boldstart 2018 recap and what’s hot in enterprise 2019


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




2018 Recap

Welcome to our annual boldstart recap and enterprise predictions letter. We had another solid year filled with learning, growth, laughter, and new projects and partners. Thanks to all of the amazing founders, advisors, co-investors, corporate partners, and others that helped make 2018 an amazing year. We are truly grateful for your support.

boldstart 2018People often ask us why firstcheck.vc or what is first check and our response is that the seed landscape is so confusing, and what founders need is an investor with courage and conviction to lead their rounds and support them from day 1. This initial round could be $500k or it could be $3mm. We are purpose-built to not only invest pre-product but also to help accelerate your path to product-market fit with our decades of entrepreneurial and investing experience along with our active CXO advisory board.

To that point, we are most excited when our founders are able to go from slide deck to product-market fit and Series A and beyond. This year was a banner year as boldstart portfolio cos raised over $150mm of follow on capital from some of the top Series A and B investors (highlights below).

    1. First check leads in 5 founding teams, all in stealth. Some of these themes include privacy/ML, next gen CMS, intelligent automation, and developer productivity.
    1. First check to Series B — congrats to BigID on its $30mm Series B led by Scale Venture Partners, Kustomer on its $25mm Series B led by Redpoint, and Snyk on its $22mm Series B led by Accel and GV. Truly amazing that all of these companies went from slide deck to B in approximately 3 1/2 years.
    1. First check to Series A — congrats to Fortress IQ on its $12mm Series A led by Lightspeed and a stealth co on their $13.5mm Series A led by Bessemer Venture Partners. Once again, we led each of these rounds at slide deck stage and helped land the first handful of customers to accelerate path to product market fit and their Series A rounds.
    1. First check to seed — congrats to Blockdaemon on their seed round led by Comcast Ventures and Wallaroo Labs on its seed led by RRE Ventures. In each of these cases, we led much smaller rounds before they raised proper seed funding.
    1. SmallstepClayDark, and Windmill emerged out of stealth. All are developer first companies respectively in zero trust security, automation, and developer productivity.
  1. Rebel exit to Salesforce. Dev-first API for interactive emails — will be a great fit with the Salesforce marketing cloud.

7. New CXO advisors join — Tony Saldanha (P&G Next Gen Svces, Transformant), Farhan Shah(Allstate, CTO, Head of Platform Eng), Munu Gandhi (VP Infrastructure, AON), Virginia Lyons

Continue reading “boldstart 2018 recap and what’s hot in enterprise 2019”

On SaaStr Episode 190 discussing the 0 to 1 enterprise stage and first customers


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




\I had the pleasure of speaking with Harry Stebbings for the second time on the SaaStr podcast released today. On this episode we took a different tact, focusing more on the zero — 1 enterprise stage and how to get your first referenceable customers vs. scaling post Series B. Please listen here if interested in how to grow and gain your first Fortune 500 customers — show notes below.

SaaStr 190: Why SaaS Founders Should Not Sell Their Products in The Early Days, How Founders Can Build Relationships with Enterprise CIOs and The Right Way To Think About Discounting and Pilots with Ed Sim, Founding Partner @ Boldstart Ventures


In Today’s Episode You Will Learn:
• How Ed made his way into the world of VC from one very meaningful high school lecture that changed his life and career path?
• What does Ed mean when he says “founders should not sell their product to enterprise in the early days”. Starting from the ground up, what can founders do to begin that relationship building process with enterprise buyers and CIOs? What can a startup do to establish that trust in the mind of large buyers? How much of a role does VC backing provide in comforting enterprise buyers?
• What would Ed advise founders contemplating the debate of going SMB up to enterprise or enterprise to SMB? What role should product play in this decision-making process? What are the leading indicators in testing the product that founders should observe for and guide their direction? Where does Ed most often see founders make mistakes here?
• How does Ed think about discounting? Would he agree with a previous guest that “discounting is now table stakes”? Rather than the financial element, what does Ed believe the founder should really be looking to get from the buyer in terms of commitment? How does Ed approach and asses pilots? To what extent should they be free or paid? What can be done to set the benchmarks for success and ensure closing?

  1. What does Ed know now that he wishes he had known in the beginning?
  2. Quality or quantity of logos?
  3. What would Ed most like to change in the world of SaaS?

The post On SaaStr Episode 190 discussing the 0 to 1 enterprise stage and first customers appeared first on BeyondVC.

