What's 🔥 in Enterprise IT/VC #180
🌞Optimism
I thought I’d kick off this week with some optimism 😃. NYC schools are now shut down until the Fall, and while some believe the peak for infections is here in NYC, signs still point to a longer time in isolation and even longer time for a recovery. Take a look at Jamie Dimon’s note to JPMorgan shareholders in his annual letter.
That being said, the cloud and enterprise software is more important than ever (Scott Farquhar, co-founder and co-CEO of Atlassian).
As trite as it might sound, digital transformation is still what CEOs are talking to us about. There was a McKinsey survey recently that said only 16% of respondents believe their organizational digital transformations are successfully improving performance. These companies are still at the very beginning of making their entire world digital.
There's only three types of companies, right? Companies that are technology companies, companies becoming technology companies, and companies that are being disrupted by technology companies. And so every company in the world needs to go through this digital transformation to make sure that they can produce goods and services in a digital way.
Obviously, this is even more important when people aren't turning up to your retail stores, and they're buying online, when people need to work from home in new ways. COVID-19 is changing the way that this all happens, when you need visibility into your organization.
And for those startups who have made the hard choices, I am super excited about the future.
A few Zooms I had this past week highlighted the incredible productivity of some of our default distributed teams. Less outside distractions equals more focus.
Another positive I see are the era of co-led rounds potentially coming back. Over the last 5 years, the single handed round seemed to be the norm as VCs were so focused owning as much as they could, thus crowding out others. In this new era, ownership still greatly matters, but I’m hearing some peers potentially take a “little less” to accommodate another as reserves matter and so does another helping 👋🏼
As always, thanks for reading and please feel free to share! Find time to truly make this a weekend and to break up the monotony of endless Zooms 😃. We will get through this!
Scaling Startups
Good advice from CEO coach and former VC Steve Schlafman + even works better in WFH world
Wing’s annual analysis of the venture market - great data and trends continue to show companies raise more before their A round and are more mature. Seed is the new A. I’ve never loved the labels as most of our investments are pre-revenue but I would call them pre-seed.
Github shares some secrets on remote work and their culture - must read!
Be intentional from day one about making sure that people have a way to feel a sense of belonging and connection to the company and its community, regardless of where they’re working. You can also easily showcase your commitment to remote work to employment candidates with virtual interviews. A truly remote-friendly environment gives people the chance to work for their dream company, and your dream employees to work for you, without the barriers of location.
Great thread from Sarah Guo at Greylock on PMF - I highly suggest clicking through…
Enterprise Tech
All things you may have missed at Kubecon Europe - Part 1 and Part 2 - shoutout to SpectroCloud, a portfolio co. Lots of k8s and service mesh related startups as you can imagine.
The common theme across these six providers is enterprise centricity leveraging open-source technology. True, many of them drive open-source projects, and they all take advantage of open source technologies, but they all have commercial enterprise offerings that build upon open-source value propositions to address enterprise-centric requirements such as compliance, security and massive scale.
As startups are head down building product, here’s a great read from Slack Engineering on how they balanced deployment speed with resiliency over time
Deploy to dogfood and canary
The rollout to production starts with the dogfood tier, a set of hosts that serves some of our internal Slack workspaces. As we’re very active Slack users ourselves, dogfooding has helped catch many problems early. Once we are confident that core functionality is unchanged, the build is deployed to canary, which has about 2% of production traffic routed to it.In 2018, we hit a point where deploying as fast as possible was hurting the stability of our product. We had a very capable deploy system that was being heavily invested in but the process around deployments had to evolve. Reliability took center stage as we became a bigger company that powered increasingly more mission-critical collaboration around the world.
This pandemic could be a watershed moment for privacy preserving machine learning tools as governments want user data to track movements and tracing and of course, users still want privacy. Happy to have @capeprivacy in the portfolio working on this for last 2 years. More below and from Protocol.
It had to be said - “We weren’t ready for a pandemic - imagine a crippling cyberattack” - 🎩Andrew Peterson of Signal Sciences
It does not matter that we are the United States of America, that we are the most technologically and, in this case, medically advanced nation in the world, or that we are the strongest and wealthiest. When it really mattered, even though the warning signs were blinking red, we did not organize promptly, which left us unprepared to deal with the threat swiftly and effectively.
