What’s 🔥 in Enterprise IT/VC #407
What’s 🔥 in Enterprise IT/VC #407
Reflections on venture - what founders should look for in Inception investors, the importance of speed for founders as well as investors in winning the best opportunities + other reflections...
For some reason this week, a number of my posts were around the practice of venture investing. Despite it being August, the activity at boldstart ventures and the market in general continues to be 🔥 with no days off when chasing the best founders. So let’s start with a few reflections:
First, let’s talk Inception investing - a number of founders this past week lamented this exact sentiment shared by Vivek Sodera, co-founder of Superhuman:
I know of a few firms that are putting founders through unnecessary deep diligence + ref checks at the inception stage.
This is spot on by @edsim
As I worked with a couple of our founders this week doing the “Sand Hill Shuffle” now SF Shuffle, I got to witness first-hand the playbook of many multi-stage VCs. All I can say it reiterated this one fact for me - Speed matters for founders...and investors! Some great comments in 🧵 also…
Finally, exits are hard to come by but why not dream? Exits like this in the .0001% chance category are what dreams are made of 🛌🏼 - $1m ARR and $2B exit!
Read Katie Roof’s excellent Bloomberg which details the drama around the Tabular acquisition.
Finally, just a random thought:
When my dad emigrated from Korea, the language barrier was quite high with his accent. I remember him going to these weekend seminars from Dale Carnegie, and it always struck me as quite strange, why do I need help making friends? Well, when I graduated from college, my dad handed me his original copy, and I’m so glad that I read it. Here’s a snippet of the key learnings - some of this may seem obvious or even trite but believe me the basics matter!
As always, 🙏🏼 for reading and please share with your friends and colleagues!
Scaling Startups
#winning - startups work like hell, must watch from Eric Schmidt, ex-CEO of Google - btw, the interview was later taken down…love the no holds barred clip
#👇🏼💯
#that PMF feeling - so hard to describe but man can you feel it when it’s clicking! Check out comments 🧵
#yes, what are you an expert or geek at - can be anything but love to see the obsessive passion about something and ability to dive deep to build expertise!
#🙏🏼 why I ❤️ what I do every single day, get to partner with amazing founders and executives grinding for the ❤️ of it with a deep desire to WIN
#take your shot!
#hiring your first few enterprise sales reps - remember Order Makers vs. Order Takers (my original post from BeyondVC circa 2005 still applies!)
Enterprise Tech
#Ramp’s State of AI spending from Eric Glyman, co-founder and CEO - great report and here are some highlights
AI is no longer a toy. 1 yr ago only 40% of businesses that bought an AI products were still paying a year later. Now 70%+ are. Retention is getting strong.
@tryramp
's Summer 2024 Spend Report just released and it's a very interesting read. These charts also jumped off the page for me:
1/ AP spending with AI vendors jumped 375% YoY. Companies are making longer-term AI commits, and increasing experimental (💳) and core budgets (bill/AP).
2/ @AnthropicAI is seeing rapid adoption. After hovering at 4% at the start of the year, its market share jumped to 17% (of businesses purchasing foundation model inference).
@OpenAI remains the far away leader, but the fight for developer attention is heating up; posts like the following may not be one-offs https://x.com/Pavel_Asparagus/status/1818067793146982621
3/ Curious which AI applications grew the fastest? There are some fascinating ones including ...
Rest here...
#Forbes Next Billion Dollar Startups - congrats to portfolio company Clay! (full writeup on Clay’s story on the 6+ year journey to PMF here in What’s 🔥 IT/VC #400)
#1000% - the future of seat-based pricing will be challenging but at same time no one is ready yet to go 100% outcome-based pricing either
#more from Eric Schmidt in the interview that was later taken down since it was too frank (The Verge)
Ex-Google CEO says successful AI startups can steal IP and hire lawyers to ‘clean up the mess’
/ “But if nobody uses your product, it doesn’t matter that you stole all the content,” Eric Schmidt said during a recent talk at Stanford that has been taken offline.#there is real value in GenAI delivering real results in the F500
#How are Shopify’s engineers using AI from Farhan, VP Eng
#future of software dev?
#this is huge…esp as Anthropic continues to gain market share against OpenAI - read 🧵 - speed and huge cost advantage
#what’s next in the YC batch? Lots of ideas in 🧵 but frankly I’m still scratching my head about why folks are so excited as not sure of what LT moat is…
#You know my mantra, “There is no AI in the enterprise at scale without AI security” - well, it’s now a board level concern (WSJ)
Why AI Risks Are Keeping Board Members Up at Night
Company directors are trying to get a handle on artificial intelligence as its use soars, bringing potential productivity gains—but also raising the prospect of employee blunders#Black Hat security recap from cybersecurity analyst Francis Odum - great read
Reflections on Black Hat 2024: Key takeaways from almost 100+ conversations with Founders, Investors, and Operators (yikes - it was hectic):
Black Hat delivered on all fronts! Some key observations:
1) Identity Security was a major theme in my network (Across data, NHI, governance, and SaaS). AppSec, email, SOC and vulnerability mgmt/risk mgmt also garnered some attention. Surprisingly, the AI buzz was subdued compared to RSA.
2) Fancy booths but poor UI. I noticed some flashy booths from companies struggling with growth or old legacy vendors. If I were their investor, I’d question if those S&M dollars could be better spent on product. Also, there is a growing trend among vendors who would rather host private events than spend on booths.
3) Lots of capital on the sidelines. A significant amount of cybersecurity funding is waiting to be deployed, with investors eager to jump into “hyped” markets. There's also lots of good startups in stealth with big funding.
4) Israeli Founders. Israeli founders continue proving why they are best at building security products. I admired the resilience of those who navigated some serious travel hiccups to attend BH.
5) Lessons from Crowdstrike's blip. The Crowdstrike issue brought up discussions about vendor consolidation, but reactions are still mixed. I also noticed a high quality of CISOs and security leaders present this year.
6) Many private companies seeking exits. There’s a growing divide between the “haves” and “have nots” within each security category, with many exploring exits. I predict we'll see some interesting M&A later this Fall.
7) "Who Is The Next Wiz?" Last week's Big Announcements from Wiz, Abnormal, and Cato continue to drive enthusiasm from founders for learning from their playbooks (I have a report on this soon).
More here...#this will only get worse, deepfake audio and video phishing and the tech is making it easier and easier for hackers to deliver
#💯
# Uber with $2B IT budget - what do they spend it on?
Markets
#VC returns over 10 years still trump all else
#Pay to play back in VC deals (Axios)