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What's 🔥 in Enterprise IT/VC #309
On shiny new objects like generative AI in startup land + starting companies for the right reason
We have a new shiny object for founders and VC alike, and it’s called generative AI.
Due to significant improvements in models, compute, and datasets, AI which was once relegated to the realm of analysis only has become all about creation. Some early examples showcasing the power of AI for human-like creation include DALL-E which is a simple text-to-image generator and Github Co-pilot which is an AI paired programmer and code generator. Here’s an image I created using DALL-E using the text “oil painting of silicon venture capitalist throwing bags of money at AI robot".”
As you can imagine, founders and VCs alike are racing to discover all of the open categories which have not yet been disrupted using Generative AI ranging from creation of email copy for outbound sales to image generation for social media to dozens upon dozens of code generators. Don’t get me wrong - this is just wave 1 and there will be some groundbreaking companies created in this space. The problem is that the barriers to entry are limited, and when everyone thinks it’s a great idea, then well, the market will get crowded and overfunded fast. @swyx covers it well below.
And if you believe this is the future, then one day everything you read, hear, or watch could be AI generated?
As with any new technology, my only suggestion is that if you’re a founder thinking about creating a company in this space, don’t! Always start with the burning pain you are trying to solve, figure out what unique insight you have which will make a user’s life 10X better or more, and then decide what tech to use. Yes, the tech should come last, and if you are going to leverage generative AI to help solve customer problems then great. You may create the next big thing. However, when it comes to buzzwords, there will be hundreds of founders who will start the other way around with the tech first and look at market maps to determine which category in generative AI has not been done yet.
The first group of founders are what I call mission driven while the second I would call whiteboard founders. My personal bias is to always fund the founders who start with customer pain vs. looking for white space. When lifelong mission to solve a massive customer pain meets generative AI, then by all means go build a company but remember not to lost sight of solving the customer problems always!!!
If you’re an investor, I get that generative AI is super cool but invest for the right reasons and not because you’ve market mapped it and determined I need to have one of those.
As always, 🙏🏼 for reading and please share with your friends and colleagues.
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💯 Being candid means you truly care - in startup land, time is money and you need to be direct and candid and not wait
💯 although having both is even better
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On the heels of announcing our investment in Steadybit which is shifting chaos testing and resilience engineering ⬅️, we’re pumped to announce the Series A for Jeli, a one stop incident response toolLFG! Recover from downtime faster - slack incident bot now free along with world class incident analysis platform Congrats on $15M A led by our friends at Addition Capital Thrilled to be day one partner + double downWe're thrilled to announce our $15Million Series A to further our mission of building the best product to help you learn from your incidents 🎉 A big thank you to our investors, the community, and our wonderful team of Jeli beans 🤗🚀 https://t.co/t5I4BCMyCYJeli.io @jeli_io
Did someone say generative AI? Sequoia market map…
Meta make a video - yes, more generative AI
Congrats to Marc and AtomicJar (a portfolio co)! Great post on why Marc joined from DatadogVCs need only be right 10% of the time. The rest of us lowly employees better be 💯 sure when we join a startup! Back in 2017 it took me 9 months to find . This time it took 9 months to find the fine folks at . Here's my thesis: marc.trems.al/atomicjar/
When I first joined Datadog, I had a lot of people ask me why I was so excited. I would proudly explain that "people want traces, metrics, and logs in a single platform" or "monitoring and ITSM are broken in cloud-native environments" and ... it mostly wouldn't click. Turns out, you can't just make bold claims and expect people to believe you unless you're ready to argue why.
In related news, several people have asked me why I'm so excited about joining AtomicJar.
It's all about "shifting integration tests left", "shortening dev cycles" and "getting rid of broken staging environments". But don't just take my word for it, read on!
Let’s go - if you haven’t checked out Cloudflare workers, then now is the time. Liveblocks is building on it and we also have one in stealth doing so as well. 🔥 up for my fund boldstart to be a part of thisWe are excited to support startups building on Workers 🎉 a portfolio co, currently uses Workers & Durable Objects to provide APIs to devs efficiently! We hope to find & support many more in the future Congrats on this launch 🚀The world’s leading venture capitalist firms commit $1.25 BILLION to back startups built on Cloudflare Workers. https://t.co/ZD0Sa0vPBA #BirthdayWeek🎂Cloudflare @Cloudflare
WASM has been a 🔥 topic with infra founders and investors on the server side as of late but what’s slowing it down? Standards based or Proprietary (The New Stack)?
The future of WebAssembly — beyond the browser at least — seems to reside in the Component Model. But we should also look beyond it to the wider software market.
“There’s going to be venture-backed competition to occupy this space,” Wingo predicted. “Some of this might trickle down to standards but I think a lot of this is going to be proprietary lock-up.”
This is perhaps a natural evolution of what the likes of Shopify and Fastly are doing now; the question is how easy will it be for vendors to package up WebAssembly into edge compute solutions
More on WASM
Must read on where we are in terms of interest rates and valuations from leading valuation expert and NYU Professor of Finance
TripActions confidentially files for IPO aiming for $12B valuation (Business Insider)
TripActions, a startup last valued at $7.25 billion that aims to modernize business travel, has filed confidential paperwork with the U.S. Securities and Exchange Commission to go public next year, according to a person with direct knowledge of the matter.
Founded in 2015 by Ariel Cohen and Ilan Twig, the Palo Alto-based company helps businesses manage travel, company cards and expenses for employees. Customers include Lyft, Shopify, Unilever, Adobe, Netflix, Rivian, Thomson Reuters, Heineken, Notion, Canva, Carta, Loom, Databricks, and Patreon.
The company is being represented by Goldman Sachs in the listing, which is being targeted for the second quarter of next year at a $12 billion valuation, added the person who asked to remain anonymous because he was not authorized to discuss the IPO. His identity is known to Insider.
Overall thoughts on IPO market from Bill Ford, General Atlantic (CNBC)
The fundamental shift in the public markets has taken place, with investors reconnecting to fundamentals and “getting in touch with what a sustainable growth rate of companies is,” Ford said at the conference. But that reset for companies that are growing without profits hasn’t fully translated to the private markets yet.
“It will take some time for entrepreneurs to accept that growth is priced differently, and we have a stalemate now,” he said of the reset forced by shrinking P/E ratios on the S&P 500. “We’re waiting for that,” Ford said, adding that "it will clear itself in a few years."