🧵 for the rest

To be clear, I don’t want to be prescriptive, just sharing the different paths. If you decide to go more top down, my two cents is to focus on fast moving tech companies who can make quick decisions. And while nice to get some validation like this, investors want to see the engine and momentum when they write a check - where will the next 5-10 come from and what is your engine to deliver those leads. Which goes back to my point, if you can build that developer ❤️, that is one of the most incredible engines out there.

In order to get there, there will be no shortage of 💰 for your first round but as JJ, founder of OSS Capital, says:

Founders who raise meaningful capital from VC well before even possessing a basic understanding market dynamics will be forced to have full clarity on those issues in short order, and if they are not able to graduate and grow into investor expectations within 1-2 years at most, they will experience very painful misalignment conversations... which will cause them to betray social contracts and principles set in place with other key stakeholders in their open source ecosystems.

This initial 💰 from the wrong partner could also lead you to destroying longer term value by monetizing too early. There are so many amazing examples of companies that stayed the course and focused on true developer ❤️ before going enterprise too early from MongoDB to Twilio to Elastic Search to Github to HashiCorp to Snyk and more. Trust me, all of them were faced with the developer first fundraising conundrum and held off as long as possible and focused on winning the ❤️ and 🧠 of developers before focusing on the enterprise.

Patience matters - case in point 👇🏼

As always, 🙏🏼 for reading and please share with your friends and colleagues.

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Scaling Startups

  1. 👇🏼 Must read from Andy - so simple yet so powerful when it comes to leadership

  2. I want to see the true “you”

  3. Choose your board wisely - great 🧵

  4. Founders, those early rounds of dilution can add up

  5. 🧵 from cofounder of Loom, start planning for success early


Enterprise Tech

  1. Databricks raising at $27 billion??? (Newcomer)

  2. How VMware is trying to be cool for developers (The Information) and Craig McLuckie (one of creators of Kubernetes) spells out the classic tension I often write about in this newsletter, centralized control and policy setting from IT and the need for self service for developers.

    There is often tension between the two groups. Cloud developers generally seek to move as quickly as possible to build and update applications, while IT departments tend to proceed more cautiously, partly because they’re often in charge of tracking the usage of cloud services for accounting and regulatory compliance purposes. In pursuing the cloud crowd, VMware has to make sure it doesn’t alienate the IT folks that account for most of its business.

  3. Don’t forget internal APIs - great 🧵 started by James Watter (VMware)

    Full report from Postman here.

  4. Elastic Search finally changed its OSS licensing to prevent hosted commercial use i.e. AWS

  5. Service meshes are great but also add complexity. David Mooter, Senior Analyst at Forrester Research, nails it as he writes about focusing on, you guessed it, the developer experience first. (🎩 Gareth Rushgrove)

    Vendors that believe service mesh is merely about connectivity miss the point. The fundamental value of microservices (and cloud in general) is greater agility and scalability from smaller deployable units running on serverless, yet the programming constructs we’ve needed for decades haven’t gone away. Many advancements in cloud technology are filling in the constructs we lost when migrating from monoliths to cloud-native. Vendors that make the microservice developer’s experience more on par with that of traditional software development, without sacrificing the benefits of microservices, will have the winning products.

    In sum, the service mesh should be a platform feature, not a product category — as far out of sight and mind from the DevOps team as possible.

  6. Solid post from Rak Garg at OpenView on the unbundling of Splunk with a nice mention of portfolio co Wallaroo


Markets

  1. Enterprise vs consumer - big hits in consumer like Doordash and other than snowflake, value more spread across enterprise - more from Scale Venture Partners

  2. 🤔 Gitlab?

  3. Holy SPACs! (via Bloomberg)

    SPACs were already looking frothy last year, when they accounted for about $78 billion of issuance in North America, or about half of all money raised in IPOs. But things have gotten even crazier since then.