Be Bold or Go Home – Fortune 500 Innovation


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




Click image for this evolving story

We at boldstart ventures have regular dialogue with Fortune 500 IT and business executives who are at the forefront of creating more agile organizations. Along those lines, I’ve been exploring new storytelling mediums and have put together a few different Series on Medium (best on mobile) sharing some of our thoughts on how CIOs should think like VCs and move earlier stage to partner with startups. Read here for the full story

The post Be Bold or Go Home – Fortune 500 Innovation appeared first on BeyondVC.

The Enterprise Strikes Back


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




Consumer companies are the ones that drive the headlines, that generate the most clicks on Techcrunch, and are top of mind for many in the tech industry. So I’d like to celebrate this brief point in time where the enterprise strikes back. While one of the darlings of the last 10 years, Facebook, is getting pummeled, the enterprise market is back in the spotlight.

Look at the Dropbox IPO which priced above its initial value and came out white hot at the end of one of the worst weeks in stock market performance. Couple that with Mulesoft being bought for 21x TTM revenue (see Tomasz Tunguz analysis) at $6.5 billion and Pivotal’s recent S-1 filing and you can see why the enterprise market has everyone’s attention again. However, I’ve been around the markets long enough to know that this too shall pass.

The real story in my mind is about what’s next. It’s true that Salesforce and Workday have created some of the biggest returns in recent enterprise memory. And with that, VC money poured into every category imaginable as every VC and entrepreneur scrambled to create a new system of record…until there were no more new systems of record to be created. My view is that we will see many more of these application layer companies go public in the next couple of years and that will be awesome for sure. There will also still be some amazing companies that raise their Series C, D and beyond funding rounds with scaling metrics. There will also be the few new SaaS app founders who have incredible domain expertise reinventing pieces of the old guard public SaaS companies.

However as a first check investor in enterprise startups, the companies that truly get my attention are more of the infrastructure layer companies like Mulesoft and Pivotal. We are at the beginning stages of one of the biggest IT shifts in history as legacy workloads in the enterprise continue to move to a cloud-native architecture. Being in NYC working with many of the 52 Fortune 500 companies who are undergoing their own migrations and challenges makes us even more excited about what’s ahead. The problem is that as an investor in infrastructure, it’s quite scary to enter a world where AWS commoditizes every bit of infrastructure and elephants like Microsoft and Google are not far behind. Despite that, it’s also hard to ignore the following facts:

  1. Enormous spend and growth for public cloud and app infrastructure, middleware and developer software of $50b (Gartner, Pivotal S-1)
  2. Rise of multi-cloud
  3. Fortune 1000 digital transformation journeys still in early innings
  4. Most legacy workloads are still locked on-prem and not moved to any cloud

    Continue reading “The Enterprise Strikes Back”

The Enterprise Strikes Back


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




Consumer companies are the ones that drive the headlines, that generate the most clicks on Techcrunch, and are top of mind for many in the tech industry. So I’d like to celebrate this brief point in time where the enterprise strikes back. While one of the darlings of the last 10 years, Facebook, is getting pummeled, the enterprise market is back in the spotlight.

Look at the Dropbox IPO which priced above its initial value and came out white hot at the end of one of the worst weeks in stock market performance. Couple that with Mulesoft being bought for 21x TTM revenue (see Tomasz Tunguz analysis) at $6.5 billion and Pivotal’s recent S-1 filing and you can see why the enterprise market has everyone’s attention again. However, I’ve been around the markets long enough to know that this too shall pass.

The real story in my mind is about what’s next. It’s true that Salesforce and Workday have created some of the biggest returns in recent enterprise memory. And with that, VC money poured into every category imaginable as every VC and entrepreneur scrambled to create a new system of record…until there were no more new systems of record to be created. My view is that we will see many more of these application layer companies go public in the next couple of years and that will be awesome for sure. There will also still be some amazing companies that raise their Series C, D and beyond funding rounds with scaling metrics. There will also be the few new SaaS app founders who have incredible domain expertise reinventing pieces of the old guard public SaaS companies.

However as a first check investor in enterprise startups, the companies that truly get my attention are more of the infrastructure layer companies like Mulesoft and Pivotal. We are at the beginning stages of one of the biggest IT shifts in history as legacy workloads in the enterprise continue to move to a cloud-native architecture. Being in NYC working with many of the 52 Fortune 500 companies who are undergoing their own migrations and challenges makes us even more excited about what’s ahead. The problem is that as an investor in infrastructure, it’s quite scary to enter a world where AWS commoditizes every bit of infrastructure and elephants like Microsoft and Google are not far behind. Despite that, it’s also hard to ignore the following facts:

  1. Enormous spend and growth for public cloud and app infrastructure, middleware and developer software of $50b (Gartner, Pivotal S-1)
  2. Rise of multi-cloud
  3. Fortune 1000 digital transformation journeys still in early innings
  4. Most legacy workloads are still locked on-prem and not moved to any cloud

    Continue reading “The Enterprise Strikes Back”

Snyk, from first check to leader in dev-friendly open source security


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




We are thrilled to announce our investment in Snyk, which is a developer-first security solution that helps companies use open source code and stay secure. We couldn’t be more excited to be leading this new round of capital again with Canaan Partners and including Heavybit, FundFire, and Peter Mckay (Co-CEO of Veeam) (see Techcrunch for more coverage).

