What’s 🔥 in Enterprise IT/VC #476
Product Led, Sales Led or...Ad Led Growth 🤔 - OpenEvidence at $150M ARR ads for physicians
There are so many ways to get big fast and one that we haven’t discussed is ALG 🤣 or ad-led growth. Alright, I’m kidding…right? Well 👇🏻
Now let’s look at the metrics for the more traditional enterprise busines models as the end of year seems to be the time for everyone to just flex 💪🏻 a bit before the holiday season.
To set the stage, I encourage you to watch Alex Clayton’s Meritech markets presentation that he gave to LPs recently at the Emergence Capital annual meeting. Here’s the “AI is growing so fast chart” that everyone has seen, and what we still don’t know is how durable and sticky this revenue truly is.
What’s clear, however, is the winners receive outsized valuations which are significantly higher than the median across Series B to D.
Another way to hit these numbers is with a bottoms-up or product led (PLG) motion. Our boldstart portfolio company Clay which we’ve been partnered with since Inception grew from $1M to $100M in just 2 years. However, it did take some time, 6-7 years to be exact, before discovering its North Star. I’ve written more about Clay’s GTM here in previous issues, but Clay co-founder Varun breaks down its unplaybook playbook quite clearly below!
Here’s my TL:DR summary of Clay’s unique model.
6 contrarian moves:
Reverse demos killed friction - Product was unusable (8 calls for $200/mo). Let customers drive 30-min screen shares, solved their problem live, got instant UI feedback. Brought sales cycle to zero.
Brand before revenue - Bought Clay(.)com, hired claymation artist, made Head of Brand employee #18 pre-revenue. Felt crazy. Became a moat.
Usage pricing when everyone said per-seat - First GTM company to do it. Investors said they’re leaving money on table. Actually unlocked technical buyers and land-and-expand motion.
Cold email agencies as first customers → UGC flywheel - Agencies became experts, posted on LinkedIn, attracted clients organically. Self-perpetuating cycle. These agencies then became “Claygencies” and has been like an army of forward deployed engineers but not on its payroll.
Hired farmers, physicists, archaeologists, magicians - 50% of GTM/G&A doing first job. Prioritized passion/empathy/curiosity over experience. Taught mechanics later.
Created GTM Engineering category - Now thousands of GTME jobs exist. Hundreds of agencies built on Clay. First-time founders building 7-figure businesses on top. Community as force multiplier.
While Clay could have copied and tried to brute force its original platform and business model (a more programmable Airtable), it took more time to discover what its platform was built to do, testing and iterating and relentless trying lots of things to become the Clay that we know. Here’s a slide from the original Clay deck and more on how it found its way.
That’s the bottoms-up playbook. Now Glean did the exact opposite, and is also on a tear with $200M ARR, doubling in nine months. Zero PLG motion. Pure enterprise GTM - top-down sales, no viral loops, full stop.
Glean proves that AI-native scale works in enterprise GTM. ElevenLabs shows how explosive it can get when distribution and demand align perfectly as it added $14M ARR in one day 🤯!
To zoom out, here’s the market data from Menlo Ventures’ latest State of AI report.
Over 50 AI products generating over $100M ARR - I’m just sharing what’s possible for all of you - this is one of the biggest gold rushes we will ever see and yes, there will be some huge meltdowns along the way, but this opportunity is simply historic and just getting started!
As always, 🙏🏼 for reading and please share with your friends and colleagues!
Scaling Startups
#inception/seed - and the rounds just keep getting bigger
#40 hard earned Nos to raise his $1M seed round for 20% of the company 🤯
#it’s getting brutal out there - either you go big (multistage), go niche (specialize by stage/sector), or go home (game over)
#and the kicker for seed managers…
#hard to go long without turning some insanely lucrative offers; in this case, $1.2B sale and now at $8B valuation - not for everyone but worth noting…
Enterprise Tech
#great post from Jamin Ball on Systems of Record Evolving - 👇🏻 for full read
which 100% aligns with where i’ve been thinking for quite some time - read The Enterprise Agent Hunger Games #400 here…
#🤯 - must watch as design and engineering all together in code - can iterate in design and code visually - where it’s meant to be - what happens to Figma?
#how memory actually works on ChatGPT and it’s not RAG
#Peak AI already?
#Enterprise is a priority at OpenAI
At the lunch, Altman made clear that selling to enterprises was a massive OpenAI priority, and mentioned that it was an application problem, not a training problem, that the company needed to solve. Altman was straightforward about OpenAI’s need to build better products for enterprises and his intent to fast track them.
#but OpenAI still not yet ready to automate finance analysts - that’s some lemonade 🍋 stand!
#DevOps is not dead! Harness raised at $5.5B and at 250M ARR and port.io in internal developer portal space raised $100M at $800M - yes, both are positioned as hard core agentic platforms!
Markets
#it just took a quarter of a century but we’re so back 🤣
#what the Oracle stock drop means to the market and AI trade 👇🏻
This is a great reminder that there’s no single “right” way to build in enterprise. GTM choices, timing, and structure matter as much as the product itself. Interesting to see how different paths can still converge on real scale when they’re thoughtfully executed. I'm interested in the enterprise space as well. I've written a post that analyzes the rise of AI-driven due diligence tools for law firms and how its transforming M&A workflows. Would love to get your views on it!
https://harshithviswanath.substack.com/p/ai-driven-legal-due-diligence-the
Stunning breakdown of Clay's contrarian playbook. The reverse demo insight is something most founders miss, they're so eager to pitch that they forget customers dunno what they need until they see it solving their actual problem. What caught me was thatusage pricing piece. Back in 2020 everyone told me per-seat was the only model that scaled, but watching companies like Clay prove that aligning pricing with value delivery actually creates stickier growth. The GTM Engineering category creation feels overdue tbh.