    So far in 2021, almost 60 new SPACs have together raised about $17 billion, or more than $1 billion for each day the market was open. Market participants say SPAC IPOs tend to be several times oversubscribed, and no wonder: SPACs have usually “popped” in the first days of trading. On average each of this year’s SPAC cohort has gained about 8%, according to Bloomberg data.

What's 🔥 in Enterprise IT/VC #220

Coming out of stealth and what to 🤔 about to optimize the 👯‍♂️, all about momentum...

😮 Pitchbook and NVCA Monitor just came out with the YE 2020 US VC numbers and it was a record breaking year with over $150 billion invested into startups. As imagined the bulk of the 💰 was accounted for by the massive late stage investments which represented 67% of all dollars invested but only 29% of the deal count. In addition, look at the average valuation for enterprise startups which are on 🔥 over the last 10 years and in particular the last 2 years.

Switching gears, a question we often encounter when partnering with founders on day one is when to announce the initial funding round and when to “officially” come out of stealth.

There is so much that goes into timing; launch too early and you tip your hats to competitors and launch too late and you may have missed your initial window to claim ownership of a new category or new subcategory. In addition as the data shows above, there are so many later stage enterprise financings of significance that most reporters don’t care about seed rounds. So how should one go about it and cut through the noise?

One caveat is that the days of an official launch are overrated and many in the industry prefer a soft launch over time to onboard beta users, testers and to get external validation before formally announcing themselves to the world. So when I say “launch” assume that it really means coming out of stealth vs. the old school launch from a zero start. Slack did an amazing job getting tens of thousands of influencers before opening themselves to the world. Same with Superhuman who only officially came out a year after having thousands of paying users. And many infrastructure and developer first companies leverage Hacker News to generate early users and buzz like Supabase.

So here are a few random thoughts and by no means meant to be comprehensive but some things you should consider…

  1. Work backwards in timing when you know product is good enough or story is strong enough from external validation vs. just rushing to get something out

  2. Initial seed funding announcements on their own are not interesting to the press

  3. Coincide initial funding announcement with product announcement

  4. External validation is huge before launch: I strongly prefer having a number of beta users or testers or enterprise design partners ready to go at launch to further validate the need and excitement around the product. In Slim.ai’s case, they had tens of thousands of downloads and users of their open source project DockerSlim. In Jeli’s case, the company had one of their key users from Indeed talk and tweet about the product.

  5. Only launch when product is “ready enough” as you only get one chance to make a first impression which means when the readers go to your site or repo or try your service, they will be 🤯. Launch when you know you can execute on the inbound customer traffic coming in - prepare for success!

  6. Get the message right - think about 2 different audiences, your users and the rest of the world. For your users, the goal is to get signups so you can be more technical in nature in explaining the benefits of the product while for ROW you want to zoom out a bit and share where this fits in the market, why this product is needed, and to plant a flag for why you will own that market.

  7. Having a working draft of your initial press release should help cover the ROW story. Here’s Slim’s from its announcement this past week.

  8. Work with a PR professional - we’ve vetted and screened many and have a few we absolutely ❤️ to work with. Also your investors should hopefully have a few key press contacts as well because the next point is super important…

  9. TechCrunch is the most important for coverage for ROW; potential customers, investors, and recruiting for employees; it usually generates 85% of the traffic so you need to get a story and nail it.

  10. Whether TechCrunch covers you or not, try for wave two of coverage from Business Insider, Silicon Angle, Venture Beat and the others. If an infrastructure or developer play, make sure you post in Hacker News and placements down the line in the New Stack also reach a targeted developer audience.

  11. For your users, especially in the developer or infrastructure world, have your why we built this and call to action post for actual users ready shortly after the TechCrunch piece - example from Slim.ai coming out party this past week. This is your chance to get more technical.

  12. Have your investors at the ready with their versions of why they invested in your company and share different perspectives. Here’s ours from boldstart and Jon and Dan’s from Decibel.

  13. The launch is not just one day but need to think through a calendar of stories post announcing yourself to the world; what 3-4 follow up stories will you have showing momentum - customers, significant new hires, partners, etc. Think of this as the rolling thunder ⛈️ approach.

