Kellblog covers topics related to starting, leading, and scaling enterprise software startups including company strategy, financing strategy, go-to-market strategy, sales, marketing, positioning, messaging, and metrics
Dan, the founder/CEO of PeopleReign, has been doing AI since long before it was cool and, to give you an idea of how long he’s been podcasting about AI and the future of work, my appearance marks episode 324 of his podcast. He’s no Johnny-come-lately to the fascinating intersection of people and technology and his material is always worth a good listen.
In what’s become a tradition, I’m back on the show to talk about my 2025 predictions blog post. In the 43-minute episode we bounce around a lot, but cover these topics:
The evolution of search: answers, not links
LLM optimization, how to show up in LLM-generated answers
Why it’s dangerous to think you’re lost in a “sea of sameness” when it comes to product differentiation
Why branding isn’t the last bastion of differentiation
Why to track Rand Fishkin when it comes to the evolution of SEO to LLMO
Why general-purpose databases are generally good at absorbing special-purpose databases — but not always
Does Europe’s tendency to greater regulate have any hidden benefits?
The Robin Williams quote about Canada: “it’s like living in the apartment above a meth lab.”
How America-first VCs will likely shoot their feet off with European companies and entrepreneurs
Why I predicted that LinkedIn will likely follow the path to enshittification by following engagement as their north star
I’ll conclude by saying that the Future of Work has become one of my favorite topics. It started with my Clubhouse room (remember Clubhouse?) with Thomas Otter. That led to some ongoing collaboration with Thomas when he moved to become a partner at Acadian Ventures (which, by the way, is an investor in PeopleReign). That also eventually led, through introductions to the founders, to my joining the board of TechWolf, where I’m now learning about redesigning work, people-centric data platforms, and the skills-based organization. It’s a fascinating area, particularly here at the dawn of mainstream AI, and one that affects all of us.
Thanks again Dan for having me on the show and for a great conversation about the predictions and a whole lot more.
I’m late with this year’s predictions post because I’ve discovered that writing while recovering from knee surgery, zonked on painkillers, is a surprisingly difficult endeavor. Onward, through the fog. And apologies for the delay.
I’m always humbled by the act of making predictions. A few months ago, I was in London, sipping champagne at the BAFTA, improbably discussing the mast on Mike Lynch’s superyacht. As I talked and sipped, with my mind already in 2025 predictions mode, I couldn’t help but think: I’ve made a few predictions about Lynch in the past, but how could anyone have predicted this?
On that note, let’s begin our eleventh annual Kellblog predictions post. As always, I’ll review my 2024 predictions (with my generous self-scoring) and then make ten predictions for 2025. This is neither business nor investment advice and this content is provided for information and entertainment purposes only. See my FAQ and T&Cs for disclaimers. See note [1] for my policy on political content.
2024 Predictions Review
1. Election dejection. Hit. The election certainly was distracting. The media generally did emphasize “odds, not stakes” in their coverage. My comment about “testing the once-veiled political neutrality of Silicon Valley,” was the understatement of the year with Elon Musk, A16Z, Sam Altman, the All-In Bros, and several others coming out in direct, vocal and fiscal support of Trump. Andreessen’s take was the most interesting, effectively saying they made me do it, accompanied by explanations (some might say rationalizations) to justify their position as self-declared, single-issue voters. In effect, to modernize an old argument, “what’s good for VC is good for America.” In the end, I suppose it shouldn’t be surprising that when the president puts a For Sale sign on access, that some come forward as interested buyers of power.
2. A slow bounce back in startup land. Hit. I correctly called 2024 as a transition year where the Silicon Valley system would purge itself of recent excesses. ARR growth rates continued to get hammered. ARR multiples hovered around historical means, around half of what they were during ZIRP. See these slides from Aventis.
While I was correct that 2024 would be a tough year, I was over optimistic in thinking we’d turn the corner. I now think the bloodletting will continue in 2025. AI will be a huge driver of the rebound, because of both the large VC investment it attracts and its ability to convert headcount budget into software budget (e.g., AI SDRs).
3. The year of efficient growth. Hit. Efficient growth was the watchword in 2024, with companies delivering increases in both profitability and Rule of 40 scores. Again from Aventis:
Rule of 40 scores increased more moderately than profitability, a reflection of companies’ struggles with cracking the code on efficient growth.
Investors did increasingly look at ARR/head as an overall efficiency measure. Bessemer’s new Rule of X gathered momentum as a key SaaS metric because it better accounts for the ~2.2x greater importance of growth over profit in explaining valuation.
4. AI climbs the hype cycle. Hit. While I’m not sure this requires explanation, I’ll share two observations. First, per Pitchbook, AI grabbed 36% of VC deal value in 2024 on its relentless upward march. Frankly, I’m surprised that figure wasn’t more than 50%.
Second, in the enterprise at least, I think Salesforce made the launch of the year by doing what they do best – neatly packaging industry evolution into a simple three-part message and broadcasting it to the world. I’m not talking about technology innovation; I’m talking about the service they perform for the market by widely broadcasting key positioning messages including (a) we are in the agentic era of AI (the previous two being predictive and generative) and (b) it’s safe for enterprises to get into the AI water.
Great marketers remove fear from the equation in new technology adoption. While profit-motivated in the macro, enterprises are risk-averse in the micro because executives literally bet their hard-earned careers on the success or failure of new technology projects. Credible announcements from enterprise leaders do far more to grease the skids of enterprise adoption than the endless, ever-inflating prognostications from Sam Altman, whose views were summarized by one critic as, “we are now confident that we can spin bullshit at unprecedented levels, and get away with it.”
5. AI-driven GTM efficiency. Hit. There has certainly been an explosion in AI-powered, go-to-market tools from startups. Mega-vendors, keenly aware of the deadly potential of disruptive technology, have not been caught flatfooted, either. (That’s the often-ignored, second-order effect of everyone now having read The Innovator’s Dilemma.) While I don’t think we have yet captured Battery’s 30% increased efficiency target, I believe we will in 2025, particularly for more mature SaaS businesses. New and AI-driven SaaS businesses will likely be investing so much in growth that it will be hard to see those same-store sales productivity increases when they are mixed with the large investments in new capacity (which is a fundamental limitation of the CAC ratio as a growth efficiency metric). But, overall, I think we are well on the way to achieving the GTM productivity improvements promised by AI GTM tools. Keep investing in them and experimenting with them. What’s a competitive advantage one day is often table stakes the next.
6. Beyond search. Hit. To paraphrase REM, it’s the end of the (Internet search) world as we know it. This MIT Technology Review article does a great job of explaining the evolution of search and how conversational interfaces are replacing the search box and generated answers replacing lists of links. This will have a profound impact on businesses that rely on Internet search for traffic, leads, and customers, from publishers to e-commerce providers. And it will impact any business that relies on digital marketing, such as paid search, SEO, or content marketing. So, basically everyone.
Marketers should understand these impacts and get ready for a future of zero-click marketing. While HubSpot’s SEO crash recently made headlines, I agree with Kyle Poyar that they’ve adequately hedged themselves against this. The question is, of course, have you? Lest all this sound too scary, I offer this excerpt from Rand Fishkin.
I believe that this is not an apocalypse for digital marketers.
These are important things that we need to consider, and we need to, as a result, invest in zero click kinds of marketing and change our entire thought process around what we’re doing online with digital marketing. But influence has always been better than traffic. Traffic was always a vanity metric. I love my friend Wil Reynolds who posted this video about showing how their traffic, Seer’s traffic, his company’s traffic had dropped 40%, and it seemed like the end of the world, but sales were up 20% because traffic is not the same as conversions. Traffic is not the same as customers. Traffic isn’t even the same as fans.
So, like REM, I feel fine.
7. From RAGs to riches. Hit. I like RAG because it’s a practical approach that solves or mitigates key problems with LLMs (e.g., hallucinations, explainability, sourcing), all while leveraging their tremendous power. In 2024, I think RAG established itself as a cornerstone technology for enterprise AI. These twoposts provide a detailed review of RAG’s progress in 2024. Menlo’s The State of Generative AI in the Enterprise report shows RAG as the dominant and fastest-growing design pattern in enterprise AI.
