What's 🔥 in Enterprise IT/VC #280

Dev first stocks 📉 but still bullish in LT - MongoDB - from $100M ARR to $1B ARR in 5 years 🤯

Mar 12

🙏🏼 for 🇺🇦 - this week’s focused giving is on Alex Iskold from 2048 Ventures 1k Project to send $1k to directly support a family that has been impacted by the war in Ukraine. If interested, you can donate here.

So this past week I tweeted this out.

Ed Sim @edsim

Some perspective on fast growing developer first + infra startups Hashicorp once valued >$14B now $6.7B, ARR run rate $322M Gitlab once valued >$15B now $5.5B, ARR run rate $268M Founders, if u haven't adjusted valuation expectations, u better 100x NTM is over for 99% of cos

Alex Wilhem from TechCrunch expanded on this tweet here:

alex @alex

inspired by an @edsim tweet

Selling to developers is no longer a sure path to insane valuation multiples – TechCrunchProduct-led growth is a big deal these days as startups are trying to find ways to grow without spending all their capital on advertising and sales staffing. But it’s no panacea.tcrn.ch

Jason Lemkin from SaaStr has a great post adding to the 🧵 - “Your VCs Are Worried About Public Multiples. Do You Need To Worry, Too?”

Now that I have your attention, read more in the 🧵 as it’s not the end of the world but more of an expectations resetting on valuations.

Ed Sim @edsim

As thus far less affected and Bs somewhat - will be interesting next few months as still so much private capital on sidelines where funds want to put 💰 to work, thus increasing round sizes and valuations

Ed Sim @edsim

For those founders who raised large preemptive rounds at super high prices, cash is king 👑, revisit your budget, make it last, will need even better performance to avoid down rounds due to multiple compression

Most founders will still believe they are in the 1% where this does not apply to them and who can fault them for it. However, my strong belief is that while this correction is overdone and things will improve once we get through this war, I highly doubt that we will be back to the world of 100x NTM ARR but perhaps we will find a happy medium between 20x and 100x.

The good news is that all all is not lost for developer first and infrastructure companies as a number continue to grow and beat their quarterly revenue targets. Case in point is MongoDB which is continuing to show the power of consumption based pricing as it beat its earnings and jumped over 20% after announcement.

😲 Here are a few quotes from the most recent earnings transcript:

We had another strong quarter of customer growth, ending the quarter with over 33,000 customers. The fourth quarter marked another major milestone as we crossed $1 billion in annualized revenue run rate. Crossing over the $1 billion mark five years after reaching the annualized $100 million mark is clear evidence of the value MongoDB's application data platform offers customers, large and small, all over the world. Our excellent fourth quarter performance was broad-based.

More on the bull case for enterprise 💰 spending:

Businesses across all industries will continue to invest heavily in software as a means to differentiate themselves to seize new opportunities and to respond to new threats. While this has been happening aggressively over the past decade, we are still only in the early stage of this movement. As infrastructure becomes more advanced, with chips getting more powerful, algorithms getting smarter and networks getting faster, the capability for innovation only increases. Powerful software powered by real-time data will empower experiences and business models we cannot even conceive us today.

And MongoDB continuing to refine its GTM motion as it aims to grow from $1B ARR run rate to $2B and more…

Sure. So we've constantly always tried to stay ahead of where the business is in terms of anticipating changes to our go-to-market model. I mean, as you can imagine, in the early days, we had one model, which is a direct sales force really trying to sell to everyone. Then we introduced an inside sales team.
Then we introduced self-serve. Then we've introduced the notion of having focused teams on high-end accounts. We introduced the notion of removing friction from the initial selling process to get customers on our platform more quickly. So we're always refining our go-to-market motion in anticipation of, one, how big this market is, and we try to meet customers where they are versus trying to force them to try to engage with us in one way.

I am as bullish as ever and as I’ve always said, what better time to start a company than now. Super early stage funding has been minimally affected, and if you are in build mode the next 12-18 months, by the time you are out with product, I do believe the world will be much improved.

We @boldstartvc continue to invest at company formation having added 3 new founding teams in the last two weeks to the family and are doubling down as they grow - more below on Upstream (DAO in a box) and more…

Let’s keep 🏗️ and onwards and upwards!