  14. Enjoy and remember the launch is not one and done, it’s a continuous process and most important is to get your story straight for each audience in terms of why you exist and to continue to show the momentum afterwards to make people understand that this is a movement.

🙏🏼 as always for reading and please share with your friends and colleagues!

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Scaling Startups

  1. All about developer relations: lots of discussion this last week on how to measure developer relations and all I can say is that sometimes you can lost in the trees and forget about the forest by overdoing KPIs. Secondly, companies need to understand that the dev rel function, especially in the early days, is an investment and will take time to build and evangelize your product. Third, no matter what KPIs you have, the founders need to embrace the idea of dev rel and investing for the long term.

    This great post from Petr Švihlik who is head of devrel at Kentico shares his search for the holy metric and what ultimately is the most important way to measure, tie dev rel to the company goals. Sounds simple but many miss this fact.

    And here’s another must read post from Sarah Drasner at Netlify (🎩 @ellenchisa) talking about Developer Experience and what it means versus just developer relations.

  2. Amazing 🧵 from Dan Rose at Coatue and how the move off Sun servers saved the company and led to AWS

  3. So much goodness here from Intercom helping find the right balance to getting a MVP out and not overbuilding at the beginning

    10 technical strategies to avoid when scaling your startup (and 5 to embrace)”

    From premature optimization to over-engineering solutions for your product, it’s easy to get caught up in making technology decisions that slow you down instead of speeding you up.


Enterprise Tech

  1. 😮 Once upon a time you couldn’t make money selling to developers and DevOps didn’t exist - now day in and day out we are seeing massive funding rounds like Harness.io which just raised $85mm at $1.7 billion valuation 🦄. “Harness is a self service CI/CD platform for every team enabling software changes of all types to reach production environments in a safe, quick, and sustainable way.”

  2. Amplitude hits the $100mm ARR mark - leading product intelligence platform using a data driven approach to helping companies build better products

  3. Here’s Laceworks’ deck (Business Insider) from its $525mm round, whole product solution for cloud from SIEM to cloud config, vulnerability discovery, API, and containers…

  4. While we all know 2020 was the year that digitization of everything accelerated, I keep thinking about what’s in store for the next few years, what will stick and continue to grow. I found this McKinsey Executive Survey from October (yes, data old as of now) but a good indicator of what may stick. And it also shows the mindset from 2017’s survey of how tech was viewed as a cost center where cutting costs was a top 3 imperative for almost 50% of organizations and now it’s 10%. The future is certainly bright for enterprise tech as more $$$ to be spent by global enterprises!

  5. More Pitchbook YE data and here’s a graph showing growth in seed round sizes over time - note the 75th percentile going from $1 - 4mm in size - I see no sign of this slowing down.


Markets

  1. Dropbox struggling as it cuts 11% of it’s workforce

  2. A list of YC’s top companies by market cap with 125 companies valued at >$150mm and 25 companies over $1 billion

What's 🔥 in Enterprise IT/VC #219

Talent, not capital is a rate limiting factor to scale, importance of wiring recruiting/retention on day one

Let’s take a bye on this week and say 2021 starts Monday.

With that, the enterprise market continues to be on 🔥 with a number of 🦄 funding announcements right out of the gate starting with Laceworks and it’s $525 million round which is like a next-gen SIEM for cloud infra built on top of Snowflake and Dremio in the data infra space. Expect this furious pace of announcements to continue until the end of January as much is a holdover from the end of 2020. That being said, I can say that despite the insanity of this past week in the States, deal pacing has picked right back up.

With all of that 💰 flowing like a🚰, I keep thinking about some of my board meetings this past week and how much time we spent on hiring and how companies can institutionalize hiring. In fact, one technical founder told me he spent 40% of his time on recruiting and hiring. Imagine if a good portion of that was offloaded and his time could only be focused on interviewing?