8. Outbound finds its proper place. Hit. I think that companies, assisted by the rapid adoption of AI SDRs (e.g., Piper), are increasingly figuring out some key truths about SDRs.
Inbound SDRs are an extension of marketing and, due to their fairly rote work, are increasingly being replaced by AI SDRs.
Outbound SDRs are an extension of sales and, due to their relatively complex work, are not easily replaceable by AI SDRs.
Unfocused outbound is generally an unproductive activity. You are better off investing in inbound and partners if you don’t have defined, high-value targets.
Outbound SDRs are best used as part of targeted account programs, such as ABM, aimed at high-value customers. Think: is the juice worth the squeeze?
9. The reprise of repricing. Partial hit. The best data I’ve found here is in a report from Carta, which suggests that I was a year late: option repricing appears to have peaked in 2023. That said, this chart contains only one quarter of 2024 data. The 2H24 version of this report should be out soon, so we’ll know more in a few weeks. Either way, if your company is still digging out from valuation overhang, it’s never too late to consider repricing. Look at last year’s predictions post for more.
10. Peak podcasting. Miss. Podcasts continued their upward march in 2024. While I’d argued that podcasts would peak in 2024, both market forecasts and industry trends suggest that podcasts will continue to grow in the years to come. The demise of Internet search and the associated need for companies to build their own first-party audiences will drive podcasts to grow in importance. While I’d written that 2024 might be the last good year to start a business podcast, I think 2025 will be a good one as well. So, if you don’t have a business podcast yet, think about starting one. Just make sure you produce good content.
Kellblog Predictions for 2025
1. America gets what we deserve. We voted for it, both via the electoral college and the popular vote, so we’re going to deserve what we get. That will include:
A more brazen, more conflicted, and less constrained Trump. In short, we’ll see “Trump, Unbridled.” The unlikely bedfellows that elected him will discover exactly what they ordered and exactly who the administration is going to serve. Trump will face less resistance on both the internal front (i.e., intra-party, intra-staff) and external front (i.e. Democratic). Decreased internal resistance will result from fealty-based screening and fear-based leadership, making quick examples of those who step out of line. Decreased external resistance will come from a mix of advance obeying, a sense of futility, and continuous (if incorrect) mandate rhetoric. If the Democrats brought knives to a gunfight last term, this time they’re bringing cupcakes.
A more divided country. I’d initially thought the more brazen approach would result in buyer’s remorse, but I now think it’s more likely to result in increased division, with supporters doubling down in response to each fresh outrage. Aided by a more fearful and less hostile media, Trump’s apologists may need to contort to new degrees, but they will invariably support virtually anything he says or does. Thus, the country’s divide will widen, with one side believing that we’re making the tough decisions needed to restore America’s greatness and the other thinking we’re destroying many of the things that made America great in the first place.
A more distracted country. I think of the government like plumbers. I have little interest in what they do and how they do it. I don’t view plumbing as a spectator sport. I just want things to work. But we have now signed up for four more years of stunts, boasts, bluffs, brags, parade jumping (e.g., Stargate), hyperbole, constitutional crises, and trial balloons. Trump is a master at centering attention on himself, has turned shamelessness into a superpower, and paralyzed the traditional media in the process. I’ve always been surprised that we haven’t seen clear opportunity costs associated with all this distraction. In 2025, I think we will.
Get used to hearing “unprecedented” a lot. It, as was once said, will be wild.
2. The broligarchs enjoy their 15 minutes of fame. For some, the agenda was preemptive defense. For others, a desire to deregulate AI, crypto, or big tech M&A. For a few, a chance to grab power and live in the spotlight. For many, the ideological pursuit of sci-fi-inspired visions.
We know who the broligarchs are and why they’re here. A surprising number hail from the PayPal mafia. We know that they’ll all get their 15 minutes of fame. The big question is how long will they last?
Given Trump’s mercurial personality, the revolving door of “best people” in Trump’s inner circle, the sizes of the various egos, and the fact that the broligarchs are all much smarter than Trump, I think the general answer will be: not long.
For every person who hangs on, I think we’ll generate several Rex Tillersons who don’t. As a reminder, while his “fucking moron” quote was never publicly confirmed, here’s what Tillerson did say about his experience:
“It was challenging for me,” he said, “coming from the disciplined, highly process-oriented Exxon Mobil corporation, to go to work for a man who is pretty undisciplined, doesn’t like to read, doesn’t read briefing reports, doesn’t like to get into the details of a lot of things, but rather just kind of says, ‘This is what I believe.’ ”
It won’t be easy for the data-driven tech bros to handle such arbitrary decision-making. But to steal a line from Airplane: “they bought their tickets, they knew what they were getting into. I say let ‘em crash.”
I think the odds of any given individual hanging on will be an inverse function of their desire for power. The more they’re conducting business as usual and simply looking out for their firm’s or industry’s interests (e.g., Cook, Bezos), the longer they should be around. The more they’re trying to work in the inner circle (e.g., Musk, Sacks, Ramaswamy), the shorter.
Heck, Ramaswamy couldn’t even last one Scaramucci before getting blown out. While Musk’s $270M may have bought himself a longer tenure, featuring multiple lives, we’ll see how many times he gets to embarrass Trump before being blown out himself.
3. The startup ecosystem purge continues. As mentioned above, I think the cleanse that started in 2024 will continue into 2025. In many ways, startup investing is like playing craps. You play for a long time, accumulate bets on the table, and either win slowly as different bets pay off at different times – or lose a lot all at once when the shooter rolls a seven. Personally, I’ve never had more angel investments sell, cease operations, or return money than I have had in the past 12 months. There are two opposing forces in play: cash reserves and exit multiples. I think that many startups have strategically decided to sell, but don’t want to start a process in what’s clearly a buyer’s market. Look at these feeble M&A-specific exit multiples from Aventis:
Thus, many startups are tightly managing their cash reserves to buy time and hopefully sell into a better market. I believe that as multiples start to bounce back many of those in waiting will be able to achieve their exits.
4. Attention is the new oil. In 2006, Clive Humby, coined the phrase “data is the new oil,” to suggest that data would power the information economy in much the same way as petroleum powered the industrial economy. Today, I think we can replace “data” with “attention.” In his upcoming book, The Sirens’ Call, Chris Hayes argues that every single aspect of human life is being reoriented around the pursuit of attention. Attention is a kind of resource, he argues, it has value, and if you can seize it, you seize that value.
This harkens back to Jeff Hammerbacher’s 2011 quote, “the best minds of my generation are thinking about how to make people click ads.” Today, you might update that with “click anything,” as best demonstrated by the bizarre game Stimulation Clicker, which ends up part game, part real-life reenactment, and part parable.
We are moving, Hayes argues, from the information age to the attention age. The masters of attention, such as Trump and Musk, already understand this and are leveraging it to their advantage. The rest of us need to learn how to play the game, both on offense and defense. I think that will accelerate in 2025.
5. The world wide web, as we knew it, is dead. Born: 1989. Died: 2024. The original web vision was for an open, world wide network of hyperlinked content, freely accessible to all.
That worked until the information wants to be free crowd got (rightfully) squashed by paywalls to protect creators. Then Web 2.0 came along, creating a read/write web, with user-generated content, so that individuals could not just read, but publish and share content without requiring any technical skills. The mobile explosion extended connectivity but undermined the vision as applications and app stores (with their heavy platform fees) replaced web browsing and websites – resulting in oddities such as the inability to buy an e-book in the iPhone Kindle application.
In recent years, platform providers (e.g., Twitter, LinkedIn) declared war on the hyperlink, unapologetically downranking content that included links beyond their walled gardens. Google’s ever more ambitious front-running (e.g., featured snippets, AI-generated answers) provided the final nail in the coffin, decimating search traffic, and replacing it with the zero-click search.
