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What's 🔥 in Enterprise IT/VC #282
Lessons from the early days of VC, relationships not transactions, doubling down when others won't
I’ve been reading The Power Law: Venture Capital and the Making of the New Future by Sebastian Mallaby which traces the history of VC and the idea that a small handful of companies generate the majority of returns for investors. Mallaby’s book also reminded me of how VC was in the early days, an industry powered by deep and strong relationships with the founders. With all of this 💰 flushed into the system, I feel that the world is becoming more transactional and data driven versus relationship driven, and Power Law is an important reminder for all of us to make sure we focus on more than just the numbers and don’t lose the personal touch.
It’s the personal touch and deep connection that gave Kleiner the conviction to double down on Tandem when no one else would. If investors want to buy up in companies and increase ownership as companies grow, one of the only ways to do it is to have inside information and conviction when others don’t. It’s having the belief a winner is a winner before others believe it is. Here’s a great example:
This brings me back to the Kustomer closing dinner which was held this past week with the Kusty exec team, investors, and bankers. It was so awesome to finally see everyone in person for the first time, celebrate, and also share stories on the
journey from day one. That evening I was also reminded of the fact that everything was not always 📈. Fundraising was tough in the early days after the A round, and we at boldstart, Social Leverage, and Canaan led a bridge round between the A and the B, to buy more time to hit a few more product milestones and close a few more customers.
So what gave us the conviction to write a bigger check in the bridge round than in our initial seed? Relationship and true belief in the founders and team’s ability to deliver the additional features needed on the product to close more deals. Fortunately that turned out quite well. In fact, looking at a number of our best companies and 🦄 in the portfolio I can say that almost all of them had a few bumps in the road and needed a bridge between some early rounds to get to the promised land.
Here’s how the evening ended…with Vikas Bhambri aka @spicedawg56, our first
and only Global Head of Sales, and I dancing in Times Square for a debt owed on a bet made at a board meeting. I will miss the entire Kusty team but along the way I made new friends, learned a ton, and had lots of fun. Founders, investors remember - relationships matter and if you want to make it through the tough times and also realize outsized returns, focus on relationships and not transactions. And who knows you may get to brush up on some of your dance moves along the way!
As always, 🙏🏼 for reading and please share with your friends and colleagues!
Wisdom from Tom Peters
Sage advice for early hires at startups when companies scale
What’s a COO and how to hire for one from First Round Review - this is definitely a hire that many founders struggle with in terms of what the profile is (hint: different for all) and what is the goal
PM stackPM Stack, one year later: 🏆 Top: (same as 2021) ⬆️ Up: ⬆️ Down: ↔️ Staying strong:Final results of the informal Product Manager stack survey Surprises: 1. @SlackHQ 🥇 2. @MiroHQ at 6th 3. @NotionHQ over @googledocs 4. @WhimsicalPowers in top 20 5. For tasks: @Jira ➡️ @trello ➡️ @productboard ➡️ @asana ➡️ @linear_app ➡️ @mondaydotcom ➡️ @clickup https://t.co/CPeqGLVoJc https://t.co/k8Ou9UjJu9Lenny Rachitsky 🇺🇦🇺🇸 | lennysan.eth @lennysan
Who says infrastructure startups can’t go after perceived to be crowded markets dominated by the huge cloud vendors? Huge congrats to spectro cloud ( boldstart portfolio co) which has built a visually stunning, easy to use and infinitely scalable kubernetes SaaS platform with the power of BYOB and the ease of SaaS!
Statement by President Biden on our Nation’s Cybersecurity - net net, companies must do what it can to protect itself which equals more 💰 spent - here’s a link to the fact sheet - notice the emphasis on “developers” - let’s go!
“We also must focus on bolstering America’s cybersecurity over the long term. We encourage technology and software companies to:
Build security into your products from the ground up — “bake it in, don’t bolt it on” — to protect both your intellectual property and your customers’ privacy.
Develop software only on a system that is highly secure and accessible only to those actually working on a particular project. This will make it much harder for an intruder to jump from system to system and compromise a product or steal your intellectual property.
Use modern tools to check for known and potential vulnerabilities. Developers can fix most software vulnerabilities — if they know about them. There are automated tools that can review code and find most coding errors before software ships, and before a malicious actor takes advantage of them.
Software developers are responsible for all code used in their products, including open source code. Most software is built using many different components and libraries, much of which is open source. Make sure developers know the provenance (i.e., origin) of components they are using and have a “software bill of materials” in case one of those components is later found to have a vulnerability so you can rapidly correct it.”
Data50 - The World’s Top Data Startups as picked by a16z
Great 🧵 on delivering quality software and all forms of testing…
This is 💪🏼 - the institutional wave of crypto as a true asset class is building
Reminder: crypto founders, token or no token...first principles of building great product, hiring top talent still matter - no shortcuts
Early signs of round size decreasing which means valuations as well…