What's 🔥 in Enterprise IT/VC #267
The Rise of a D2E (Developer2Enterprise) Juggernaut - MongoDB
I just got back from Miami 🛫🌴…again…as I had the opportunity to attend the first ever offsite for Blockdaemon ( a core crypto infrastructure comapny +the 1 place for institutions to access all crypto).
While the future is fully distributed, nothing replaces a few days in person with a focused group on a mission. I was blown away by the quality of the people, the engagement, camaraderie, and focus. If you’re a founder with a distributed team my strong suggestion is to plan an annual get together and have smaller IRL team breakouts throughout the year. Snyk, also a portfolio company, has done an amazing job making this an annual tradition as they continue growing fast but having folks feel like they are 1 team.
Now on to the regularly scheduled programming! It’s been another crazy and volatile week in enterprise VC/founder land and the big thing on my my mind is inflation and the specter of rising interest rates next year. What this means is that the flight to quality for investors will even be more focused in the coming years.
So let’s work backwards on what a quality infrastructure company looks like in the public markets as The Street will continue to reward growth. On Monday, MongoDB blew out its Q3 numbers and was up 18% in after hours trading.
What GTM lessons can be learned from MongoDB if you’re an open source and infra founder? While trying not to simplify things too much, it’s pretty clear that MongoDB used the classic open source playbook by focusing on developers, building its community, increasing its downloads for on-prem, and only over time built its D2E (dev2enterprise) motion which based on conversations with some friends over there is still getting refined. What accelerated its growth post IPO was launching Atlas, its SaaS version, which now accounts for over 58% of its revenue.
As you know, I always like to preach “patience” when it comes to building community and not going after enterprise too early. One way to think about it is to ask yourself 2 questions when launching your first OSS product as product and GTM go hand in hand.
“What is your initial wedge or insertion point?”
“What is your plan to expand?”
Here’s how Dev Ittycheria, President and CEO, explains it on the most recent earnings call:
MongoDB's document model maps data to the way developers think and code, removing friction from the development process to enable developers to move incredibly fast.
First, focus on your user and in the case of OSS, build a killer product that developers ❤️.
As a disruptor of a massive market with a long-standing entrenched technology, we had to build our credibility one workload at a time.
Second, go after net new workloads, not replacement ones.
We usually land in an account by identifying a pain point that simply cannot be addressed by legacy technology. We then leverage the success of the first workload to expand across divisional and geographic boundaries. Eventually, we up-level the conversation to the C-suite and become a standard for future app development.
Third, expand existing workload and use case and then to other departments.
While it's still early days, we believe the key driver of our success this year has been the growing trend of customers choosing MongoDB as an enterprise standard, which is having a positive impact on our ability to increase our penetration of these accounts over time. With more than 31,000 customers, which is up 10 times since our IPO four years ago, we have all types of customers using MongoDB to do a wide variety of amazing things to run and transform their businesses. We have had tremendous success in acquiring customers from large global 2000 organizations to cutting-edge start-ups across all major industries and most geographies. This creates a compelling social proof effect.
Become the enterprise standard - this takes a ton of time and patience as MongoDB was started in 2007! And what is even more amazing is how much it has grown the customer base since the IPO - 10x from 3k to over 31k customers.
While we feel confident about our position in the marketplace, we are not standing still. We recently moved to a quarterly product release schedule starting with MongoDB 5.1 to bring new features and capabilities more quickly to market.
No matter how big you get, don’t forget what got you there in the first place - product and iterating rapidly and continuing to have a sense of urgency.
And here’s the stock since IPO
Lost in this story is how MongoDB transitioned from an open source download and on-prem software company to a hosted SaaS company with Mongo Atlas growing like a weed (check out one of my earlier posts on why Atlas and the insane growth).
Atlas revenue grew 84% year over year, representing 58% of revenue, and is now over $0.5 billion revenue run rate.
This is the same playbook and opportunity ahead for other open source infra companies that recently went public like HashiCorp and Gitlab. Remember, an IPO is not the end of the journey, but just the beginning of a new one as Mitchell and Armon so aptly wrote this past week.
