Profitability or net income margin has become the most important correlate to public software company valuations. But public companies are less profitable today than a year ago. Surprisingly, PLG companies’ profitability has suffered more than sales-led businesses.
Across every quartile, public software & infrastructure companies have seen a 5 percentage point drop in net income since Covid.
These are the top 10 posts by engagement for 2022 at tomtunguz.com.
Reflecting on them, I see they clustered on web3 & the fundraising market, both of which experienced a tumultuous year. Selling in the pandemic & post-pandemic also drew a lot of interest.
I’m grateful to everyone who read them, commented, debated, & shared them.
Data visualization is a passion of mine. I remember reading Edward Tufte’s book The Visual Display of Quantitative Information & stumbling across Charles Minard’s “Napoleon’s March.”
Most visualizations plot 2 dimensions. Napoleon’s March encodes 6 : the geography of the terrain, the route & the direction of the army, the headcount of the troops, the temperature of the battlefield, & the time of year of Napoleon’s doomed quest to conquer Russia. Click to enlarge it.
Airdrops may be one of the most prevalent forms of marketing in web3. Airdrops reward users who have helped the project & generate awareness of the token by depositing free tokens into their wallets.
Recently, Dune Analytics published an analysis of the Uniswap UNI token airdrop.
Some background on the UNI airdrop: To be eligible, users must have transacted on Uniswap before September 1, 2020. Uniswap distributed 150m UNI tokens - about half went to insiders (investors, employees, etc.). Uniswap gave 400 tokens to each eligible user, worth about $1200 at the time. Today, UNI tokens’ market cap tops $5b.
What was the most successful launch of web3 in 2022? I think it’s a project that deserves more visibility than it has received.
Reddit’s Collectible Avatars launched in August 2022. Collectible Avatars allow users to buy profile pictures. They can sell these to other users if they like. Blockchain powers the experience.
The avatar trading subreddit has an active dialog of current collections.
I set out to determine if fundraising seasonality had changed from this post I published in 2014 which suggested Q2 & Q4 were best for founders.
The answer is yes. The US software Series A market has become much less seasonal since that post in 2014. I’ve plotted the data above & smoothed it to clarify the patterns. In 2013, the surge in June/July & December stand out.
After more than 14 years at Redpoint, I’m starting a new chapter.
I’m filled with optimism for the future.
The US venture capital ecosystem has grown 40x in dollars from $8b to $320b invested in 10 years. Fueled by this capital, startup company formation rates touched fifteen-year highs in 2021.
The Decade of Data is just a few years in & already it has transformed the way we do business.
Builders are re-architecting SaaS applications atop data warehouses to join data across domains in a wave that will transform software.
My laptop is faster than your cloud.
For the last ten years, the data ecosystem has focused on big data - the bigger the data set, the more exciting.
But most workloads aren’t massive. Instead of requiring a scale-out database in the sky, most analyses are faster with an optimized database on your computer that can leverage the cloud when needed.
On November 29th at 9am Pacific Time, Office Hours will host Fredrik Haga, founder & CEO of Dune.
Dune is the authoritative source of web3 data. For information on Decentralized Exchange activity, lending volumes, or even the current FTX account balances. I used Dune to make the State of Web3 Presentation.
During this Office Hours, Fredrik & I will talk about
If you’re interested to attend, please register here. As always, submit questions through the registration form & I’ll weave them into the conversation.
Let’s compare the organizational design of two hypothetical startups. Each has 4 layers in the company: CEO, VP/Director, Manager & Individual Contributor (IC).
This first company has 112 employees across those four levels. 27 in management & 85 doers. Each manager has four reports. This is called the span of control. Layer 1 is the CEO, 2 are the VPs, etc.