Category: Technology

My Best Ideas Of 2024: A Compilation

Presenting a compilation of my best ideas & observations from 2024, sorted across 7 Chapters.

Happy Holidays to all my readers out there. I have a habit of routinely posting pithy and concise ideas and observations on LinkedIn and X. Topics range from Startups, Venture Capital, and the Economy to Careers and Life.

I feel that many of these get lost over time amidst all the noise on social media. Hence, have put together this compilation of my best ideas from 2024, sorted across 7 Chapters.

Note: this is a compilation of my short-form social posts. My long-form posts for 2024 are available on An Operator’s Blog, accessible via homepage shortcuts by year/ category/ tags.

CONTENTS:

  • Chapter 1: Startups
  • Chapter 2: Venture Capital
  • Chapter 3: Economy
  • Chapter 4: Careers
  • Chapter 5: Life
  • Chapter 6: India
  • Chapter 7: Other People’s Ideas

Hope you enjoy reading it!

_______________

Chapter 1: Startups

1/ “Closing” People

A simple tip to convert customers/ investors/ potential hires who are sitting on the fence:

Keep coming back to them with monthly/ quarterly updates, showing tangible progress and momentum.

Even the most hardened professionals can’t resist a curve that is trending up and to the right.

If you bug them long enough (ranging from a few quarters, to up to a few years) with positive momentum, you are almost guaranteed to “close” them eventually.

A very powerful technique with a high hit rate.

2/ Thinking Big

I would like to encourage Indian founders building software companies for the world to think significantly bigger and more aggressively both in terms of how large their business can become and how fast can they get there (y-o-y growth targets).

Why? Because software TAMs and market growth rates are much larger than what our brains can imagine. Look at the growth rates of these public companies:

(1) Shopify (Founded in Canada) is growing 21% at $8.2 Billion ARR.

(2) Canva (Founded in Australia) is growing 40%+ at $2.4 Billion ARR.

(3) Toast is growing 29% at $1.5 Billion ARR.

(4) Monday (Founded in Israel) is growing 34% at $940Mn ARR.

I am now encouraging my portfolio founders to think beyond the proverbial “Path to $100Mn ARR” slide and start strategizing a path to hit $1Bn ARR.

It’s time we reset our internal narratives and think bigger and more aggressively as an ecosystem.

3/ Time To Real PMF

In recent conversations with growth investors, a bunch of them asked about my experience on how much time a pre-seed company typically takes to achieve real PMF.

Based on my venture experience since 2011, here’s what I have observed on average for pre-seed companies:

(1) Typical enterprise software/ SaaS in existing markets:

  • without a major pivot: 3-5 years
  • with a major pivot: up to 7 years

(2) Category creation plays in software: as long as 5-7 years

(3) Deeptech/ hardware: minimum 4-5 years

I am, of course, generalizing a bit here and outliers could get there sooner. But I feel these numbers are directionally correct.

Moral of the story: it’s a marathon for founders and seed investors. So, buckle up to play the long game!

4/ Investor Updates

Both as a founder in my past life, as well as a venture investor now, I have discovered that writing updates (to investors or LPs, as the case may be) on a consistent cadence over the years is an easily accessible superpower.

What it needs is basic discipline and intellectual honesty, which in turn, come from self-awareness, keeping imposter syndrome at bay, being comfortable in one’s own skin, and equanimity about monthly/quarterly wins and losses.

5/ Speed

If you think about it, the only real advantage a new entrant has against incumbents in any field (be it a startup or even an emerging VC manager) is speed. Speed of decision-making, speed of shipping, speed of learning & iterating, speed of taking risks.

As an upstart, if you aren’t fast, the odds are against you.

6/ Boring Zoom Pitches

The majority of first-pitch meetings tend to happen on Zoom these days. I find remote pitching especially challenging for founders. A big part of venture investing is catching the vibes and personal energy of the founders. That’s super hard to communicate on Zoom.

Leaving the detailed nuances of Zoom pitching for another post, I want to leave founders with this one thought – at the minimum, avoid being “boring”! I have been through too many Zoom pitches where it seems like founders are just going through the motions, pitching in a monotone with an almost deadpan expression, and spending little time or care on breaking the ice and vibing with the other person.

Especially on days packed with back-to-back Zooms, you should assume that the investor is coming in with Zoom fatigue. If you don’t grab their attention and get them to lean in during the first five minutes of the meeting, even though they might appear to be listening and nodding through your monologue, they have mentally zoned out.

So, be interesting, and don’t be afraid of bringing your personality to Zoom. It will at least get the other side to actually hear you out and engage with you, without which, an eventual investment is not possible anyway.

7/ Cold-pitching Your Startup To VCs In 30 Secs At An Event

For the first 30-sec pitch, I recommend having 3 parts to it:

[The Grandmother’s Explanation]

followed by…

[Social Proof of Team]

followed by…

[Proof of Business]

a) The Grandmother’s Explanation means explaining what your startup does in the way you would explain it to your grandmother. Yes, most investors aren’t domain experts in your field. They are likely investing across sectors and aren’t living and breathing your specific area/ problem statement. Assume they are as ignorant about your business as your grandmother.

I am literally shocked by how most founders can’t explain their startup in simple tech-layman’s terms. Barring a few, true deep-tech startups coming out of research labs and universities, most enterprise software, SaaS, and consumer Internet startups should be able to explain their business in simple words. This is the bare minimum signal of clarity in thinking.

b) Social Proof of Team means talking about your credentials in a straight-up manner, without beating around the bush. These could be:

  • Education-related – undergrad and grad schools, unique course work etc.
  • Work-related – past employers, roles, needle-moving projects, accelerators like YC or Techstars etc.
  • Execution-related – products shipped, content created, social following, word-of-mouth etc.

c) Proof of Business means talking about the business progress of your startup in tangible terms. Things like user base, retention, engagement, number of customers, revenue, customer acquisition etc.

It’s important to remember that while providing Proof of Business, both absolute numbers and growth rates are important. So, frame statements like “we have $Xk ARR, growing y% m-o-m”.

Most startups attending these events don’t have enough Proof of Business yet.
For the ones who do, make sure you talk about it as traction trumps everything, and especially at the seed stage, any traction will help you stand out.

For startups who don’t have much Proof of Business, you can still talk about proxies of business progress like the velocity of shipping new features, people on the waitlist, early design partners, and how they are deeply engaging with your product etc.

PS: An important recommendation for the 30 sec pitch format:

If you have compelling traction, pitch [Proof of Business] first and then [Social Proof of Team].

If you are very early and don’t have compelling traction, pitch [Social Proof of Team] first and then [Proof of Business].

The idea is simple – always lead with your strongest suit.

8/ Pitch Decks

I see an overemphasis on creating sophisticated-looking pitch decks at the seed stage.

While an eye-catching deck is always nice to have, have seen terribly basic & verbose decks getting funded simply because the underlying business was super differentiated & therefore, interesting.

PS: this changes at the Series A & beyond stages, where the pitch materials are held to a much higher bar by larger institutional investors.

9/ Over-capitalization

These lines from a post by Christina Farr on X resonated with me:

“One of the top reasons companies die in health tech is overcapitalization. I can’t tell you how many growth-stage founders I’ve talked to lately who told me they wished they’d raised less and at a lower valuation. Huge problem, rarely discussed.”

This is a smart observation. The underlying reason seems to be that most health tech companies either tap out at a certain revenue scale or tend to grow slower than what enterprise s/w VCs expect. Overcapitalization then artificially distorts execution velocity and/or makes it harder to exit.

This point actually applies to more verticals of enterprise software than folks realize. Many of them can’t support very large outcomes and yet, if they can be capital efficient, can still lead to meaningful outcomes both for founders and early investors.

