The Future of Startup Office
Tomasz Tunguz
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2d ago
100 years ago, fluorescent lamps & suspended ceilings topped the list of hottest trends in office design. In 1928, San Antonio’s Milaml Building claimed the honor of the first office skyscraper with air conditioning. Twenty-five years later, window-encased skyscrapers with internal glass walls distinguished the modern office. Employees ensconced in the Lever House & the Seagram Building in New York enjoyed more daylight at work than any other Manhattanite. Another generation would pass before the open office plan bulldozed walls separating managers & employees. Robert Probst concei ..read more
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Microsoft as a Mirror - What We Can Expect for SaaS in 2023
Tomasz Tunguz
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1w ago
I’m watching public company earnings to identify early weaknesses in the software market. Yesterday, Microsoft announced earnings. The transcript highlights the major trends in software of 2023. Below, I’ve listed those trends with data & excerpts from the earnings call transcript. 1. Enterprises Have Slowed their Spending, Decelerating Further in December: Company Q-6 CAGR Q-5 CAGR Q-4 CAGR Q-3 CAGR Q-2 CAGR Q-1 CAGR Q-0 CAGR Guidance Microsoft Azure 50% 51% 46% 46% 40% 35% 31% 26% Google Cloud Platform 46% 54% 45% 51% 35% 38% Amazon Web Services 37% 39% 40% 40% 33% 27 ..read more
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How Layoffs in Startupland Differ Between B2B & B2C Companies
Tomasz Tunguz
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1w ago
The current wave of layoffs, a difficult component of the innovation boom/bust cycle, differs from the previous years’ dynamics. B2B companies have reduced headcount to a greater extent than at any time since 2020. In the last three years, B2C startups’ ratio of layoffs have dwarfed B2B layoffs. In 2020, B2C companies cut 8.8x the number of B2B employees. 3.8x in 2021, & 6.9x in 2022. Year-to-date in 2023, the figure is 1.6x, just 60% more. Reduction magnitudes don’t differ by buyer type. B2B & B2C companies both downsize around 15% on average, with a 75th percentile of 30%. Tangenti ..read more
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Is the Suite Strategy Right for Your SaaS Startup?
Tomasz Tunguz
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2w ago
Most massive software companies structure themselves with an office of the CEO, which allocates capital to different business units. Within each business unit, a general manager operates one or more products. There are three paths I’ve seen to achieve this scale: The dominant path of the last ten years: focus on a single product until the company is roughly at $100m in ARR, then build adjacent products. Snowflake, DataDog, Zendesk, CrowdStrike etc. Build a financial holding company acquiring lots of small businesses & use the profits to acquire more businesses. Constellation Software. De ..read more
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The Most Acquisitive Acquihirers in Software
Tomasz Tunguz
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2w ago
“The Startup M&A Market Fell 94% Year over Year - But One Segment Thrives”, a post from last week, elicited the same question from many readers. Just who are the most active acquirers for smaller takeouts? To answer the question. I reviewed the roughly 560 US software acquisitions under $400m since January 1, 2020. ServiceNow tops the list with 5 acquisitions. Alphabet ingested 4 companies. So did Medallia. Most of the other top 25 buyers, including Splunk, Apple, & VMWare, closed the period with 3 M&A events, about one annually. Examining the data by dollars reveals Motorola spe ..read more
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Rabbits on Firetrucks : Generating Images for B2B Blog Posts Using AI
Tomasz Tunguz
by
2w ago
I’d like to have a hero image atop each blog post. Readers dwell for a few seconds longer on blog posts with images. Plus, images garner more interest across social media. I wondered how the current wave of generative AI image makers like Midjourney, Dall-E, & Stable Diffusion would fare creating images for a few of my posts. Here are the results. The format is blog post, the prompt issued to the algorithm, & some commentary. What the $6B Coupa Acquisition Means for Software Startups. Prompt: Coupa & Thoma Bravo logos each in front of a cloud with a plus sign between them. The syst ..read more
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2023 is the Year of _________
Tomasz Tunguz
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3w ago
Frank Bien at Looker kicked off each year with a theme. A decade later, I still remember them. These themes focused the company & the board. The management team wove that theme through every board deck during the year. I imagine the internal messaging prioritized it, too. One year, he dubbed the Year of the Hound. Looker had focused on technical data teams as its ideal customer profile for the early years. As the business grew, the Looker team expanded that focus to non-technical users (hounds) - the business analysts consuming, sharing, & commenting on dashboards. Another year, Frank ..read more
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The Startup M&A Market Fell 94% Year over Year - But One Segment is Thriving
Tomasz Tunguz
by
3w ago
The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. It rivals the dotcom bust & Global Financial Crisis for its paucity. In percentage terms, last quarter dropped the most since 2000, falling 94% year-over-year. US venture-backed M&A fell from $34.6b in Q4 2021 to a paltry $2.1b in Q4 2022. The total quantity of acquisitions demonstrated greater resilience shrinking by 56%, while the median acquisition value tumbled from $81m to $22m (-72%). A $22m median M&A price implies most of these transactions were acquihires - acquisitions that value a co ..read more
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Sizing the Web3 B2B Software Market
Tomasz Tunguz
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1M ago
Just how big is the current web3 B2B SaaS total addressable market (TAM)? In the last six months, 103 web3 companies generated revenue on-chain, the smallest of which recorded a few hundred dollars of sales & the largest, Ethereum, tallied $401m. 44% of these companies produced less than $0.5m. But a nascent mid-market does exist : 41 companies produced between $5-25m. Figure Value Total Revenue, $M 771 % of Revenue spent on Software 30% Implied Web3 Software TAM, $M 231 Implied Web3 Software TAM (excluding Ethereum), $M 75 The average software company operates at about 70 ..read more
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My Quest for Speed - Learning to Use My Computer the Fastest Way Possible
Tomasz Tunguz
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1M ago
Sometime in the winter of 2020, I read Dan Luu’s article on latency. “I’ve had this nagging feeling that the computers I use today feel slower than the computers I used as a kid.” So he measured different computers using a high-speed camera & he found a modern Macbook had about 3x the latency of an Apple 2e, a computer from 1983. Dan wrote a subsequent post on terminal latency : the fastest application on your computer is likely the terminal or the command prompt. Those posts inspired me to learn how to use the terminal : mutt for email, neovim for taking notes, ripgrep for searching a c ..read more
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