Institutionalizing hiring must start on day one with the founders and be built into the culture. When evaluating founding teams, all of whom are technical, one of the key ingredients that gets us excited about investing besides the obvious product and market, is the team’s ability to attract talent. Through reference checks, it’s easy to see how founders sourced, managed and retained talent, and if they were excellent in their prior roles, they will likely have 3-5 engineers and other product folks ready to join upon funding. In fact, the best founders come to us needing cash because they already have 3-4 key engineers or product folks they want to hire and are signed up and ready to go. That’s momentum right out of the gate which is so huge to evolve from idea to product.

The less experienced folks think it’s just about the idea and once they raise the cash, they can go about hiring. Fact is that building a product that people want is job #1a and attracting the best talent is job #1b.

While bringing in key folks from existing networks is always the way to go in the early days, having a broader sourcing engine becomes extremely important as you want to bring in diversity of race, sex, and thought to your team early. Once you get past employee 10 and that’s not built into your team and culture, it becomes harder and harder to do so. That’s why having a former Head of People like Natalie Ledbetter as our Operating Partner has been so important for our portfolio companies to expand their horizons past the first few hires.

I’ll have Natalie riff on this more in the future, but suffice to say that money is becoming less of a problem, and it’s all about building an engine for people.

As always, 🙏🏼 for reading and please share with your friends and colleagues.

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Scaling Startups

  1. Must read 🧵 - hire believers, focus on who building for…

  2. ❤️ Mission driven founders playing the long game…and 🙏🏼 Rob for letting me be there on day one!

    Founders, listen and learn from Rob, he created a new industry for live chat customer support, was one of first pure play SaaS players ever (was called ASP model back in day), weathered multiple storms and a stock price once at $.08 per share, yes 8 cents, and now at $61 and $4 billion market cap, and still CEO on the original and same mission.

  3. Always…give before you get - must read 🧵


Enterprise Tech

  1. Many folks back to work early this week and Slack down again for a few hours…as I’ve said before, look for a huge uptick in investments in resilency engineering, incident analysis, and more in 2021…

  2. Pendulum constantly swings in computing, will monoliths come back asks Matt Asay?

    In early 2020, Hightower suggested that "monoliths are the future." The problem, he pointed out, is that developers haven't been building microservices so much as building distributed monolithic applications: "Now you went from writing bad code to building bad infrastructure that you deploy the bad code on top of." It's garbage code (and microservices sprawl) all the way down.

  3. Acquisitions in infrastructure announced this week include RedHat buying StackRox in the kubernetes security market and F5 buying Volterra for $500mm in app security/networking space.

    FWIW, RedHat is becoming much more aggressive on the partnership and acquisition front especially as most of the best talent in infra land is going to start their own companies rather than work for IBM/RedHat. Expect many more acquisitions to come in 2021.

  4. Enterprise blockchain is back but focused on what its core use case really is, an amazing platform for payments

  5. great to see Olivier from Datadog discussing the importance of security shifting ⬅️ and a big area of importance for customers in the future

  6. I’d say yes and no on points below but a great 🧵 on data infra nonetheless

    Frankly, every week we see another 2-3 data infra startups and the slicing and dicing of entry points for tools for data engineers is becoming narrower and narrower. Combine that with the fact that finding technical talent to join all of these startups will become next to impossible leaving many orphaned data infra companies. Which goes back to my point in the beginning, those who build a hiring culture, treat it like a product with engineering blogs and attracting folks who want to solve hard problems, will end up winning.

    IMHO, sharing, collaborating and operationalizing data is what’s next and why I’m excited about Harbr and Cape Privacy

  7. Interesting 🧵 on Notion and speed

    Lots of technical debt there…

  8. Scale of hacks only getting bigger…click through and scroll down to get true understanding of scale over last 10 years

  9. I couldn’t resist…


Markets

  1. Goldman Sachs buy rating for security stocks (PING, VRNT, CRWD, TENB, RPD, SAIL) but more importantly security by design becomes even more important along with 3rd party vendor analysis from cos like Security Scorecard (a portfolio co)

    “2020 was the worst year on record for cyber threats,” he wrote. “Fueled in part by the pandemic, elections, and a sudden shift to remote working environments, this record had already been achieved by the end of the second quarter. As a result, security remained the priority of CIOs through the year.”