Our initial journey goes way back as we were investors in Guy Podjarny’s previous company, Blaze.io, which sold to Akamai in 2012. For the next few years we collaborated on several co-investments and what ultimately attracted us to Guy’s new company (along with co-founders Danny Grander and Assaf Hefetz), was their bold vision to create a new platform for securing open source components with a dev-first focus. At the time we seeded Snyk in late 2015, open source library usage was growing significantly and solutions were either security first which slowed down dev or dev first but not with enough security built in. With the movement towards continuous integration and deployment, it was clear a new solution was needed.

In a little over two years, Snyk has gone from “founder market fit” to “product market fit” and this new round will allow the company to build out is product offering and expand its Fortune 500 customer base.

With over 120,000 developers using the platform, 100,000 projects protected, 350,000 downloads per month, and notable partnerships with Heroku, JFrog and Microsoft Sonar, Snyk has proven it can get developers to fully adopt a security solution, and the importance of having the strongest database of known vulnerabilities in open source

Funding rounds are always a great opportunity to look back and see how the company’s initial thesis has held up and what has improved or changed. See below for Snyk’s initial vision from late 2015, much of which remains the same today; developer velocity increasing, security isn’t dev-friendly, how do you bridge the gap, esp. in open source world where much of it is third party code.

There have clearly been some tweaks to the model since then, but what is most exciting for us is watching Snyk go from idea and vision in a non-existent market to one where the question of how developers are securing open source components is becoming mainstream. And given some high profile security breaches like Equifax in Sept. 2017 where it was due to unpatched open source vulnerabilities, you can see why the interest in solutions like Snyk’s are gaining rapid adoption.

While the need for dev-friendly open source security may seem obvious today, especially with the stats above, how did we frame our initial investment? Here‘s what got us Continue reading “Snyk, from first check to leader in dev-friendly open source security”

Snyk, from first check to leader in dev-friendly open source security


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




We are thrilled to announce our investment in Snyk, which is a developer-first security solution that helps companies use open source code and stay secure. We couldn’t be more excited to be leading this new round of capital again with Canaan Partners and including Heavybit, FundFire, and Peter Mckay (Co-CEO of Veeam) (see Techcrunch for more coverage).

Our initial journey goes way back as we were investors in Guy Podjarny’s previous company, Blaze.io, which sold to Akamai in 2012. For the next few years we collaborated on several co-investments and what ultimately attracted us to Guy’s new company (along with co-founders Danny Grander and Assaf Hefetz), was their bold vision to create a new platform for securing open source components with a dev-first focus. At the time we seeded Snyk in late 2015, open source library usage was growing significantly and solutions were either security first which slowed down dev or dev first but not with enough security built in. With the movement towards continuous integration and deployment, it was clear a new solution was needed.

In a little over two years, Snyk has gone from “founder market fit” to “product market fit” and this new round will allow the company to build out is product offering and expand its Fortune 500 customer base.

With over 120,000 developers using the platform, 100,000 projects protected, 350,000 downloads per month, and notable partnerships with Heroku, JFrog and Microsoft Sonar, Snyk has proven it can get developers to fully adopt a security solution, and the importance of having the strongest database of known vulnerabilities in open source

Funding rounds are always a great opportunity to look back and see how the company’s initial thesis has held up and what has improved or changed. See below for Snyk’s initial vision from late 2015, much of which remains the same today; developer velocity increasing, security isn’t dev-friendly, how do you bridge the gap, esp. in open source world where much of it is third party code.

There have clearly been some tweaks to the model since then, but what is most exciting for us is watching Snyk go from idea and vision in a non-existent market to one where the question of how developers are securing open source components is becoming mainstream. And given some high profile security breaches like Equifax in Sept. 2017 where it was due to unpatched open source vulnerabilities, you can see why the interest in solutions like Snyk’s are gaining rapid adoption.

While the need for dev-friendly open source security may seem obvious today, especially with the stats above, how did we frame our initial investment? Here‘s what got us Continue reading “Snyk, from first check to leader in dev-friendly open source security”

boldstart in 2017, enterprise tech in 2018


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




2017 Recap

2017 was another year of growing, learning, investing and partnering with amazing founders. Once again, we are grateful to have the opportunity to work with so many amazing founders, advisors, co-investors, and other collaborators to bring the boldstart family together.