When was the last time you saw an in-line hyperlink, particularly on a corporate website? Why are newsletters and Substack replacing blogs and WordPress? Why do people bury links in comments and replies? Why can’t WordPress auto-post to Twitter? Why did Seatguru stop updating its content years ago? Why are sites like SlideShare so ad-laden as to become unusable? Why, when I have 20K+ followers, do I have posts that get only 500 views? In a world with algorithm-driven feeds, what does “follow” even mean anymore?
These are the death throes of the world wide web. Why must platforms invariably undergo enshittification? It’s the tragedy of the commons all over again.
While web 3.0 and a Read/Write/Own paradigm is theoretically coming to save us, I’m not holding out much hope. As interesting as some of those ideas are, Web 3.0 strikes me as too much of a hodgepodge of agendas and ideas. I think the current web 3.0 (which is actually web 3.0 v2) has roughly the same odds of success as its predecessor, web 3.0 v1, aka, the semantic web.
So, for now, I think we’ll remain stuck in the Hotel California era of the web: you can check out any time you like, but you can never leave.
6. Working for the algo. You hear a lot of concerns about AI replacing jobs. But I’m also concerned about something else: about us working for algorithms as opposed to algorithms working for us.
Then congratulations. You’re not working for the man. You’re working for the algo.
CAPTCHA is my favorite perverse example because you have a human trying to prove to a computer that they’re human. Or 2FA, where you have a human trying to prove to a computer that they are who they say you are. Ponder that for a second.
In 2025, I think we’ll increasingly be working for the algo. When I’m performing transactional tasks, I already feel like I’m spending as much time on CAPTCHA and 2FA as on the tasks themselves. And I definitely dislike the menial work I do to tune my content for maximum reach.
Working for the algo isn’t necessarily bad. But it does pose a lot of questions about who is making or tuning it. Bluesky’s custom feeds are one approach to solving one of the many problems here. Passkeys help with security. I’m sure we’ll see other solutions arise as well.
7. The death of SaaS is greatly exaggerated. Satya Nadella made headlines with a three-minute commentary during a recent BG2 podcast appearance which many translated to: SaaS is Dead!
While this is a somewhat fashionable thing to say these days, let’s first look at what Satya actually said:
“Yeah, I mean, it’s a very, very, very important question, the SaaS applications, or biz apps. So let me just speak of our own Dynamics. The approach at least we’re taking is, I think, the notion that business applications exist, that’s probably where they’ll all collapse, right in the agent era, because if you think about it, right, they are essentially CRUD databases with a bunch of business logic. The business logic is all going to these agents, and these agents are going to be multi-repo CRUD, right? So they’re not going to discriminate between what the back end is. They’re going to update multiple databases, and all the logic will be in the AI tier, so to speak. And once the AI tier becomes the place where all the logic is, then people will start replacing the backends, right?”
Translating the surprising amount of technobabble, he’s making an old-age argument that a business application is “just” a UI tied to a database with some business logic, the implication being: how hard can that be? Workday’s $70B, Salesforce’s $330B, and SAP’s $330B market caps all say “pretty hard” to me. Or, if not technically “hard” per se, that there’s nevertheless a lot of value in tying those things together.
Satya builds upon this to say that the business logic can now be handled by agents, again a repackaged argument that once was made about rules engines, business process automation, and low-code development tools and one that trivializes the domain expertise built into business applications. I think the quote says more about Microsoft and their worldview than it does about the future of business applications.
To bring some data to bear here, I found this interesting chart in this excellent deck from Aventis, which asks companies what inning SaaS adoption is in at their firms.
I think the best short answer I’ve seen to this question comes from Jason Lemkin:
To paraphrase Mark Twain, reports of the death of SaaS have been greatly exaggerated.
8. An unlikely revival of branding. In an era of efficient growth and highly scrutinized marketing budgets, it’s surprising to predict a revival of branding. But I think one’s coming because I’m increasingly hearing statements like:
We’ve spent the past two years optimizing pipeline generation efficiency.
Now we need to focus on winning more deals.
SaaS products are increasingly lost in a “sea of sameness,” and we are thus unable to differentiate at a product level.
Branding is therefore the last bastion of differentiation
So, we need to win deals based not on product superiority, but on brand value and experience.
In short, since we can’t differentiate our product, we need to differentiate our company.
I have two problems with this logic:
As someone raised in product marketing: you can always differentiate your product. If you can’t, it’s time to turn in your marketing badge and gun.
As someone with a child who works in CPG: if my daughter can differentiate fermented milk (i.e., yogurt), then we should darn well be able to differentiate a complicated piece of enterprise software.
But I do understand how a demandgen-oriented CMO – as most are these days – could get caught up in this logic. So, before you embark on a branding program, ask yourself three questions:
Are you sure you can’t increase your win rate the old-fashioned way — through product marketing and market research (e.g., win/loss analysis, sales enablement, sales training)?
Are you guilty of Law of the Hammer bias? Is branding the right solution, or are you simply more comfortable working on branding than product marketing?
Do you have the time and money required to complete a successful branding program? Will your tenure as CMO be long enough to see the fruits of your labor, or will your successor send you a posthumous medal of honor for your contribution?
Whether done for the right or the wrong reasons, I think we’ll see a revival of branding campaigns in 2025. If you’re doing one, make sure you’re in the first group, by ensuring that you’ve exhausted product marketing solutions to the problem.
9. PR is the new SEO. It turns out that one of the best ways to optimize inclusion in ChatGPT results is, per Rand Fishkin, “getting your brand mentioned alongside the right words and phrases in authoritative media.
In other words: PR.
Here’s a link to Rand’s five-minute explainer video.
I guess that if you live long enough, everything comes full circle. This is good news for marketing teams that kept an active PR function and agency during the dark times. It’s bad news for those who turned off PR and will now need to restart from scratch.
There are numerous techniques that marketers must learn to build their LLM optimization skills while still running traditional SEO programs in 2025. Here are a few of the better articles I’ve read on the topic.
Emily Kramer’s post summarizing an interview with Flow Agency
10. LinkedIn enters the social media death cycle. LinkedIn is at a fork in the road. With users fleeing other social networks (e.g., Twitter, Facebook) and trolls, bot-nets, and the like wanting to increase their reach, there is an increasing amount of non-work content on LinkedIn. For example, jokes, memes, snark, and political content. And that’s not to mention the gray zone content where business leaders are making political commentary.
This trend has not gone unnoticed by users, and I think they generally don’t like it.
LinkedIn can go down the usual path to enshittification, relying on engagement as their North Star metric. Because this content is highly engaging, the engagement scores are through the roof: look at the numbers in this screen clip.
The problem is, of course, by allowing and amplifying this highly engaging content, you get more engagement, right up until the point your site becomes a hellscape and nobody wants to use it anymore (e.g., X). Then the hapless platform provider finds that network effects also work in reverse: the more your friends stop using a site, the less incentive you have to go there.
Or they can make the tough decision and focus on their original vision, purpose, and positioning: a social network for work. While they have taken modest steps, such as a feed preference to turn off political content, the features simply don’t work. If they want to preserve their status as the social network for work, they’ll have to do much, much more. And that’s not to mention getting core work social network functionality, such as job seeking, to work properly.
While I think they’re a smart organization, the sirens’ calls of engagement are strong. I’m predicting that in 2025 they only take half-hearted measures to preserve their positioning and thus enter the social media death cycle. Some would argue they’re already in it.
Thank you for reading all the way through. I hope you’ve enjoyed this post, and I wish you a happy and healthy 2025.
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Notes
[1] As described in my FAQ, I generally avoid political content on Kellblog unless I’m using politics to illustrate strategy and messaging. My annual predictions post is an exception because I like to start at the macro level and, particularly in recent times, that will likely involve some intersection of business and politics. Instead of attempting the impossible (i.e., pretending to be neutral), I will allow my views to leak out in the process but, rest assured, I’m not trying to change your mind about anything. Note that I’ll delete comments that try to engage in political conversation as opposed to comments about the predictions themselves. If you are interested in my broader views, you can follow me on Bluesky where I post on a broad range of topics (largely just sharing and commenting on what I read) including SaaS, VC, Silicon Valley, strategy, politics, current affairs, France, the Grateful Dead, databases, humor, and others.