    He added that as the fallout from the Sunburst attack continues to become clear, more enterprise victims are likely to emerge. “We also anticipate greater scrutiny over how vendors develop, distribute and maintain their software as the scope of security extends beyond vendors themselves to customers that rely on the integrity of their platforms,” he wrote.

  2. Dharmesh Thakker from Battery Ventures shares his views on the robust exit environment to come in 2021

What's 🔥 in Enterprise IT/VC #218

Predictions: enterprise remains 🔥 in 2021, 🦄 anywhere, SaaS collaboration + dev 1st product to embedded workflow, everyone is a 🌱 investor, SRE is the new DevOps, security continues to go dev first

Happy 2021 to all and glad we could get 2020 over with. Let’s brace ourselves for a bit more pain until we can resume back to a hybrid world. Speaking of, I believe 2021 will continue to be 🔥 for enterprise, albeit not at the same pace and the famous “2 months in 2 years” that Satya from Microsoft discussed, but the ☁️ is here to stay and more 💰 continues to be raised for enterprise startups. Case in point 👇🏼 which also plays into themes from last week’s newsletter on the “race to be first

For those that don’t know, Daniel Loeb is one of the most successful activist hedge fund investors with over $17 billion under management and his interest, according to the FT, will be towards enterprise and cyber security.

Mr Loeb hinted at his ambitions in an October letter to investors, writing that advancements in artificial intelligence and the “digital enterprise” had created opportunities “to pursue with dedicated capital”.

And now here’s my predictions for 2021 which I shared on Medium on December 30!

What’s 🔥 in Enterprise 2021

As mentioned above, 2020 only accelerated many of the themes we’ve been excited about at boldstart for the last 10 years. While we can’t wait to see many of you again in person, it’s pretty clear that 2020 has made a permanent change in how startups and corporates view remote work and distributed teams. Expect 2021 to be the beginning of a new era where remote-only and in-person work are seamlessly blended based on function and job to be done. What this means is we will see continued investment in any tech that supports fully remote teams, collaboration built into all apps, and more ️️cloud all the time. Products that have immediate time to value and gotomarket models that are based on product led growth will continue to garner the lions share of capital as these selling motions are built for this partially remote world with lower $ entry points and less decision makers needed to close.

So here are my predictions for 2021 (notice some overlap with last year’s predictions).

1/ 🦄 can be built from anywhere: Once again, this is a trend that was started pre-2020 and only accelerated this past year. With distributed teams becoming more accepted along with Zoom-only rounds, expect a continued uptick in startup financings anywhere. Case in point, our latest investment was in Colombia (yes, the 🇨🇴) and others made in 2020 included Dublin, London, Tel Aviv, and Paris.

From last year’s prediction:

Acceleration of Fully/Partially Distributed teams with an international flair: The cost of living in the Bay Area and NYC is prohibitive for many. Given that it is harder to scale engineering teams in SF and NYC and that the tools to collaborate and work are getting better and better (see 2 above), we are seeing more and more companies founded with a remote HQ or fully distributed team on day one. Once upon a time, VCs cringed at the idea of distributed teams, and now it’s seen as a huge positive. In addition, Tier 1 financing risk is all but eliminated as VCs from the west coast are increasingly comfortable not only leading Series A rounds in Europe but also seed as well.

2/ 2021 will be first year that a large scale M&A of a fully distributed team happens: We’ve always ❤️ distributed teams and see the power of talent everywhere. If anything good has come out of 2020, I hope that large acquirers will be more amenable to buying fully distributed teams. We sold a company last year and one of the closing conditions was 90% of the core team had to relocate. With many of the larger companies having gone fully remote permanently or more accepting of it, 2021 will be the first year this happens and thankfully so.