_______________

Chapter 2: Venture Capital

1/ Liquidity

As a GP, it helps to have gone through some personal experiences that teach you the value of liquidity, why cash is king, and how it’s not around when you need it the most.

This helps develop empathy for your LPs and how unrealized paper gains can’t be used to pay medical bills, take care of kids’ tuition, build homes, and support pension liabilities.

As much as sourcing & picking the best investments, another core job of a GP is to proactively create liquidity for LPs so the cash can be used towards human needs.

2/ Psychology

One of the biggest changes I have seen in myself as an investor over the last decade – I now spend significantly more time studying the psychology of both the markets I am playing in as well as specific individuals I am working with.

3/ 1st-Time vs Repeat Founders

While second-time founders are great risk-adjusted bets, I keep reminding myself that a majority of generational tech companies were started by 1st-time founders both in the US and India.

4/ Non-Consensus-And-Right

2024-25

“Hot” theme of the year: Gen AI

What I have been investing in:

(1) AR/VR

(2) Edutech

(3) Robotics

(4) Drones

Periodic reminder: outlier venture returns are non-consensus-and-right.

5/ Alpha

Given AI is leading to massive competition in every obvious software opportunity, perhaps a good way to improve the odds of true venture returns in the portfolio is to index on “potential for category creation” much more than ever before.

This will require being open-minded to narrative violations, leaning in on products that look implausible/ hard to understand at this point, believing that future winners are unlikely to be simple extrapolations of the past, and having the courage to act on this belief.

However, one thing remains the same. The fundamental traits & qualities of a top-notch founder don’t change across cycles.

So, rather than thematic or market-driven, perhaps a truly “founder-first” venture investing style (backed by a humble admission that it’s hard to predict how markets will evolve over the next decade and which products are likely to eventually win) is better poised to do well.

Founder-first style + looking for category-creation plays = Alpha?

6/ Value-Add

What founders need help with the most is customer intros…

BUT…few investors can repeatably & scalably help with this.

ALTHOUGH…investors can introduce you to connected cliques who in turn, can potentially connect you to customers through a chain of intros.

THEREFORE…a major value add investors can bring to the table is connections to cliques that founders can then mine.

7/ Top 5 Learnings From A Decade Of Angel Investing

(1) Choose a “strategy” ➡️ many can work, focus where you have an edge.

(2) Take enough “shots-on-goal” ➡️ adequate diversification/ portfolio size but watch out for “di-worsification”.

(3) Respect “power law” (few winners will account for the majority of the returns) ➡️ hence, Point (2) is important.

(4) “Access” is everything ➡️ watch out for adverse selection.

(5) Brace for long periods (10+ yrs) of illiquidity to let compounding kick in ➡️ Knowing “when to sell” is going to be super-important, and unfortunately, it is an art rather than a science.

PS: for your own good, see this chart once daily 👇🏽(Source: David Clark of VenCap).

8/ Your Fund Size Is Your Strategy

Striking analysis put together by Jason Lemkin shows how LPs need to have a multi-decade view in order to truly harvest the alpha in venture as an asset class.

One nuance though is that smaller pre-seed/seed firms can start returning DPI in phases through secondaries in growth rounds, while still holding on to a chunk for harvesting during the eventual main exit (IPO or M&A event).

“Your Fund size is your strategy” holds truer than ever before.

9/ “Access” vs “Picking”

In a venture upcycle, “access” becomes more important.

In a venture downcycle, “picking” becomes more important.

Currently, we are in the latter.

10/ Power Law

Venture Capital is all about “finding the best companies”, not just “doing deals”. The power law is so extreme that the latter almost guarantees failure.

11/ TAM Fallacy

Having very rigid views on TAM at seed stage is a classic VC fallacy. The best founders either create new markets or expand to adjacent markets over time. So the TAM keeps growing.

If a startup remains sub-scale, in most cases it tends to be due to founder motivation, quality of execution and team/culture issues, rather than available market.

At the seed stage, better aspects to evaluate include 1) founder-market fit and 2) competitive differentiation/ right to win (I call it “non-incrementality”).

12/ LP Updates

In an undistorted venture market, valuation markups should always follow operating progress toward PMF. This order got reversed during ZIRP, where markups happened in anticipation of progress.

The right logical structure should ideally, also be reflected in LP update emails from VCs.

  • The primary section upfront should cover operating updates from the portfolio [revenue, ACVs, product releases, key logos, churn, patents, team additions, etc.].
  • This should be followed by a “financial” section, positioned as an enabler of the operating progress. This can cover follow-on rounds, mark-ups, runways, etc.

The last 2 years have shown that private valuation mark-ups are transitory anyway. Core operations are the real building blocks that stay and continue to compound across cycles.

_______________

Chapter 3: Economy

1/ Top vs Bottom

With the S&P500 hitting ATHs post the election results, many are wondering if we are at the top.

Sharing my post from last year wherein I covered John Templeton’s framework of thinking about market cycles. As we stand today, it seems to be playing out perfectly. Stage 2 (“grow on skepticism”) seems to have ended and we seem to be at the beginning of Stage 3 (“mature on optimism”). This stage can last a few years, till we reach the “point of euphoria” (the last one being Nov 2021).

I follow the mental models of Charlie Munger and therefore, know that the future is unknowable and predictions have little value. However, I also follow Howard Marks and believe that it’s still useful to estimate where we are in the market cycle.

Enjoy Stage 3 of the cycle!

2/ Liquidity Cycles

The way the world works…

When you really need the capital, no one is ready to give it to you. And when you really don’t need it, they trip over each other to hand you the cheques.

This is the way liquidity cycles work.

Source: hard knocks from multiple cycles.

3/ Mean Reversion

Mean reversion is one of those laws that’s so powerful and yet, is actively utilized as a mental model by only a few. One can see it in everything from stock multiples and startup valuations to BigTech headcount.

If understood and used well, it’s a really powerful tool for scenario analysis and being prepared for various eventualities.

_______________

Chapter 4: Careers

1/ PMF Approach To Careers

My career arc started changing the moment I started trying to figure out:

1) What I am uniquely good at, relative to competition

2) What’s the best way to bring that unique value to the world

3) Who will pay me for it and how much

The key is to approach it like a PMF-finding process for a product, indexing more on “discovery” and “inputs”, as opposed to “outputs” like compensation, title, and career trajectory.

The key is to get the input strategy right, align your mindset, lifestyle, and family goals to it, and be patient enough to execute it for decades, taking feedback and iterating along the way.

As simple as that.

2/ Networking

Whether one likes it or not, networking (I prefer the words “relationship-building”) is a key skill to succeed at anything in the real world, particularly as a founder.

Here’s Marc Andreessen of A16Z talking about why so.

That’s why I keep writing about various aspects of relationship-building on An Operator’s Blog. Some posts that folks might find helpful:

(1) Networking at Events for Introverts

(2) Curiosity As A Networking Cheat Code

(3) How to cold-pitch your startup in 30 seconds to VCs at events

(4) The Success Flywheel – Part 1 and Part 2

3/ Content

During Web 1.0 and 2.0, the Internet rewarded “volume” of content. But now with AI, anyone can churn volume.

So, what matters now? Hypothesis:

(1) Targeting sharply-defined niches

(2) Going deep into concepts

(3) Keeping a high bar on quality

(4) Sustaining adequate volume while doing #1-3

4/ Clarity

Speed is an outcome of Focus.

Focus is an outcome of Clarity.

Seek Clarity of Thinking.

5/ Make It Interesting

Even if you are writing what you believe is the most helpful (or technical) content on a topic, you still got to make it interesting for readers.

