What's 🔥 in Enterprise IT/VC #168

Enterprise tech raised more than consumer for first time in five years - why?

The headline from Bloomberg says it all, “Everyone Wants a Piece of Enterprise Tech Companies: Last year enterprise tech startups raised more cash than consumer tech companies for the first time in at least five years.”

And then you have WSJ writing about Sequoia financing more enterprise software companies from it’s growth fund. Having been investing in enterprise for 24 years now, my fear radar spikes as it’s becoming way to 🔥. While I am long term bullish on enterprise IT spend and the idea that every company is a software company, I also fear when too much 💰 chases a sector as valuations go up and returns go down. 

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Scaling Startups

  1. Rahul (Superhuman, a portfolio co) crushed his talk at the a16z Summit this past November - really interesting how he brings in video game concepts into software, more around psychology versus gamification, sparking joy for end users

  2. VCs are just tired” says Danny Crichton from Techcrunch - while title does sound like it comes from the Onion, Danny does drive home one point - post seed, VCs are becoming more data driven as everyone has same information and harder to build long term relationships leading to these compressed and intense fundraising cycles.”

    “Ironically, the “tired” line was something I used to hear from seed investors, who constantly had to churn through dozens of under-hearted startups to find the gold. Now, I’ve heard this language more and more from later-stage VCs, where the Excel spreadsheet drives the valuation more than a relationship with a founder — and everyone can read the gridiron of SaaS metrics.”

  3. Startups should rethink what the meaning of a “launch” is - such an amazing thread…


Enterprise Tech

  1. This Gartner chart says it all - 10.5% growth for enterprise software to $503 billion

  2. Privacy of our health data is a human right - this will be a battleground to pay attention to in 2020 and will also determine some of the winners in the cloud wars. Read on for a full expose on what Google is capturing and how they are using our health data. Epic Systems, one of the largest medical records vendors, just also announced it will stop working with Google Cloud likely because of data ownership.

    On its website, Google’s cloud computing division until recently listed as a customer the large nonprofit health system Kaiser Permanente, something hospital representatives say isn’t accurate. Google removed the listing after inquiries from the Journal. 

    “We are not actively doing anything today with Google,” says Kaiser Permanente vice president Elizabeth McGlynn. “We have to be very clear about who shares our values about protecting patient privacy. Not every tech company can satisfy that standard, and a lot of them come with baggage they have earned.”

  3. Pretty awesome profile in WSJ CIO Journal on Manjit Singh, Toyota North America CIO, in how he is working with earlier stage startups and firms like boldstart where he just joined our advisory board. As a FYI, we are seeing this across the board in enterprise tech land. The pace of change is accelerating in software and it has become incredibly difficult for large enterprises to keep track of what’s happening. Combined with the fact that it’s difficult to hire the best of the best engineers means that they are looking more towards VC firms to help filter the signal from the noise.

    In the past, enterprises favored services from established vendors. “There was always some level of hesitancy about engaging with startups,” said Manjit Singh, group vice president and chief information officer of Toyota's North American unit.

    But in recent years, Toyota has become more interested in working with startups, in part because consumers are demanding that the company innovate faster than ever before. Within the past year, the company has been more willing to take bets in partnering with startups that have only landed their first or second round of funding.

  4. What happens when your application goes from monolith to microservices in terms of APM and Observability? How do you rethink this to go from tracking each service with lots of small pictures and no big picture? Ben Seligman of Lightstep nails it in this thread…also good read to understand

  5. Merci Victoria Grace from Lightspeed nails it with her market map on Workplace Collaboration Startups. Great to have 3 of our portfolio companies on there as well; Superhuman, Front, and Cycle.


Markets

  1. New Relic CTO and CRO both resigned this past week as the company cut its forecast for the year back from $600mm to $586 - $593 million. I’m sure they are feeling pressure from Datadog and others in the market.

  2. Will be interesting to see how Slack holds up as Microsoft goes on an aggressive advertising campaign starting this weekend during the NFL playoffs…

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