What's 🔥 in Enterprise IT/VC #178

Keeping the💡on 🏪⌛ as traffic scales

By now, you’ve probably had enough on VCs discussing what may happen in the next few weeks or months and the debate on how to manage through the crisis. If you want one more viewpoint 😁, please listen to the talk I had with Semil Shah yesterday on his Talkshow. While I’ve been through a few crisis as a VC, this one is way different than ever before as we have to prioritize the safety and well being of our and our family’s health and safety over anything else combined with a shutdown and quarantine. I’ve learned a lot in the last few weeks and continue to learn more every day as we go through this. If you listen, Semil and I covered everything from how much runway a company should have, state of Series A + B markets, what investors will value coming out of this with respect to operational efficiency vs. growth at all costs, what younger investors should think about when experiencing this for the first time, and more DevOps.

While on the topic of DevOps, it’s pretty clear that startups will definitely find their opportunity as the world becomes more online and traffic increases. In addition, any companies that can help engineers and DevOps be more productive “while remote” will be a huge plus as well. Keep an eye out for Pinpoint as they launch their new product to help teams build software better. Rosalie Chan from Business Insider wrote a story on which companies may fare well in the new environment.

Ed Sim @edsim

🌥️ for these tough times - keeping the💡on + building software faster + more reliably becoming a bigger need with WFH - 🙏🏼 to @Boldstartvc cos @envZero @spectrocloudinc @pinpoint_sw and the many others on this list businessinsider.com/17-devops-star… @rosaliechan17 @businessinsider

businessinsider.comDevOps startups that help developers be more productive will fare well in an economic downturn, VCs say. Here are 17 they think will thrive…Amid the coronavirus pandemic, VCs say that companies may rely on DevOps tools more than ever to keep their applications running smoothly.

Here’s a quote from myself on how I’m thinking.

If anything, DevOps software will become even more of a necessity for companies now, as they adjust to the effects of the coronavirus, like the need for remote work and increased uptime on their services since people around the world are stuck in their homes, says Ed Sim, founder and managing partner at Boldstart Ventures. 

"While most categories will take a short-term hit, DevOps will be as resilient as any category of IT spend moving forward," he said.

The NY Times had an article 2 days later titled “Facebook Is ‘Just Trying to Keep the Lights On’ as Traffic Soars in Pandemic” which reiterates my point.

“The usage growth from Covid-19 is unprecedented across the industry, and we are experiencing new records in usage almost every day,” Alex Schultz and Jay Parikh, two Facebook vice presidents working on infrastructure, said in a blog post on Tuesday. “Maintaining stability throughout these spikes in usage is more challenging than usual now that most of our employees are working from home.”

Combine this with Chetan from Benchmark’s tweet on Nike’s online business at 20% of total revenue and growing 35% annually, and you will definitely see continued spend in the DevOps category.

Chetan Puttagunta @chetanp

From Nike's earnings call yesterday: $10B revenue in quarter 7% annual revenue growth Rapidly shifting online: 20% of business online & growing 36% revenue growth 80% growth for Nike activity apps in quarter Jordan 11 Bred sold out in 28 mins via SNKRS app Resilient business.

Once again, I hope everyone is safe and healthy and finding ways to enjoy time with family.

As always, please share and retweet.

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Scaling Startups

1. Thanks to Semil for hosting me on his Live Talkshow

   Semil @semil

   3rd time was indeed a charm. Thx to ⁦@edsim⁩. Here is the recording of our discussion, focused on what founders of B2B, enterprise, infra/cloud & open source startups can expect re changes to biz models, GTM, and valuations. Ed nailed this.

   

   jointalkshow.comTalkshow | Semil Shah and Ed SimChat w/ Ed Sim @ Boldstart on biz models & GTM in a pandemic world. (3rd time is the charm!)

2. Stewart Butterfield from Slack shares his day to day experience as CEO of a public company while traffic is growing insanely, trying to keep service up and running, and trying to figure out what to tell Wall Street with respect to his quarterly earnings and future prospects. This is a must read!