We've also been warned repeatedly over the past two years about another "lights are blinking red" threat to our national security and economy that has equal or greater potential than the coronavirus to cast us quickly into collective national chaos: the vulnerability of our national electricity delivery system, generally known as the grid.
Speaking of security, Chris Wolf, CTO Field at VMware, talks about security shifting left and what else is important in 2020
At VMware, we believe that security has to be intrinsic and baked in at the time the application is born. On average every week, our R&D team is provisioning 500,000 containers and more than one million VMs. With that level of agility, security has to be a part of the CI/CD (Continuous Integration Continuous Delivery) pipeline. It can’t be something that is done as a manual process. It has to be ingrained in the DevOps processes.
I wish I had a 🔮 and could predict what the “new normal” will look like. To that end, important to understand how other countries who come out of lockdown go back to work. Interesting data from Microsoft here:
After China lifted coronavirus restrictions, Microsoft is still seeing two times the number of new Teams users each day in the country, compared to the end of January. The number of daily active Teams users also continues to grow week-over-week in China. That’s an early indicator of how the rest of the world might adjust to the new realities of post-pandemic society. Singapore has also implemented a circuit breaker model where it sends workers and students home if there’s an outbreak in a certain part of a city.
“The new normal is not going to be, like what I thought two weeks ago, that all is clear, go back everybody,” says Spataro. “There will be a new normal that will require us to continue to use these new tools for a long time.”
And this from the Economist with respect to Chinese factories coming back online:
Most Chinese factories are now back to operating at around 80% of capacity. Some are pushing 100%. Foxconn, the Taiwanese contract manufacturer which assembles the majority of Apple’s iPhones in China, says that with the help of tests for the virus and chest x-rays it has been able to get all its operations on the mainland back up and running with no risk to the health of its workers. In a call to investors on April 1st it reported that it was on target to provide Apple with all the 5g iPhones it needs for the launch of the device this autumn.
Many of the measures that made China’s great reopening possible were boring-but-important changes to existing protocols; more hygiene measures, more separation between workers, and screening (companies in China and elsewhere are trying to get their hands on a lot of tests for sars-cov-2 infection).
But there has also been investment in automation and remote operation that has brought forward improvements not expected for some time to come. Anna Shedletsky, the boss of Instrumental, a firm which uses machine learning to help manufacturers improve their processes, says that in electronics manufacturing “We’re going to do five years of innovating in the next 18 months.”
IDC updates spending forecasts; no shocker, numbers are down but if you see software and infrastructure (cloud spend) still up year over year
451 Research did a survey in March and their conclusion:
IT Search terms on Gartner.com pre and post Covid
To that point, digital transformation will accelerate
The industries that have resisted going digital —healthcare, banking, legal, retail, government— will do so faster this year than in the last decade combined.As you can’t be having this (via Bloomberg)
And even more reason why the laggards need to invest in tech (as per co-ceo from Atlassian)
Some banks these days are producing and pushing code to their point-of-sale terminals 10 times a day, and they have no downtime. And so there's a big gulf between that company that can produce and deliver software to the terminals 10 times a day, and the company that produces once a quarter, in terms of how fast they can react to customer feedback and how fast they can adapt to the changing world.
Wonder if enterprise VR usage will accelerate in the “new normal” - Microsoft Hololens, Oculus et al
Random: in case you want to upgrade your wardrobe in Animal Crossing
Markets
🤔 - really, we need one of these? 🎩 to my colleague Shomik for sharing this!
🤔again!
For those that erroneously "insist" that Wall Street is overly focused on short term results, I offer exhibit A: $BKNG announced business is off 85%, & that they could run out of cash next year. Stock up $48 (+3.5%).
Infra still sells - Cohesity raised $250mm at $2.5 billion valuation, more than double last round in June 2018
Total funding stands at $660m and its valuation has more than doubled from the $1.1.bn set in a previous funding round in June 2018. Rubrik, Cohesity’s arch-rival, has taken in about $550m in its funding rounds.
