What's 🔥 in Enterprise IT/VC #265

🎢 Strap it on for a bumpy next couple of months - but opportunity abounds in the long term + fun matters

Nov 27

Wow, I needed that…a brief pause for Thanksgiving 🦃 to spend time with family and to just be 🙏🏼 for being here and for friends, family, science, and the web which helped us out just a bit through these last couple of years.

I’m also 🙏🏼 for the incredible and unexpected bull market and the new golden age of developer and infrastructure software which the mainstream, public investors have seemed to adopt…I truly believe this is still just the beginning.

That being said, the latest news of a new Covid variant reminds me that we are not out of the woods and that the stock market is an amazingly efficient voting machine which makes decisions about the future in rapid fashion.

CNBC Now @CNBCnow

BREAKING: Stock futures plunge on fears of new Covid-19 variant; Dow set slide more than 830 points at the open, S&P 500 and Nasdaq to decline more than 1% cnb.cx/3p4KwMB

Zoom stock was down 14% earlier in the week on lowered growth expectations due to reopening and just like that it’s back up 10% in pre-trading. It’s important for the founders and VCs reading this to remember that while we need to buckle up for a bumpy ride the next few months, we should also not get too spooked by the near term and keep building and investing for the long term.

Clearly, private investors right now are quite bullish on the long term as 1000x multiples are becoming the norm for the most sought after founders. 🔑 here is to find the underdog founders who are not en vogue and hope they do become that founder in the future. That being said, I wonder how sustainable these prices are as investors are paying it forward 3+ years in advance for companies to “grow” into these valuations.

Eric Newcomer @EricNewcomer

Here’s a list of startups that raised at unicorn status with single digit millions (or less) in annual recurring revenue newcomer.co/p/raising-more…

For now, the public markets are continuing to reward one thing, growth, and the second that a company slows down, the valuation multiples compress quickly.

Jamin Ball @jaminball

The median software forward revenue multiple is now lower than where it dropped to in May. However, median multiples are still 23% higher than where we peaked pre-covid. High growth software multiples are 118% higher than where we were pre-covid (currently 31x vs 14x)

Regardless of multiples, builders build because they fundamentally want to solve a problem they deeply care about and want to see their product or service alive in the world. When it comes to what’s next in enterprise software, I’ve had a number of conversations in the last couple of weeks with founders or executives who are going all in on crypto instead. It reminds of back in 2017 when we started our blockchain accelerator at boldstart and then things died down. However, many believe this time is different…

Ed Sim @edsim

We all know portfolio company hiring is super tough but twice in last few days, a few star recruits decided to start crypto companies instead. These are enterprise tech engineers and both cited this will be big and it's fun! 🌊 is just starting - lots of building to do...

Yes, these are enterprise engineers, security experts, and execs who are excited about web3 and digging into to understand the infrastructure challenges associated with it from sidechains, privacy, scale, node monitoring, security and auth - there is still so much to build and it’s super early.

ChainLinkGod.eth 2.0 @ChainLinkGod

25/ There will be different ways blockchains attempt to scale and lots of experiments going on concurrently, especially within the modular realm, it will be interesting to see the result A lot of work is being done by some very smart people, it's not something I would sleep on

Chris Dixon @cdixon

Computing movements are positive-sum games. There can be many winners at both the infrastructure and application layer. It's important to run a variety of experiments — and stay focused on the bigger goal of bringing blockchains and web3 mainstream.

One other point that was made repeatedly from these folks is they are just having so much FUN diving into web3 and thinking about the possibilities. And for most of these folks who have done pretty well the last 10 years, FUN really matters!

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