Before diving into yet another year and list of predictions for enterprise in 2018, we’d like to recap a few thoughts and moments from 2017.

  1. We were first check leads in 8 founding teams including Wallaroo Labs, MState (fka hyperfab), blockdaemon, and 5 in stealth.
  2. Thematically our new investments include 4 targeting the “Rise of the Developer,” 3 in “Intelligent Automation,” and 1 in “Decentralized Computing;” geographically 4 are in NYC, 3 in Bay Area, and 1 in LA (more on our themes)
  3. 6 portfolio companies raised Series A financings including ManifoldHypr, and 4 unannounced, 1 raised a Series B (unannounced), and Security Scorecard raised a $28mm Series C.
  4. 2 exits including yhat (sold to Alteryx — AYX NYSE) and init.ai, one an early investment in a data science platform and the other on NLP for developers.
  5. We co-founded MState (fka hyperfab, read Coindesk article) with Rob Bailey to help bring enterprise company building expertise and Fortune 500 connections to the blockchain community. Our partners include IBM and one unannounced Fortune 50.
  6. We built out our CXO advisory board and further cemented our Fortune 500 relationships to help our portfolio cos scale from “founder-market” fit to product market fit in an accelerated timeframe (meet our advisors). This resulted in tons of collaboration with large enterprises ranging from product feedback to pilots and customer relationships.

Enterprise Tech in 2018:

“The Law of Accelerating Returns” by Ray Kurzweil is truer than ever before: the rate of change in a wide variety of evolutionary systems (including but not limited to the growth of technologies) tends to increase exponentially.

1_T2mgRWcGugiSXs_kRsRQVg

In other words, today is the slowest rate of technological change you will ever experience in your life and doing nothing is worse than doing something. Keep this in the back of your mind as you think about the biggest transformation in enterprise tech; the re-platforming of corporate America from legacy to cloud/hybrid cloud and monolithic software apps to microservices driven development. With this pace of change accelerating, everyone will have to move earlier in the food chain; corporates will need to work with earlier stage startups (we are experiencing that phenomenon in our portfolio) and VCs will have to go earlier to invest Continue reading “boldstart in 2017, enterprise tech in 2018”

boldstart in 2017, enterprise tech in 2018


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




2017 Recap

2017 was another year of growing, learning, investing and partnering with amazing founders. Once again, we are grateful to have the opportunity to work with so many amazing founders, advisors, co-investors, and other collaborators to bring the boldstart family together.

Before diving into yet another year and list of predictions for enterprise in 2018, we’d like to recap a few thoughts and moments from 2017.

  1. We were first check leads in 8 founding teams including Wallaroo Labs, MState (fka hyperfab), blockdaemon, and 5 in stealth.
  2. Thematically our new investments include 4 targeting the “Rise of the Developer,” 3 in “Intelligent Automation,” and 1 in “Decentralized Computing;” geographically 4 are in NYC, 3 in Bay Area, and 1 in LA (more on our themes)
  3. 6 portfolio companies raised Series A financings including ManifoldHypr, and 4 unannounced, 1 raised a Series B (unannounced), and Security Scorecard raised a $28mm Series C.
  4. 2 exits including yhat (sold to Alteryx — AYX NYSE) and init.ai, one an early investment in a data science platform and the other on NLP for developers.
  5. We co-founded MState (fka hyperfab, read Coindesk article) with Rob Bailey to help bring enterprise company building expertise and Fortune 500 connections to the blockchain community. Our partners include IBM and one unannounced Fortune 50.
  6. We built out our CXO advisory board and further cemented our Fortune 500 relationships to help our portfolio cos scale from “founder-market” fit to product market fit in an accelerated timeframe (meet our advisors). This resulted in tons of collaboration with large enterprises ranging from product feedback to pilots and customer relationships.

Enterprise Tech in 2018:

“The Law of Accelerating Returns” by Ray Kurzweil is truer than ever before: the rate of change in a wide variety of evolutionary systems (including but not limited to the growth of technologies) tends to increase exponentially.

