Asking “What problems do blockchains solve?” is like asking “What problems does steel solve over, say, wood?” Blockchain networks are a new construction material for building a better internet.
This section in Read Write Own, Chris Dixon’s book, has been bouncing in my brain for the last few weeks.
Very few people know whether today’s apps are built with, just as they don’t consider the construction materials of their office building.
The Bitcoin exchange-traded funds (ETFs) launched on January 12, approximately one month ago. On the first day, investors bought over $655 million and nearly $2 billion within the first three days. Since then, the figure has grown to an impressive $4.6 billion.
It’s not a fair comparison but for fun, we can compare the Bitcoin interest to the largest technology IPOs for a sense of scale.
On February 23rd at 10am Pacific time, Office Hours will host Steven Goldfeder. Steven founded Offchain Labs, the company behind Arbitrum, a web3 project worth $21b as of this writing.
Arbitrum is a L2, a layer 2, that sits atop Ethereum, improving its performance & cost to write transactions.
Steven authored many of the seminal papers behind modern blockchains.
We’re entering a new pricing environment for software: AI vs non-AI. It’s only happened in the last few weeks.
Recent earnings have pushed some of the most important companies to all-time highs.
| Company | Performance |
|---|---|
| Confluent | 34% |
| Cloudflare | 21% |
| ServiceNow | 20% |
| Microsoft | 14% |
This dynamic doesn’t favor everyone.
Theory created a public market AI index to track software companies who have significant product plans or current AI businesses.
As we’ve been researching the AI landscape & how to build applications, a few design patterns are emerging for AI products.
These design patterns are simple mental models. They help us understand how builders are engineering AI applications today & which components may be important in the future.
The first design pattern is the AI query router. A user inputs a query, that query is sent to a router, which is a classifier that categorizes the input.
“For some companies, [AI is] going to be standard issue like a PC.”
It’s not just for some. Many companies are moving in this direction. Across Microsoft products, OpenAI infrastructure, Github CoPilot (for coding), & Power Platform (for Office users) the growth is spectacular.
| Calendar Quarter | Azure OpenAI Orgs, k | CoPilot Users, m | Power Platform Orgs, k |
| 1/1/24 | 53 | 1.3 | 230 |
| 10/1/23 | 18 | 1 | 126 |
| 7/1/23 | 11 | 63 | |
| 4/1/23 | 2.5 | 36 |
OpenAI & Power Platform organizations have doubled or tripled in the last quarter.
Last year, I argued every company would need an AI strategy because AI would infuse most products.
But, I missed an important concept in the post.
Talent. In the last year, AI experience has become a status symbol on a resume & a path to materially higher salaries.
I’ve spoken to many executives seeking their next role. “I’m looking for a role in an AI company” is a refrain in every conversation.
The fastest growing software category in the public markets is security. Data follows.
Security companies as a group average 29% expected revenue growth in 2024, compared to 23% for Data (or DaaS which stands for data-as-a-service). Fintech & SaaS (horizontal) average ten percentage points fewer expected growth.
ServiceNow, a $150b market cap company, made this statement yesterday in their earnings call :
“In Q4, our gen AI products drove the largest net new ACV contribution for our first full quarter of any of our new product family releases ever, including our original Pro SKU.”
That’s pretty sensational for a company with 3 massive business lines & enough acronyms to fill a dictionary :
“With technology, customer and creator, we now have 3 workflow businesses over $1 billion in ACV. We have 11 individual product lines with north of $250 million in ACV. ITSM, ITOM and ITAM, each had double-digit deals over $1 million in Q4. Security and risk combined for 12 of the top 20 with 9 deals over $1 million. "
Last Friday’s post about delegation called The Class Missing from Business School, spurred a deluge of great advice from readers.
There was a recurring theme when delegating:
Paul sent this graphic about Hostinger’s Task Relevant Maturity.