Just a quick episode to highlight my recent appearance on Dan Turchin‘s AI and the Future Work podcast. In the episode, we discuss my 2024 predictions both in general and with an unsurprising spin towards AI and the future of work. I think this is our third year running in getting together to discuss my predictions.
If you don’t know Dan’s podcast, you should. It’s one of the longest running founder/CEO podcasts in Silicon Valley with approximately 300 total episodes, an overall 4.9 rating, and some great reviews including this one from none other than Ben Horowitz: ”I love this podcast. Great guests and great discussions about AI, ethics, technology, and entrepreneurship.”
Guests of note in the past year have included Arvind Jain (Glean), May Habib (Writer), Robert Plotkin (AI legal expert), Vijay Tella (Workato), Dr. John Boudreau (Cornell), Tom Wheeler (former FCC chair), Wade Foster (Zapier), and Meredith Broussard (NYU).
In our discussion, Dan and I hit many topics, including:
My self-ratings on my 2023 predictions, including discussion of which are cycles, extrapolations, and pendulums.
A deeper dive on the “retain is the new add” 2023 prediction, looking at expansion ARR as a percent of new ARR as proof.
The post-truth world and AI’s impact on it through synthetically-generated content, including discussion on SEO and generative AI optimization.
History and future of algorithmically-generated feeds versus manual curation and how I sometimes find myself missing RSS.
Retrieval-augmented generation (RAG) and how its two key abilities (sourcing plus augmenting) help make generative AI much more appropriate for the enterprise.
AI climbing the proverbial hype cycle, including funding rounds and their structure; new value-based pricing and how much of AI-created value will be captured by vendors versus customers.
Fair use and large-language models (e.g., the New York Times complaint), including discussion of virtual SaaS expert pools such as SaaS GPT Lab.
Battery’s now somewhat famous slide on GTM efficiency, arguing that a sales team of 75 people armed with AI tools can support the same quota as a 110-person team without. Be ready for the board meeting where they ask about this slide!
The odds of both Dan and I attending the upcoming rumored performances of Dead & Company at The Sphere in Las Vegas.
I hope you make some time to listen to the episode. And thanks, Dan, for having me.
Well, it’s that time of year again, time for my annual predictions post, now in its tenth incarnation. As per my custom, let’s review my 2023 predictions before presenting those for 2024. Please remember that I do these for fun and fun alone. See my FAQ for my terms, disclosures, disclaimers, et cetera.
2023 Predictions Review
1. The great pendulum of Silicon Valley swings back. Hit. I think Silicon Valley is driven by a master pendulum that in turn drives numerous sub-pendulums — and they all swung back in 2023. Valuations came down, structure regrettably came back, cashflow trumped growth, founder friendliness decreased, diligence generally flopped back from FOMO to FOFU, and companies again started to treat employees as, well, people they are paying to do work.
2. The barbarians at the gate are back. Partial hit. They’re there, but not quite buying with the frenzy I’d anticipated. The problem with buyer’s markets is that sellers can often wait — and it seems many have. PE software acquisitions were at roughly pre-pandemic levels in the first three quarters of 2023, though still well below 2021 and 2022 highs. Notable deals on the year include Silver Lake buying Qualtrics ($12.5B) and SoftwareAG ($2.4B), Thoma Bravo buying Coupa ($8B), Clear Lake and Insight buying Alteryx ($4.4B), Vista buying Duck Creek ($2.6B), Francisco Partners buying Sumo Logic ($1.7B), and Symphony buying Momentive ($1.5B). Expect more of this activity in 2024.
3. Retain is the new add. Hit. Customer retention came into sharp focus in 2023 and with it a new, balanced view relying on both NRR and GRR as key retention metrics. As I said last year, “while this bodes well for the customer success (CS) discipline, it does not automatically bode well for the customer success department.” Some found themselves blown up (aka Slootmanned), often in hasty lose/lose transactions leaving customers dissatisfied with reduced attention levels and sales unhappy with additional work without additional resource or pay. Blowing up customer success to save money is myopic. Re-organizing it, or simply re-chartering it, with a more business-aligned mission is the key to success. New technology (e.g., Hook) will help. Jason Lemkin predicts a slow reboot of the customer success function in 2024.
4. The Crux becomes the strategy book of the year. Partial hit. Two things went wrong here. First, I was manifesting this prediction – I wanted it to be the strategy book of the year. Second, I was late to the party. I bought my copy in December, 2022 so to me it was a brand-new book, but it had been released seven months earlier and had already won recognition from the FT, Forbes, and The Globe & Mail. Sales-wise, I don’t have access to great stats, but I can see its best ranking on Amazon is in Business Systems and Planning where it currently ranks 121st. It should be in the top ten with Good to Great, Blue Ocean Strategy, Thinking in Bets, The Art of War, and its older sibling Good Strategy, Bad Strategy. Popularity be damned, I think The Crux is a great book, better than its predecessor which does a great job tearing apart the garbage that passes for strategy, but a worse job of saying what to do about it.
5. The professionals take over for Musk. Hit. I almost downgraded this to a partial hit because “take over” may not properly describe what has happened with Linda Yaccarino. But she is nevertheless the CEO, if perhaps in name only. (And yes, I’m still reluctant to call Twitter X.) The question today is not how long Musk lasts, but how long Yaccarino lasts. Having withstood so much already, I think it’s unlikely that she’s gone in 2024, but I won’t waste a prediction on it this year.
6. The bloom comes off the consumption pricing rose. Hit. I’ve always felt the famous Warren Buffet quote applies to consumption-based pricing: “when the tide goes out you can see who’s swimming naked.” I’m scoring this a hit not because I think usage-based pricing (UBP) – as it’s also known — is bad, but because I felt it was overhyped and often pushed too hard on companies by investors chasing stratospheric (or Snowflake-spheric) net revenue retention rates (NRR). In reality, UBP has both pros and cons and is better applied to some products than others. While UBP companies were hit harder, as this slightly confusing slide from Iconiq demonstrates [1], they nevertheless grew faster than their subscription counterparts in 2023. Consumption models are here to stay, but hopefully the industry can take a more balanced, rational view on them.
7. The rise of unified ops. Partial hit. I think organizations increasingly realize that stovepiped ops functions generate inconsistency, conflict, and excess cost. Though here again, I was manifesting because I believe in unifying all go-to-market ops – e.g., salesops, servicesops, successops, and marketingops — into a single ops function. Some companies call that unified function revops, others use revops to mean only the unification of sales and successops. The big rock is to bring marketing into the unified team. While it’s impossible to know the revops job description from the name alone, a phrase search for “sales operations” versus “revenue operations” on LinkedIn jobs reveals 3x more listings for salesops than revops. We still have a long way to go, but I’m confident slowly and steadily these functions will integrate over time. Every time a unified revops team is created an angel gets its wings.
8. Data notebooks as the data app platform. Hit. This prediction is in large part a proxy for “Hex will prosper,” because I’m a big believer in their vision to create a collaborative analytics platform [2]. In a difficult fundraising environment they raised $28M from not just anyone but Sequoia, using my all-time favorite fundraising strategy — not looking for money. As of the round, they’d grown the business 4x over the prior year. Per LinkedIn, headcount is up 240% over the past two years. They continue to rapidly innovate on product. They support a wide variety of use-cases that go well beyond data apps. They’ve also expanded the personas they support. And, for the marketers out there, they’re the first data-oriented company since Splunk to have a distinctive voice in their marketing (e.g., the Hex 3.0 launch subtitle, “one arbitrary version number for Hex, one giant leap for data people.”) If you want to understand why I’m so excited about this company (and see concrete examples of what some of these data buzzwords mean), watch their latest product launch video.
9. Meetings somehow survive. Hit. I’m so glad the idiocy of companies are for builders, not managers was brief. Yes, companies need to focus on continuous productivity improvement. Yes, companies need to remain vigilant against unproductive meetings, particularly standing ones. And yes, we can always do better. But to suggest discarding the collaboration baby with the unproductive bathwater was always absurd. If you want better meetings, read Death By Meeting. But meetings were, and are, here to stay.
