Hot in Enterprise IT/VC - What's 🔥 in Enterprise IT/VC #319
What's 🔥 in Enterprise IT/VC #319How Open Source founders can go from artistic success to commercial success - lessons from Hashicorp🤯 If you wonder why interest rates and controlling inflation matters, this chart from my friends at Guggenheim Securities (Rob Bartlett) showing current EV/NTM multiples will pain the picture. It’s down from an all time high of 48x just a year ago and now it’s at 8.2x for the fastest growing software companies (>40% YoY). Multiples aren’t coming back until inflation gets under control and while the pendulum will swing back to more historical pre-pandemic numbers, don’t expect seeing 48x ever again. The good news is that against this massive valuation compression, we still have developer and infrastructure software companies executing in this challenging environment. Companies like Gitlab, MongoDB and Hashicorp all beat expectations. Hashicorp, for example, had an amazing quarter growing over 52% to $125M Revenue with 134% Net Dollar Retention. More importantly there are some lessons to be learned from the transcript and investor deck. So many nuggets of wisdom from @HashiCorp earnings transcript
Here's how most OSS projects go from artistic success with lots of devs using it to commercial success where the 💰 is - need to serve both constituencies
more here: seekingalpha.com/article/456312… also a matter of sequencing - always need to nail the individual user value prop for developers on day 1 b4 u can get the budget
challenge also grows as company gets bigger + customers demand more enterprise features + making sure u don't lose sight of North ⭐ + dev 1st engine This slide from the Hashicorp Q3 Presentation shows how the OSS flywheel is supposed to work: user first, budget second. Reminder the user and grow the ecosystem elements require significant patience, anywhere from 12-24+ months to get that flywheel moving. When folks fall short is not understanding what the economic buyer needs and that they are different than the user. Yes the budget could be developer engineering but Hashicorp focuses on the new platform eng team and even security budgets. Done right, this model can drive results like this 👇🏼 - 7 years later, a land of $100k has turned into a multi product sale and 10M of ARR - a 100X increase from 2015! Here’s more on the current market and the GTM motion from the earnings transcript.
Be patient, focus on the user, find the economic buying center and budget, land, expand, and never forget your North ⭐ and focus on delivering value for that single user no matter how big you get. As always, 🙏🏼 for reading and please share with your friends and colleagues! Scaling Startups
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What's 🔥 in Enterprise IT/VC #318
Saturday, December 3, 2022
VC investor letters written by ChatGPT 🤯
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What's 🔥 in Enterprise IT/VC #317
Saturday, November 26, 2022
Navigating your first enterprise sales in 2023 - innovative is great, but save me 💰 or give me a 2:1
What's 🔥 in Enterprise IT/VC #316
Saturday, November 19, 2022
Carnage in security to come, a game of musical chairs but still massive outcomes for the winners
What's 🔥 in Enterprise IT/VC #315
Saturday, November 12, 2022
A silver lining from this past week?
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