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What's 🔥 in Enterprise IT/VC #279
What goes up must come down - ❄️ back to earth, what it means for private cos + how a customer discovery email turned into a company
Let’s all support the people of 🇺🇦 - this is one of many ways to do so but one to which I’ve contributed.
Switching gears, the last of the high growth public cloud companies is coming back to 🌎 multiple wise. Snowflake beat its quarter, as usual, but guided to less growth in the future and here’s what happened.
Jamin Ball sums up the cloud multiples best here…
Look at the Top 5 multiples - down from 80x NTM to 30.9X - 😲.
Yes, folks, this multiple compression has been sustained and does have an impact on later stage companies raising growth rounds.
Snowflake was always at 40x and higher and gravity is a powerful force which finally took hold. If you are thinking of getting that 100x NTM multiple for your company, then think again. It’s not coming back…it will get better as the world normalizes in 12 months but the 100x days are over. While growth investors have adjusted their 🤔, it’s time for founders to do the same and go back to picking the right partner and right amount of capital for your business. Overcapitalizing your business at too high a price can eventually cause massive ripple effects for your business if you “miss” a quarter. Here’s one of many examples we will probably read about in the near future.
As for Series As and Bs, this multiple compression has not filtered down yet and the best companies are still raising large sums of 💰 at super high valuations. However, eventually even these companies will have to perform in order to raise their next round. If you have 💰, remember cash is king and spend it wisely.
Top of mind for me this week was also the launch of CommonPaper which we funded over a year ago, backing Jake Stein (for a 3rd time) and Ben Garvey. I remember first talking to Jake about his idea and thinking to myself, I can’t wait to back Jake but whoa, how does one create a scalable way to solve the problem of standardizing sales contracts to close deals faster (see our Why We Invested post).
So how did this customer discovery email turn into a company?
As background, you can share that I’m researching an idea for a startup related to improving commercial contracting in B2B software sales. I’d love to ask XXX a few questions about how XXX handles this and get his feedback on the new approach I have in mind.
It’s called founder magic 🪄 is when you take a pain, a ❓, + a discovery email and turn it into contracts as APIs with a structured contract platform and open source standards (CommonPaper blog post here).
As always, 🙏🏼 for reading and please subscribe if you have not done so.
On active patience…(farnam street)
Eastern Europe’s Talent Pool in Focus (CNBC)
“Gartner estimates there are over one million IT professionals in the three countries, with one-quarter (250,000) working for consulting or outsourcing firms. One in five Fortune 500 companies had tech talent exposure in Ukraine as of 2019, according to an industry report.
Software vendors working on behalf of big corporations, from financials to retail, rely on the talent that the region has cultivated. Take EPAM Systems, as an example. More than 50% of its tech staff are across the three nations – over 30,000 employees.”
“A great developer experience gets out of the way, leaving the developer in a flow state. DX allows developers to be more effective, by making the good thing the easy thing – in areas such as testing, security and observability this is increasingly important. Good DX allows for shift left (see Rachel Stephen’s post below for more on this).”
Six Things I Learned in Six Years at GitHub (Sophie Shepherd)After 6 years (😱!) today is my last day at GitHub. I spent some time this week reflecting on the biggest lessons I've learned in that time, and wrote them up here. sophieshepherd.com/six-years/
“My second takeaway is to rethink the concept of shipping all together. We sometimes put too much importance on shipping, when deciding not to do something is often the harder, and smarter, decision—and should be celebrated. With so much weight on shipping The Big Thing, we forget how important it is to work incrementally. If it felt like we threw a lot of work away, did we bite off more than we could chew?
And last, it has taught me the importance of storytelling, documentation, and leaving a record of your work. People come and go from companies, but good ideas remain. Leaving time capsules of your thinking and learnings will ensure that your ideas live on.”
Day one to exit to Pager Duty - Let’s go Sean Chou, Ravi Singh and the entire Catalytic team. You are truly great founders, built a business and culture the right way and can’t wait to see your platform extend from 30,000 workflows every day to 300,000 and 3,000,0000 🚀Fellow founders, I’ve worked with a lot of VC firms now and I’m going to tell you that you cannot do better than for your first check. They’ve been helpful and supportive through a LOT of thick and thin. If they offer you a check, take it.💪🏼 huge congrats to @sychou @Code4Ever and the entire @catalytic team. Super excited to see catalytic power the @pagerduty Operations cloud. 🙏🏼 @Boldstartvc to be partnered since day one as team scaled to almost 1m enterprise users on platform. LFG https://t.co/KoIJ40EliYEd Sim @edsim
Still early days for institutional investors in the crypto space and excited to invest in Stakewise with Blockdaemon, a portfolio co, to create the world’s first KYCed liquid staking product - will unlock massive opportunity and value in defi🔥 up to announce investment into in collaboration with to create the world’s first institutional liquid staking product Will unlock the next level of inflow into Ethereum with long awaited Institutional involvement in staking & DeFi 🚀StakeWise has joined forces with Blockdaemon to build the first liquid staking product for institutions 🏦💸 As part of our collaboration, StakeWise also received a strategic investment from @BlockdaemonHQ and @Boldstartvc into SWISE. Learn more: https://t.co/VQH5CogVk3StakeWise @stakewise_io
🧵 broken out by infrastructure, experience, and value add layers
In Hebrew but on starting a company on day 1, recruiting and more….
How we started and chose our day 1 partner 🧵
Feel free to ask a question in any part of the thread and I will try to answer 🙏🏻
Gravity is a powerful force