   Stewart Butterfield @stewart

   My day job (also: night job) is CEO of Slack, a publicly traded company with investors to whom I am a fiduciary, 110k+ paying customers of all sizes, and thousands of employees I care about very, very much. The last few weeks have been 🤯😳😢 Here’s what it's been like. [Thread]

3. David Ulevitch nails it - please don’t say it’s not me, it’s him or her and instead do this!

   ☁️ David Ulevitch ☁️ @davidu

   One of the most destructive and delusional things a CEO does is that when a fantastic employee quits, they try to then explain how that employee wasn't actually that good or it's not a loss. Don't do that. It's so weak. Just figure out where you went wrong and fix that. 🤯🤯🤯

4. Finally, sage advice from a pro

   Bill Gurley @bgurley

   If someone older than you with business experience is giving you advice on navigating tough times please listen & don’t argue. Good judgement comes from experience that comes from bad judgment. They used to have the same perspective you do. That’s why they are trying to help.

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Enterprise Tech

1. 14 AI startups (Business Insider) that will still exist after the coronavirus outbreak - 🤔 a bit clickbaity but some great companies here including BigID and BackboneAI from the portfolio

2. Interesting stats and graphs from Cloudflare on how the pandemic has affected Internet traffic

   

3. Phil Venables, former CISO of Goldman Sachs shares tips/thoughts on Selling into a Crisis while Stan Kreydin who is CTO/CISO of Wyndham International shares his thoughts:

   Stan @skreydin

   Dear Software/Services vendors, instead of trying to sell your wares under the #Covid_19 banner I have another idea. Focus on being relevant when this is over and convince me that I need to prioritize keeping you around given tough choices ahead. #business #SaturdayMorning #CIO

4. Satya Nadella CEO of Microsoft writes about the role of his corporation and software to combat COVID-19

   No one company is going to solve a challenge like this alone, and it’s going to take the private and public sectors working together to turn the tide on COVID-19. Our unique role as a platform and tools provider allows us to connect the dots, bring together an ecosystem of partners, and enable organizations of all sizes to build the digital capability required to address these challenges. During this extraordinary time, it is clear that software, as the most malleable tool ever created, has a huge role to play across every industry and around the world. Our responsibility is to ensure that the tools we provide are up to the task.

5. Unfortunately criminals like to take advantage of crisis situations - no surprise here as Crowdstrike sees “real uptick in phishing campaigns” - real damage may not be known for a long time as more WFH, security is more easily compromised and criminals can strike many months later

6. With all of the money invested in the picks and shovels for ML/AI - still need help collaborating on data and models - Snowflake is working on the data exchange piece along with others like Azure and AWS and we have portfolio co Harbr Data doing models as well as data - more on Business Insider - “JPMorgan has tapped buzzy startup Snowflake to help it solve one of the biggest issues firms face when moving to the cloud”

7. Automation as an opportunity from customer support to robotics

   Meanwhile, LivePerson, which sells cloud tools for automating customer service conversations through chatbots and other software, has "multiple new deals in progress" with large and medium-size companies as a result of the call center shutdowns in the Philippines, a spokesperson for the company said. 

   In the last month, the number of automated conversations that LivePerson’s service handles has jumped over 20%, said Spinelli. Airlines and hospitality firms, which are dealing with a crush of calls as people try to change or cancel reservations or obtain refunds, have seen conversation volumes increase by 96% and 130% respectively in those two areas over the past month, he said.

8. Moment of levity

   Dan Ahdoot @standupdan

   Me quarantined with my parents watching sex scenes. Take me now, COVID. #QuaratineLife

   

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Markets

1. Jeff Richards from GGV shares a pic on how long it took SaaS multiples to recover from other corrections - keep in mind valuations were quite high going into this

   Jeff Richards @jrichlive

   Q: How long did it take high growth SaaS stocks to rebound in prior crashes? A:

   

2. Checkmarx in the developer security space was acquired by PE Firm Hellman and Friedman for $1.15b - rumors are its around 10-12x TTM Revenue

3. More Zoom numbers 🤯 on positive side below

   Jon Ma @jonbma

   Zoom is incredible. Its the fastest growing SaaS Company 12 quarters after hitting $100m ARR ever. Added $88m Net New in Q4'19 and now $752m ARR growing 78% For Q1'20 with COVID-19? If it adds $100m+ in the next few quarters, $ZM will be $1b ARR in 2-3 quarters. Wow.

   

   and a differing view from The Information - why Zoom stock will come fall to earth when Pandemic ends