MV #025: Are we past the bottom finally?
The market is green. We're moving through the bottom. Leadership principles from Snowflake CEO and CRO, struggling VCs in Europe, and bashing sales reps.
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👋 Hello, hello, nice to see you here.
Lots of goodness this week. We’re looking at the tech sector and why it’s not all that bad. I’ll share some great learnings from the Snowflake CEO and CRO. Plus, you’ll get to read the transcript of Cloudflare CEO who bashes his sales org!
Let’s get into it.
☁️ 1 Insight - Cloud Earnings
In the last edition, I covered that I’m excited about earnings season, especially for the cloud providers. (I know my life is very exciting.) These earnings largely influence how many SaaS companies will do.
So, what happened?
The major cloud providers posted their results, and it’s not looking that bad. Companies spent more on Amazon Web Services AMZN 0.00%↑ , Microsoft Azure MSFT 0.00%↑ and Google Cloud GOOG 0.00%↑ .
We’re moving through the bottom but haven’t quite passed it yet. This is a useful leading indicator for general software spend. If all SaaS companies need more cloud, that means they’re selling more software.
Despite what mainstream media might tell you or how your sales pipeline looks, we are working our way through this slump.
Data over narrative!
🔗 Link: Major cloud providers doing well.
Even more broadly, the market has had a bit of a hidden comeback. You might be surprised if you zoom out just a bit and look at the year-to-date performance of tech companies.
It’s looking pretty strong!
Major stocks have rebounded. That does not mean every company will thrive. We’re in the phase where we’re starting to split the chaff from the wheat. We start to see which companies have a strong business model, are making shifts, and will adapt to thrive vs the rest.
📊 Chart: Year-to-date stock performance of major tech companies.
🧠 1 Learning - How Wiz achieved 100m ARR in 18 months
Great piece by Insight Partners covers the journey of the four founders of Wiz. This pretty incredible startup grew at lightning speed as it’s transforming the security industry.
🔗 Link: “The company hit a $100 million ARR within only 18 months of reaching $1 million”. This is a great piece on the story of Wiz by Insight Partners.
👉 My take: The amazing success of this company comes down to these 5 factors.
Serial founders - they learnt from past mistakes and executed better.
Corporate experience - they used startup and corporate experience
Trust - they are a high-trust team, they knew each other for years.
Expertise - they shared areas of expertise which reduced friction.
Timing - they had good market timing, cloud spend is growing.
📺 2 Videos - Snowflake lessons from the CEO and CRO
“Leadership is not a popularity context”.
🔗 Link: This short, insightful, and motivational video on leadership principles by Frank Slootman, CEO of Snowflake, is a must-watch.
👉 My take: This is incredible leadership, and Snowflake defies the market downturn. Watch this quick video and also the insights from the CRO in a video provided by Stage 2 Capital.
🔗 Link: From product-market-fit to massive scale from Snowflake CRO, Chris Degnan.
🤖 AI News for SaaS Leaders
🔗 Link: Boring Sales tasks will be completely automated with ChatGPT. Check out this demo. The AI does all the data entry to your CRM based on a call transcript.
🔗 Link: Google VP leaves to talk more openly about AI. Medisreported several times why he was leaving. Geoffrey clarified on Twitter (link).
🔗 Link: Y Combinator is a leading indicator for startup trends, and generative AI is rising. The most recent batch of YC companies highlights where the opportunities are. We will see widespread adoption of this technology, and you better start reading up.
🔗 Link: Want to raise more VC money easier? Add AI to the mix! Interesting data by Carta shows raising as an AI company is easier.
💡 Insights for SaaS Leaders
🔗 Link: NET 0.00%↑ CEO Matthew Prince just threw his sales org under the bus on the last earnings call. A great lesson on how NOT to do leadership. Imagine you were a sales rep at Cloudflare...
🔗 Link: Sales vs Sales Engineering at early-stage startups. What should Sales do, and what should Sales Engineering do? Great perspective by Tomasz, VC, Theory Ventures.
But for those startups still needing to prove the value or with more patient strategies, sales engineering-led sales extend the successful pattern of founder-led sales until the startup establishes a brand & social proof in the market.
🔗 Link: Are we past the bottom of the market already? Not quite yet, according to startup data from Carta. Private markets are still tough even though public companies seem to work through the bottom now.
🇪🇺🇬🇧 3 stories for startup builders in Europe/UK
🔗 Link: VC activity in DACH is slowing down massively.
🔗 Link: Is the UK still startup-friendly? There was a great discussion on LinkedIn after Tech Editor Zoe Kleinman posted an article on BBC. (BBC link)
🔗 Link: Europe wants to regulate ChatGPT and similar tech. No surprise there.
👉 My take: Expect many sales cycles to get delayed if your company starts to use GPT without considering security implications for your target customers in the EU.“Makers of artificial-intelligence tools such as ChatGPT would be required to disclose copyright material used in building their systems, according to a new draft of European Union legislation slated to be the West’s first comprehensive set of rules governing the rollout of AI.” (WSJ)
🔗 Link: Leaked Google memo on AI says: “We have no moat.” Excellent share by
.
👉 My take: I wrote about this on LinkedIn. Despite a massive headstart launching Google Brain in 2011, acquiring Deepmind in 2014, and paying some of the industry's highest salaries, they are playing catchup against OpenAI in the AI race.
Without a clear mission:
- it’s harder to retain the best talent
- it's harder to motivate employees
- it’s harder to succeed as a company in achieving your goals.
👋 Parting thought
🔗 Link: “Can you go from doing DEMOS to becoming CEO?”
Spoiler alert: Yes.
🙏 That’s it. Have a great Sunday!
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Thank you so much. I’m Semir Jahic, and I hope to see you again for the next edition in two weeks.