1_T2mgRWcGugiSXs_kRsRQVg

In other words, today is the slowest rate of technological change you will ever experience in your life and doing nothing is worse than doing something. Keep this in the back of your mind as you think about the biggest transformation in enterprise tech; the re-platforming of corporate America from legacy to cloud/hybrid cloud and monolithic software apps to microservices driven development. With this pace of change accelerating, everyone will have to move earlier in the food chain; corporates will need to work with earlier stage startups (we are experiencing that phenomenon in our portfolio) and VCs will have to go earlier to invest Continue reading “boldstart in 2017, enterprise tech in 2018”

All Platforms Need a Killer App – Cryptokitties is the one for blockchain


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I’ve always loved investing in companies that can become platforms but not investing in platforms. What does that mean? Well, to be succinct, it’s quite hard to sell a platform. You need to show users/customers how your platform can solve problems. Every platform needs a killer app to demonstrate the power of the platform – show don’t tell. Going back to webmethods, it was how DHL used WIDL (precursor to XML) to embed tracking information in other websites. For twilio, it’s first big opportunity was becoming the SMS provider for Uber. For the blockchain, it’s bitcoin and for ethereum and smart contracts, it’s Cryptokitties. Yes, cryptokitties.

It’s taking over the ethereum blockchain and despite all of the ideas for enterprise smart contracts and tracking assets on the blockchain, cryptokitties is the first killer app (outside of the currencies) showing end users how they can create unique assets on the blockchain and create, share, track, trade and sell digital goods. To date, estimates have transaction volume of over $10mm and individual kitties selling for over $100k. Yes, those numbers sound insane but my point is that decentralized apps like this open the world to the power of the ethereum blockchain.

According to the crytokittie site:

CryptoKitties is one of the world’s first games to be built on blockchain technology—the same breakthrough that makes things like Bitcoin and Ethereum possible. Bitcoin and ether are cryptocurrencies but CryptoKitties are cryptocollectibles. You can buy, sell, or trade your CryptoKitty like it was a traditional collectible, secure in the knowledge that blockchain will track ownership securely.

To get onboarded, we need to start with a Metamask.io plugin to connect our browser to the ethereum blockchain and the world of distributed apps. It’s pretty simple and once you get up and running, you need to add some Ethereum to your account via Coinbase or direct transfer. Once you have Ether in your account, you can buy a kittie and enter the world of blockchain without even knowing it.

So despite all of our discussion on putting car titles, real estate titles, and other unique assets on the blockchain, cryptokitties, a fun and addictive game, is the one application showing how powerful the blockchain can be for asset tracking and ownership. And it’s not so far a leap to think about what other enterprise digital assets can be similarly put on the blockchain.

The post All Platforms Need a Killer App – Cryptokitties is the one for blockchain appeared first on BeyondVC.

All Platforms Need a Killer App – Cryptokitties is the one for blockchain


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I’ve always loved investing in companies that can become platforms but not investing in platforms. What does that mean? Well, to be succinct, it’s quite hard to sell a platform. You need to show users/customers how your platform can solve problems. Every platform needs a killer app to demonstrate the power of the platform – show don’t tell. Going back to webmethods, it was how DHL used WIDL (precursor to XML) to embed tracking information in other websites. For twilio, it’s first big opportunity was becoming the SMS provider for Uber. For the blockchain, it’s bitcoin and for ethereum and smart contracts, it’s Cryptokitties. Yes, cryptokitties.

It’s taking over the ethereum blockchain and despite all of the ideas for enterprise smart contracts and tracking assets on the blockchain, cryptokitties is the first killer app (outside of the currencies) showing end users how they can create unique assets on the blockchain and create, share, track, trade and sell digital goods. To date, estimates have transaction volume of over $10mm and individual kitties selling for over $100k. Yes, those numbers sound insane but my point is that decentralized apps like this open the world to the power of the ethereum blockchain.

According to the crytokittie site:

CryptoKitties is one of the world’s first games to be built on blockchain technology—the same breakthrough that makes things like Bitcoin and Ethereum possible. Bitcoin and ether are cryptocurrencies but CryptoKitties are cryptocollectibles. You can buy, sell, or trade your CryptoKitty like it was a traditional collectible, secure in the knowledge that blockchain will track ownership securely.

To get onboarded, we need to start with a Metamask.io plugin to connect our browser to the ethereum blockchain and the world of distributed apps. It’s pretty simple and once you get up and running, you need to add some Ethereum to your account via Coinbase or direct transfer. Once you have Ether in your account, you can buy a kittie and enter the world of blockchain without even knowing it.

So despite all of our discussion on putting car titles, real estate titles, and other unique assets on the blockchain, cryptokitties, a fun and addictive game, is the one application showing how powerful the blockchain can be for asset tracking and ownership. And it’s not so far a leap to think about what other enterprise digital assets can be similarly put on the blockchain.

The post All Platforms Need a Killer App – Cryptokitties is the one for blockchain appeared first on BeyondVC.