3/ If collaboration first was the SaaS theme of last year’s newsletter, workflow is 2021’s theme: (from last year’s predictions).

SaaS 3.0, design first…and collaborative: The consumerization of enterprise has finally come with a focus on beautiful, intuitive, easy to use software, i.e. design first. Companies like Superhuman (a portfolio co), AirTableFigmaFront and Cycle (both portfolio cos) have led this resurgence and excitement for the SaaS application stack. With the nature of distributed work and teams, design first and usability also means that collaboration has to be built into the workflow from day one; natively with real-time updates, sharing, commenting and more. This collaboration first thinking is a must have for most applications in 2020 and beyond.

With so many point products in the market gaining market share and with switching costs quite low, the name of the game for many well funded SaaS productivity startups is to create stickiness by embedding themselves in a user’s workflow and business processes. Examples include companies like Calendly which has done an amazing job going from single player, point product for scheduling to multi-player embedding in workflows for scheduling sales meetings, interviews for HR, and more. Expect every SaaS startup once it reaches some critical mass to execute on this model.

Along those lines, expect to see massive consolidation as many of the players who have built vibrant user bases can also expand TAM through acquisitions to support sky high valuations. Public companies will also take advantage of their multiples and the M&A market will be on 🔥 as companies like Box, Zoom, Dropbox, RingCentral, and Cisco evolve from best of breed applications to full product suites to continue to take on Microsoft and Google.

4/From developer first to embedded workflow: And there you have it again, the word “workflow”. Product led growth only works when a product is designed to make a user of one a superhero. Same goes for developer first companies and the trick is to know how to embed easy invites and interactions so a user can easily share with their team. From there, the journey from user of one to small dev team and organization begins. Given the number of developer first and open source companies that are all funded with a fair amount of capital, this means that not every company will succeed in making this journey from individual to team workflow. For enterprises, finding that balance between speed, developer empowerment and self service capabilities versus centralized policies and governance will be an ongoing battle in 2021, especially as we live in a hybrid working world. One project to keep an eye on is Backstage (from Spotify) which is an open source platform for building developer portals and Clutch (from Lyft) which is similar in vein.

Other areas that will be 🔥 include infrastructure as code automation with companies like Env0 (a portfolio co) and git-like version control from companies like Optic which is Git for APIs.

5/Cross functional apps and not just a system of record for one department: What Figma got right is that design is not just for product designers but it’s a team sport and should be easily used and accessible by everyone. We are seeing this in trend in more and more SaaS startups like Dooly which is a Superhuman-like note taking interface for Salesforce but more importantly all revenue facing functions and Cycle (a portfolio co) which is doing this for product centric teams from executives to product to engineering to presales…and not just for PMs.

Read Medium for the other 5 predictions (and please comment there on what you think).

🙏🏼 for being a reader and wishing for a healthy, meaningful, and prosperous 2021 to you and yours.

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Scaling Startups

  1. Reminder, great startups can be built anywhere and VCs don’t know 💩

  2. 👇🏼🤣

  3. When to go upmarket - there is no one playbook, must read 🧵

  4. While not an enterprise tech startup, I admire how the founders of Sir Kensington started an offbeat, premium brand in the commodity ketchup space and innovated into other condiments eventually selling for $140mm - 10 lessons learned in their journey

    Develop your storytelling abilities. This will amplify everything you and your company want to say.

    Humans are emotional creatures who have, over time, gained the capacity for logic. Stories create emotional stakes and enrollment and can unlock a sense of purpose. Storytelling is crucial to present a compelling vision everyone can get behind, and to make employees and customers feel a part of something bigger than themselves. No matter what business you’re in, you are in the human energy business. Take every opportunity to practice storytelling and encourage your team to step into their natural talents here.


