For the nine years I’ve been a venture capitalist, there’s always been a buzzword of the year. Solomo (social local mobile). Mobile-first. Realtime. Big data. 2016 was the year of machine learning. Is ML just another wave to crash and dissipate on the trough of disillusionment?
I don’t think so. In this rare case, I think hype is masking quite a bit of true technical innovation. During last quarter of 2016, machine learning research has made huge strides.
Over the last few days, I’ve been reading Shoe Dog, Phil Knight’s autobiographical tale describing the formation of Nike, and I think it might be one of the very best founding stories I’ve read. Easy to read, brimming with passion, full of harrowing business crises, the book is an inspiration to anyone who has a crazy idea and commits to persevering.
I’ve been struggling with the right way to enable commenting on this blog for a long time. In 2013, I wrote a post called Letter to the Editor about my challenges with comments.
Most notably, comments meaningfully changed readers’ perceptions of the content they read, even if the comments are not sound. In addition, I haven’t found a way to effectively moderate comments at scale.
Several months ago, I deployed a chat widget at the bottom off this page as an experiment. Here are my observations so far:
Most SaaS companies dream of attaining the $100M ARR mark. The very fastest attain the goal in 6-7 years. Last week, Workday halted trading to announce it had signed Walmart as a customer. Brian White, research analyst at Drexel Hamilton investment bank, estimated this one customer could generate $100M-$200M per year for Workday in recurring revenue - a single customer.
I couldn’t validate that this is the largest contract ever signed by a SaaS company, but if it is not the largest, it is most certainly the top 5. Workday beat SAP for the business.
During my first few weeks at Google, I read through the internal resumes of my new colleagues, which detailed their work and promotion paths. Google promoted people quickly. Some college graduates who had distinguished themselves had been promoted every quarter for more than a year, and were managers, senior managers, even directors. And I wanted the same type of trajectory.
Calendars contain one of the under-studied data sets within companies. How we spend our days, is of course, how we spend our lives, wrote Anne Dillard. How we spend our days at work determines what we and the company ultimately achieve.
I remember meeting Ryan Fuller of Volometrix several years ago. He shared the story of the business he and his colleagues had built analyzing the way companies spend their days. For one company, they tallied the annual hourly contribution of employees to support the three-hour weekly executive team meeting: it was something on the order 300,000 hours or about 150 person years. Quite an investment!
The fundraising market is in flux. The data indicates that it is certainly reverting to the mean after two record years in 2014 and 2015. Late stage market dynamics are changing as hedge funds and mutual funds seek other areas to invest. In 2017, there will be a lot of comparison between the prices public bound companies fetch at IPO compared to the last round private valuations as the public window opens. Given all that change, which early round will be the hardest to raise for founders in 2017?
Founded in 2008, AppDynamics is a leader in the application performance management space. AppDynamics technology helps engineers determine how software applications behave as users interact with them. Based in San Francisco, AppDynamics employs about 1200 people and has raised approximately $315M to date. The company filed their S-1 recently to take the company public. Let’s look at some of the key metrics and then compare AppDynamics to NewRelic, a close competitor which went public in late 2014.
The end of the year is fast approaching. Time for some quantitative analysis of the content that readers liked the best this year.
2016 was a year of change for SaaS, and most of the story was the public market. Valuations there fell from their highs in 2014. More than $70B of public SaaS market cap was taken private by both other publics and also by private equity firms. SaaS company formation seems to be slowing, but the companies that do raise, command larger Series As than ever. Through the evolution of the market, these were the top 6 posts of the year
Australia, Canada, Israel, China, India. SaaS startups are thriving in these countries and many more. Next generation software companies hail from many different parts of the world, and some of them are worth billions of dollars. Shopify and Hootsuite in Canada. Atlassian in Australia. Xero in New Zealand, just to name a few. As these successful startups have boomed, how has the early stage fundraising market for them evolved?