What’s 🔥 in Enterprise IT/VC #437

building the AI Native company - not just product

👇🏼 this…

There is no board meeting I’m in now where using AI to get more efficient is not discussed! Here’s an excerpt from a recent one - this slide or some form of it has showed up in every single meeting the last few months.

Here’s an example of how you can use AI to operationalize your GTM - AI as a true partner from lead gen to outreach to pre call to post call.

To be clear, this is not a young founder versus more experienced founder vibe. In fact, it’s the 2nd and 3rd timers who are often the most adamant about this - they are just so pumped to have the opportunity to build differently this time, more efficiently, and wiring the AI Native company from inception.

While every existing company is rethinking about wiring AI into their workflows, it’s obviously much better to do it from Inception!

The latest batch of companies at YC shows the extremes:

And exactly as I stated a year ago!

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

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Scaling Startups

#benchmark data from Pete Walker Carta on ownership after various rounds of investment - VC is not free which goes back to the earlier post - many founders I meet also want to raise as little as possible to get as big as possible - will AI help change the equation?

#“Mira Murati’s Stock-Option Strategy Pays Off With Recruits” - (The Information)
Super important - this is nothing new - make sure you don’t get a term sheet or price for your startup until you have all your key folks ready to go with 83b elections filed and options which they can pay for upfront…this is what Inception investors help founders work through!

Without an established valuation, the startup seems to be able to offer early candidates equity at low prices—while fielding investment offers at much higher prices, which will make those candidates instantly wealthier on paper after the round is done. Exercising options early—thereby buying shares at a very low price—could also help employees save on taxes if they sold those shares in the future, since options are taxed based on the difference between the strike price and the value of shares when options are exercised, compensation consultants and lawyers tell us.

It’s not unprecedented for new startups to grant options before a company has set a 409a valuation, these advisers say. Since the strike price of stock options is generally determined by the fair market value of a company’s shares, companies sometimes hold off on receiving written offers from investors, even if they have discussed or verbally committed to a certain valuation, until their negotiations have finished.

#when I started in the biz 3 decades ago, endowments were the gold standard. Fortunately there are lots of other pockets of institutional capital as Meghan highlights one huge concern

#🤔 read the 🧵 - lots of interesting charts

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Enterprise Tech

#🤯 best products sell themselves…

#❤️ this for all of those 🦄 birthed during ZIRP!

9 year old AI company, Moveworks, bought by ServiceNow for $2.85B 🤯!!!. Heard this was at18-20X forward NTM multiple which is super healthy. While one may wonder what future of AI SaaS is, this shows how having a product ready to sell on day one matters as Moveworks and ServiceNow have a lot of mutual customers. Deep integrations and full enterprise support and scale matter for ServiceNow which now sounds like it can offer a whole menu of AI from copilot to agent to even search with one acquisition - see next note from Glean CEO.

More on the story from the press release:

ServiceNow and Moveworks will redefine the value of how to put AI to work, setting a new standard for the future of employee engagement with a powerful universal AI assistant, along with more perceptive AI‑based enterprise search, to find fast answers to requests, automate and complete everyday tasks, and increase productivity. The majority of Moveworks' current customer deployments already use ServiceNow as an important system of action to access enterprise AI, data, and  workflows, pointing to a seamless integration for the companies.

Moveworks has also seen exceptional adoption of its AI assistant with leading Fortune 500 and Global 2000 companies, such as Hearst, Instacart, Palo Alto Networks, Siemens, Toyota, and Unilever. With its new agentic platform growing to nearly 5 million employee users in about 18 months, and nearly 90% of its customers deploying the technology to all of their employees, Moveworks’ front‑end AI agent and enterprise search services will expand ServiceNow’s reach to every requestor in an organization. ServiceNow is already one of Moveworks’ more than 100 technology integrations, and the companies have approximately 250 mutual customers. Together, ServiceNow and Moveworks will be the best agentic AI platform in the market.

#another 9 year old 🦄 positiniong itself as an AI leader

- points to my Goldilocks startups thesis - the ones who may win in the world of AI, not the startups, not the incumbents but…read here!

#super classy from Glean founder, unlike the thesis of verticalization of SaaS, he lays out why horizontal platforms matter and why Glean can be that new horizontal giant

#all you need to know about the OpenAI agent building tools and multiagent framework 🧵

#Manus, the first generalized AI agent, broke the internet last weekend - watch, pretty amazing…who needs a $20k research agent from OpenAI when you have this and oh yeah, will release open source version later this year

10 more insane Manus agent examples

#turns out Manus is an amazing wrapper for Claude and other products…🧵

#more on agents from Aaron Levie at Box - not just reimagining existing workflows but also what new areas can agents attack?

One of the biggest mistakes we make in thinking about enterprise AI Agents is imagining that they will primarily be aimed at going after the exact same things we already do today with software or people. It’s much easier to imagine an existing TAM getting moved around instead of growth coming from all new areas. 

But in practice, many of the biggest AI Agents opportunities will be in areas that are currently considered “non consumption”; where agents get deployed to solve net new problems for the customer that they weren’t spending on previously.

#imagine the software maintenance for this 🤯

#to my point

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Markets

#great overview of state of markets from Redpoint Logan Bartlett - this plus many more 💎

#state of the enterprise software world 🎢

#Recession vibes??? (WSJ)

Take low-income consumers: At an interview at the Economic Club of Chicago in late February, Walmart Chief Executive Doug McMillon said “budget-pressured” customers are showing stressed behaviors: They are buying smaller pack sizes at the end of the month because their “money runs out before the month is gone.” McDonald’s said in its most recent earnings call that the fast-food industry has had a “sluggish start” to the year, in part because of weak demand from low-income consumers. Across the U.S. fast-food industry, sales to low-income guests were down by a double-digit percentage in the fourth quarter compared with a year earlier, according to McDonald’s.

Things don’t look much better on the higher end. American consumers’ spending on the luxury market, which includes high-end department stores and online platforms, fell 9.3% in February from a year earlier, worse than the 5.9% decline in January, according to Citi’s analysis of its credit-card transactions data.