All Platforms Need a Killer App – Cryptokitties is the one for blockchain


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I’ve always loved investing in companies that can become platforms but not investing in platforms. What does that mean? Well, to be succinct, it’s quite hard to sell a platform. You need to show users/customers how your platform can solve problems. Every platform needs a killer app to demonstrate the power of the platform – show don’t tell. Going back to webmethods, it was how DHL used WIDL (precursor to XML) to embed tracking information in other websites. For twilio, it’s first big opportunity was becoming the SMS provider for Uber. For the blockchain, it’s bitcoin and for ethereum and smart contracts, it’s Cryptokitties. Yes, cryptokitties.

It’s taking over the ethereum blockchain and despite all of the ideas for enterprise smart contracts and tracking assets on the blockchain, cryptokitties is the first killer app (outside of the currencies) showing end users how they can create unique assets on the blockchain and crate, share, track, trade and sell digital goods.

According to the crytokittie site:

CryptoKitties is one of the world’s first games to be built on blockchain technology—the same breakthrough that makes things like Bitcoin and Ethereum possible. Bitcoin and ether are cryptocurrencies but CryptoKitties are cryptocollectibles. You can buy, sell, or trade your CryptoKitty like it was a traditional collectible, secure in the knowledge that blockchain will track ownership securely.

To get onboarded, we need to start with a Metamask.io plugin to connect our browser to the ethereum blockchain and the world of distributed apps. It’s pretty simple and once you get up and running, you need to add some Ethereum to your account via Coinbase or direct transfer. Once you have Ether in your account, you can buy a kittie and enter the world of blockchain without even knowing it.

So despite all of our discussion on putting car titles, real estate titles, and other unique assets on the blockchain, cryptokitties, a fun and addictive game, is the one application showing how powerful the blockchain can be for asset tracking and ownership. And it’s not so far a leap to think about what other enterprise digital assets can be similarly put on the blockchain.

The post All Platforms Need a Killer App – Cryptokitties is the one for blockchain appeared first on BeyondVC.

Thoughts from Mulesoft and AppDynamics IPO Filings


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I finally had a chance to take a quick read of the respective S1 filings for AppDynamics and Mulesoft. While the growth for each company is quite amazing, two thoughts jumped out at me.

As we move to a cloud-only world with instant-on capabilities and low friction in onboarding customers, why does professional services revenue keep increasing year over year for these enterprise cloud businesses. Secondly, as the world continues to move to the cloud, why does on-prem software exist any more?

Looking at both S1 filings, it’s clear that AppDynamics and Mulesoft have caught on to what Salesforce already knows – if you want to be a massive business you also need to sell professional services. As these tech companies get larger and larger, their target customer also increases in size as these vendors look to move from 6 to 7 figure deals. In order to support continued ARR growth upstream, some of the best companies successfully use professional services as a weapon and make implementation, support and training part of the sale. See Jeff Leventhal’s post (boldstart venture partner and Workrails cofounder/CEO) on why services continue to matter for cloud vendors.

Same goes for why on-prem. In both S1s, we can see Mulesoft and AppDynamics discussing the need for multiple delivery models as many larger customers have regulatory and compliance needs, esp. in banking, insurance, and health care. On-premise and hybrid cloud deployments are not going away despite the continued adoption of the cloud. There is a whole world of what being enterprise ready from a product perspective looks like, and how SaaS companies can use new technology like Docker to have the best of both worlds, SaaS and on-prem without multiple code bases. If interested, take a look at EnterpriseReady.io curated by Replicated (full disclosure: boldstart is an investor).

Professional services drives subscription revenue

From a customer and revenue perspective, Mulesoft has continued to move upstream as their average selling price was $82k in 2014, $105k in 2015, and $143k in 2016. For AppDynamics, the best I could find was total number of customers at end of October 2016 of 1,975 with revenue of $158mm for average selling price of $80k.

From both filings, we can see that professional services revenue became a bigger part of the revenue pie. And in both cases, it’s pretty clear that professional services exist to drive the recurring subscription growth. In other words, neither group is making tons of gross margin and in fact one is almost breakeven while AppDynamics is losing money.

Here is a deeper dive into the importance of professional services revenue at Mulesoft and AppDynamics:

from Mulesoft S1 Filing:

Screen Shot 2017-03-20 at 8.40.38 PM.png

Increasingly, our platform has been deployed in large scale, complex technology environments, and we believe

Screen Shot 2017-03-20 at 8.41.11 PM.png

Continue reading “Thoughts from Mulesoft and AppDynamics IPO Filings”

Thoughts from RSA and the Climate for Security Startups


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




Just getting back from a few days at RSA. We kicked it off Sunday night with a boldstart founders and execs dinner where we talked about what’s next in cybersecurity with some of our portfolio companies like security scorecard, bigid, snyk, stealth co and many friends from the industry representing strategic partners and IT buyers. After a couple more days of straight security talk with lots of new vendors, VCs, strategics and CISOs, I wanted to share a few observations. Many of these are not earth shattering but important to cover nonetheless.