Enterprise Tech

  1. Must read 🧵 from Hemant Mohapatra from Lightspeed on why GCP was first and could have won ☁️ wars but didn’t

  2. 👇🏼 💯 Still a massive problem and gap no matter how great the ☁️ providers have been, read 🧵

  3. Go is 13 years old and great overview on why Go could be the language of the future, Go, Docker, Terraform, Kubernetes, Prometheus are built in Go for example

    Over time new complex systems were built on top of these foundational systems/libraries and languages. People too often don’t think of the hidden costs of complexity. The truth is that code is read many more times than it is written. Team velocity is significantly burdened by complexity. In contrast, Go is simple. It takes an afternoon to learn. The code is very straightforward and readable. This simplicity empowers teams to collaborate in ways never before possible.

  4. 💰 spending to move to ☁️ will continue in the Fortune 500, refactoring and lift and shifting legacy apps is next and will take years, from CIO Dean Del Vecchio at Guardian Life

  5. Important note for what’s ahead in nation state cybersecurity and for the US, from Paul Kolbe, ex-CIA directorate of operations oversees. Expect even bigger hacks than Solar Winds in 2021 and beyond

    Unlike nuclear weapons, or even sophisticated conventional arms, powerful cyberweapons are cheap to produce, proliferate with alarming speed and have no regard for borders. Unable to match the United States in military spending, Russia, China, Iran and even North Korea view cybertools as a great equalizer. Why? Because the United States is singularly vulnerable to cyberattack: America is more reliant on financial, commercial and government networks than our adversaries, and, at the same time, our systems are frighteningly open and vulnerable to attack. American networks represent targets for our adversaries that are simply too soft, juicy and valuable to resist.

  6. Some holiday 😃


Markets

  1. Alex Clayton from Meritech Capital sums up the year in enterprise tech IPOs and it was 🔥, here’s a bar chart showing initial market cap vs YE close

  2. Land and expand, product led growth is the way 💪🏼

What's 🔥 in Enterprise IT/VC #217

The 🏃🏼‍♀️ to be first and the importance of vision alignment with investors

If I can sum up 2020 for enterprise tech and the venture markets, this is it 👇🏼

And here’s why FOMO is so big at earliest stages.

Everyone is trying to invest for the future Top 25 and the only way to get in many of these is if you’re first. The challenge is that this may not bode well for founders.

This race to be first and not miss out means most companies are getting overfunded early and in many cases 12 months ahead of where the business really is. This is most pronounced when going from seed to early A round and the expectations from A round investors to monetize and build a sales motion which can scale at the B. But, my biggest 😨 is that founders and investors need to understand that you can’t force or buy yourself to product market fit with more 💰 or 🧍🏼‍♂️🧍‍♀️. '

Trust me, I’ve been through this 🎥 before, back in the bubble days. Yes, it was different then, but many companies were flush with 💰 with no product market fit and tried to spend their way to realize growth. Why? Because they promised their investors outlandish numbers based in a bizarro world with no hopes of achieving unless they hired more sales, spent more marketing dollars, and 🙏🏼 for the best. But guess what, hope is not a strategy. For many of the companies that we’ve backed who have raised early rounds, we keep reminding founders to build 2021 targets to be challenging but also achievable on the top end versus setting unrealistic goals. Think about what each incremental 💵 of burn will yield back in revenue.

Building a developer first community takes time. Building a product led growth engine takes time. Getting the product right takes time. Ensuring that your first couple of customers succeed takes time. And all of this can get complicated if you monetize too early and bring in the heavy guns built to scale cos from $1-10-20 when what you really need is the expertise and help to go from $0-1m. Money is a commodity and having a true partner who not only understands where you are as a business, who can help you think about building the right way for the long term, and also who will not skip steps becomes even more important in 2021. Make sure you are not just an option but a truly valued portfolio company where real work and time will be spent helping you hit your milestones.

As always, 🙏🏼 for reading and please share with your friends and colleagues. Happy Holidays to you and your families!


