What's 🔥 in Enterprise IT/VC #302

☁️💯, PLG + Dev First dominate, breaking down the Top 20 for 2022

It’s mid- August and time for another ☁️💯 list.

The seventh annual Cloud 100 list of the world’s top private cloud companies, produced in partnership with Bessemer Venture Partners and Salesforce Ventures, recognizes standouts in tech’s hottest category from small startups to private-equity-backed giants. Ranging from Helsinki to Hong Kong, the companies on the list are selected for growth, sales, valuation and culture plus a reputation score derived in consultation with 26 CEO judges and executives from their public-cloud-company peers. (You can read more about it here.)

Similar to years past (2021, 2020), I spent 10 minutes and used my best guess to understand the primary business model and initial sales motion of The Top 20 Cloud 100 companies and as you can see below, dev first models (including OSS) account for 30% of the list (same as last year) while overall PLG cos comprise 35% of the list (down slightly from 40% last year).

Of note, 3 of the 5 companies who primarily target developers are API-first companies (Stripe, Checkout, Checkr) while Databricks is the lone OSS co as Hashicorp and Gitlab graduated from the list as they both went public. Notice new Top 20 entrant Snyk, a boldstart portfolio co, which is developer first and the only cybersecurity company in the Top 20. When you combine Dev First cos with PLG, 65% of the Cloud 100 use a frictionless GTM which is insane! To be clear, this is only reflective of the initial sales model since as deal sizes get larger, every company eventually layers in an enterprise sales motion. Also huge congrats to one other PLG and portfolio co, Front, as it made the list at 100.

Here’s another datapoint on the Cloud100 from an IT Spending perspective. This is from ETR (Enterprise Technology Research) and covers a Net Sentiment score as evaluated by a community of over 5k IT decision makers representing >$1 Trillion of spend. The Net Sentiment Score metric aggregates customer evaluations and utilization, then subtracts churn to determine overall enterprise traction and which companies are currently best positioned. No surprises here as many of these emerging companies favored by IT all appear on the Cloud100.

MarkETR @mdsmaldon

Many of the Forbes Cloud 100 are tracked in ETR's universe of spending intent and sentiment sourced directly from IT decision makers such as @MiroHQ @figma @databricks @getpostman @snyksec @collibra @Tanium @OneTrust @Calendly among others ..

Finally, with inflation easing versus expectations (could be just a bear market rally), multiples for the Top 10 cloud stocks on NTM/Rev basis are back at 20x! (thanks Jamin Ball!)

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

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Scaling Startups

1. Finally!

   Ed Sim @edsim

   Market doing its thing. So refreshing to c more $2m vs $5m initial rounds as of late. Smaller rounds create constraints + intense focus. Smaller teams move faster. Some founders can handle larger rounds but many others end up overhiring + losing scrappiness.Choose rd size wisely

2. 🤯 you don’t need lots of venture funding to build a big business as Calendly got to $70M ARR on a $500k seed round

3. PMF can take time - sharing B2C since PLG, dev first has lots of elements of this

   Lenny Rachitsky @lennysan

   In my research into the product-market fit journeys of the most successful B2C startups, I found that there are essentially five archetypes of finding PMF: 1. Lightning in a bottle: Immediately clear, up and to the right

   

4. 💯

   Jeff Richards @jrichlive

   One of the strongest "moats" you can build as a company is an execution moat. Sounds basic, but very few private tech cos execute in a reliable, methodical way towards goals. Transitioning from "we have a great idea/product" to "we are building a great company" not easy...🤞

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Enterprise Tech

1. Congrats to Slim (build secure containers faster) and CodeSee (code visibility platform), both boldstart portfolio cos

   CRN @CRN

   The 10 Hottest #DevOps Startups Of 2022 (So Far): crn.com/news/cloud/the… @architect_team @Codeseeio @DuploCloud @Esperdev @insightlydotai @LinearB_Inc @Modular_AI @MondooHQ @readysetio @SlimDevOps #CRNYearSoFar

   

   crn.comThe 10 Hottest DevOps Startups Of 2022 (So Far) | CRNCRN’s list includes DevOps startups CodeSee, LinearB and Mondoo.

2. cloud security is real and growing fast 🤯 - Wiz fastest to scale from $1M - $100M ARR in 18 mos - from Wiz

   

   Wiz can be rolled out in minutes via an agentless, API-centered approach to seamlessly scan workloads and give organizations full visibility of their cloud environment.

   At the heart of our product lies the Wiz Security Graph, which is a game changer for cloud security. Rather than a long list of contextless alerts, Wiz identifies, correlates, and prioritizes risk across all layers – network, identity, secrets, workloads – and then puts it on the graph. This provides context that both cloud builders and cloud defenders need to focus on risk that matters. We identify different attack vectors and toxic combinations that represent critical risks better than any other technology in the market.

3. SaaS is still on 🔥 as another Israeli co still growing fast as Monday.com released its Q2 earnings for its work OS platform: check out the Monday.com presentation for a masterclass on storytelling and execution

   

4. Huge congrats to Kumospace, a virtual office platform and boldstart port co, which just announced its $21M Series A led by Lightspeed - get your customized virtual office here and join the 1000s of other companies like Google, NASA, Deloitte, and my firm boldstart to create your own

   Brett Martin @brett1211

   1/ Proud to announce @Kumospace_’s $21M+ series A fundraise led by @paulbz @lightspeedvp alongside @Boldstartvc @alumniventures @GreenDVentures, @ChargeVC++. The future of work is remote and @Kumospace_ is your virtual HQ. 🚀 techcrunch.com/2022/08/08/kum…

   

   techcrunch.comKumospace nabs cash to replace physical offices with virtual ones – TechCrunchKumospace, a startup developing a ‘virtual office’ platform for corporate and government customers, has raised $21 million in a venture funding round.

5. Free is powerful

   Zach DeWitt @ZacharyDeWitt

   Free distribution is a powerful weapon

   

6. Retool has been crushing it with a no code internal tooling platform and there is no shortage of companies going after this market. Enter Superblocks which has been quietly building a more comprehensive and easier to use platform more for developers vs. business analysts and is generating significant traction - huge congrats 💪🏼 to Brad Menezes on Superblocks’ $37M Series A round led by Kleiner along with Spark, Meritech and co-founders of AirTable - here’s more on the product and positioning 🧵

   Brad Menezes @bradmenezes

   Excited to announce @superblocks $37M funding round led by @kleinerperkins, @sparkcapital, @MeritechCapital & Greenoaks alongside world-renowned operators We’re on a mission to save developers 1000s of hours building custom internal tools. A thread 👇 bit.ly/3QjSVZ0

   

7. Chaos Engineering moving up in Innovation, DevSecOps in Plateau of Productivity

   Mark O'Neill @TheMarkONeill

   The Gartner Hype Cycle for Software Engineering 2022 is published! Notable changes this year include Machine Learning Code Generation entering the Hype Cycle, many technologies at the Peak, and Microservices finally escaping the Trough of Disillusionment gartner.com/interactive/hc…