What's 🔥 in Enterprise IT/VC #332
Monday can't come soon enough
Apologies for the delay on the newsletter as I, like many of you, have been scrambling to help founders figure out payroll. I’m still in shock 🤯 at the speed of this failure but also not surprised. The beauty of the echo chamber is that products like ChatGPT can be instant hits overnight, but at the same time, the mob can turn quickly and, in this case, create a bank run at the speed of which has never been seen before. I’m not here to opine on SVB management or if VCs caused this, but what I can say is that there are thousands of tech employees who are and will be severely impacted if deposits are not 100% honored. Let’s 🙏🏼 that the Fed does the right thing and steps up and guarantees deposits after all assets have been sold. If not, SVB, IMO, will lead to a massive ripple effect, a rapid flight to safety and quality, and potentially put other smaller, regional banks like First Republic, Signature…into similar paths of destruction. Best case scenario is a larger bank like a JPM Chase or Morgan Stanley takes over the SVB deposits and honors them fully on Monday morning similar to what happened to Washington Mutual during the mortgage crisis.
For now, we don’t know the full effects on the startup ecosystem. Besides the obvious like meeting payroll, there are many venture investors whose bank accounts are on SVB and are in no position to make short term loans. Some Limited Partners who invest in VC funds also have assets locked up in SVB and can’t wire to VCs who are making capital calls. SVB was so important to the industry that 50% of all tech startups banked there along 44% of the companies that went public.
This liquidity crunch will get much worse if we don’t get clarity on Monday. Hopefully there is either a sale or the uninsured receives the first of a few advanced dividends to alleviate the burden. As a founder/investor, once the ST payroll situation is solved, wait until Monday before signing any emergency additional bridge loans to cover future payrolls. Start those discussions now but wait until we all know more. I’ve seen pretty aggressive terms from some investors offering $0.50-60 on the dollar for future recovery of cash, and now is not the time to do so if you’re payroll this week is covered. BTW, here’s a great, simple document if you need to put together a short term more friendly loan.
As always, 🙏🏼 for reading and please share with your friends and colleagues. We will get through this but let’s be patient and kind to one another. Looking on the bright side, once we get through this, there will be a generation of founders and investors who once knew only 📈 but now will be seasoned veterans bringing healthy skepticism around building startups the right way with an obsession around the importance of cash.
Scaling Startups
Staying lean and mean…
Complexity increases with team size
for VCs building new firms
Enterprise Tech
Great post from Chase Roberts Vertex Ventures on the new edge with contributions from: Guillermo Rauch, Co-founder & CEO of Vercel, Kurt Mackey, Co-founder & CEO of Fly.io, Nicholas Van Wiggeren, VP of Engineering at PlanetScale
Why generative AI will be layered into every application where it makes sense…
👀Two early papers find the effects of generative AI on knowledge work are completely unprecedented in modern history Separate studies of both writers and programmers find 50% increases in productivity with AI, and higher performance and satisfaction. And this is just the start.
also in 🧵 link to GitHub article on developer productivity which has always been hard to measure but here is some of its thinking:
We’re here to support developers while they build software—that includes working more efficiently and finding more satisfaction in their work. In our research, we saw that GitHub Copilot supports faster completion times, conserves developers’ mental energy, helps them focus on more satisfying work, and ultimately find more fun in the coding they do.
We’re also hearing that these benefits are becoming material to engineering leaders in companies that ran early trials with GitHub Copilot. When they consider how to keep their engineers healthy and productive, they are thinking through the same lens of holistic developer wellbeing and promoting the use of tools that bring delight.
From a couple of weeks ago but super relevant
The SaaS app chatbot race is on: more from Microsoft (Bloomberg) - as Satya stated in his earnings call in October 2022, AI copilot coming for Microsoft Dynamics and Office
“ERP, CRM, marketing, customer service, supply chain—all these distinct categories are all made up, right? I mean, they’re all garbage sort of categories thought up by vendors,” said Nadella, whose first executive role at Microsoft was running an early internet-based version of business applications called bCentral. “What if we said, there was just one Biz App workflow?”
as Dharmesh from HubSpot built his own SmartCRM product…
got to ❤️ when founders of $20B co @HubSpot is still hacking away nights + weekends to build what's nextI've been furiously coding away every night on a new project. Thrilled I can finally share it with you. ChatSpot is something I built for myself. Check out the launch video: https://t.co/yTYVMeS0U0 It's the all-in-one ChatGPT-powered tool to help you grow better. It's in… https://t.co/JjJbwTGxTZ
dharmesh @dharmeshNot to be outdone, here’s Salesforce
I still want a GenAI bot to analyze all my messaging, email, etc and then automatically create and update my CRM - none of these retrofits will do that as it will upset the existing paradigm
Circle stablecoin now depegged with $3.3B exposure
💯 as computing continually shifts between centralized to distributed computing, reminder that some problems still have not been solved
Values not features/speeds & feeds
Markets
🧵 on MongoDB and more specifically insights into 2023 and IT spend
Agree. We need to focus on the human side of things. But instead people enjoy watching the world burn too much and forget the fact that at the end of the day those who are impacted are very likely far away from the decisions or circumstances that led to the situation at hand.