What’s 🔥 in Enterprise IT/VC #439

MCP baby you know me + Animal spirits are flowing...

Perhaps this best summarizes the week in startup land…amazing startup pitches, new financings at insane multiples, more new AI toys, and the rise of a new standard, MCP.

I couldn’t resist - this image in the style of Studio Ghibli was created using OpenAI’s latest release which I’m sure your social feeds are flooded with at the moment. The wild thing about where we’re at in the cycle is that as a founder and investor, you’re always living on a razor’s edge, and I kind of concur with this sentiment below. The important question you have to ask yourself is “is my product/service improving with each new release” or getting killed. Increasingly that question may be getting harder to answer if you’re in the crosshairs of the generalist foundation model move to the app layer.

But what’s the big deal? The idea that 15 months of work can get replicated in a matter of seconds by AI is the big deal.

Balaji spells it out here:

The real question is what’s next after this? The improvements from ChatGPT image generation v1 to now have been exponential, and if we apply the same logic to other functional areas in reasoning and work, just imagine the implications…

Speaking of animal 🐯 spirits, on the heels of Wiz’s $32B acquisition by Google in cybersecurity, we have our next potential breakout winner as Island in the browser security space just raised a new round at a $5B valuation 🤯. What’s notable is that it’s main competitor Talon decided to sell early for $625M, a phenomenal price for a company with little to no revenue, at the end of 2023 when the market was nascent. It brings up so many questions for founders and investors in cybersecurity on deciding when to go long, be wrong, or sell (more from last week’s post).

Animal spirits are also alive and well when it comes to revenue multiples 😲. Here’s some numbers on Island along with other cybersecurity cos courtesy of The Information. This is certainly ZIRP like.

More animal spirts include OpenAI raising $40B at a $300B valuation!

And then there’s Anysphere, creators of Cursor, which is on an incredible revenue ramp 📈 and rumored to be raising at over a $10B valuation 🤯 just 4 months after its last raise at $2.5B (The Information)!

Finally, the last big leap from this past week is OpenAI’s embrace of MCP which was first released in late November by Anthropic and has built huge momentum on its way to becoming an industry standard with OpenAI joining the party. Here’s what MCP is:

MCP is an open protocol that standardizes how applications provide context to LLMs. Think of MCP like a USB-C port for AI applications. Just as USB-C provides a standardized way to connect your devices to various peripherals and accessories, MCP provides a standardized way to connect AI models to different data sources and tools.

Why MCP?
MCP helps you build agents and complex workflows on top of LLMs. LLMs frequently need to integrate with data and tools, and MCP provides:

* A growing list of pre-built integrations that your LLM can directly plug into
* The flexibility to switch between LLM providers and vendors
* Best practices for securing your data within your infrastructure

Here’s why its becoming an industry standard.

Steve Manuel founder of Dylib.so and MCP.run, a portfolio co., breaks down the bigger opportunity regarding the future of system integration.

Microsoft also joined the party 10 days ago 😲.

Will this interoperability powered by intent based integration lead to an acceleration in the unbundling of SaaS powered by agents easily calling other applications? So much to discuss and ponder (here’s a widely read post on this exact topic…)

Much more covered from the week is covered below with the Enterprise Tech 30 of hottest private companies to the AINativeDev landscape of over 150 startups to JPM’s Emerging Tech Landscape …

If you have time this weekend, there is no better way to see the future than to play around with it. Go to ChatGPT, upload a picture, and enter a prompt - perhaps convert your image into the style of Family Guy or South Park and then head to Hedra to convert the image into a video like this!

I couldn’t resist - Inception baby!

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

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Scaling Startups

#being a founder means you will get rejected…a lot, even for Canva founder Melanie

#As I like to say bleeding F&%$ing early - where the best opportunities lie…

#CEOs need to set the tone every single day!

#when VC was a cottage industry

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Enterprise Tech

#💯

#The Wing Enterprise Tech 30 of most promising enterprise startups is out - click through and check them all out - lots of AI! BTW, notice the Inception date of our investments in these 3 cos - one would assume it’s just the hot new startups as winners, but anyone, can recommit to being AI Native in product, thought, and spirit

Superhuman circa 2014
Clay circa 2017
CrewAI circa 2024

#the first official AINativeDev landscape is out…great to see port cos Snyk, Tessl, Baz, and CodeYam on it (click through to check it out)

#second mover advantage in AI - 🧵 and lively replies

#always look forward to the JPM Emerging Tech Trends report - click below to get the 2025 version

#taste matters even more in the AI age

#must listen - 🤯 having partnered from Inception with Rahul Vohra not once but twice with the latest being Superhuman, I can tell you that this is a must listen podcast

Consider this Rahul's greatest hits on building startups, getting to product market fit, not listening to your customers too deeply, doing things your own way like manually onboarding the first users, and how he built his exec team to refocus on product...

And of course, Lenny Rachitsky extracts the best insights out of him!

and for the record, Rahul settles the debate on who was the very first check into Superhuman 🤣, or first 3 checks

#🤯 OpenAI’s embrace of MCP as a standard, hugely important since this was created by rival Anthropic

#need to build trust first esp. in security where a hallucination can F things up royally but CISOs and customers are receptive…(Axios)

#The Goldman Sachs AI playbook for internal deployments

#Quantum may be here faster than we think - JPM with a major breakthrough

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Markets

#Power laws

#KKR evolution from PE to mini-Berkshire - worth a read (Bloomberg Money Stuff)