Hot in Enterprise IT/VC - What’s 🔥 in Enterprise IT/VC #406
What’s 🔥 in Enterprise IT/VC #406The race to be the last mile AI platform for enterprises - lessons from Palantir's Bootcamp model (BLG is the new PLG), Glean, and others...What a wild ride 🎢 in the markets! As mentioned previously, it’s so important for us investors and founders to stay the course, play long ball. Let me share with you how that looks like at the moment from public comps, private financings, and GTM (go-to-market) execution. First, Jamin Ball’s update on multiples is here: Look at Palantir - well deserved on its 21.1x multiple and even though its NTM growth is much lower than others below, the AI story looms large and its trading at a premium. Secondly, according to the WSJ Glean, initially a GenAI enterprise search platform (Feb 2024 website) is in talks to raise a new round of funding at a $4.5B valuation. More importantly, the multiple is quite rich but also will compress if the growth continues:
To be clear, while Glean’s initial wedge was built around enterprise search, its ambitions are much broader - to be the enterprise platform to build AI-driven apps and workflows in an easy-to-build, privacy-preserving and secure manner. Here’s the website today. As an aside, I did mention Glean as one of top startups to watch that I have not invested in on this most recent Business Insider list of amazing enterprise software companies (85 of the most promising startups of 2024, according to top VCs). Well, this is exactly what Palantir is doing - fixing the last mile problem, aiming to be the platform from which every enterprise builds every single application. What does that tell you? The value is not in the foundational model or LLM, it’s in the workflow and the last mile to make it super easy for enterprises to conceive, build, and deploy GenAI in the enterprise in a rapid, accurate, cost-conscious, privacy preserving, and secure manner. That is the race of the future and every single company that starts with a wedge solving a specific problem will eventually end up in this race. What’s also interesting is how both of these companies go-to-market. This is real enterprise sales - there is no PLG, freemium play at the moment but…all that being said, both are focused on delivering insane Time-to-value or time to the “Aha” or “Wow” moment for its customers. Look at Palantir’s execution from this past week as it continues to leverage its new model - the AIP Bootcamp - BLG for the win! Zooming out, I encourage you to read Iconiq’s The State of Go To Market in 2024. It’s loaded with great survey data on sales motions, cycles, rep productivity and more to benchmark yourself against >150 B2B Saas Companies. While there are so many slides I could pull out, here are a few that hammer home my points above: #Slide 1 - SLG vs PLG - this first one is super important as companies need to stop getting enamored with sales acronyms like PLG, SLG, now BLG, and just focus on getting customers to the “WOW” moment as soon as possible. TIME TO VALUE MATTERS! The easier your product is to try, test, etc, the quicker to the Aha moment. As you can see here, more SLG companies are going more PLG and thus making it easier and easier to get their products into the hands of customers with miminal friction - that’s a big shift from 40% to 54%. This has resulted into a large shift away from Top-down sales to Hybrid and bottom- up. Frankly, I am all about hybrid as at the end of the day all roads eventually lead to enterprise sales and steak 🥩 dinnahs! In light of this survey data from ICONIQ and the shift from SLG to hybrid, let’s take a deeper look into Palantir’s GTM. I originally wrote this post 6 months ago but never released it but based on this past week’s numbers, we can say that the Bootcamp/BLG model is working pretty well! More on the BLG model:PLG or product led growth was all the rage during the ZIRP era as products seemed to sell themselves. However, as times got tough, folks learned that easy onboarding also equaled easy offboarding, and that PLG is just lead generation that generates highly qualified customers. Eventually everyone needs to sell, and all roads eventually lead to top-down enterprise sales. But what if you have a complex enterprise sale that always requires an extensive POC? How can you increase time to value? How can you get prospects through the funnel faster? Enter the bootcamp which Palantir has been using to stunning success. Here’s CRO Ryan Taylor commenting in its Q4 2023 Palantir earnings call:
So what’s an AIP Bootcamp - here’s Palantir’s description:
What’s important to note that Palantir is famous for coining their own customer delivery process with “forward deployed engineers” which really meant that they would sell a huge platform and have engineers custom build solutions while living at the enterprise.
Bootcamps are an exponential leap in time to value as the new AIP platform enables Palantir to show time to value in days versus months.
Given how early we are in the AI cycle, it’s an amazing way to move prospects to close much faster. Here’s a chart showing the Bootcamp sales process and from reading comments from management it sounds like deals are closing post-bootcamp and pre-full ROI realization of 3 months. Here’s what Ryan Taylor (Chief Business Affairs Officer) of Palantir said about the bootcamp motion 3 quarters ago in its Q3 2023 earnings call:
Palantir’s COO Shyam Sankar chimes in later:
What Shyam is saying is that the bootcamp is also a leveraged model since consulting partners can run these for customers and it also speeds time to implementation or time from booking to happy customer as it becomes the implementation motion. Here’s how the AIP bootcamp worked 1 quarter later! The stock was up 📈 30% (Feb earnings call) that week.