10. Silicon Valley thrives again in 2024. TBD. In a desire to end last year’s list on a positive note, I realize that I inadvertently included a 2024 prediction in my 2023 list. Thus, the score on this prediction remains to be decided. Despite a rough 2023, or more aptly, in part because of it, I remain optimistic that the Silicon Valley business environment will improve in 2024.
Kellblog Predictions for 2024
1. Election Dejection. No matter your political leanings, the 2024 presidential election will be divisive, distracting, and quite probably depressing. It will test our institutions, challenge supreme court legitimacy, and drown voters in higher-calling rhetoric about saving the country or saving democracy, as the case may be. There will likely be a constitutional crisis or two along the way, for good measure.
To stay in my wheelhouse of Silicon Valley, communications, and to a lesser extent, media, I think three things will happen:
The media will make a dog’s breakfast of coverage. Alternative facts. Improper framing. Narrative fallacy. Bothsideism and false equivalence. And many others. Worst of all, due to a lazy preoccupation with oddsmaking, the media will abdicate a key duty in its coverage, wasting the coming months endlessly handicapping the outcome. Instead of this horse-race journalism, the media should do what NYU professor Jay Rosen advises: focus on not the odds, but the stakes in its coverage.
The election will test the once-veiled political neutrality of Silicon Valley. For years, Silicon Valley was a place of quiet liberalism among workers and veiled libertarianism among overlords. The attitude towards Washington was leave us alone and let us work [3]. In the past two decades, that’s changed with lobbying dollars up about 10x, more VCs and celebrityCEOs openly expressing political views, and the rise of podcasts with strong political leanings. A16Z’s American Dynamism initiative has strong political overtones and is surprisingly nationalistic for an international firm [4]. Politics are coming out of the closet in Silicon Valley, for better or worse.
There will be a lot of infantile rhetoric. The rise of social media dropped the level of our discourse, with many politicians only too happy to follow suit. Today’s vile norms (e.g., name-calling) were unacceptable only 10 or 20 years ago. This debasement will continue during the 2024 election cycle. I refer readers to Graham’s hierarchy of disagreement as a framework for characterizing the quality of debate and to encourage everyone to climb, not descend, this ladder.
The ray of good news is that while the election will almost certainly be a mess, most Americans are exhausted by today’s politics and polarization. Eventually, this should percolate into votes and candidates, and ultimately result in a government focused on consensus and compromise [5]. One hopes so, at least.
2. A Slow Bounceback in Startup Land. There’s blood in the Silicon Valley water. 3,200 startups failed in 2023. Unicorns are turning into zombies. The predicted mass extinction event appears to be upon us. Those who can raise money face dilutive downrounds. Even among healthier unicorns, there’s a large backlog of over-valued private companies trying to grow into a contemporary valuation before running out of cash.
On the financing side, VC funding was down to pre-pandemic levels. OpenView surprised the industry with an abrupt shutdown in new investing. Some predict that 25% of VC partners will exit the business in the next few years. Silicon Valley Bank failed.
So, what will happen in startup land in 2024?
We will start to turn the corner. ARR growth stalled. Valuation multiples were hammered. But green shoots are emerging. I think the worst of it is over, particularly for those companies that responded quickly to the downturn by increasing focus, reducing burn, and increasing runway.
This will happen more quickly on the startup side. Net new ARR growth rates are already rebounding. David Sacks is calling an end to the software recession of 2022 and 2023. Gartner predicts software spend will grow 14% in 2024. Things will recover, but they won’t snap back.
And it will happen more slowly on the venture side. Everything happens more slowly on the venture side [6]. While public markets can turn on a dime, venture funds are decade-long, illiquid, limited partnerships where prices are reset more quarterly than daily [7]. This creates a damping effect whereby dramatic change needs time to percolate through the system [8].
3. The Year of Efficient Growth. If 2023 ended up the year of hunkering down, then 2024 will be the year of efficient growth. For the first time, an overall productivity measure, ARR/FTE, has crawled its way into the top 5 SaaS metrics [9]. See chart below for how it varies with scale [10].
The rule of 40 (R40) is back with a vengeance. R40-compliant companies currently command a 61% EV/R multiple premium over their non-compliant counterparts [11]. In a two-factor regression, the relative importance of growth to profitability in predicting EV/R multiples is currently around 2.0 [12] – so growth and profit both matter, but growth still matters more. Because of that, and because Bessemer believes that the relative impact should change as a function of scale, they have introduced a new metric, the rule of X, which is a variably growth-weighted rule of 40 [13]. Don’t read the article with the understanding that there will be no math. There’s plenty of it.
The ultimate sales pitch for the rule of X is its superior explanatory power of the EV/R multiple, as depicted in the chart below [14].
While I have several concerns about this proposed metric [15], the point is that Bessemer, a thought leader in SaaS metrics who to my knowledge defined and/or were early evangelists of CAC, CPP, and CCS, is spending time and energy on a growth/profit balance metric. That’s the point. GAAC is dead. Long live balanced growth and profit.
In 2024, expect emphasis on the usual go-to-market (GTM) efficiency metrics like CAC, CPP, and LTV/CAC, continued emphasis on both net and gross retention rates (NRR and GRR), new emphasis on overall productivity (ARR/FTE) and balanced growth measures (R40), and of course strong attention to cash burn efficiency (burn multiple).
4. AI Climbs the Hype Cycle. In 2023, artificial intelligence peaked on Gartner’s hype cycle. It garnered significant attention, particularly in sectors like healthcare, finance, and entertainment, promising personalized solutions and immersive experiences. However, amid this excitement, there was a growing awareness of AI’s challenges, including ethics and regulations. This marked a crucial juncture for AI, transitioning from hype to practical use, demanding responsible implementation.
Perhaps you noticed the change in voice — the prior paragraph was written by ChatGPT. While I think I’m still winning my John Henry battle with generative AI, I know my lead won’t last forever. Writers fighting ChatGPT are like mathematicians fighting calculators.
Last year was an amazing year for AI, one that both inspired and frightened us. While 40% of humans don’t pass the Turing test, ChatGPT can now pass as human about 40% of the time. Marc Andreessen, in his role as public intellectual, declared that AI will save the world (presumably after software has finished eating it). Some see Andreessen’s manifesto as visionary, others as self-serving, but it’s well worth reading as is this Stratechery interview. For extra fun, watch the techies debate on Hacker News.
Should we lean into AI as the e/acc movement believes, or should we pull back to avoid turning humanity into collateral damage from an AI all-consumed with making paperclips?
If you don’t have time for Marc’s philosophy, I recommend Ben Evans’ wonderful, more down-to-earth deck on AI. It hits all the key issues with a nice balance of insights, examples, and just enough Meeker-style trends data [16].
In 2024, I think AI will continue to blow our socks off as we climb to peak hype. Vendors will propose a wide variety of use-cases, some of which will stick while others will not. Some features will become companies and some products will become features [17]. What’s a technology consumer to do? Allocate time to experiment with a broad range of AI features and products. I expect many AI solutions to go from magical advantage to table stakes almost overnight.
In 2024, AI will continue to pose interesting questions in four areas:
Philosophical. The semantics of predicting vs. reasoning. See this amazing interview with Jensen Huang and Ilya Sutskever, in particular the part where Ilya presents his detective novel analogy. Goosebumps.
Practical. Are you getting quality answers that you can trust or generating botshit? Do generated answers include hallucinations, as a hapless lawyer discovered, or math challenges, as highlighted by Stephen Wolfram?
Legal. Copyright and fair use questions reminiscent of Internet 1.0. Will OpenAI have their Napster moment? Read the New York Times complaint. While not yet at the forefront of debate, my friend Anshu Sharma often highlights important privacy concerns as well.
