Ethereum generated $370m in profit on $825m in revenue for about a 45% net income margin.
The chart above shows both the historical performance & also explains how web3 blockchains like Ethereum generate revenue & profits.
How does Ethereum compare to other software companies?
If Ethereum were to trade on the New York Stock Exchange or the NASDAQ, it would top the net income margin (%) charts, with Microsoft, Adobe and Veeva thereafter.
Over the weekend, Tobi, the founder and CEO of Shopify, discussed the major reason investors passed on Shopify in the early days : market size.
Good supercut about why Shopify worked https://t.co/pw92KutpEn
— tobi lutke (@tobi) April 14, 2024
I remember that financing round, & I remember having the same concern, & making the same mistake. Living in the valley & driving on 101, the billboards & logo-adorned headquarters of successful companies provide a daily infusion of all the mistakes in I’ve made in guessing how a company or a market might evolve.
Recently, I was at the library & stood in front of a book that might be a good read. I fired up Gemini, asked it for a plot summary & a digest of the reviews before deciding to read it.
So I started a list : what are the ways I use AI that are new in the last year?
First Round’s Product Market Fit Framework adds dimension & texture to a concept we all use - Product Market Fit (PMF).
PMF isn’t attained permanently, but sustained over time as companies & complexities grow. As they scale, startups move up-market, expand into new geographies, add new product lines, & develop new customer acquisition motions.
These complexities are initially linear but eventually multiply. The idea is best illustrated by example.
Looker is one of the companies highlighted 🤗 & a portion of their journey is detailed here :
On April 18th at 9:30am Pacific time, Office Hours will host Evan Cheng, founder & CEO of Mysten Labs, creator of SUI.
Evan & the Mysten team were instrumental in the creation of Meta’s high-performance blockchain techology before leaving to start Mysten.
There are few key ideas Mysten espouses about blockchains that have led to dramatic improvements in performance & usability.
Product managers & designers working with AI face a unique challenge: designing a delightful product experience that cannot fully be predicted.
Traditionally, product development followed a linear path.
A PM defines the problem, a designer draws the solution, and the software teams code the product. The outcome was largely predictable, and the user experience was consistent.
However, with AI, the rules have changed. Non-deterministic ML models introduce uncertainty & chaotic behavior.
Situational Management is a framework for deciding how to manage a report depending on their skill level & motivation.
Where does AI fit today?
The answer is easy. It’s in the micromanage category where the motivation is high but the skill is low.
The computer is relentless in wanting to users’ questions or complete their code. But the skill level is relatively low - about the same as a high-school student.
The average American attention span has fallen from 150 seconds in 2004 to 75 seconds in 2012 to 47 seconds in 2023 - a 5-6% annual rate of decline.
| Year | Avg American Attention Span (sec) | CAGR |
|---|---|---|
| 2004 | 150 | - |
| 2012 | 75 | -6% |
| 2023 | 47 | -5% |
How does this compare to these blog posts?
In 2013, the average reader dwelled on this site for 47 seconds.
Today, it’s 33 seconds, a 3.6% decline - which is a bit better ! but probably within the realm of statistical noise ¡
Rubrik, a Palo Alto-based data security company, filed their S-1 yesterday. At $784m in ARR, growing 47% with 130% net revenue retention across 6100 customers, the company should be one of top 10 fastest growing software companies alongside Klaviyo, ZScaler, & Crowdstrike - in ARR terms.
Half of new customers are over $100,000 in size & contract values have grown 19% from $101k to $120k in a year. 41% of new bookings derives from those new customers.
AI will transform software sales. Most of the discourse so far has focused on how AI upends the sellers’ worldview. But the buyers’ process will also evolve. When researching software, operational buyers & procurement teams alike will use AI to research different offerings.
Typing “Compare Salesforce & Hubspot for a 10 person sales team. which is better?” into Gemini produces this result & most importantly, a recommendation :