What's 🔥 in Enterprise IT/VC #246

ABR - always be recruiting + some great research on why 💰 continues to pour into enterprise

So when a friend told me about a $21M seed round in Israel, I was 😲 but not so much as when it comes to fundraising for enterprise startups, it's never been more competitive and the stakes keep going higher. In this market when one 🤔 it can’t get any frothier, the co-founder of Nutanix and his former SVP engineering just launched a newco with a $50M seed round, yes a $50M seed round 🤯. Sounds like a big idea with a great team but 🤔 what milestones does one focus on with that much capital in the bank (TechCrunch). I’ve always been a believer that necessity is the mother of invention.

When it comes to 💰 and fundraising, the next question for every company is hiring. This past week like every week, many of my conversations with founders centered on talent. While many companies have challenges finding the best people on a timely basis, some seem to do it better than others. Given the continued flow of capital into the enterprise sector, here’s a reminder why not every company will succeed 👇🏼

Ed Sim @edsim

There is so much 💰 flowing in enterprise that talent is the rate limiting factor to scale Great news with world going remote is access to talent is > than ever Bad news is your competition is now global Focus on recruiting, hiring, + retaining best talent must start on day 1

So while hiring, culture and retention is a deep topic, I can say that some of the best founders I’ve worked with are always thinking about hiring well ahead of where they need folks.

Ed Sim @edsim

Best founders I know are always thinking about their next hires + have a running list of 5-10 dream candidates they regularly grab ☕ with for updates, feedback, advice Conversion rates to hire are 📈 - also curating your early group of advisors/angels a great source for talent

The best hires start with who you bring on the cap table from day one as advisor or angels as many of the best founders and investors are super focused on surrounding the team with the “right village” of day one folks who have seen a step or two ahead of them. I can’t tell you how many times these “sounding boards” end up as a great source of talent through their connections or even potentially joining themselves. The second thing that some of the best founders also do is randomly reach out on LinkedIn to folks they may not know, who have the ideal profile of a candidate they would love to hire. Yes, this includes founders of companies that have raised >$100M! I know LinkedIn is a wasteland but I can confirm that several key exec hires in the portfolio were found through this method. Bottom line, think well ahead of when you need talent, cultivate those relationships, and leverage each node to meet more folks and you’ll be surprised at what you can accomplish.

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

---

Scaling Startups

1. The investment memo that helped Airbase (reimagining spend management software) raise $60M in 10 days - the 🔑 here is that the memo was written by the founder in lieu of deck

   

2. Patience required, especially for PLG and developer first

   Suhail @Suhail

   The first 10 paid users took 18 mo. Getting to 50 took 6 mo. I think we will be at 100 in less than 2 mo. This all takes a lot of time, iteration, and grit.

3. Great lessons here on how Evernote lost its way - remember your product north 🌠 and don’t chase too many different things on product

   Peter Kazanjy @Kazanjy

   Is there a startup that squandered more opportunity than Evernote?

   Hiten Shah @hnshah

   @Kazanjy

   

   nira.comWhy Evernote Failed to Realize Its Potential [The Full History]Evernote has been plagued by a series of managerial missteps and failed product launches. The company’s future is far from certain.

   As a whole, the company had been distracted by chasing the wrong revenue streams. Instead of building a solid team-based product, Evernote built a food app. The company had expanded too quickly in the wrong direction.

   Everything besides the main Evernote app was a distraction from the company’s core mission to help people remember everything. Products like Slack and Google’s G Suite had successfully made the leap from personal product to collaborative product, whereas Evernote had not.

   Speaking of a company losing its way, I also highly encourage folks to read the “The rise and fall of InVision”

   The cumulative result is a hodgepodge of apps built on top of apps and stitched together with yet more apps (many with both new and legacy versions existing at the same time). All of these with competing branding that makes it hard to keep track of what’s going on, and a lacking layer of experiential polish to boot.