Pricing. Much as SaaS moved the industry from perpetual to subscription (and then consumption) pricing, will AI move the industry to value- or results-based pricing? [18]
5. AI-Driven GTM Efficiency. We are experiencing a Cambrian explosion of enterprise AI tools. Here’s a part of Sequoia’s map to them. And these are just the leaders.
These things are everywhere. And we’ve not even discussed customer success, customer support (e.g., chatbots), or professional services.
My prediction is that this Cambrian explosion will continue into 2024 and by the end of the year things will start to sort out. What does that mean?
If you’re a vendor, you’re playing musical chairs and you should go all-out to ensure you have a seat when the music stops (i.e., the market starts to organize)
If you’re a customer, you should allocate real time to play with and explore these tools. Don’t be too busy fighting battles with swords to talk to the machine gun salesperson.
If you’re a GTM executive, you should understand that your investors expect real productivity gains from these tools.
In terms of gains, this slide from Battery argues that an AI-enabled sales team with 75 people can support the same number of sellers (and drive the same quota) as a traditional 110-person team. Are you ready for this board conversation? You should be.
6. Beyond Search. The traditional search business is in trouble. For decades, information retrieval people have pleaded for “answers, not links.” While Google has made progress over the years at providing answers (e.g., featured snippets, PAA) [20], generative AI clearly delivers the answers that many have sought for so long.
Search today is in roughly the same mess that it was in the pre-PageRank days of Yahoo and AltaVista. Bombed out. Gamed out. Loaded with clickbait. Over advertised. It’s just increasingly hard to find what you’re looking for. And that’s before the coming, widespread creation of more AI-generated, SEO-driven content. More cruft to jam up the system.
Well, Clayton Christensen to the rescue. We are watching the cycle of disruptive innovation play out. As Google continues to cater to its existing customers and is increasingly run by extractors as opposed to innovators, they create the opportunity for disruption. Now, since Google is a very smart company, they’re not flat-footed in response and are very much trying to disrupt themselves. But, regardless of which vendors win, I expect generative AI’s answers to largely replace traditional search’s lists-of-links going forward.
This will have a huge impact on SEO. For example, the question will no longer be “are you above the fold?” but instead, “are you in the answer or not?” Consider this example, where I asked ChatGPT to make a short-list of conversation intelligence tools to evaluate.
You’re either on that list or you’re not [21]. There is no next page — no consolation prize if you will. Perhaps that’s not really a change because few people clicked on subsequent pages anyway. But I think the stakes are going up in an increasingly winner-take-all race — where most of us currently lack the requisite knowledge and skills to even compete. I’m not talking about how to use ChatGPT for traditional SEO and generate more cruft. I’m talking about optimizing your content for inclusion in ChatGPT results. SEO is dead. Long live ChatGPTO.
For decades, information retrieval expert Stephen Arnold has written a blog called Beyond Search. In 2024, we’re finally going to get there.
7. From RAGs to Riches. Consider this now famous chat with Chevy of Watsonville.
That feeling when your chatbot is overqualified for the job.
General-purpose, large language models (LLMs) can suffer from three weaknesses:
Broad scope, in many applications far broader than is necessary or desirable.
Inability to inform them with specialized knowledgebases and/or supplemental information after the model has been trained.
No sourcing, making hallucination detection more difficult and limiting their use in environments that require sources.
A relatively new technology, introduced in 2020, called retrieval-augmented generation (RAG) solves these problems. This article provides a great technical overview of RAG. IBM Research also wrote a great high-level overview, including two nice analogies:
“It’s the difference between an open-book and a closed-book exam,” Lastras said. “In a RAG system, you are asking the model to respond to a question by browsing through the content in a book, as opposed to trying to remember facts from memory.”
And
“Think of the model as an overeager junior employee that blurts out an answer before checking the facts,” said Lastras. “Experience teaches us to stop and say when we don’t know something. But LLMs need to be explicitly trained to recognize questions they can’t answer.”
From what I understand of RAG, I like it because it’s a practical approach for eliminating problems with LLMs that adds enterprise features like use of existing knowledgebases and references to sources.
In 2024, I think we’ll be hearing a lot more about RAG. Salesforce has added it to Einstein. Glean has raised over $150M from Sequoia and others to reinvent enterprise search using RAG. Cohere has raised over $400M from Index and others to build conversational apps with RAG. Many more will follow.
8. Outbound Finds Its Proper Place. Debates about outbound heat up faster than honey in a microwave oven. Particularly when companies (often quite prematurely) think they have picked all the low-hanging inbound fruit, outbound becomes a religious issue, fast. Here are some of the reasons I’ve heard for this:
The great hope. It must succeed because other methods are topping out or failing (and execution quality couldn’t possibly be the reason).
It worked before. Five years ago at my last company, even if it was in a different situation, with a different strategy, in a different time.
I was brought here to make it work. It’s why the CEO hired me. I know how to build it.
Sales wants control of its own destiny. Even if it’s inefficient, I don’t want to be so dependent on marketing.
I need outbound SDRs to groom into sellers. They’re my funnel for filling AE headcount.
I want a club to beat sellers. When sellers complain about lack of leads, I need to be able to say: “So what have you done to help yourself?”
The last point is true only in cases where sellers are required to generate a certain amount of their own pipeline, which, with the exception of account-based marketing (ABM) models, I don’t think they should do. Remember the quote: “sellers are like airplanes, they only make money when they’re in the air.”
Recently, I’ve heard more and more CEOs abandon this religious belief in outbound. That’s good. Standalone outbound [22] is a low-conversion rate activity. Stalk someone. Twist their arm to agree to a meeting. See if they show up. (Often, they don’t, so repeat the stalking process.) Try to convince them they need to buy in your category and then to buy from you. See what happens.
If you were a seller, which would you prefer?
The stalked, arm-twisted lead above, or
Someone who found us through an organic search, downloaded a white paper, attended a weekly demo session, rated it highly, and asked to speak to a seller
Conversion rates usually reflect this [23]. Partner- and inbound-generated leads often convert at double or triple the rate of outbound. I expect standalone outbound effectiveness to only get worse because of the AI-driven tools arms race. Every SDR will be sending AI-generated, personalized email sequences. And that’s not to mention the new Gmail anti-spam rules that go into effect in February.
What’s the glaring exception here? ABM, done properly. When a company targets a small number of accounts, focuses sellers on penetrating them, and aligns both marketing and outbound SDRs as part of the effort. In effect, the whole company stalks the customer, not just an SDR. Does this work? Yes, absolutely. What’s the catch? That’s simple:
Is the juice worth the squeeze?
ABM is a lot of work. You shouldn’t bother trying it to win a $10K or even a $50K deal. But when you can do $100K to $500K+ deals and have a few strong references in a vertical to which your company has strategically committed, that is when you should do ABM.
Outbound isn’t Santa Claus. It’s just a nice old man with whiskers. In 2024, I think many companies will figure that out.
9. The Reprise of Repricing. Compressed valuation multiples and reduced growth mean lower stock prices. That’s no surprise. However, this creates real problems with equity-based compensation, greatly lowering or entirely eliminating its value. Let’s look at two common equity-based compensation methods.
RSUs which are typically granted in terms of value. For example, if you’re granted $400K worth of RSUs over 4 years when the stock is $50, you get 8,000 shares over 4 years or 500 shares/quarter. If the stock falls to $20, you’re now vesting $10K per quarter instead of $25K. That’s a big compensation hit.
Stock options which are the right to buy shares at a fixed price, typically the stock’s value on the day the option is granted. For example, you are granted 8,000 shares over 4 years when the stock price is $50. If the stock falls to $20, your option is “underwater,” meaning it’s basically worthless because the market price is well below your strike price [24]. That’s an even bigger compensation hit [25].
Now, let’s imagine that we at GoodCo have a similar competitor across the street called NiceCo, and that NiceCo’s stock has suffered similarly. I can stay at GoodCo and vest equity compensation at a reduced or zero rate, or I can quit, cross the street to work at NiceCo, and get a new grant.
For RSUs, I might get a new grant of 20,000 shares and vest at my original $25K/quarter rate. And feel like there’s upside because the stock may appreciate from there.
