What's 🔥 in Enterprise IT/VC #265

🎢 Strap it on for a bumpy next couple of months - but opportunity abounds in the long term + fun matters

Wow, I needed that…a brief pause for Thanksgiving 🦃 to spend time with family and to just be 🙏🏼 for being here and for friends, family, science, and the web which helped us out just a bit through these last couple of years.

I’m also 🙏🏼 for the incredible and unexpected bull market and the new golden age of developer and infrastructure software which the mainstream, public investors have seemed to adopt…I truly believe this is still just the beginning.

That being said, the latest news of a new Covid variant reminds me that we are not out of the woods and that the stock market is an amazingly efficient voting machine which makes decisions about the future in rapid fashion.

CNBC Now @CNBCnow

BREAKING: Stock futures plunge on fears of new Covid-19 variant; Dow set slide more than 830 points at the open, S&P 500 and Nasdaq to decline more than 1% cnb.cx/3p4KwMB

Zoom stock was down 14% earlier in the week on lowered growth expectations due to reopening and just like that it’s back up 10% in pre-trading. It’s important for the founders and VCs reading this to remember that while we need to buckle up for a bumpy ride the next few months, we should also not get too spooked by the near term and keep building and investing for the long term.

Clearly, private investors right now are quite bullish on the long term as 1000x multiples are becoming the norm for the most sought after founders. 🔑 here is to find the underdog founders who are not en vogue and hope they do become that founder in the future. That being said, I wonder how sustainable these prices are as investors are paying it forward 3+ years in advance for companies to “grow” into these valuations.

Eric Newcomer @EricNewcomer

Here’s a list of startups that raised at unicorn status with single digit millions (or less) in annual recurring revenue newcomer.co/p/raising-more…

For now, the public markets are continuing to reward one thing, growth, and the second that a company slows down, the valuation multiples compress quickly.

Jamin Ball @jaminball

The median software forward revenue multiple is now lower than where it dropped to in May. However, median multiples are still 23% higher than where we peaked pre-covid. High growth software multiples are 118% higher than where we were pre-covid (currently 31x vs 14x)

Regardless of multiples, builders build because they fundamentally want to solve a problem they deeply care about and want to see their product or service alive in the world. When it comes to what’s next in enterprise software, I’ve had a number of conversations in the last couple of weeks with founders or executives who are going all in on crypto instead. It reminds of back in 2017 when we started our blockchain accelerator at boldstart and then things died down. However, many believe this time is different…

Ed Sim @edsim

We all know portfolio company hiring is super tough but twice in last few days, a few star recruits decided to start crypto companies instead. These are enterprise tech engineers and both cited this will be big and it's fun! 🌊 is just starting - lots of building to do...

Yes, these are enterprise engineers, security experts, and execs who are excited about web3 and digging into to understand the infrastructure challenges associated with it from sidechains, privacy, scale, node monitoring, security and auth - there is still so much to build and it’s super early.

ChainLinkGod.eth 2.0 @ChainLinkGod

25/ There will be different ways blockchains attempt to scale and lots of experiments going on concurrently, especially within the modular realm, it will be interesting to see the result A lot of work is being done by some very smart people, it's not something I would sleep on

Chris Dixon @cdixon

Computing movements are positive-sum games. There can be many winners at both the infrastructure and application layer. It's important to run a variety of experiments — and stay focused on the bigger goal of bringing blockchains and web3 mainstream.

One other point that was made repeatedly from these folks is they are just having so much FUN diving into web3 and thinking about the possibilities. And for most of these folks who have done pretty well the last 10 years, FUN really matters!

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

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Scaling Startups

1. Don’t go to business school and you won’t have this problem

   Orlando Bravo @OrlandoBravoTB

   I was taught in business school that pessimists make the best investors. I've found the opposite to be true. Pessimists waste creative time making up negative stories, while optimists are busy imagining the possibilities. And yes, one can be optimistic, cautious, and diligent.

