Times like these below are what makes day one investing so awesome. BigID had its first partner and customer conference this past week in Miami and despite the doom and gloom in the world, the vibes were incredible. Guest speakers from partners like AWS, MongoDB and others talked about the future of data privacy and security while customers were sharing nuggets of wisdom on how to do even more with the BigID product. Just a reminder that it wasn’t too long ago that many did not think that privacy was a business and only when Zuck testified before Congress on the day of RSA Sandbox did BigID make it on the map as they won best startup in 2018. It also reminded me of how founders need to start small to go BIG (see post on initial BigID slides from day one) and become a true platform player.

Ed Sim @edsim

Dream @bigidsecure - first customer/partner conference - amazing energy - well done @dimitrisirota @nimrodv w/@etdurbin @Boldstartvc

May 25th 2022

11 Likes

This is especially true today more than ever. In the last few years, day one startups raised too much capital to start and hence weren’t forced to prioritize. There is nothing like a huge correction to get founders and investors to focus on the few things that really matter. Startup darwinism has accelerated and the companies with no hope will die faster leaving the better companies with less competition and more opportunity. I was interviewed this past week by Alex Gove on the StrictlyVC Podcast about the current state of the market so please tune in if interested in what we’re seeing for next rounds and how founders should think about prioritizing.

Ed Sim @edsim

🎙️Enjoyed the chat on @StrictlyVC - we covered lots of ground esp. the fact you need to be nuts to start a company now, true missionary founders - shoutout to @RobLoCascio @LivePerson @konstantin11 @BlockdaemonHQ - listen in, starts ⏩ 8m 35s - let's 🏗️ podcasts.apple.com/us/podcast/ass…‎StrictlyVC Download: Assessing the Market Meltdown with VC Ed Sim on Apple Podcasts‎Show StrictlyVC Download, Ep Assessing the Market Meltdown with VC Ed Sim - May 27, 2022podcasts.apple.com

May 28th 2022

4 Likes

While the public markets had an up week for once, overall the news was less than stellar as all signs are pointing to a recession. That being said, technology with real ROI can be deflationary by allowing folks to do more with less and this is best highlighted by Jamie Dimon from JPM Chase who stuck to his plan from a few months ago to spend $14.1 Billion on IT, yes $14.1 Billion. Read 🧵 for more charts and if you want full slide deck, go here.

Ed Sim @edsim

@jpmorgan had big analyst day today + for founders who are overwhelmed by doom and gloom, JPM still spending lots on core infrastructure - cloud, developers, cybersecurity to tune of $14.1 Billion

May 23rd 2022

3 Retweets19 Likes

Question is how will this budget and the budget of other large enterprises be affected if we move into a prolonged recession? Target also said they would continue their spend on IT but let’s check back in a few months.

Bill McDermott of ServiceNow who mostly sells to large enterprises continues to be bullish by promising to double revenue by 2024 😲 and increasing the revenue target from $10B to $11B!

On the flip side, Snowflake warned of lower future consumption from some customers and its shares dropped 13% in after hours trading slipping below its IPO price.

“Today, some customers face a more challenging operating environment specific customers consume less than we anticipated, amid shifting economic circumstances, we believe are unique to their businesses, most notably consumer-facing cloud companies. Although these customers are still growing, we believe as long as they are impacted by macroeconomic headwinds, the consumption will be impacted.”

The slowdown came in April in particular, leading executives to reset their forecasts for specific customers for the full fiscal year, Scarpelli said. The past two weeks of May were very strong, but macroeconomic concerns now have leaders feeling more cautious, Scarpelli said.

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

Scaling Startups

1. On surviving the dotcom crash 🧵

   Ed Sim @edsim

   Reviving this...@LivePerson went public in April 2000 - we needed the cash, IPO pricing went from $16 to $8 in matter of days but glad we got out. 💰 in bank was 🔑 + still public today SaaS did not exist in 2000, what an epic run! LT lens, what will be created in this pullback?

   Ed Sim @edsim

   1/ cleaning out my desk before SaaS, we had the ASP (application service provider) market, found this from August 1999 where I'm quoted in @Infoworld talking @LivePerson Can’t believe how far we’ve come, yet in many ways things didn’t change much, just got WAY MORE EFFICIENT https://t.co/hYl3V32YVa

   May 24th 2022

   5 Likes

2. Sequoia “Adapting to Endure” Slide deck (from The Information)

3. Which one are you?

   Ed Sim @edsim

   There are 3 kinds of companies in this world: 1. Those who don't have product mkt fit 2. Those who have it 3. Those who think they have it but don't Last is where intellectual honesty comes in For 1+3, only spend should be on product to get to #2. for #2, efficient growth 🔑

   May 25th 2022

   3 Retweets27 Likes

4. layoff tracker - 709 startups w/ layoffs ∙ 119503 employees laid off ∙ Since 3/11/20