Helpful but boring content won’t work at scale.

6/ Getting On A Plane

Getting on a plane to meet people you are doing business with is an execution superpower that is accessible to everyone.

7/ Urgency

A sense of urgency is a superpower not just for founders but also investors. Unfortunately, while it’s a standard expectation from the former, I don’t see much of it in the latter.

8/ Superpowers

The best career advice can essentially be distilled down into one sentence:

“Find your superpower and double down on it.”

_______________

Chapter 5: Life

1/ Personal Burn

The person/business with the lowest burn usually ends up winning.

2/ Life Is A Marathon

Quick note to all youngsters out there:

Based on what I have seen across the world in my life so far, you should assume that achieving reasonable success at any endeavor in life will most likely require a decade of focused work on that craft.

Account for these timelines as you plan your career (& life).

3/ Immigrant Mindset

As immigrants, we have no choice but to be brutally driven and almost emotionless while making important life decisions.

The reason is that we and those around us have sacrificed way too much. We literally can’t afford this not working out.

4/ Courage

The real arbitrage in the world is “courage”.

Those with courage become owners.

Those without courage serve the owners and make them rich.

5/ Name Dropping

Life has taught me to instantly get my guard up when someone starts name-dropping in the first few mins of a conversation.

6/ Winning

Winning in the short term vs winning in the long term – two totally different things!

7/ Opportunities

As a founder/ employee/ investor, you will likely stumble upon only 2-3 truly asymmetric-upside opportunities in your lifetime. So when you know you have one, try your best to make it count.

Rest of the time is spent grinding towards creating a funnel that hopefully, someday, will get you to these 2-3 opportunities.

8/ Upper Middle Class

The upper-middle-class are the true suckers in an economy:

(1) High enough income to get royally taxed. Yet low enough to keep them on the treadmill.

(2) Not large enough economic outcomes so need to keep aspiring for downside protection for kids (eg Ivy League education). But just enough assets to be able to afford this protection (keep saving in 529 plans for 18 years).

(3) Just enough W2 to put a downpayment and get a mortgage on a “stretch” house. Yet, slow income growth so keep paying the mortgage for 30 years.

_______________

Chapter 6: India

1/ Structuring Your US-India Startup

This is a timely post by Aditi Shrivastava of The Arc. I often see this issue of choosing which country to domicile in, being painted in broad strokes.

  • A decade back, all Indian VCs were flipping their portfolio companies, especially those in the SaaS/ enterprise space, to the US (Inventus Law was a big beneficiary of this move).
  • Then, as YC doubled down on India, everyone stopped discussing this issue. Whether consumer or enterprise, if you went to YC, you did a Delaware C-Corp.
  • Now in the last few years, with Indian public markets ripping and showing a major appetite for IPOs (including SME/mid-sized ones), founders are getting blanket advice to domicile in India to take advantage of this market.

A few things to consider on this topic:

  • Even in the Valley, IPO outcomes are rare and outliers. Most exits happen via M&A. If you are playing the odds, this is an important idea to keep in mind as global acquirers are generally reticent to acquire Indian-domiciled companies, especially in software. This could change, and I hope this changes going forward, but this is the present state of things.
  • Indian public markets being gung-ho right now doesn’t guarantee how they will behave after 5-10 years or when you are ready to go public. Though, it’s reasonable to expect that macro secular tailwinds will continue over the next decade.
  • It makes sense for domestic consumer companies like Razorpay and Groww to re-domicile to India, given their business is domestic consumption-based and they are already late stage/ IPO ready.
  • Indian public market demand for domestic consumption themes might not necessarily translate to other areas/ sectors in the future. Would Indian markets have an appetite for your specific deep tech or enterprise business N years down the road? Something to think about…
  • Right now, there seems to be more than enough INR/domestic capital demand for consumption-themed companies across the early->growth->late stage/pre-IPO spectrum of VC/PE. But is that the same case for enterprise and deep tech? Would these companies have a higher reliance on global growth capital in Series C and beyond rounds?

This is a highly nuanced topic and I am not a legal or tax expert. But what I will say is that like most things in business, your specific context as a startup is very important. And many of these calls are extremely hard and expensive to reverse later on.

So, while I can’t offer broad-based/ cookie-cutter answers on this topic, I would definitely encourage both Indian founders and VCs to avoid thinking in broad strokes on this matter, and partner with cross-functional experts to together explore the nuances of each case.

2/ India’s Seed VC Landscape in 2024

From what I am seeing in my deal flow over the last few months (and my focus is (1) enterprise software and (2) deep tech), I feel there is almost a dearth of quality, structured & consistent angel/pre-seed/seed capital in India right now.

From what Founders are telling me, almost all major Indian VC firms seem to be holding out & looking for late-seed/pre-Series A levels of traction even to start a real conversation. The proverbial $1Mn+ ARR, 2-3x y-o-y growth…

Anecdotally, it looks like only previously successful repeat founders are mopping up large seed rounds from these firms at the idea/pre-product stage. Pre-seed/seed seems to be significantly tighter for first-time founders.

Genuine question for myself and many India-based enterprise & deep tech founders out there who are fundraising – who are the angels/ seed firms in India that are comfortable in CONSISTENTLY writing checks at the true early stages in enterprise software and deep tech (idea/pre-product/MVP/design partner/some usage stage)? And by consistent, I mean doing 10-12 deals per year.

3/ Indian Elections 2024

The 2024 Indian elections almost turned out to be another 2004 “India Shining”. Probably the delta this time was the personal charisma of the PM.

The Indian economy is already close to a tipping point so the current govt getting an opportunity to continue the work it started in 2014, for another 5 years is a good sign.

Finally, this election just goes to show that this economy is underpinned by a vibrant democracy that has all the checks-and-balances that the likes of China continue to struggle with.

To global investors – India will continue to lift millions out of poverty, put more disposable income in the pockets of its citizens, build world-class infrastructure and digital public goods, export innovation via its tech startups, and deliver growth that is sustainable for all stakeholders.

4/ Domestic Hardware

Wanted to throw out a challenge for Indian founders – in this next generation of the ecosystem, can we aim to build our own domestic smart EVs to compete with BYD and Xiaomi?

In the last cycle, I had a ringside view into how in smartphones, Indian companies like Micromax and Lava had massive dependence on Chinese OEMs and ultimately, ended up bowing out to OnePlus and Xiaomi.

Given the ambitious goals we are setting for the Indian economy, it’s time we invest towards controlling the hardware stack too. From what I am hearing about all the work already happening in semiconductors, automotive, space and manufacturing in general, this is totally doable if we have the courage.

I also believe that there is enough global capital available that is positive on India and will be ready to back this courage. Or perhaps our Indian conglomerates can also step in there with INR capital?

The role model here is how Sachin Bansal and Binny Bansal stood up to US and Chinese competition in eCommerce, ultimately ensuring a homegrown & enduring market leader Flipkart continues to thrive to this day.

_______________

Chapter 7: Other People’s Ideas

1/ Network Density

As always, massive insight-per-sentence from Fred Wilson on how “density” matters a lot while building networks.

2/ ACV Expansion

The key to ACV expansion 👇🏽

3/ Emerging Managers

For all emerging managers out there who are trying to understand the world of LPs:

This 10X Capital episode on How to Pick Top Decile Venture GPs is awesome. Albert Azout of Level Ventures candidly shares some amazing insights on how LPs evaluate emerging managers, what separates the best GPs from the rest, common pitching pitfalls etc.

4/ Talk Less

This is a very, very important and practical insight for fundraising, or any sales process for that matter. Thanks Hugh Geiger for putting this out there!

5/ Ryan Reynold’s Marketing Principles

Ryan Reynolds shared some excellent marketing principles that also apply to startups.

(1) “Doing more with less” by leveraging creative thinking.

(2) Moving fast with campaigns to keep up with the speed of culture vs getting caught up in analysis-paralysis and bureaucratic over-planning.

6/ Stay In The Game

If you are going to read one thing today, please read this (especially if you are a parent).

7/ An LP’s Perspective On VC

Nice convo between David Clark (VenCap) and Jason Calacanis. Was interesting to hear a top LP’s perspective on venture capital, manager performance and portfolio construction.

  • Across a sample of 12,000 companies that VenCap analyzed, only 1% were “fund returners”. Power law in venture is intense.
  • Venture is a game of finding outliers. The best managers aren’t afraid of high loss ratios. In fact, loss ratios are surprisingly similar across various percentiles of funds. Even the best strike out a lot.
  • The best managers have the confidence to let their winners run. You might have 1 fund returning outcome in a portfolio of 50 companies so if you don’t let it run, it is a bigger sin than not having invested in it at all.
  • Breakout private companies with real businesses tend to hold their value. But when these companies go public, VenCap has seen the stock going down by a lot in subsequent years in many cases.
  • In WeWork, the only people that won were Benchmark (exited pre-IPO with a $2Bn outcome) and Adam Neumann (via secondary sale).
  • In venture, less capital is more capital. If you get too big, you become more of a capital allocator than a venture investor.
  • Under-performing managers tend to put more capital into their under performing companies vs the winners. The opposite is true for the best performing managers.

PS: also check out this amazing X thread where David shared raw insights on power law in venture.

8/ Learnings From Scaling To 10Mn ARR! – via Bessemer Venture Partners

Attended an awesome US-India SaaS event organized by Bessemer Venture Partners in Redwood City. Key takeaways below:

Session 1 – Learnings from a decade of building Manychat

Mike Yan shared candid founder learnings from 8 years of building Manychat (a marketing platform for chat eg. IG DMs, WhatsApp etc.), wherein the company had to be completely reset during Covid before reaching tens of millions in revenue at present.

(1) The art of decision-making with limited data:

One of the key jobs of a founder in the 0-to-1 stage is to take strategic direction bets with very limited data. Eg. Manychat pivoted in a specific direction with only 40 beta customers by asking, “Are what these 40 customers doing representative of millions of other businesses?”.

Being able to develop the right judgment even with limited data comes down to how deeply the founder understands the market. To quote Mike – “your mental neural net has to get to the level where you can say with 80% confidence that this is going to work at scale”.

(2) In the initial stages of building products, it’s important to remember that data acts as a rear-view mirror into the past. It doesn’t necessarily show you the future.

(3) Value of focus:

To compete as a startup, it’s important to sharpen your product and business knife by saying no to a lot of markets, features, geographies etc. That’s how you get to a point where no one can compete with you in your sharp niche.

(4) Importance of Events for demand-gen:

Manychat has found holding flagship events to be very successful in demand-gen. The company works with influencers and paid marketing to drive maximum traffic and sign-ups for these events.

Events are also a good internal forcing function around new product launches, feature rollouts, fresh campaigns etc.

Interestingly, Manychat charges a small registration fee to ensure attendees are invested in the event. Also, all the content gets hosted on the event portal. They have found hundreds of people browsing through it daily many days after the event.

It’s important to note that events only work when a product has a basic resonance with the market.

(5) Key to differentiate in a crowded market:

To differentiate as a startup, it’s important to have a clear ICP and nail down messaging just for that ICP, and no one else.

One common mistake is talking about the technology more than the benefits to the ICP. Eg. while most of Manychat’s competitors were talking about how cool Facebook Messenger was when it was launched and where all they could integrate with it, Moneychat’s messaging focused on what its ICP (email marketers) could do with FB Messenger, how they could run a campaign on it and what outcomes they could drive from it.

Session 2 – Selling to large enterprises

Ashwin Ballal, ex-CIO of Medallia, shared the following insights on what founders should keep in mind while selling to large enterprises:

(1) For a customer CXO to take a startup seriously, you must solve a deep-seated personal problem for the exec. Else, it won’t be important enough to warrant their bandwidth.

(2) Every enterprise shouldn’t be a “customer” for your startup. It is important to be surgical and focus on an ICP.

(3) There are essentially only 2 high-priority problems that any customer is looking to solve – (1) growth and (2) cost optimization. A startup needs to hit the core of these problems. Everything else like productivity improvement is a nice-to-have.

(4) Given weak macros over the last 2 years, cost optimization has become so important that CEOs are mandating the CIO and CFO to work together and bring down costs by being willing to adopt cheaper software even with relatively inferior UX.

A new solution has to create a minimum of 25-30% cost savings to have a chance at displacing the incumbent solution.

Customers look at this potential cost-saving both in terms of being able to boost the bottom line or being able to use it for extra headcount to drive growth.

(5) Large enterprises are increasingly looking to adopt “bundled software” to reduce IT costs. They are also looking to transition from per-seat pricing models to consumption-based pricing. These elements are going against specialist incumbents which turn out to be significantly expensive.

(6) There has been a trend over the last decade where software buying decision-making shifted from the IT/ CIO org to functional teams. Now, with capital becoming scarcer and more expensive, cost reduction is back at the forefront, and therefore, CIO/ IT orgs. are again becoming important stakeholders.

Startups often make the mistake of not looping in the CIO org early on in the deal and not building relationships within that team. This often derails deals at late stages. In addition to functional champions, important to have a parallel champion within the CIO org too.

(7/) Nobody is doing AI in production at scale. Most projects are still POC stage so long way to go in the space.

_______________

About the Author

I am Soumitra, a venture investor focused on the US-India corridor. I invest in Global Indian founders via my Fund Operators Studio.

I like to say that “I am a writer in the costume of a VC”. I write about Startups, Investing and Life on An Operator’s Blog. Also check out the AOB Podcast on YouTube.

Feel free to reach out on LinkedIn and follow me on X.

*Audio Overview of this post (via NotebookLM):

The Ground Is Shifting For Tech (More Than We Realize)

From anti-immigration and de-globalization to tech org restructuring and vertical SaaS headwinds, Tech is staring at a drastically different world going forward.

Was chatting with a VC friend earlier this week where we were discussing the US-India corridor and what the future looks like for cross-border SaaS from India.

During the convo, I ended up saying this – “I can just feel that the ground seems to be shifting in a big way for tech and most people aren’t fully recognizing it”. Btw, I repeated this line to my better half the next day in some other context too.

It just feels like a lot is changing at the same time, both macro and micro, and we as tech workers caught up in the daily grind of keeping the ship afloat in our businesses and personal lives, aren’t fully realizing how big some of these shifts are and how they will massively impact our futures.

Consider this laundry list of things unfolding as I write this (sorted from macro to micro, but in no particular order of importance):

1/ Military conflicts

As the world barely came out of Covid, it’s now faced with multiple global conflicts – Russia-Ukraine, Israel-Hamas, Red Sea, and now Iran has frikkin’ fired missiles at Pakistan (who would have thought?).

In the medium to long term, we are also staring at other potential standoffs like China-Taiwan, China-Japan, India-China, and more fronts in the Middle East.

While they might seem distant, these geopolitical tensions can have an indirect economic impact, especially on inflation and cross-border activity.

2/ Social tensions

The Israel-Hamas conflict is seeing side effects on the streets in the US. Who would have thought that top Ivy League campuses like Harvard would see active anti-semitism tensions?

This tension has powerful political and economic actors at the center and therefore, can have a second-order yet decisive political impact, especially with the 2024 Presidential elections around the corner.

