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Omni announced a $27m Series A. Omni builds modern BI with a consistent data model using SQL. Omni picks up where Looker left off. Looker’s fundamental innovation, LookML, enabled one person to define the revenue metric & everyone else in the organization to use it.

Omni extends that insight by building a modeling layer that learns about your data as you query it, evolving the data model with each subsequent query. That insight comes from the founding team’s shared history over more than 15 years.

Last week, Office Hours welcomed Bill Binch, former CRO at Pendo, EVP Worldwide Sales at Marketo & operating partner at Battery to share his views on building world-class sales organizations.

Bill & I exchanged emails about Deliberately Underselling as Sales Strategy. I asked him to share his views on land & expand team structure & quotas. But we covered much more. Here are three highlights from the session.

This is a paper bond from the US Treasury dated 1976. This piece of paper guarantees its holder $5000 on August 15, 1986. At the bottom, four coupons entitle the holder to $200 at the maturity date on the top right. The coupons represent the interest on the bond.

Those four little coupons would lead to the creation of a $2 trillion bond behemoth.

Prior to the early 70s, investors bought bonds & held them until maturity. Sometimes the bonds were good bets. Other times, their borrowers folded & investors lost money.

In 2020, revenue growth was the most important factor explaining a public software company’s forward multiple. The formula has changed since then.

Net income has surged to the highest correlate of a public software company’s multiple surpassing revenue growth. Narratives published in newspapers trumpeting the importance of profitability correctly assess investor sentiment on stock exchanges.

Revenue growth & sales efficiency round out the top 3 with gross margin & cash flow from operations margin rounding out the 5 tested metrics.

This year, private equity firms have acquired five public software companies, totalling $38b in value. Seven months into 2022, these figures exceed last year’s totals, something I wondered about last month.

Since these transactions’ details are public, we can use them to infer how the private software market values companies.

In the last decade, a software company’s revenue growth correlated most highly to its valuation multiple.

Messaging has become the bottleneck for growth in web3. The lack of a native messaging protocol prevents apps from communicating with their users.

Today, web3 apps communicate with users on Discord & Telegram. But these social networks aren’t web3 native. My Telegram username isn’t linked to my wallet. Knowing a chat user is the same who bought an NFT remains elusive but important.

These communities don’t help new app developers with user awareness. So developers stuff wallets full of airdropped tokens. They hawk their wares by stuffing them into strangers’ pockets, which is problematic. These airdrops are a novel form of spam for both users & wallets.

How much value does a successful software startup create per dollar of venture investment?

About 10x, though it’s volatile.

Let’s call the value generated per venture dollar the MOIC (multiple on invested capital).

MOIC = value_at_exit / total_VC_dollars_raised

Over the last 30 years, a venture dollar invested in a successful US software startup generated $10 of value.

In the late 90s, the MOIC oscillated between 12-42. After the dotcom crash, the MOIC fell to 5.0, save for a brief period preceding the Global Financial Crisis. Quantitative Easing for the next decade juiced the MOIC to 8.5. In 2021, the figure topped 15 for the first time in ten years.

AWS announced earnings earlier today and reported 33% growth. That concludes this quarter’s IaaS earnings scorecard reports & provides us a complete picture of the infrastructure buyer’s index.

AWS’s growth rate is the slowest of the three largest public infrastructure clouds. With about 39% market share, AWS reigns supreme as the largest provider. Larger businesses face more daunting challenges sustaining higher growth rates, so AWS numbers are expected.

GCP reported 37% growth & Microsoft 40%.

On August 11 at 9:30 AM Pacific time, Office Hours will host legendary sales leader Bill Binch. Bill started his career at Oracle where he rose to VP. He led Marketo sales as EVP of Worldwide Sales. Most recently, Bill led the sales team at Pendo as CRO. Today, he’s an operating partner at Battery.

Over the last few weeks, I’ve been writing about Deliberately Underselling as Sales Strategy. Bill & I have been trading emails about different ways of accomplishing this goal. In addition, many founders & sales leaders have asked questions about the details, the pros & cons, & the alternatives to this strategy.

I’m watching public company earnings to identify early weaknesses in the software market. This week Microsoft, Google/ Alphabet, & Amazon report their figures.

Today, Microsoft & Google revealed the health of their infrastructure business units.

Good news & bad news. Microsoft Azure grew 40% y/y, declining six percentage points from the previous two quarters. The relatively modest decline suggests the cloud market is quite strong.