Scaling Startups

  1. Classic 🎧 and must listen from Hunters + Unicorns who interview the creator of MEDDIC, John McMahon and playbooks from 33 CxOs like MongoDB, Datadog… (🎩 Crissy Costa from B Capital)

  2. Marketing 101 from the master - first principles!

  3. What hypothesis are you trying to solve and for whom? Must read 🧵

  4. This is pure gold from Lenny Rachitsky - a survey of product managers from skills necessary to get hired to what gets you promoted and what some of the best companies gravitate towards

    Takeaways:

    Companies who spike on Communication: HubSpot, Salesforce

    Companies who spike on Execution: Salesforce, Tesla, VMware

    Companies who spike on Product sense: Asana, Flipkart, Intercom, Netflix, ServiceNow, WhatsApp

  5. 💯

  6. Which side of the debate are you on? Read the 🧵 but I agree, especially as 13 of our 18 investments in fund iv have at least one international co-founder. So excited about the future


Enterprise Tech

  1. Multiples 🤯 - 130x for Starburst data at $12mm ARR and $1.6 billion price and 50x for Ironclad which was at around $13mm ARR, double from last year

  2. Zoom looking to expand footprint, evolve from best of breed to true platform as rumored to add email and calendaring and exploring messaging

  3. Important follow up note from last week on AWS and its new managed Grafana service - it is partnering with Grafana and not killing it first by forking their own version!

    On this go-round, AWS has changed the script. Going beyond offering coding contributions, it is adding a revenue sharing and joint support component. There are precedents for this in the cloud landscape – we're thinking about the Google Cloud open source database partnership program that involves joint licensing, go to market, and technical support. We believe that this is the first time that AWS has entered such an active partnership with an open source provider, which proves the maxim, never say never.

  4. The most amazing thing about AWS

    As soon as we hatched that plan for ourselves, it became immediately obvious that every company in the world was going to want this. What really surprised us was that thousands of developers flocked to these APIs without much promotion or fanfare from Amazon. And then a business miracle that never happens happened — the greatest piece of business luck in the history of business, so far as I know. We faced no like-minded competition for seven years. It’s unbelievable.

  5. Salesforce Ventures has become quite an investment powerhouse and congrats to friend Matt Garratt as his team has been quietly generating 🤯 returns (the Information). All I can say is they are great partners as they are co-investors in Snyk and BigID an a stealth co at seed.

  6. Market for alternative data will only grow in 2021 as Bloomberg buys Second Measure, imagine all the infra needed to process data rife with privacy, to share and sell that data…

    Bloomberg L.P. announced today that it has completed its acquisition of Second Measure, a consumer data analytics company that analyzes billions of anonymized purchases to help investors and businesses gain insight into company performance and consumer behavior.  Bloomberg acquires Second Measure’s proprietary analytics for daily tracking and real-time exploration of thousands of public and private companies, providing users with insights that complement Bloomberg’s company fundamentals and market data.

  7. What’s next for RPA? A 🔦 will be on it as UiPath goes public in 2021 - human in the loop will still matter but how far can this all go?

    DeWitt and others see far greater possibilities in the future based on more integration between complementary technologies. DeWitt even anticipates the beginnings of “autonomous automation” in 2021 – that is, bots that can themselves automate processes. Today, IT teams often need to intervene to connect to various apps, interfaces, and databases to retrieve information or apply rules to complete processes, Dewitt says.

    “By the middle of the decade, or in some cases, next year, we’ll be able to automate the process of automation,” DeWitt says, “and once this moment happens, the enterprise will be able to rewrite itself.”

  8. So true…

  9. Importance of security ratings as explained by Phil Venables, ex-CISO of Goldman Sachs, esp. important in light of solar winds attack and an enterprise need to monitor vendor supply chain security

  10. Another beauty for Uber engineering blog on how they went from polling to push messaging and their new system RAMEN (Realtime Asynchronous MEssaging Network).

  11. Five interesting data engineering projects to track, DBT, Prefect, Dask, Great Expectations, DVC…

  12. 🤯 - spoiler alert if you have not watched the last episode of Season 2 but deepfakes are here and will be someting to deal with for years to come…


Markets

  1. Woo hoo! Must read 🧵 - direct listing and raise primary capital!

  2. Yes, much more room to run for the☁️

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