What's 🔥 in Enterprise IT/VC #229
Why enterprise startups are growing faster than ever out of the gate, Rest In Peace Sparky 😢
Universal laws of truth suck when it comes to investing and building startups and us VCs are guilty of those all the time. For those of you who don’t remember, in the late 90s, early 2000s during the first .com boom, the formula was simple - come up with an idea, raise lots of💰, spend it all on your data center so you could scale to millions of people before proving product market fit. This meant buying servers from Sun Microsystems who the put the dot. in dot.com, databases from Oracle, and storage from EMC.
Then along came the dot.com bust and tons and tons of startups went out of business and they couldn’t pay their bills and crushed the growth of all of those companies servicing them.
With that, the universal truth amongst venture investors was that you can’t build a real enterprise business selling to other startups and that you need Fortune 500 validation to raise capital. And that was the way for so long…but I truly believe the times have changed.
First, AWS was launched 15 years ago and has grown to a pretty nice size first selling to other startups.
Secondly, there are more well funded startups with real business models than ever before…
Just because a VC says something, you don’t have to believe it. This issue is in memoriam for my bestie, Sparky 😢.
Scaling Startups
Don’t listen to the skeptics
Watch/Read lessons learned from Tobi Lütke, founder of Shopify, as he scaled through the pandemic (with Jason Calacanis)
Removing friction creates new opportunities and increases market size.
Shared priorities of some of the best companies in the world:
Priority #1: Go build the best product you can possibly build
Priority #2: Make some revenue so that you can do more of Priority #1
Priority #3: Never do #2 at the expense of #1
👇🏼 must read 🧵 from HashiCorp - their playbook for running a fully distributed team which has allowed it to grow to over a $5 billion valuation
Very excited to announce that we're opening up our internal website documenting how we work at HashiCorp. This covers our document-oriented culture, how we interview/hire, how we communicate, and more. We'll open up more articles/documents soon!
Within How HashiCorp Works you'll find documentation on everything from setting up a successful at-home work environment to participating in HashiCorp's writing culture for making decisions. With over 1,100 HashiCorp employees working together all over the world, we are committed to helping all team members learn our individual, team, and company-wide best practices. Thank you to all the HashiCorp employees who shared their perspectives and whose quotes are used throughout the guides.
So important to remember for founders, goal is not to raise as much 💰 as possible
Enterprise Tech
Are Private Clouds Prolifering? This is an important data point and one I am seeing more and more as our portfolio cos are being asked to deploy on prem in private clouds…keep an 👀 on this over time…
The average number of private clouds being used or experimented with jumped 3.9 to 4.9 in the latest study Flexera 2021 State of the Cloud Report. That’s more than the average 3.4 public clouds in the same study. Google Anthos rapidly picked up users and Amazon Web Services‘ Outposts also saw gains
If you’re a developer first co, going enterprise too early can be hazardous to your health - is Docker making a comeback with its renewed focus on developers?
The company has gained 1.8 million more registered developers for a total of 7.3 million. Annual recurring revenues rose 170% from last year.
For Johnston, the traction Docker has been getting suggests the limitations of trying to sell directly to an enterprise. If grassroots developers are championing a product, it’s because the service is solving a real problem. If an IT manager buys a tool or service and it just sits around ignored, then the company is stuck.
“It goes back to the product-led growth strategy,” Johnston said. “We’re investing in great product that gets developers even more excited so they’re going to keep talking to their friends and keep bringing in more and more developers. We get signals that developers are loving our products because they are consuming them on a daily, if not minute-by-minute, basis. If the developers aren’t using your stuff, you’re in a tough spot as a company.”
PLG continues to be on 🔥 as AirTable raises $270M at a $5.77B valuation - of note is that it raised <$10mm in its first five years!
👇🏼💯 Not about multicloud and hybrid but integration…Mark Hinkle from Triggermesh on New Stack
As we continued to speak with users of cloud services, we realized the problem that cloud architects are wrestling with is having a way not only to communicate between cloud services, but also how to route event streams — and sometimes even transform those events from one format to another. We saw that the emerging standards were around Cloud Native Computing Foundation‘s Cloud Events specification.
We saw large banks that wanted to filter events from Azure to Splunk, to reduce storage costs. We talked to others who wanted to integrate Salesforce and their existing ERP systems, via event streams served by Apache Kafka. We saw that some clouds like Oracle had less tooling than the Big 3 cloud providers. They needed to stream cloud metrics to Datadog. All of these problems are integration problems; the source and targets were in the cloud and on-premises. That’s why it doesn’t matter so much where the service exists — it just needs to be easy to integrate.
What are TACOs when it comes to infrastructure as code automation - Terraform Automation and Collaboration - here’s the video along with a post this past week from Ohad Maishlish of Env0 discussing the future of IaC automation and who is going to win
A new approach is needed by the US after missing massive intrusions by Russia and China - will be a huge lift to security industry if this comes to pass (NY Times)
The hope, current and former officials say, is to set up a real-time threat sharing arrangement, whereby private companies would send threat data to a central repository where the government could pair it with intelligence from the National Security Agency, the C.I.A. and other spy shops, to provide a far earlier warning than is possible today.
How to prevent the next Solar Winds? Take a data driven approach using continuous monitoring from Security Scorecard (a portfolio co) which just raised $180 million at nearly $1 billion valuation” - more from TechCrunch here
Alex Yampolskiy notes that the disastrous SolarWinds hack was entirely predictable based on SecurityScorecard’s rating system. “SolarWinds’ score has been lagging below the industry average for quite a long time, so we weren’t really particularly surprised about them,” he said.
The industry average is around 85 or a solid B in the letter grade system, whereas SolarWinds was sitting at 70 or a C for quite some time, indicating its security posture was suspect, he reports.
Markets
💯…”Palantir CEO rips Wall Street as having a ‘destructive’ and ‘corrosive’ short-term focus”
We told the Wall Streeters that we will focus on building the long-term health of our company, that we are going to invest in our product development and in our clients, and you just have to battle it out with them,” said Karp, also a Palantir co-founder. The developer of data analysis software went public via a direct listing in September after nearly two decades as a private company.
😲 Crowdstrike!
Peak SPAC when it turns into a rap