  1. There are way too many cyber security startups. A record $3b went into these companies in 2016 and $2.5b in 2015. Many startups are features or products and not businesses. Each category and mini category used to only have a few vendors and now you can expect up to 10. Lots will struggle and go out of business and industry consolidation is ahead.
  2. That being said, cyber security budgets keep increasing! Banks like JP Morgan spent $500mm on security and yet they are still not secure. While many large cos will still buy from best of breed startup vendors, the landscape is changing as Palo Alto Networks and Symantec keep incorporating new tech and provide an integrated seamless stack.
  3. Which leads me to my next point. One CISO of a large bank told me that his team met with over 300 vendors last year. Large companies can’t possibly integrate all of these disparate technologies and the more you have, the more false positives you have.
  4. Rise of Nation State attacks – more sophisticated and deadly – many are targeting the largest financial institutions.
  5. There is a huge skills gap as there isn’t enough amazing talent to meet the demand.
  6. If you look at security market into 3 phases, before, during and after an attack, most money used to go in before phase. Now more is going into the during and after phase.
  7. Hackers are also using machine learning and so it is a cat and mouse game.
  8. Despite all of this, the weakest link is still people and social engineering. Simple fixes like patching vulnerabilities and 2 factor authentication can go a long way in preventing some of this mess. Getting rid of passwords can also help – biometrics? Anti-phishing, employee training?
  9. Assume you are breached – find needle in haystack – better use of machine learning to automate work flows on incident response and back end vs playing cat and mouse game of guarding the gates.
  10. US more at risk of cyber attacks than other countries – critical infrastructure is not state owned and we are more interconnected than many other countries – we Continue reading “Thoughts from RSA and the Climate for Security Startups”

Revenues kill the dream


This post is by Ed Sim from BeyondVC


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I was on the phone yesterday with the CEO of one of our portfolio companies, and we were talking about goals for the next few months and in particular, what the company needed to get a Series A done.

Her answer was quite simply “make the product delightful.” She continued: “I want to iterate to continue to make the product faster, better, and easier to use. I want to get the user to the “a ha” moment even faster.”

And with that I knew that she got it. The company paid user base is already growing rapidly but rather than focus on a couple of features that can boost MRR in the near term, she would rather focus on the longer term.

This reminds me of a quote from Yossi Vardi, founding investor in ICQ (creators of IM and sold to AOL).

“Revenues kill the dream.”

It may sound counter-intuitive but what Yossi is really saying is don’t sacrifice long term opportunity for short term revenue…

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What entrepreneurs can learn from Jeff Spicoli


This post is by Ed Sim from BeyondVC


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I know I may be dating myself here, but over the past few weeks I couldn’t help but think about the movie Fast Times at Ridgemont High and one of the standout characters, Jeff Spicoli.  When asked by Mr. Hand, his teacher, why he keeps coming late and wasting his time, Spicoli answers, “I don’t know.”

 

In several meetings with entrepreneurs during the past few weeks, they would have been better off answering like Spicoli rather than giving me some hollow bull shit answer.  I want to make it very clear that I don't expect entrepreneurs to have all of the answers to my questions.  In fact, many questions I have may not have an answer today so "I don't know" will be your best answer. My one caveat is that the "I don't know" is followed by a how might you figure out the answer or a when might you figure it out.  This line of questioning is really just another way to test how you think and determine how our working relationship might be were I to invest.  I would rather have the honest "I don't know but I'll figure it out" then a made-up answer that will never allow you or your investors to really understand what is driving your business.

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2 horse race in mobile – iphone and android

I just caught this blog post from Seth Weintraub from Fortune on Android:

Andy Rubin just Tweeted that Google (GOOG) is activating 300,000 phones a day. That passes Apple’s (AAPL) iOS, that passes Blackberry (RIMM). That even matches any figures that Symbian has ever put up. Google is closing in on an astounding 10 million phones per month. Recall that Apple just had its biggest quarter ever with 14.1 million iPhones sold

It is no secret why every mobile company I have seed funded through BOLDstart Ventures is either already on the Android platform or soon will be.  This whole battle of licensing the OS vs. maintaining control of the full ecosystem from OS to hardware reminds me of the early days of Microsoft and Apple.  We all know who won back then – Apple had the best damn product but Microsoft had more distribution.  I am not saying it will play out the same way but looking at the early numbers it is pretty clear that the Android OS will eventually be in more hands.

