We are living in two worlds at the moment, those who are GPT-4 or AI sexy and those who arenāt. For those in the former camp, the amount of š° that continues to pour into any company with Gen AI in its tagline and at valuations from 2021 reminds me that some of us truly have amnesia. On the other hand, the best, non-sexy Gen AI leaders are continuing to retrench and refocus on first principles and core product and team building.
In my 27 years of investing in early stage enterprise tech, I canāt remember a time where the largest of companies moved so swiftly to go after a space. Donāt get me wrong, I like many of you do believe in the transformational power of LLM models and already see many of our existing portfolio companies leveraging this. I also am a dreamer and am looking for that next big win but I do want to tread with caution. Case in point - AWS Bedrockā¦
https://twitter.com/edsim/status/1646848756241817607?s=20
Amazon Bedrock will be huge for enterprisesā¦
With Bedrockās serverless experience, customers can easily find the right model for what theyāre trying to get done, get started quickly, privately customize FMs with their own data, and easily integrate and deploy them into their applications using the AWS tools and capabilities they are familiar with (including integrations with Amazon SageMaker ML features like Experiments to test different models and Pipelines to manage their FMs at scale) without having to manage any infrastructure.
On the non-AI side of the world, I remain optimistic. The pendulum in startups and venture is always swinging from one extreme to the next. While painful, šš¼ to be back in capital efficient build mode.
https://twitter.com/edsim/status/1646519216978415618?s=20
For day one startups, this is all about building the right way with the sole focus on shipping the right product and getting early proof points. This means hiring folks with āhands on keyboardā who can get shit done. Itās great to hear founders proudly pound their chest š¦ when they get to PMF or $1M ARR as lean as possible instead of puffing their chest when it comes to how much money raised and at what price.
If youāre a company who has raised a few rounds, donāt be afraid to start with a whiteboard and and ask yourself the basics - what am I building, for who, and who do I need to build and sell this product. Too much š° means chasing too many ideas, having a couple of skunk work teams sitting in the corner or carrying too many sales reps with the hope that things will turn around. Besides the cost, more people means more meetings which means more time to get shit done. This reminds me of an old movie, Stripes, probably non-PC in todayās age, where John Candy shares his goals for basic training. Keep this image in your mind as you think about your company and how to move faster.
The benefits will be tremendous - more focus, speed, runway, and more value creation. If things donāt work out and all things being equal, I can assure you that having a lean, efficient org that ships product quickly will be more valuable in the eyes of an acquirer than a bloated team doing the same. Why? Itās because every single public enterprise software company and many late stage companies are doing the same thing, focusing on the Rule of 40 and trying to get to free cash flow positivity as quickly as possible. This means that acquisitions need to be accretive and quickly (in 1 quarter ideally).
As always, šš¼ for reading and please share with your friends and colleagues!
Scaling Startups
šÆ I write about this a ton - patience requiredā¦to a point - and one of my many tweets on this
Raising capital in public - gutsy!
Another great post by The Product Led Geek on Snykās side products used to drive growth starting with its vulnerability database (full disclosure -Snyk is a portfolio co)
Enterprise Tech
Palo Alto Networks flexing its šŖš¼ (The Information)
The company, which is the biggest stand-alone security software firm measured by market capitalization, is offering its cloud security software for free for up to two years to customers who ditch a competing service to sign up with it,Ā according to interviews with customers and sales pitch documents viewed by The Information.
Itās an unusually aggressive tactic to win customers, according to industry executives, who say itās more common for software firms to offer discounts for customers who agree to buy multiple products.
Great read on bringing LLM models intro production by Chip Huyen
New post: bringing LLM applications to production!
1. Challenges of LLM engineering & the solutions that Iāve seen
2. How to compose multiple tasks and incorporate tools (e.g. SQL executor, bash, web browsers, third-party APIs)
3. Promising use cases
Perfect, I hope there are less dev tools and infra investors š
https://twitter.com/lukesophinos/status/1645422641489285120?s=2
It will only get better for developer productivityā¦
also check out AWS CodeWhisperer announced GA and itās free to use! - going after Copilot
https://twitter.com/GergelyOrosz/status/1645349618211864577?s=2
sounds like many of the YC cos
https://twitter.com/lukesophinos/status/1645422641489285120?s=2
AutoGPT is the new cool thing and hereās why it wonāt take over the world yet
RSA continues to get bigger, up from 335 in 2022 -
, ex-Gartner Analyst, breaks it down by company, headcount, HC growth here...Treat your customers with ā¤ļø - Quite a headline from The Information: Cybersecurity Firm Zscaler Loses Coveted Spot in Gartner Ranking Due to āSales Arroganceā - Gartner top rankings mean a ton when it comes to positioning and enterprise sales and this is a first that Iāve seenā¦
In the latest ranking report for security firms like Zscaler, Gartner said it heard frustration from Zscalerās customers over the companyās āpricing and perceived sales arroganceā from staffers, particularly when contracts came up for renewal. Small- and medium-size companies have frequently told Gartner that Zscaler ācan be hard to do business with,ā Gartner said in the report, which is due to be released publicly on Thursday.
Lists galore - the AI 50 (Forbes) and 44 of the most promising Gen AI startups according to VCs (Insider)
Dystopian future? āWe've officially moved past 'AI models can write blog posts for me' and into "How much can AI models act like humans?" territory.ā
a16z 2023 State of Crypto Report - lots of great data on active developers, etc.
Markets
āSilicon Valley VCs tour Middle East in hunt for fundingā from the FT
āThe Four Seasons in Riyadh is basically Palo Alto,ā said a partner at one large Silicon Valley venture fund.
šš¼ Must read: Why the startup sector should keep its eye on the SEC
The SECās current agenda ā a public list of the regulations the agency is considering ā contains proposals that will increase barriers to capital for companies and funds, constrain investor access and potentially push more companies from private to public. In short, the SECās actions could slow one of our greatest engines of innovation.
Three key areas of proposed intervention by the SEC offer examples of why the venture community should be paying attention: