On December 14th at 9.30 am Pacific, Office Hours will host Philip Zelitchenko, VP of Data at ZoomInfo to discuss Managing Data as Product. Recently, Philip shared his management techniques to run a data team like a standard product software development function with some key nuances. I asked him to join us on Office Hours to share his perspective because we believe data and software engineering practices converge. We will cover : why data teams are operating as software engineering teams how to do this well both by hiring the right people & implementing systems how to judge the effectiv ..read more

Recently, Guy Podjarny, President of Snyk & I talked through an investor’s view of AI’s impact on security & data. What’s changed with AI? A reckless data security leak threatens the career of a head of data, just as much as a mismanaged security incident ends a CISO (chief information security officer)’s. Clorox, Uber, SolarWinds, Target, JPMorgan, Facebook, Equifax, & CapitalOne : All these CISOs have been fired in the last ten years for security issues. Data has emerged from the shadows of internal-use-only to a critical ingredient in marketing, sales, customer support, & pr ..read more

I can remember at each career inflection point the person who took a bet on me. When I joined Google it was Kim. When I moved to product, Marissa & Brian. Then to Redpoint, it was the early stage team : Geoff, Tim, Chris, & Scott. Lloyd & Frank at Looker for their Series A. Today, it’s the team & the LPs at Theory. That’s the very beginning of the list. For me, Thanksgiving at work is about the gratitude to those people who made those moments in a career that could have turned out so differently. Who took a bet on you ..read more

Last week, OpenAI suffered management team infighting over the key direction of the company. The schism inside the company resulted in Sam Altman’s firing & Greg Brockman’s departure. This outcome injects uncertainty in the market including key partners (Microsoft & investors) & employees about the company’s future. Microsoft, recognizing risk with a key technology partner in one of their most important markets, stabilizes its future by hiring Altman, Brockman, & others. Microsoft has rights to the OpenAI models, has diversified its algorithm providers beyond OpenAI & count ..read more

How much does AI cost? It depends on a a few different dimensions, but for a typical use case where a user enters a query & expects about a 200 word response, the cost varies from $0.03 to $3.60. Different models cost different amounts. Also, the size of the context window is an important factor. The context window is a fancy way of saying the quantity of background information the user can provide to the AI. When asking an AI to write a two-paragraph essay in the style of Hemingway, having a few sentences of his writing won’t help much. But perhaps uploading one-third of the Old Man & ..read more

12 years of zero-interest rate policies & then a sudden increase to 5.5% woke us all up to the Wall Street mantra : Don’t fight the Fed. I’ve been reading to understand the history of the Fed & found some surprising facts from these two books : The Repo Market & Broken Money. The US Federal Reserve Banking system is about 115 years old. It was created after the Panic of 1907. In October of that year, companies couldn’t borrow money because a trading firm called the Knickerbocker Trust went bankrupt trying to corner the copper market. Lacking any government help, J.P. Morgan (the ma ..read more

Vendr’s quarterly report on SaaS purchasing trends summarize the sentiment of the software market. Q2 was tough but Q3 is looking up. The average sales cycle has lengthened from 32 to 44 days for net new software, a 37% increase. Slower cycles & fewer new purchases : 19% of software purchases are net new in 2023 ; just 17% in Q3. Still about 1-in-5, but down from 30% last year. In a challenging market where new customers are a challenge, how does a company grow? Increase price & cross-sell. Average contract values rose 43% q/q - nearly the average over this time period. What’s selling ..read more

At the IMPACT Summit yesterday, I shared our Top 10 Trends for Data in 2024. LLMs Transform the Stack : Large language models transform data in many ways. First, they have driven an increased demand for data and are causing a complete architecture inside companies. Second, they change the way that we manipulate data. Analysts will use automated data analysis, and it will be an expected tool in every product : notebooks, BI, databases, etc. If you’re curious about the evolution of the LLM stack or the requirements to build a product with LLMs, please see Theory’s series on the topic here cal ..read more

On the heels of yesterday’s post, DataDog announced earnings . The company exceeded its plan for the quarter & raised the plan for next quarter. DataDog leads the cloud monitoring & security space. They will generate about $2b in revenue this year. That they see strength in their customer behavior is a good sign for Startupland broadly. Here are some takeaways from their call yesterday : The cost-cutting activities that dominated the start of this year are plateauing, which should drive better predictability in bookings. “We are seeing signs that the cloud optimization activity from so ..read more

Six quarters ago, profitability became the most important factor to public software valuations. 14 public software companies have reported earnings in this quarter so far. These companies’ earnings surprise has been prodigious. Earnings surprise is the difference between how much the market expected in earnings compared to actuals. Positive surprise means a better result than expected. The average earnings surprise so far is 48%. Contrast that figure to 1% revenue surprise for the same companies. The efficiency efforts enacted by the office of the CFO have produced more net income than the ma ..read more