This brings me to another point.  Right now we are looking mostly at consumers but what about the enterprises?  RIMM is still the dominant player in large enterprises like banks, etc but as well know RIMM does not have a fighting chance.  Smartphones are entering the workforce and enterprise whether IT likes it or not so how best to deal with it?  Will Apple or Google focus their efforts here?  I just made an investment in a stealth company that solves this problem for Android.  By downloading an app, a user can now run another instance of Android on their device which is secure and can be managed through the cloud by IT with various policies.  Think of it as a virtual machine running on the handset.  This can be great for corporate as now their employees can buy their own Android smartphones, use it personally, but also live within the confines of IT policy by simply clicking on the App and entering work mode, for example.  More to come on this in the future.  Why not start with the iPhone?  Well Apple’s strict policies for applications prevented the company from doing so.  Either way, this will be a great battle to watch in the future.

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Cisco raises another $4b in cash and looking for acquisitions


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




Ashlee Vance from the Bits Blog has a nice piece on why Cisco raised another $4b of cash through a debt offering yesterday even though they have $30b in cash. 

"As word of Cisco’s debt sale hit Wall Street, the standard chatter surrounding possible targets began anew. As usual, companies like EMC, NetApp, Sun Microsystems, Red Hat and BMC were discussed as desirable properties."

Regarding Cisco I have heard the same acquisition rumors.  On the smaller private company side, my two cents would be platform consolidation opportunities in the security space (software that can help tie their disparate security products together), bolstering their Scientific Atlanta acquisition by adding more interactive and ad targeting products for the digital set top box, and tuck-in acquisitions for their EOS or social networking initiative (see CNET article for more on this initiative)

I would love to hear your thoughts on this as well.

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Be prudent but don’t panic!


This post is by Ed Sim from BeyondVC


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The alarm bells are ringing in Silicon Valley and start-up land today with Sequoia Capital and Ron Conway telling companies to prepare for the economic meltdown and to raise cash by cutting their burn.  This is not new news as being in New York we started to feel the real economic impact in mid-September as Lehman melted down and as Merrill Lynch was bailed out by Bank of America.  This is all prescient advice and something I have been espousing to my portfolio companies for awhile – see my last post from mid-September on Doing More with Less, a mantra that all startups should live by.  All that being said, it is not time to hit the panic button.  Don’t go out and fire everyone wholesale and skinny down just because everyone else is. Do it because it is right for your business and because all of your leading indicators tell you to do so.  Do it the right way by not making a 20% cut across the board but by thoughtfully thinking about your business, your priorities, and where you need to focus your capital and resources to grow your revenue but conserve cash.

The good news is that many companies I have seen have learned their lessons from the last bubble bursting and rather than subscribe to the "if you build it they will come" model have turned towards the "release early and release often" model of gaining customer traction sooner rather than later and at much lower costs than before.  As I look at the current landscape, obvious areas of concern are any companies with high fixed costs and heavily reliant on direct sales whether it be advertising related or enterprise related.  It is clear that for these big ticket sales that many corporations are in the mantra of doing nothing rather than doing something and that startups should adjust their budgets accordingly to reflect this reality.  For those companies that live by the frictionless sales model and that are capital efficient with a low fixed cost base, take another hard look at your organization and priorities and haircut unneccessary expenses.  Once you do all of that and feel that you have 18+months of runway, look on the positive side as there will be many great people on the market.  Yes, cash is king and if you have it and conserve it, there will be some phenomenal opportunities to pick up some great talent.

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Data wars heating up – Microsoft buys DATAllegro


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




As I have written in previous posts, what you do with data will be one of the next battlegrounds on the web.  Knowing that they had some limitations with SQL Server, Microsoft announced its acquisition of DATAllegro (full disclosure: my fund is an investor in competitor Greenplum) to enter the data warehousing market.  Enterprise volumes across the board are ramping up quickly and this clearly gives Microsoft an opportunity to capture that market.  Being an investor in Greenplum, I always like to see healthy exits of competitors as many believe it will trigger further consolidation.  When a competitor is acquired, the first reaction from many is often asking themselves why it wasn’t them and fear about competing with a juggernaut, but my perspective is quite different as it usually opens new opportunities.  As I have written before, many acquisitions fail and companies are usually so distracted for the first 6-12 months trying to integrate operationally and technically, that this gives others in the market a nice window to continue executing on their business plan.  So I tip my hat to DATAllegro and look forward to an exciting 12-18 months ahead as the data wars are clearly heating up now. 

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