   Product North 🌠 - don’t lose sight of it

4. Public service announcement 👇🏼

   Ed Sim @edsim

   Just a reminder, have FUN 😃 - I know this shit is hard but need to find the small wins every day and 😃

5. Spot on - great 🧵 as well

   👨🏻‍💻☕️ @hunterwalk

   "he said they were really interested" is not a termsheet "they want to preempt but just need to see a deck & discuss it" is not a termsheet "it was a great call & she said they def want to know when we raise" is not a termsheet only a termsheet is a termsheet

---

Enterprise Tech

1. For all those founders with a developer first approach, remember this from the founder of Docker 🧵

   Solomon Hykes @solomonstre

   Here is an important lesson I learned the hard way. Your open-source project has a COMMUNITY, and it is part of an ECOSYSTEM. Both are important, but they are not the same. Confuse them at your own peril.

2. Speaking of PLG SaaS as a new category for PLG cos (see last week’s newsletter), EndGame just announced its coming out party as it has raised a $17M Series A led by Menlo Ventures and some great design partners to boot - congrats to Alex and team!

   

   tl;dr - We’re excited to announce that we’ve raised over $17 million to power product-led sales. Endgame makes it easy to observe what’s happening in your trial or free motion, prioritize sales-ready accounts and users based on behavioral signals, and act on them to drive more revenue faster. Our product is being developed with incredible design partners like Figma, Loom, Airtable, and Retool.

3. Great 🧵 demystifying what AWS is - reminds me of the need for folks in infrastructure to dive deep and zoom into product but also be able to zoom out and explain it simply and succinctly

   Alex Lieberman ☕️ @businessbarista

   Amazon Web Services (AWS) is a $54 billion behemoth. It's bigger than Marriott, Netflix, and Twitter...combined. Yet 99% of us don't actually understand the business. THREAD: The story of AWS & lessons we can learn from it

4. DevRel hires are some of the most in-demand hires as many developer first and OSS companies are launched - Kelsey, one of the best, is hanging up his cleats but shares what matters in DevRel

   Kelsey Hightower @kelseyhightower

   After almost 6 years I'm making a career pivot. I'm stepping away from DevRel and doubling down on product work and collaborating deeply with GCP customers. I'll walk away understanding that DevRel is more than a department, job ladder, or HR title.

5. Morgan Stanley CIO Survey Q2 just out - no surprise here, cloud, catch all called digital transformation, and security top of mind for IT Spending

   

   

6. Why cybersecurity continues to be on 🔥 - from Morgan Stanley CISO survey on July 7 - 💰 increasing across the board

   

   

7. 🤣

   Camille Fournier @skamille

   Rust, Python, JavaScript, Java

   

8. 🐅 disrupting VC 🧵

   Sar Haribhakti @sarthakgh

   It’s refreshing to see Tiger dominate with “We are pure financiers. We do our homework. We don’t believe we have any value to add besides our capital, speed and terms. Go do your thing” vibe in an era where investors constantly claim credit and claim to value add!

9. I couldn’t resist

   Shalini Singh 💻 @shalinisparmar

   Using APIs without reading the documentation

   

---

Markets

1. ZoomInfo acquires Chorus AI - had a thread going with a founder and we both initially thought it was Zoom! Tale of two cities - while a $575M exit is nothing to sneeze at, its competitor Gong, which started at same time in 2016, had its last round at $7.2B

   Chorus.ai is a direct competitor of Israeli company Gong, which only recently fundraised at a value of $7.2 billion. “We will take what Chorus can do and put them on steroids. Before this purchase, Gong and Chorus were very similar in analyzing calls using a bot, and the main change will be that we know best how to sell, while on the product level they will get data that will give them an upgrade. For the first time, companies in the sales realms will get an end-to-end tool," Keren said. “We are very proactive when it comes to acquisitions, and whatever fits our engine, interests us, and Chorus is of great interest to us thanks to their technology. They created dedicated technology for text transcribing that has reached very high levels."