For options, I might get a new 20,000 share grant at a strike price of $20/share, a no-brainer compared to my existing grant of far fewer shares at a far higher price [26] [27].
How can GoodCo retain its employees in this situation? The short answer — barring soft factors like superior management, culture, and perks — is they can’t. This is a major problem and left unsolved, GoodCo will lose a lot of employees to NiceCo [28].
Enter repricing. While I won’t get into the details, the basic idea for stock options is that in return for some modest consideration (e.g., a reduction in share count), the company will reset the strike price on the options in the example above from $50 to $20. While the concept is simple, the rules are different for public and private companies and, unsurprisingly, public companies are more restricted in what they can do.
For RSUs, it’s slightly different. Technically speaking you don’t need to reprice anything. The company can simply grant more RSUs to make up the difference in reduced value. Or, it seems they can run a sort of repricing where they, e.g., redo the initial grant math to produce a new higher vest rate, but in exchange for a vesting reset.
After that long introduction, my prediction is simple. In 2024, repricing will be back. If your company has a greatly reduced valuation and is not talking about repricing or its equivalents, then you might want to ask them. I’d advise some patience because these things can take time. And bear in mind these rules often vary a lot by country.
As always with financial and career matters, make your own decisions, consult your own advisors, and ensure you understand Kellblog terms and disclaimers. You can also read a book like Consider Your Options for more information.
10. Peak Podcasting. For years, podcasts have been on the rise, with the pandemic driving a massive peak in podcast creation. One of the better-kept B2B marketing secrets was that starting a CEO podcast could serve as a structured way to help CEOs, particularly introverted ones, get out there and meet new, important people. Creating a CEO podcast was the ultimate three-fer, improving:
Communications, driving company messages and positioning the founder/CEO as a thought leader.
Customer relationships, gaining access to and/or reinforcing relationships with next-level executive contacts as invited guests.
Partner relationships, interviewing fellow CEOs, greasing the skids for many kinds of partnerships, potentially including the one that eventually sells the company.
If you like the sound of that and haven’t started one yet, I still think it’s a good idea. But start fast. It takes a long time to build an audience and I think in 2024 we will hit peak CEO podcast, for the simple reason that the word is getting out. My feeling is largely intuition-driven – podcast advertising forecasts still paint quite a rosy picture – but I think the software market will tire of B2B CEO podcasts over the next few years. If you don’t believe me, ask the podcast police.
If you want to create a podcast, make sure everyone understands why you’re doing it, get buy-in for a long-term, high-frequency commitment [29], and start now. That should keep the podcast police away.
Thank you for reading to the end, and I wish everyone a happy and healthy 2024.
# # #
Notes
[1] The two bars on the right make the point – they compare top-quartile growth rates of UBP and subscription companies. This slide doesn’t do the world’s best job of making this point, but I’ve seen it in other studies as well.
[2] Note that while I’m an angel investor in Hex, I do not work closely or actively with the company so my conclusions about their progress are based entirely on external observation.
[3] With the major exceptions of government-funded research projects (e.g., DARPA) and, usually as companies gain in scale, the embrace of government as a customer.
[4] Though I suspect they’d argue it’s a US-focused practice more than a firmwide initiative, but that hasn’t been 100% clear to me in reading about it.
[5] Which I believe was the subtitle of my American Government textbook back in college.
[6] Even OpenView’s “abrupt” shutdown was not an overnight closing of the doors; it was a cessation in new investment. As the firm noted, it will continue to exist and support existing investments until the existing funds reach their eventual conclusions – which can be years, even for growth investors.
[7] While new investments and valuations can turn on a dime, the rest of the business is focused on the long-term task of building companies and delivering TVPI, DPI, and IRR over a decade or so.
[8] IMHO, this damping is a good thing because it damps out irrationality as well. You can’t see a bank run on a venture fund, because investors generally don’t have the right to demand their money back.
[12] Bessemer State of the Cloud, slides 14-16. This shows nicely the growth at all costs era (6.0x), the trough after the peak (0.8x) and return to normal (2.0x). While growth is still twice as important as profit in predicting valuation, the balance still matters.
[13] SEG’s growth-weighted rule of 40 is double the 2x growth-weighted-average of growth and profit (i.e., it’s like a weighted average that isn’t averaged because they don’t take the last step and divide by 2). SEG does this to stay consistent with R40 which is the sum of profit and growth, not the average. In the rule of X, the relative weight (i.e., the “multiplier”) varies – over time and across stage. This makes the metric more complex, less comparable across stage and time, and produces a wider ranges of outcomes. For example, a company whose (growth, profit) is (100%, 50%) scores 150 on R40 and scores 950 on RX when the multipler is 9x, 130 when the multiplier is 0.8x, and 280 when the multiplier is 2.3x.
[14] Frankly, this argument strikes me as circular. If you’re getting the weight multipler from a regression of the current market, it seems obvious that you’d expect a higher R^2 compared to any fixed weighting of growth and profit, including the default weight of one in the rule of 40.
[15] My concerns: bad name (if rule of 40 abbreviates to R40, this abbreviates to RX), hard to interpret scores, incomparability across stages and time, and seeming circular logic (see prior note). Their ultimate point is correct: growth matters more and blind adherence to an unweighted rule of 40 may take you to the wrong place. But this metric needs some more work.
[16] Meeker was legendary for drowning the audience in nevertheless interesting data in her annual tech trends reports. As my dearly departed father might have said, “there’s enough here to gag a maggot.”
[17] Ben Evans covers these ideas, starting on slide 39 of his deck.
[18] The argument in favor is that AI will create a lot of value, vendors want to capture that value, and vendors are certain enough that they’re willing to take the downside risk to get the upside. The argument against is that value creates an upper bound on pricing, but the lower bound is determined by the price of alternatives. At Host Analytics, I could replace a Hyperion system that cost $500K/year with a SaaS app that cost $50K. That’s a lot of value to tap. But if Adaptive Insights were willing to do the same deal at $25K, then the price of alternatives, not value, became the focus of the conversation and differentiation the focus of the sales cycle.
[19] Please note that none of these references are endorsements, I don’t know many of the companies, and I’m sure many would be unhappy with my chosen one-word label. The point is to show the breadth and depth of the market.
[20] Front-running content producers in the process – e.g., featured snippets provide answers that leverage content producers’ content while eliminating and/or reducing traffic to their sites.
[21] This example also shows the problems with ChatGPT’s cut-off date, e.g., it doesn’t seem to know that Chorus is now part of Zoominfo.
[22] By standalone outbound, I mean outbound not done as part of a bigger ABM program.
[23] Unless they’ve been gamed to over-credit outbound as is sometimes the case when a company has “outbound fever.”
[24] Technically, even an underwater option has value because of its time value and the chance the stock price may rise above the strike price at some point in the future during the life of the option. In my example, it needs to go up by 150% before the option has any intrinsic value.
[25] Though these days an increasing number of tech workers are jaded with stock options, may value them at zero, and see them as pure upside – e.g., lottery tickets on top of their cash compensation. In that case, there is no “hit” per se to compensation, because they were expecting zero value anyway.
[26] If the company derives option grants from value, they’d say: we’ll grant you $400K worth of value, so at $20/share, that’s 20,000 shares. Even if they don’t work this way and simply offer to match the number of shares, the job-switcher is still offered a far better deal — 8,000 shares at a $20 strike price, as opposed to $50.
[27] Note that other factors come into play here, including the fact that grant sizes tend to decrease over time. For example, if you’ve been at GoodCo for four years with an initial grant of 8,000 shares, the going rate for your job might have dropped to 2,000 shares. Thus, crossing the street to NiceCo might result in a grant at a lower strike price, but with a much smaller number of shares. I think this is somewhat less true of RSUs (because they feel more a part of annual compensation as opposed to gravy on top), but I’d need to think more to be sure.
[28] That said, in this example, they can presumably hire NiceCo employees in the same situation. That aside, neither company benefits from the mass rotation of employees.
[29] Because that’s what it takes to climb the charts. And some advertising spend doesn’t hurt either.