3/ Anti-immigration

The US is dealing with a massive illegal immigration problem, with videos of thousands of people crossing the border via wall breaches going viral. Even other developed countries like the UK and Canada are dealing with a major rise in immigration.

In times of weak macros, high inflation, and a rising perception of hardship, I expect immigration to be a major election issue this year, particularly in the US.

Source: Ruchir Sharma (Rockefeller International)

4/ De-globalization

Candidly, I have been a big beneficiary of massive tailwinds of globalization starting in the early 2000’s. Many of the companies I worked for in India served US customers. The venture firm I worked for had US LPs. I moved to the Bay Area and became a global expansion operator. My startup had a distributed team across 4 countries.

At present, it definitely feels like these globalization tailwinds have weakened considerably. I am reading about Indian founders struggling to get US visas, the EU clamping down on migration, and China falling out of favor in terms of global trade and people movement.

If these tailwinds continue to weaken, this is a massive change in a key assumption that underlies the career plans of many global tech workers, especially those from emerging markets. To get a sense of this, check out this awesome thread on X that shares how Indian Masters students in the US will struggle to find jobs this year.

5/ The decline of China

China has come out in the open as an overtly aggressive competitor to the West. At the same time, Xi is executing a drastic socio-economic reset domestically that has decimated an earlier-vibrant tech sector. Noted economist Ruchir Sharma recently cited how in its peak years, China used to attract ~$100Bn of FDI in a single quarter, and now, its FDI has de-grown in Q3’2023.

I remember being in awe of China’s infra, talent and execution focus while working at Alibaba. That just seems like a dream now. I never imagined that I would read headlines about 21% unemployment and disillusioned youth in an energetic economy like China.

What are the repercussions of this? As Western companies pull out investments from China, this is an opportunity for other emerging markets like India and SEA to capture parts of this supply chain being diversified.

Source: Ruchir Sharma (Rockefeller International)

6/ Higher Interest Rates

From operating in a near-zero interest rate environment for more than a decade since GFC, the Fed has now executed the steepest interest rate ramp ever.

When the cost of capital is low, an economic party begins. Public stocks appreciate given the denominator effect. People borrow more so housing demand goes up and homeowners feel richer. Companies lever up and aggressively invest in physical infra and talent.

At the same time, investors start searching for higher yields given low risk-free rates, thus boosting illiquid-high-return asset classes like venture capital and private equity.

While this post-GFC ZIRP party was in full swing, Covid took it to a new crescendo courtesy of additional QE and stimulus packages. As everyone in the party reached peak highs, a neighbor (inflation) called the cops (Fed), and the party abruptly ended (interest rates rose from 0.25-0.50% in Mar’22 to 4.75-5.00% in Feb’23).

While the highs of the ZIRP party have been gradually coming off through 2022 and 2023, who knows what the long-term impact of this prolonged loose monetary policy will be? Millennials like me have largely worked and grown up in ZIRP, creating our goals, expectations, and lifestyles according to what we saw. Are we ready to re-configure our lives in this new era of higher interest rates?

7/ Tech org restructuring

The recent Big Tech layoffs in the Bay Area are much more significant than many people imagine. For the last 15 years, this compact region has been used to massive jobs getting created by default, salaries rising on auto-pilot, and major equity upsides being captured by RSUs and options. Forget layoffs, anyone working in the Valley since 2010 has only seen an era of multiple job offers and compensation ramps.

This scenario seems to be changing at a highly disruptive rate. Elon catalyzed it by doing deep RIFs in X, including eliminating entire functions altogether. Across mid and large tech companies, am now seeing orgs getting drastically flatter, classic white-collar functions like product management, ops, program management etc. either getting extremely lean or even going away altogether.

I fear that unless a tech worker can either build (code) and/ or sell, they will struggle to see adequate demand for generic tech ops skillsets. At the minimum, this will reflect in drastically restructured compensation packages.

8/ Rise of AI

I am lucky that as a venture investor, I get to see cutting-edge products before the world has even heard of them. From what I am seeing in terms of AI-powered products, both infra and application layer, I fear that many jobs as we know them will get automated away rapidly.

  • Individual developers and software dev shops have already started using AI for testing and debugging code. This was a job typically done by entry-level IT services talent in offshore centers like India.
  • Making creatives for digital ads and other low-complexity design tasks are being automated away rapidly.
  • Google has been drastically cutting down on its ad sales team, expecting a lot of that work to get automated by AI.

Ever since I entered tech in 2011, I have seen engineers be the kings both in startups and big companies. While outstanding engineers will always be gold, the last decade saw even mediocre engineers with basic skill sets reap massive financial rewards mainly due to the supply-demand imbalance.

As we enter the age of AI agents, I am not sure if this will be the case going forward. PS: for more insights on how the AI landscape is playing out, check out my AI Musings series – #1 How The Odds Are Stacking Up?, #2 OpenAI DevDay and #3 LLMs for Beginners.

9/ Bitcoin becomes legitimate

The biggest news of 2024 already is the SEC green-lighting Bitcoin ETFs (see my post ‘Bitcoin ETFs and The Challenges of Digital Gold‘). From being an edgy piece of technology for innovators in 2013, to being discovered by early adopters like myself in 2017, hitting all-time-highs in 2021, then seeing large-scale frauds like FTX in 2022, the SEC suing Coinbase in 2023, and now, getting recognized by the same SEC as a mainstream asset class – whew, who would have thought?

Again, I don’t think most people realize the significance of this move. Over a decade, pure, grounds-up, community-driven adoption of Bitcoin by common people has created a new asset class, helped it travel from Silicon Valley to Wall Street, and forced the regulator to recognize it.

What does Bitcoin going mainstream say about our current monetary systems? Will it change the balance of power between the wealth hoarders (Boomers) and the wealth aspirers (Millennials and Gen Z)? With cash fading away globally in various respects, is this the dawn of pure Internet money? Are there going to be any other ripple effects of the expected mainstream adoption of Bitcoin going forward?

I feel these are open questions with massive implications for who will hold wealth and power over the coming decades.

10/ Startup and VC shakedown

The last 2 years have been the most turbulent for the startup ecosystem since GFC. Venture financing in the US has been on a major downward slide, from ~$348Bn in 2021, to ~$242Bn in 2022 and then, another estimated 30% drop to ~$171Bn in 2023. Startup shutdowns have hit all-time highs, and given the drastic reset in public market comps, valuations in both early and growth-stage financing have drastically come down.

Source: Carta

As recently as Q1 2022, just 5.2% of new fundings on Carta were down rounds. In Q3 2023, that figure was 18.5%, continuing a nine-month stretch in which nearly one out of every five rounds raised by startups resulted in a decreased valuation.

Carta

This shakedown is reflected in the VC ecosystem too. A major Boston-based VC firm OpenView with $2.4Bn in AUM abruptly shut down in Dec’23. More recently, hard-tech VC firm Countdown Capital wound down operations, stating the following reason – “funding industrial startups is not inefficient enough to justify our existence, and larger, multi-stage venture firms are best positioned to generate strong returns on the most valuable industrial startups”.

Source: Altimeter

I believe that the 2023-25 vintage of startups will be built with very different philosophies, fundamentals, and capitalization strategies. In parallel, the 2020-21 vintage startups will need drastic re-wiring that in most cases, might just not be possible, leading to large-scale write-offs (read my post: Cheetah in the Rainforest: 2021 Vintage of Venture).

Another related view that I recently posted on X – “access to capital was widely considered a competitive edge but it now looks like a view that should be carried with contextual caveats eg. applicable only in low cost of capital macros and in specific types of startups like those with network effects”.

11/ Vertical SaaS headwinds

Within the venture landscape, I wanted to do a quick double-click on vertical SaaS.

With weak macros and the rise of AI, most point SaaS solutions have seen intense customer headwinds over the last 3 years. Startups selling to other startups have been hit particularly hard (many YC companies fall in this category), given the customers themselves are doing brutal cost-cutting.

Enterprise customers too, have been under pressures of layoffs and reducing general opex, hence creating push-back on the per-seat pricing model. See this prescient thread from David Sacks in late’2022 when SaaS was bottoming out.

Source: All-In Podcast

Based on anecdotal conversations, am also seeing many customers now focusing on reducing software fragmentation and trying to consolidate tech stacks to bring down costs and complexity. In a sense, this seems to be a move away from buying a portfolio of unbundled SaaS solutions, and towards buying bundled software that addresses multiple use cases from the same vendor. In fact, I feel there is an understated opportunity here for startups with strong PMF to really push up their ACVs by solving multiple use cases for customers.

The biggest question mark is on the future of Covid-boosted products. Hopin, one of the poster children of the era, sold for peanuts to RingCentral. Point SaaS products in productivity, sales enablement, and workflows accelerated in 2020 but with the current customer behavior, it remains to be seen if they are vitamins or painkillers, and whether their differentiation and value to customers is strong enough to justify their independent existence.

Closing thoughts…

It’s probably the January-effect but this week got me organically thinking and connecting the dots on all that is unfolding in the world right now. The venture investor in me is part-excited for all the new opportunities this change is going to bring with it, and part-concerned for how both myself as well as existing portcos need to navigate this massive change.

Having adaptability and a growth mindset is going to be key. I have a strong resolve to be on the right side of this change, and also working to transfer this conviction and learning to the founders I work with.

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

Cooking with the Bay Area secret sauce

I often get the question from founders – “what makes the Bay Area successful? And how can I replicate its model in my teams?”.

Outlier success is usually driven by a set of interconnected factors. But there is one element behind the Valley’s success that is less talked about. Sharing that secret sauce here for your own cooking!

During this India trip, a bright young founder asked me an interesting question – “why does the Bay Area keep doing better at thinking big & innovating? And how can I get my engineering team in India to start doing the same?”. These questions got me to reflect on my own experience of operating in Silicon Valley & what makes it different from other geos.

Any region that becomes an industry hub (erstwhile Detroit in auto, New York & London in finance, the Bay Area in tech) is usually the result of a complex web of factors. These go top-down, starting with the country’s history, values & socio-economic structure at the macro level, to local factors like weather, presence of feeder universities & a critical mass of companies that drive network effects.

However, based on my experience, there is one important element in these complex webs that’s less talked about – the presence of “Relatable” role models. While social, economic & cultural factors set up an amenable environment, seeing people you know or can relate to, pushing boundaries & a few getting outstanding rewards for it, is what drives daily action from talented folks.

Doing anything new or unconventional requires 2 things:

  • Inspiration – stories that create a desire to chase something better than the status quo.
  • Action – internal motivation to translate inspiration to daily action.

Each of these is driven by a different set of role models. Inspiration is driven by what I call as “Prominent” role models while Action is driven by “Relatable” role models.

Prominent role models

These are the handful of most visible, externally successful and recognized leaders of their fields. I have been inspired by many of these in my own life.

Even before startups were a thing in India, I remember discovering Steve Jobs’ famous 2005 Stanford Commencement Address while I was working as an investment banker at Citigroup (& hating it). Looking back, this was my initiation into this world that now deeply lives within me. Jobs inspired me to start looking beyond spreadsheets & discover unsolved problems in the world.

When I entered venture capital, I discovered Fred Wilson of USV & reading his blog inspired me to start writing articles & become an early adopter of Twitter in 2011 when most Indian VCs didn’t even have Twitter accounts. Many years later, as I was driving global expansion for Alibaba, observing Jack Ma’s leadership & learning about his backstory inspired me to startup on my own.

Steve Jobs, Fred Wilson & Jack Ma are Prominent role models that inspire you to the very core, creating those moments of decision-making that change your direction. However, a long & arduous journey only begins in these moments, and walking the path requires years of daily action. This is where the ongoing presence of Relatable role models is super-important.

Relatable role models (the secret sauce!)

Completing the loop I started in the beginning; I believe one of the core strengths of the Bay Area that makes it an ongoing innovation engine is the vast presence of Relatable role models doing non-incremental things.

These are people you either know directly or know of in your extended network. These are people just like you, sometimes at the same stage of the journey as you, maybe a few steps ahead in a journey similar to yours, or perhaps already rewarded for walking the path.

These are ex-colleagues, batch-mates, friends-of-friends & social media acquaintances. To you, they are reachable, approachable, understandable. They aren’t necessarily outlier successes. It’s just that they are either walking the same part of the hike as you or have already walked this segment & reached the next check point.

When I first moved to the Bay Area & was looking to meet people in the ecosystem, I still remember one of my close friends introducing me to his “Mamaji” (mom’s brother) who had sold 2 companies & was living in Saratoga. One of the first intros I got was to this kid in his mid 20s who had just sold a company to LinkedIn & was on to his next startup already.

As I started working in the Valley, I saw colleagues building side-products on weekends & senior leaders joining startups with significant pay cuts. I saw peers investing into startups with salaried money & heard stories of friends-of-peers who were the first angel checks into now-prominent startups.

Humans learn the best by observing others in their surroundings. The core value prop of top universities is not classroom learning, but a high-quality peer group you end up learning with on campus for 4 years. Paul Graham realized this & therefore, created YC as a community-driven venture model where founders build largely on the back of peer learning & support. I can confirm this as a parent too, when I see my kids largely learning by osmosis from their friends & indirectly observing behaviors of grown-ups.

Living in the Bay Area exposes one to a continuous stream of relatable, real-life stories of risk-taking, of taking big bets & importantly, of creating all types of success, big or small, by taking these bets. In most cases, you can even get direct access to the protagonists of these stories, who are more than happy to pay-it-forward by sharing their learning & actively helping out. They do this because they too, are on the way to their next base camp & are looking up to their own Relatable role models for it. And so, the cycle continues!

Coming back to Part 2 of the question I got from the founder – how can one drive a non-incremental culture in your own teams?

As a leader, consciously surrounding your team with Relatable role models is a strong step towards this. It could be by encouraging team members executing differently to share their approach or bringing in folks from other companies for sessions & fireside chats. It could be doing knowledge sharing sessions at an offsite, or discussing a case study of a similar product or company that is nailing something you are struggling with. It could be recognizing taking on large problems & bold approaches via hackathons & ideathons. Or it could be setting up days where talented younger folks shadow leaders, sitting in important meetings & observing how they execute.

I tried to leverage this concept in my own startup a few years back wherein I convinced one of my batch-mates who was the ex-CTO of a large Internet company to come onboard as a CTO-in-residence. Him spending a few hours every month with the team & joining townhalls to share his perspective on technology transformed the learning trajectory & energy levels of our young engineering team. Even today, everyone fondly remembers that experience as a game changer for them personally.

So that’s it, I gave you the Bay Area’s secret sauce. Each of you is a Relatable role model for someone out there, so go ahead & pay-it-forward by sharing your stories, supporting other builders & connecting people to each other. If this becomes the dominant culture in your ecosystem, whatever that might be, success will follow!

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

Bouncing back in careers

It’s been a gut-wrenching last few days for us to witness several friends get impacted by Google’s RIF. My wife is a tenured Googler so naturally, we have built some outstanding relationships there & got so much value out of its community. This makes it even harder to see close friends & collaborators come to terms with this abrupt life change.

Folks who have built successful BigTech careers are typically pros at the job-hunting process, so I don’t think I can share any particularly new insights there. However, there is one idea I believe could be relevant in navigating this phase, & that I have been sharing with some friends over the last week. It’s the value of being “radically open-minded” while searching for your next adventure.

As we progress through our careers, especially beyond the first decade, we tend to build a certain self-image in our heads. It mostly reflects where we have seen the most external success in the past (titles, money, fame, influence etc.). But the reality is that the market is an ever-evolving beast that doesn’t really care about this self-image.

So while we might believe that we fit best into specific roles, or deserve certain compensation, the market may disagree. And this isn’t necessarily a negative reflection of one’s skillsets or experiences – in rapidly-changing industries like tech, the definition of talent-job-fit for the same role keeps shifting across eras, especially when the macros are hard. We don’t get exposed to this change while at a stable job until we start job hunting under pressure, which is when this reality hits us in the face.

So how can one effectively deal with this challenge while job-hunting? The key is having a radically open-minded approach to this process. Borrowing from a beautiful piece of advice one of my mentors gave me when I was trying to bounce back post my startup – try & approach this phase the same way a founder tries to find product-market-fit:

  • Talk to many different types of customer segments
  • Deeply understand their pain points
  • Talk about your unique value proposition & how it can potentially solve these pain points
  • Observe where your value prop is resonating the most
  • Follow the highest-fidelity customer signals
  • Have an overall vision as a guiding North Star, to keep this process aligned with your internal compass

This approach is much more “discovery-based” (where does the market believe I can uniquely solve a problem), rather than “search-based” (this is what I want OR this is where I think I fit in the best). Similar to how market-pull takes startups in directions that the founders never originally expected, it’s worth being open to all kinds of re-framings & new opportunities that the market sees for you as a professional.

The curse of being an achiever is believing that you know exactly what’s best for you next. I call this a local maxima. But often, the market is giving you signals that can potentially take you to a global maxima in the long run, allowing you to become the best version of yourself. You just need to a) listen to the market & b) be brave to move in new directions. That’s what being radically open-minded is.

Humbly sharing these 2 cents from my own life experience, with the hope that it can give you a new tool to emerge stronger from this uncertainty. If I can help you in any way (listen/ brainstorm/ give intros), please don’t hesitate to DM me on Twitter. More power to you!

PS: in case you are interested in startup roles, especially in the US-India corridor, feel free to check out my portfolio. Happy to make intros.

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

Ten big ideas for 2023

2022 definitely felt like the end of an era. A decade-long party for US tech, fueled by low-interest rates -> increased availability of risk capital -> price inflation across asset classes.

The last chapter of this post-GFC era was perhaps the craziest – an unprecedented pandemic -> widespread lockdowns -> more fiscal stimulus -> injecting more air into already inflated asset bubbles.

With inflation crossing 7%, the Fed finally started increasing interest rates last year and is expected to continue quantitative tightening over the next few quarters. Public market valuations expectedly turned south (valuations are based on DCF, so as discount rates go up, valuations go down), with tech growth stocks correcting by as much as 80-90%.

The following dynamics are currently at play:

  • Large tech: shrinking macro-demand + adverse public markets -> pressure on companies to reduce costs to bring them in line with lower growth projections -> drastic cost-cutting measures, including major layoffs.
  • Venture Investors: public market corrections -> LPs cut back on venture allocations + downward revision of expected returns on exit -> venture activity slows down + any deals that happen, happen at much lower valuations given new public market comps.
  • Startups: less capital available + higher bar in private markets -> startups need to cut costs to survive -> layoffs in high-cost/ non-core functions + pause hiring unless absolutely essential.

2023 appears to be the “year of transition”, as both the overall macroeconomic cycle, as well as the technology sector within it, move into a new paradigm. I see the following ten big ideas for 2023:

  1. Leaner-and-meaner big tech

For anyone working in tech over the last decade, we have witnessed first-hand the level of entitlement & cultural complacency that has grown within large tech companies like Google & Meta. With more challenging times ahead, I expect large tech companies to take drastic steps towards re-wiring their cultures & operating models. Layoffs are just one piece of the puzzle – expect significant changes to compensation policies, KPI/ OKR philosophies, org. structures, functional locations, work-from-home policies, contractor hiring, operating routines etc., all with the aim to make execution more efficient.

Founder-led companies (eg. Meta, Salesforce, Shopify, Coinbase etc.) will take quicker & braver calls to re-invent themselves, compared to those run by professional management teams (eg. Google). In the latter case, I expect shareholders to put considerable pressure on these professional CEOs to take corrective measures. In fact, I won’t be surprised if some of the big tech CEOs get unexpectedly replaced as many of them come across as peacetime CEOs who will struggle in wartime.

2. Capital efficiency over growth for startups

The last decade in tech startups was all about growth. This year, expect investing thesis & operating models to decisively shift towards capital efficiency. Mirroring the demands for margin improvement by public markets, I expect private market investors to significantly raise their expectations on operating efficiency.

Founders will have to react fast and in several cases, give a 1800 turn to their culture & business models. A silver lining – founders who were heads-down amidst the craziness of 2020-21, building their companies in a capital-efficient way, will have an enviable opportunity (& deservedly so!) to play offense both with customers & investors.

3. Bay Area bounces back

Remote work boomed during the pandemic, as tech companies grew at unprecedented rates. However, we saw signs of a comeback-to-office across both big companies & startups last year. With current headwinds, I expect factors like teams getting together to drive execution & in-person networking to become increasingly important.

With rampant layoffs, tech professionals will also feel more insecure & would need more access & optionality to get their careers back on track. All this bodes well for the Bay Area – I expect significant migration to the region, especially for people in their 20s to mid-30s. In terms of the sheer depth of the tech ecosystem, the Bay Area remains unparalleled. As emerging areas like AI, health-tech & EVs gain strength, they will provide even more reasons for talent to be physically here.

4. “De-angelification” of the startup ecosystem

Amidst the post-pandemic investing frenzy, liquidity-rich, over-optimistic, FOMO-driven tech professionals started dabbling in angel investing. Becoming an angel in a “hot deal” became a status symbol, & rapid paper-markups made everyone feel like a winner.

A majority of newbie angels from this vintage neither understand the nuances of this asset class nor have the depth of resources to play the game effectively over the long term.

As more startups start shutting down this year, combined with layoffs & decreasing compensations courtesy dwindling value of RSUs, I expect a massive churn in 2020-21 vintage angels. In my experience, tourist angels typically drop out of the game around the 4-6 deals/ 24 months mark, as they see portfolio companies starting to shut down & their hard-earned money vaporizing into thin air.

5. More pain in Crypto

If you thought 2022 was brutal for Crypto, brace yourself! FTX implosion is only the beginning of a much-needed cleanup in the space. I expect many more tokens to go to zero, projects to shut down & low-conviction talent to move out. Given the scale of the FTX fraud, am expecting even more regulatory oversight & ramifications for the overall sector this year.

Personally, I do believe there is a kernel of truth in the Web3 opportunity. The faster this cleanup happens, the sooner the next chapter can begin & we can make tangible progress towards discovering its real-world use cases.

On BTC and ETH, I expect both to remain flat at best, & significantly down from current levels in the bear case.

6. The FOMO shifts to AI

Whenever there is too much consensus around a trend or an asset class, I get worried! It was clean-tech pre-GFC, then Blockchain & Crypto pre-pandemic, moving to Web3 & future-of-work post-pandemic. Based on my Twitter feed, I can safely say that with the rise of OpenAI & launch of ChatGPT, the FOMO has now shifted from Web3 to AI. I am expecting the space to see a lot of hype, investor interest & startups being launched in 2023.