2. As an investor, past does not = future 🧵

   Ed Sim @edsim

   One of hardest aspects of venture investing is the need to constantly remind myself that: Past does not always = future Important to remember scars but to not let them prevent u from trying new things! Keep an open mind, sometimes you're just too early or team did not execute

3. On hiring PMs from founder of Plaid

   Zachary Perret @zachperret

   My favorite PM interview set: 1: Tell me about the highest-impact project you've done recently. 2: What were the goals, and how did you deliver on them? 3: If you replaced yourself with any other PM at the company, how would the outcome of the project have been different?

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Enterprise Tech

1. Want to know what's next in DevOps? See 🧵 from my colleague @ellenchisa @Boldstartvc as she kicks off Day 2 #DevOpsDaysTLV.

   With 8 investments in 🇮🇱 in the last couple of funds, it's great to see the community of infra super 💪🏼 as it's not just cyber security!

   Dan 🇪🇺🇨🇦 @phrawzty

   Kicking off day 2 with @ellenchisa on what's coming in the next 10 years of DevOps. #DevOpsDaysTLV

   

2. Game on - JAMstack (JavaScript, API, Markup) on 🔥 as Netlify raises a $105M Series D and its competitor Vercel just raised a $150M Series D

   Netlify @Netlify

   We’re excited to announce that Netlify has raised $105 million in funding! 🍾 We’re bringing together the #Jamstack ecosystem to build a better web👇 ntl.fyi/3qHPxNP

   

   Vercel @vercel

   Announcing our $150M Series D. We're building the end-to-end platform to accelerate our mission to make the Web. Faster.

   

   vercel.comAnnouncing $150M to build the end-to-end platform for the modern Web – VercelWe’ve raised $150M Series D at a $2.5B valuation to accelerate our mission to make the Web. Faster.

3. What are analytic apps in the Modern Data Stack 🧵?

   Modern Data Stack @moderndatastack

   1/ When you talk about the Modern Data Stack, you must have heard a lot of buzz around categories like ETL, Reverse ETL, PLG CRM, Data Mesh, etc. But, there is still an area that is not often discussed, yet has a lot of potential -"Analytical Apps", also called "Data Apps".

4. All about usage based pricing and how to scale to $100M+ from Openview

   

5. Great advice…

   Paul Graham @paulg

   If you're wondering how to design your startup's product so that everyone will want it in 10 years, just do whatever would make your friends want it this week. Otherwise your company won't exist in 10 years anyway.

6. Many web scale companies like Uber, Netflix, Lyft, AirBnB have released some of their code as open source but none have actually made a move to monetize the OSS…until Spotify

   “TLDR: Next year, Spotify is going to start selling some new plugins we build for Backstage (developer portal). We’re doubling down on Backstage with a sustainable business model as the cornerstone to our long-term commitment to the project. Following in the footsteps of the most successful open source projects, our goal is to pave a path for careers and companies to be born out of Backstage.”

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Markets

1. Great roundup of origin stories and how businesses work from Datadog to Twilio to Salesforce to John Deere

   BusinessBreakdowns @bizbreakdowns

   We started creating Breakdowns last fall. We tried and failed 20 times before recording one that we were proud to publish. This morning, we passed through one million downloads. Thank you to everyone who has listened to one of our Breakdowns, it means everything.

   

2. >$10B outcomes?

   CASΞY @caseykcaruso

   Did analysis for cryptocurrencies per @fredwilson's post. Here's where marketcaps sit today: 1 = $1T+ (BTC) 1 = $100B+ (ETH) 19 = $10B+ (SOL/AVAX/USDT etc.) 103 = $1B+ (UNI/AXS/SC etc.) # of >$1B entities that went live in ~last decade? 131 public tech co's 124 cryptocurrencies

   

   Flaherty.eth @josephflaherty

   Some historical context on @fredwilson's latest. Between 1/1/2010 - 12/31/2019, 166 tech startups went public. Here's where their valuations sit now: 2 = $1T+ (TSLA/FB) 4 = $100B+ (SHOP/NOW/TEAM/SQ) 48 = $10B+ 35 = <$1B Median = $4.4B Deploy wisely! https://t.co/6levc7OkXd