For most of the information age, companies looking to scale invested in server farms and hired teams to keep them running.
At one of my first runways, I walked in one day to find two co-workers sleeping, who had spent the night configuring servers at a co-location facility 60 miles away. Soon after, when I worked at a publicly traded company, our on-prem data center was resilient enough to withstand a moderate earthquake.
The relatively recent shift to cloud computing promised to reduce costs and increase productivity, but “cloud-first strategies can reach the limits of their effectiveness, and in many cases ROIs are diminishing,” writes Thomas Robinson, COO of Domino Data. Lab.
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I started wearing sweaters at home after I got my last utility bill, but with massive workloads of “ML, AI, and deep learning programs requiring tens or even hundreds of GPUs and terabytes or even petabytes,” companies at scale can’t just call back their data usage.
As “the great repatriation” now happening among public companies also has direct implications for startup DevOps teams, Robinson shares suggestions for “a few things that can be done to ensure future flexibility for where workloads are created.”
Thanks for reading TC+ this week,
Editorial Manager, londonbusinessblog.com+
When it comes to early stage growth marketing, it is often better to imitate than innovate
I’m excited to announce that self-proclaimed “growth marketing nerd” Jonathan Martinez has come on board as a recurring TC+ contributor!
Martinez, who worked on growth teams at Uber, Postmates and Coinbase, is also the founder of SalesKiwi.
In his latest article, he explains why copying your rivals’ most successful marketing strategies can be one of the fastest ways to gain traction with new customers.
“There’s no need to constantly reinvent the wheel,” he advises. “Preserve your resources to innovate for high-probability tests you’re eager to try at different stages of your startup’s life.”
SaaS is still open for businesses, but it will take longer to buy and sell
More than 225,000 technical workers were laid off in the past year, directly impacting SaaS renewal and purchase cycles.
SaaS customers who have fewer staff are purchasing fewer licenses and sales cycles are taking a little longer than they used to, said Ryan Neu, CEO and co-founder of SaaS purchasing platform Vendr.
“Over the past three years, our data shows a steady decline in multi-year deals,” he writes in TC+. “However, we also see a significant increase in the number [average contract value] from purchase to renewal in mission-critical and sticky software categories, such as CRM or email.”
How to pitch CVCs
As individual VC firms pulled out and began collecting dry powder in 2022, corporate venture capital (CVC) funds increased.
Pitchbook found CVCs played a role in 56.2% of all venture deals that happened last year, “just a hair up from the 25.6% in 2021,” reports Rebecca Szkutak, who spoke to a few experts to find out how startups in fundraising mode can get on their radar.
“If there’s no product integration angle and we don’t see or can’t find evidence that a customer of ours or theirs would want to collaborate, it would be difficult for us to collaborate,” said Andrew Ferguson, VP of corporate development and ventures at Databricks.
10 tips for making hardware products risk-free
With the right team, a software startup might take just a few weeks to go from the ideation phase to invoicing their first customers.
Conversely, all hardware startups struggle with high capital expenditures and need time to ramp up production. That’s why testing and evaluating the question is so important, says Narek Vardanyan, founder of Prelaunch.com, which recently completed a pre-seed round.
“You have to make decisions based on people’s actual behavior,” he said in an interview with londonbusinessblog.com+. “You have to make sure that the data you’re tracking comes from the right kinds of people.”
Are you considering pulling the plug on your startup?
i just read a Twitter post from angel investor Gokul Rajaram claiming that founders who raised large sums before the recession but have not yet found a match with the product market are “going through an excruciating psychological journey”.
Entrepreneurs have been indoctrinated to chase success at all costs, but “chasing endless pivots to find PMF is a bridge to nowhere,” wrote Rajaram, who shared a story about a founder who returned money to investors before resuming operations phased out:
“The relief they felt when they realized that investors and employees were on board and behind their decision 100% was palpable. (All employees received solid severance pay before the company shut down).”
If you are a founder who has decided to close (or an investor who advised one), please consider sharing your story with londonbusinessblog.com+. Send a message to [email protected] to get in touch.
Business investment in AI is on the rise, driven by the promise of the technology
Last year, global investors poured $77.5 billion into AI startups, up 115% year-over-year, Tortoise Intelligence reported.
According to Kyle Wiggers, corporate adoption of generative AI is sparking investor interest, as are the industry’s outrageous returns: a 2022 poll found that 92% of large companies are “returning on their investments in data and AI”.