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

Scaling Startups

As I always say, it’s not the TAM you start with but the TAM you exit with. Best founding teams have an ability to zoom in microscopically to the end user and day in their lives and also zoom out to tell a bigger story of where it can go. But can’t fund a day one startup without the deep and focused product sensibility.
Paul Graham @paulg
Early on, the ideas of startup founders can either be grand and vague, or smaller and more concrete. Many founders think investors want the former. Maybe bad investors do. But the successful founders are the ones whose ideas are concrete.
March 10th 2022
296 Retweets2,347 Likes
Free trials vs. freemium 🧵
Lenny Rachitsky 🇺🇦🇺🇸 | lennysan.eth @lennysan
Should you go trial or freemium? My takeaways from analyzing 50+ SaaS products: 1. You don't have to choose, you can do both! 90% of freemium products also offer a trial. 2. Go trial if your product needs hand-holding and has a high price-point. 3. Go freemium otherwise.
March 8th 2022
42 Retweets436 Likes
💯 - also why best board members ask questions of founders and let them experiment and learn vs. telling what to do, best founders take that lead with the 10% you give them and learn the other 90% and do it quickly
Sahil Bloom @SahilBloom
You can read every business and self-help book in the world, but ultimately the only way to learn is by fucking it up. I love reading—I love gathering insights from the greats. But reading and studying is nothing without battle-testing. Don’t fear failure. Fail smart and fast.
March 6th 2022
299 Retweets2,356 Likes
For the GPs out there - great 🧵 on fundraising for VCs
LD Eakman @LDEakman
Denominator effect will be in play but, most of all, LPs get risk-averse really quickly (especially their ICs). I sit in on a few and the discussion is all defense, no offense these last few weeks. You can guess that I’m pushing them to keep investing through the cycle.
Semil @semil
VC friend last night estimated U.S. endowments & foundations exposed to VC have likely lost “multiple hundred of billions” in private book value so far in 2022, but it will take many months for the marks to hit. They suggested this will greatly impact those raising new funds.
March 9th 2022
28 Retweets170 Likes

Enterprise Tech

Enterprise Tech 30 from Wing Venture is back with a great list and lots of open source, dev first and PLG cos represented including Snyk (a portfolio co). Excited to participate again this year with a great group.
AI Tools Stack from Casber Wang and Aditya Reddy at Sapphire Ventures with port co
“While modularity would inherently bring in more complexity, I’m very excited to see 1) products designed with abstraction + integration in mind that meet end users where they're at from an AI workflow maturity standpoint & 2) modularity bringing flexibility to help customers tweak every last component of their model and model-building workflow to produce the most optimal analyses and systems for their specific needs.”
Stripe enabling crypto for every merchant…game changing
John Collison @collision
Stripe now supports crypto businesses: exchanges, on-ramps, wallets, and NFT marketplaces. Not just pay-ins but payouts, KYC and identity verification, fraud prevention, and lots more. stripe.com/use-cases/cryp…
March 10th 2022
960 Retweets4,358 Likes
Some 💎💎💎…
cdixon.eth @cdixon
Some reasons to build your startup in web3 🧵
March 6th 2022
850 Retweets3,776 Likes
Google buys Mandiant for $5.4B - could kick off cybersecurity M&A wave from other big cloud vendors
Wedbush analyst Dan Ives said in a note to investors Tuesday, “With cyber attacks increasing by the day and cyber warfare underway from Russia/state sponsored cyber terrorism organizations, Google is doubling down on its cyber security footprint at the right time with Mandiant and looking to differentiate itself from the likes of behemoths Microsoft and Amazon in the cloud arms race.”
Ives said his firm expects the deal to have a “major ripple impact” across the cybersecurity space.
“Cloud stalwarts Amazon and Microsoft will now be pressured into M&A and further bulk up its cloud platforms,” he said.
“We believe cyber names such as Varonis, Tenable, CyberArk, Qualys, Rapid7, SailPoint, and Ping standout as potential M&A candidates in cyber security (among a handful of private players) given these vendors laser focus on protecting next generation cloud workloads from cyber attacks.”
Acquisition #6 by Snyk is…TopCoat Data, a portfolio co, to uplevel customer facing reporting and analytics. Thrilled for all involved and more on the journey 👇🏼
Seth Rosen @sethrosen
Excited to announce that TopCoat Data has been acquired by @snyksec! Today is an incredibly exciting next chapter for our team and technology. (Thread below)
March 7th 2022
6 Retweets144 Likes
Acquisition #3 by Blockdaemon - as companies continue to scale, exercising a M&A 💪🏼 becomes a critical component to scaling and expanding TAM
Blockdaemon 😈 @BlockdaemonHQ
Today, we’re proud to announce our acquisition of @GemHQ, the #1 aggregator of fiat-to-crypto onramps and offramps💎 This acquisition will make it even easier for businesses to offer in-app crypto products and services to their customers, all powered by Blockdaemon😈 (0/5) 🧵👇
March 9th 2022
20 Retweets33 Likes
My colleague Shomik does a technical deep dive on “What's Under the Hood of SaaS Companies (Hint: Why Multitenancy Matters)” - The hidden underpinnings of what makes SaaS scale so nicely