Studying how the previous FOMO waves evolved gives a fair understanding of what to expect – those without first-principles conviction & a long-term strategy are more likely to get their hands burned. Those who were anyway committed to the space & were quietly building behind the scenes over the last few years stand to disproportionately benefit from the increased availability of risk capital & talent.

7. The return of “moats” (& rise of deeptech)

As the perpetual-growth era of software ends, I expect the question around “moats” to re-appear in the diligence checklist of investors. The lifecycle of companies like Netflix & Robinhood has clearly shown how hard it is to have a sustainable competitive advantage in tech (one reason why Warren Buffet stays away from investing in it!).

As the likelihood of purely growth-driven exits goes down, I expect venture investors to start looking at deeptech verticals with inherent moats much more seriously. These include space-tech, health-tech (including lifesciences), energy, climate etc.

Each of the above markets seems to be getting unlocked in its own unique way & while these companies can be more capital-intensive & have higher technical risk compared to say SaaS or Social, the resulting market leaders have much more defensible competitive positions & hence command healthy valuation multiples.

8. EVs taking over the transportation stack

EVs are seeing major progress on both the supply & demand side. On the supply side, most major auto companies have an EV product in the market, with use cases evolving from urban sedans to SUVs, pickup trucks & now, even semi-trucks.

On the demand side, record-high gasoline prices have acted as a key unlock. This is visible in the rising hybridization of the latest gasoline car models. With non-Tesla EV products rapidly expanding, consumers have more choices across use cases & price points. I wrote a post a few months back on how I warmed up to EVs & Tesla, in particular. I expect EV penetration to have significant growth momentum this year.

9. Digitization of mainstream healthcare

A positive side-effect of the pandemic has been consumers getting increasingly comfortable with digitally-delivered healthcare services. In my case, interacting with healthcare providers over Zoom and accessing services such as Carbon Health & One Medical via their apps (including getting advice via chat) has really opened my eyes to its value. Even beyond that, I work-out with my trainer via video & our family nutritionist is in India with all interactions happening via Whatsapp.

I expect the overall healthcare stack, including mainstream services, to digitize at an even faster rate in the coming year. These tech platforms will also open up opportunities for niche services to exist eg. virtual monitoring & consultations for chronic patients, pre & post-natal advice, nutrition guidance etc.

10. India as a global greenshoot

Amidst an unstable China, weakening EU, war-torn Russia, one-dimensional Middle East, fiscally-unstable LatAm & fragmented Africa, India appears to be a solid greenshoot both geo-politically & economically. A stable & reformist govt. has worked hard to put together core growth pillars over the last 8 years – from building physical infrastructure & a national digital payments network to ensuring economic development at the grassroots & supporting tech startup activity in the country. India is poised to now reap the dividends of all this hard work, and similar to China, grow its per-capita income from ~$2k at present to ~$10k over the next 20 years, all in a democratic environment.

India’s tech ecosystem has also come of age in the last 5 years. The mega question of “can exits of venture-backed companies happen in India?” has been progressively answered, beginning with the acquisition of Flipkart by Walmart, followed by IPOs of consumer companies like Paytm, Nykaa & Zomato in domestic public markets, & the IPO of Freshworks in the from-India SaaS space on Nasdaq. There is a growing pool of startup talent, courtesy of a decade-long Mobile & software wave, which will fuel the country’s tech ecosystem over the next decade.

The above ideas are making me super-excited for 2023, both as an angel investor & operator. After a 2.5-year hiatus, I returned to angel investing in 2022, doing 3 deals in Q4. With the turning cycle & above ideas as a backdrop, my goal is to make 2023 my most active year yet as an angel, while also keeping a high bar on quality. Excited to collaborate with all founders, angels, VCs & operators out there 👊🏽

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

Top 10 enterprise SaaS learnings from a unicorn founder

Was awesome to hear Jyoti Bansal, Founder of Harness and Unusual Ventures, chat with Anant Vidur Puri at the Bessemer Venture Partners Cloud100 India Brunch in SF a few weeks back. He shared actionable insights from his founder journey building 3 outlier startups (AppDynamics, Traceable AI, Harness).

Key takeaways that resonated with me 👇🏽

1) In SaaS/ Cloud, having a free product is really important to drive product-led-growth [note: strongly echoes what I heard from Dheeraj Pandey at the SaaSBOOMi Summit a few weeks back. Post Nutanix, he is building DevRev to be PLG-first].

2) Focusing on getting into enterprise deals much faster in his current startups compared to AppDynamics, as “that’s where the $$ are”. Eg. started doing $1Mn deals ~1.5 yrs into Harness vs taking a few years for the same at AppDynamics.

3) When doing a 0-to-1 in Enterprise, important to first build a “top 3 product” in the segment. Once that’s achieved, various layers of monetization can be built around it.

4) Really important to qualify beta customers in Enterprise, so the product can be built efficiently. Once they start using the MVP, ask them the question “what’s the business case of this product for you?”. Will help filter out potential non-customers from the beta group.

5) While in the early stages of building an Enterprise product, avoid going down a feature-building rabbit hole for specific customers. The risk here is building features that not everyone will use.

6) Content marketing is key to early customer discovery. Put great content out there and let customers find you.

7) To identify which customer segment to focus on, run multiple experiments & track metrics. Eg. do cold emails on LinkedIn to multiple personas in parallel & measure response rates to see where you are getting the most interest.

8) To build a $100Mn ARR Enterprise business, founders need to have a view early on of how that destination math will eventually look in terms of no. of customers & ACV.

9) Interestingly, the current macro climate is seeing a slowdown only from an investor perspective. Enterprise customers are still growing rapidly & also spending more on software.

10) Important to operate lean in times like these where access to capital is getting constrained. Eg. at Harness, we are asking the question “can we achieve the same growth targets but with 20% less burn?”. Looking grounds-up at each function’s op-structure & optimizing.

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.

Finally warming up to EVs (& Tesla!)

Wow, Elon Musk recently announced the production of the Tesla semi-truck. Deliveries to Pepsi as 1st customer expected on Dec 1. The truck looks insane (see pic above) 🤯

I remember speaking to one of my friends, who manages a large family office portfolio, about a year back. They are big Tesla bulls and while I always admired Elon’s vision, I didn’t know first-hand the level of innovation Tesla was shipping & its head start over incumbents.

Earlier this year, I started driving a Model 3 as my 2nd car (my main car till then was a gasoline SUV). Post experiencing an EV for the first time, and in particular, the way Tesla has re-imagined the end-to-end software & omnichannel services stack around the car (from an eCommerce buying experience to home maintenance services), I called up my portfolio manager friend and said: “Now I know what the fuss is all about 🙇🏽”

With the launch of the electric Ford F-150, Rivian pickup trucks finally being seen on the roads & now the Tesla semi-truck launch, 2022 seems to be a tipping point in EV penetration across auto use cases. Helped in no small measure by tailwinds of high inflation in gasoline prices courtesy of the Russia-Ukraine war.

As a customer, I can see that once a household transitions to EV, it’s super hard to go back to gasoline. Urban commute as a use case is already solved for. Once EV cars hit critical volume, am positive the supercharger installed base along freeways will rapidly ramp up, as will the battery range itself.

EV is a space that is constrained by supply right now, not demand. It’s pretty much inevitable. As a venture investor, am bullish on startups building software for the EV value chain. In the California gold rush, the money was made by those selling picks and shovels. As EVs (& lithium-ion batteries, in general) penetrate our lives, the market opportunity for software that powers various use cases in its ecosystem is immense.

Subscribe

to my weekly newsletter where in addition to my long-form posts, I will also share a weekly recap of all my social posts & writings, what I loved to read & watch that week + other useful insights & analysis exclusively for my subscribers.