Reminder, bootcamps as a motion is not cheap and best used when deals are huge
Shyam reiterates “getting hands dirty” with AI important!
More from Alex Karp, Palantir CEO, in his annual letter to shareholders. The key here is the delivery of the AIP platform “which has gone from a prototype to a product in months.”
So how’s the BLG motion working 6 months later? 🤯 💰 (Q2 24 Earnings call Transcript)
Time to value matters! Bootcamps work, and I’m sure we’ll see many more enterprise software companies who sell big ticket items top down create their own version of the AIP Bootcamp. BLG baby! As always, 🙏🏼 for reading and please share with your friends and colleagues. Scaling Startups#stop and listen to friend Rob Bailey, co-founder of CrewAI, initial COO for Kustomer - I’ve had the pleasure of working with him on over 6+ companies and starts here with lesson 1 - you can’t brute force PMF #fun chat with Grace on inception investing, the 5 Ps for investing at Inception, what we look for, portfolio construction… #💯 startups, you are lean, focused - leverage your advantage #here’s the full video from last week’s live stream with Michael Krigsman of CXOTalk covering many of my points above about what we’re seeing in F500s (full transcript here)
Enterprise Tech#Forbes Cloud 100 is back - congrats to boldstart portfolio co Snyk for placing again and coming in at #27 while OpenAI takes the top spot over Databricks and Stripe #Microsoft’s AI Can Be Turned Into an Automated Phishing Machine (Wired) along with video from Barqury’s presentation at Black Hat
#all 38 🦄 created this year (TechCrunch) #what is the future of software engineering as per President of Devin 🧵 - this post is 🔥 also love how Russell discusses 2nd order effects (read What’s 🔥 #379) 👇🏼 #the LLM model race encapsulated - quickly getting commoditized, low switching costs #💯 👇🏼 as I like to say, all real enterprise sales eventually lead to steak 🥩 dinnahs esp. in a world where AI-spam only increasing. #software engineering vs AI engineering: “we are acknowledging it will never be “right” because its fundamentally nondeterministic, but building new capability and turning it into product is all the engineering” #how to think about AI application development from Anton, founder of Chroma 🧵 - I took out slide 9 but encourage you to read #great writeup on boldstart portfolio co Clay from Zachary DeWitt - also read this post from my partner Eliot Durbin about Clay’s origin story as it took them 6-7 years before Clay really inflected #looking to the publics when understanding how to monetize AI - here’s ZoomInfo #AI at end of day is about jobs to be done, productivity - no better way to look at impact than understanding Indian outsourcing industry (WSJ)
#cybersecurity still on 🔥, growth rounds back as Abnormal Security in email space announced a new $250M round at a $5.1B valuation, up from a $4B valuation in May 2022 - 100% YoY growth and over $200M ARR
Markets#Zooming out over time - 🔑 lessons #🤔 - this can’t end well, can it? What's Hot 🔥 in Enterprise IT/VC is free today. But if you enjoyed this post, you can tell What's Hot 🔥 in Enterprise IT/VC that their writing is valuable by pledging a future subscription. You won't be charged unless they enable payments. |
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What’s 🔥 in Enterprise IT/VC #405
Saturday, August 3, 2024
$2.9 Trillion wiped out in stocks, $1 Trillion in CapX spend for AI - stay the course, just a mini-bubble in a long 10+ year game - time to keep building 🏗️ but choose wisely as always! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
What’s 🔥 in Enterprise IT/VC #404
Saturday, July 27, 2024
GenAI skepticism builds but 🙏🏼 ServiceNow for delivering AI monetization 💰 powered by "domain specific LLMs" ($1B revenue opportunity in just the next year) ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
What’s 🔥 in Enterprise IT/VC #403
Saturday, July 20, 2024
Cybersecurity wakeup call - 62% of the global external attack surface is concentrated in the products and services of just 15 companies 🤯 ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
What’s 🔥 in Enterprise IT/VC #402
Saturday, July 13, 2024
What are the implications when there are only 72 public enterprise software companies worth >$5B + there are still >1500 🦄? ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
What’s 🔥 in Enterprise IT/VC #401
Saturday, July 6, 2024
Going into attack mode post ZIRP, parallel thoughts from the dot.com implosion and rebound circa 2004 - the time is now! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
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