Enterprise Tech

1. On LT enterprise multiples…read Jamin Ball 🧵. Challenge will be for founders and investors to look internally and determine based on their cash runway, growth prospects, and market opportunity, which multiple they should be optimizing for

   Ed Sim @edsim

   Median NTM revenue now 6.8x + top 5 16.2x. Challenge is that every later stage co being priced as if 16.2x but there r only 5 in top 5. I suspect top 5 will normalize to 15-20x but truly need best in class growth, margins + net retention. 🤔 about how u grow into your valuation

   Jamin Ball @jaminball

   This week on Clouded Judgement: Are earnings revisions coming? + analysis on software fundamentals in a recession - Median software multiple: 6.8x - High Growth software median: 8.4x - Mid Growth software median: 6.5x - Low Growth software median: 3.6x https://t.co/gdy6TrUeXQ

   May 27th 2022

   3 Likes

2. Well said! Why we keep doubling down on developer first cos and infra

   martin_casado @martin_casado

   This is the AWS console with 510 products. There is a big, independent company to be built for each item in this list.

   

   May 27th 2022

   40 Retweets565 Likes

3. Amazing profile in Forbes from Alex Konrad on Stripe…look at that net revenue number 🤯

   Alex Konrad @alexrkonrad

   Valued at $95B, Stripe is a true unicorn even by Silicon Valley standards. So are its numbers. Sources tell @Forbes it reached nearly $12B in gross revenue and $2.5B in net revenue for 2021, still growing about 60%, and with hundreds of millions in Ebitda profit. tip @Techmeme

   

   May 26th 2022

   7 Retweets60 Likes

4. Love this slide from Daniel Bryant’s talk at Kubecon - From Kubernetes to PaaS, what’s next - highlights so well what shift left means in terms of dev responsibility and the architectural shifts over time

5. Thanks @jacqmelinek for including some of my thoughts - here are a few quotes:

   “This [time] sucks but also will be good to remove some froth from the ecosystem,” Ed Sim, founder and managing partner at boldstart ventures, said to TechCrunch. “True builders and believers will stick around and keep building.”

   TechCrunch @TechCrunch

   Vibes hold steady at crypto conferences amid bearish market tcrn.ch/3sN7Scv by @jacqmelinekVibes hold steady at crypto conferences amid bearish market – TechCrunchIt’s been a hard month for the global cryptocurrency market. And yet, community members continue to gather nonstop to network, learn and party at what feels like endless crypto conferences.tcrn.ch

   May 23rd 2022

   15 Likes

   Even with the current volatility, market players need to take a long-term approach, Sim said. “Based on experience, all I can say is that this is a great time to invest and deploy capital in missionary founders building companies for the right reasons.

   Sim shared a similar sentiment: “Let’s stop hyping and keep building.”

6. MetaMask, leading crypto wallet, now a platform…

   croissant @CroissantEth

   Some of the Metamask Snaps that are already in the works involve: -Smart contract accounts -Phishing prevention -Messaging + notifications -DAO tooling -Price feeds -L2 Snaps -Protocol Snaps -Hardware wallet Snaps -Tornado Cash Snaps & much more.

   May 22nd 2022

   35 Retweets383 Likes

7. Enterprise GTM means you need to hire 6-12 mos in advance to have enough ramped reps. Also means if u built for 1 world + biz goals go from growth at all costs to balanced growth, then sadly need to let folks go. More to come unfortunately.

   Gergely Orosz @GergelyOrosz

   Just in: @Lacework - data-driven security platform for the cloud - lays off ~300 employees, about 20% of staff today. The layoffs come 6 months after the company raised $1.8B, valued at $8.3B. Some people let go were hired 1-2 months ago. Company yet to post an announcement.

   May 25th 2022

   93 Retweets536 Likes

   Read between the lines from official blog post - we are doing great but era of growth at all costs is over, back to balanced growth

   We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet so we can be more opportunistic around investment opportunities and weather uncertainty in the macro environment. We remain 100% committed to continued best-in-class growth and leading the industry with our innovation.

   Here is what remains constant for Lacework:

   Our business continues to grow faster than our competitors because we have customers and partners invested in our success. Our customer-first orientation drives us to serve them – learning and growing – better and better, day by day.

   Despite the broader economic environment – demand for cloud security will remain strong, and it is critical to all online, cloud businesses.We have a differentiated product with an ambitious plan for continued product innovation.

Markets

1. Inflation 🧵

   Bill Ackman @BillAckman

   Inflation is out of control. Inflation expectations are getting out of control. Markets are imploding because investors are not confident that the @federalreserve will stop inflation. If the Fed doesn’t do its job, the market will do the Fed’s job, and that is what

   May 24th 2022

   2,894 Retweets15,538 Likes