And like MongoDB, HashiCorp’s future includes a major emphasis on the ☁️ -
As we enter this new chapter for HashiCorp, we are just as excited about the original mission now as we were nine years ago. We continue to build new products for new challenges, such as HashiCorp Boundary and Waypoint, which were open sourced at HashiConf 2020. As users increasingly expect cloud-delivered solutions, we are deeply invested in delivering a world-class experience with our HashiCorp Cloud Platform. This year we launched HCP Packer, building a new cloud workflow around the Packer project for image management.
Founders, stay the course, be patient, focus on the individual developer, build that community, and don’t go enterprise too early as that will take time! Who will be the next D2E Juggernaut?
As always 🙏🏼 for reading and please share with your friends and colleagues!
Scaling Startups
Founders, looking to partner with the best first check investors? Take a look at this list - not sure where the data is from but my firm @boldstart is clearly surrounded by an amazing group of peers who I’m sure all could be #1 depending on the data…but for now, I’ll take it 😃
How some of the best founders execute
👇🏼💯
How are you doing?
Must listen 🎙️ podcast Built by Humans with Peter McKay, CEO of Snyk, one of fastest growing companies out there (proud day one investor) and Scott Britton (Troops) on ”creating a culture of open communication” - some amazing leadership lessons from a CEO in hyperscale mode
Enterprise Tech
Log4J - open source code absolutely amazing but one vulnerability can light the internet on 🔥 and many believe this is worse than Heartbleed 🧵
This log4j (CVE-2021-44228) vulnerability is extremely bad. Millions of applications use Log4j for logging, and all the attacker needs to do is get the app to log a special string. So far iCloud, Steam, and Minecraft have all been confirmed vulnerable.and also why you need Snyk 😃
Where there’s 💰, there are hackers and this $120M stolen from BadgerDAO is just the beginning for crypto/web3 companies
How $120M was stolen from BadgerDAO:
BadgerDAO said that a phishing incident that occurred on Dec. 2 was caused by “a maliciously injected snippet” from Cloudflare, an application platform that runs on Badger’s cloud network.
The hacker used a compromised API key that was created without the knowledge or authorization of Badger engineers to periodically inject the malicious code that affected a subset of its customers.
Every large infra company now has a venture fund, here’s 3 from this past week - Databricks, Twilio, and Alchemy in the crypto space
Another big quarter for Cybersecurity!
“Momentum’s Cybersecurity Market Review for Q3 2021. Strategic activity in Q3 included 257 transactions completed totaling $17.6B in deal value across M&A (75 transactions, $12.0B) and Financing (182 transactions, $5.6B).”
Scaling decentralized architectures aren’t easy and seems like the emphasis on speed may have left some open holes from a security perspective 🧵 for Solana (the potential Ethereum killer)
Great 🧵 on power of decentralization - lots of debate on use cases outside of defi
Despite the massive AWS outage this week, multicloud is not the answer…
AWS continues to copy as it rolls out feature flagging and real user monitoring - think LaunchDarkly, AppD, etc…will be interesting to watch how the originals continue to grow as AWS offers the whole platform, commoditization play - still so much room for founders to operate as it usually takes AWS 3-5 years to add these features
Load testing as a service - this is going to be huge - Azure load testing - market just getting warmed up - shift ⬅️ to dev teams away from ops continues
“Application performance and resiliency are more important than ever before. As more businesses and services move toward digitization, the impact of outages and downtimes in lost revenue and customer dissatisfaction grows. Azure Load Testing is a service that can help testers and developers who are taking on a larger role in validating app quality, performance, and scalability.
Creating and managing the infrastructure required for load testing at scale can be time-consuming and complex. With Azure Load Testing, you can generate high-scale load without the need to manage complex infrastructure, and we have included Azure-specific integrations and insights so you can optimize your Azure application at scale.”
We want to help development teams gain insight into how their application behaves under stress. You can start a high-scale load test in the Azure portal and see live updates of the client and server-side metrics while the test is running.”
Markets
🤯 HashiCorp “Tops IPO Goal to Raise $1.2 Billion” at $14B valuation