Yikes, I’m a few weeks later than usual and now slipping into February, so let’s jump right into our ninth annual predictions post before it’s too late to publish. A quick reminder that I do these for fun and fun alone. See my FAQ for my terms, disclosures, disclaimers, and the like.
Kellblog 2022 Predictions Review
Let’s start with a review of last year’s predictions which, as it turns out, were pretty good.
1. Covid transitions from pandemic to endemic. Hit. We can debate the semantics. Epidemiologists would surely differ. And the billionaires at Davos still don’t treat it like a cold. But nevertheless, I think people now generally treat Covid as endemic.
2. Web3 hype peaks. Hit. I don’t think I’ve ever nailed a prediction harder than this one. My new#boi weeps for its loss in financial, if not aesthetic, value.
3. Disruptors get disrupted. Hit. The point here was that just as we become our parents, that Salesforce becomes Oracle, Nvidia becomes Intel, and so on. This is more the ebb and flow of a natural cycle than a specific prediction — but given Salesforce’s rather dismal year end, I’ll give myself a hit.
4. VC continues to flow. Miss. Well, while VC funding was down dramatically in 2022 compared to 2021, but remember that 2021 funding was at all all-time high.
The more interesting point is that all this didn’t slow VC fundraising, which hit a record high in 2022.
Going forward, while VCs clearly have dry powder, what’s unclear is their willingness to invest it. High-quality companies will still be financed, if on less stratospheric terms. Those delivering average performance may find themselves with water, water everywhere, but not a drop to drink. Some believe that capital won’t flow again until after an extinction-level event for startups in 2023/2024.
5. The metaverse remains meta. Hit. Big companies periodically catch self-boredom-itis and attempt to cure it with top-down pivots, dreamed up in corporate offsites with no regard for existing customers and no recollection of the organic, bottom-up processes that helped them become big in the first place. IBM Watson. Salesforce Chatter. Oracle Network Computer. Informatica Analytic Applications. BusinessObjects Sundance. Some companies treat these as publicity stunts, talking a big vision, but not really investing. Others get confused, believe their own marketing, and bet the ranch. Meta is in that situation: customers don’t care, the market doesn’t look attractive, and key employees are leaving. Yet on they plow. A+ commitment to a C+ strategy.
6. PLG momentum builds. Hit. I think PLG momentum built — and peaked — in 2022. Former Redpoint VC Tomasz Tunguz pointed out that product-led growth (PLG) firms are less profitable than sales-led growth firms, poking a hole in the “product sells itself” myth, and clouding dreams of liberation from costly S&M departments. (What drove people to the trial again, anyway?) PLG is a good strategy for certain categories, but VCs have a tendency, with all good intentions, to ram strategies down the throats of portfolio companies. As it turns out, PLG is like Nebraska: “honestly, it’s not for everyone.”
7. Year of the privacy vault. Partial. While it’s hard to back this with data, I believe both Okta and Hashicorp are doing well with their secrets vaults, which continues to validate the vault design pattern. I remain excited about vaults as applied to privacy (for all the reasons I detailed last year) and my friends at Skyflow continued to make great progress with their privacy vault business and the evangelization of it. What if privacy had an API? Well, it should.
8. MSDS is the new MBA. Partial. I don’t know how to easily measure this (irony not lost), so the scoring is entirely subjective. The in-hindsight obvious thing I hadn’t seen coming was the integration of the two — e.g., CMU’s Tepper school offers both an MBA in Business Analytics and an MS in Business Analytics, as do many others. So the new MBA just might be an MBA in Business Analytics or an MSDS.
9. Get ready for social impact. Partial. I was right about the things that concern younger generations. I was wrong to the extent that those things now matter somewhat less as the downturn transfers power from employees to employers. Social change isn’t just about what people believe, it’s about their power to get it. This is not to stay the new agenda will be completely ignored, but simply that change will come more slowly because the balance of power has shifted.
10. The rise of causal inference. Hit. I continue to believe that causal inference will be to the 2020s what data science was to the 2010s. Read The Book of Why to learn more. Or take this causal data science course on Udemy.
Kellblog Predictions for 2023
With that warm up, here are my predictions for 2023.
1. The great pendulum of Silicon Valley swings back. If you look at Silicon Valley over long periods of time, you see a series of pendulums that swing over decades, all loosely coupled to a great pendulum. In 2022, that great (fkamaster) pendulum started to reverse its course and that will continue in 2023.
While Davos, Main Street, and Wall Street may differ on scale and scope, everyone agrees that the economy is turning. On Sand Hill Road, they’re analyzing softening customer demand. The interesting part is how this will drive six sub-pendulums in 2023.
The valuation pendulum: 10x is the new 20x, flat is the new up. That means a lot of companies need to double their size in order to earn their last-round valuation. Some have raised enough and/or spent sufficiently little that they can do so on existing cash. Others are not so fortunate. Runway extension is the watchword of the day.
The structure pendulum: it’s back. One way to maintain a flat headline valuation is to raise money with what’s commonly called structure. Structure generally means financing terms, such as multiple liquidation preferences or participation (definitions here), that favor new investors over existing investors and the common stockholders in a liquidation. During boom times, structure falls out of favor. During slowdowns, structure, and the so-called dirty term sheets that propose it, come back. Caveat emptor. Think hard and model multiple scenarios before doing a structured round — a dilutive downround or a clean company sale just might drive more long-term value.
The growth vs. profit pendulum: balance is in, growth at all costs is out. Formerly backseat metrics like ARR/FTE, free cashflow (FCF) margin, R40 score, and gross dollar retention (GDR) come to the front seat joining net dollar retention (NDR) and ARR growth. ARR growth still predicts enterprise value (EV) multiples well — but particularly if FCF margins are better than 15%. That means growth is great — but only if you’re profitable.
The founder friendliness pendulum: the invisibility cloak loses some power. In the 2000s you’d routinely hear VCs whinging about “founder issues” at Buck’s. But in 2009, with the founding of A16Z, came a new era of founder friendliness and along with it a founder invisibility cloak (or should I say invincibility cloak) whereby the presumption that the founder should run the company became nearly absolute. That pendulum will start to swing back in 2023.
The employee friendliness pendulum. This is basic Michael Porter, but the new environment has reduced the bargaining power of employees. We’ll discover that many of those perks and policies that were ostensibly rooted in culture and values were actually rooted in competition for labor. We’re already hearing, “get back to the office” from Benioffet alia. Or unlimited PTO — the ultimate perverse benefit — from Microsoft. More companies will follow.
The diligence pendulum: FOMO gives way to FOFU. In the past five years, I’ve never seen deals done faster in Silicon Valley, driven by a competitive market, growth investors with pre-conducted diligence, and a fear of missing out on investments. As the market cools, deals become less competitive, and stories like FTX emerge, things should return more to normal.
2. The barbarians at the gate are back. Valuations are down. Growth headwinds are up. S&M costs are high. Stock-based compensation (SBC) is increasingly controversial. That means activist investors will increasingly be swooping in to shake things up. And PE giants will increasingly be jumping in to clean things up. Anaplan and Zendesk were taken private in 2022. Salesforce is under pressure from two activist investors. Expect more of this activity to follow in 2023.
The downturn obviously puts cost pressure on customers. Must-have items can become nice-to-have overnight.
SaaS sprawl. Per Statista, the average company uses over 100 SaaS apps and for many CFOs that’s too many.
SaaS rationalization. There’s an entire emerging category of vendors (e.g., Cledara, Vendr, Vertice) who work to reduce SaaS spend. Their mission is to drive your churn.
Consumption pricing. Consumption purists (without ratchets in their contracts) may well find themselves swimming naked as the tide goes out.
Bankruptcy. Companies who sell to SMB may see increased amounts of uncontrollable churn as customers cease operations.
Consolidation. Increased M&A can result in fewer, larger customers with larger discounts and lower costs per unit.
Companies increasingly have internalized the cost of churn. Namely that:
Cost to backfill churn = CAC ratio * churn ARR
That is, with a CAC ratio of 1.6, it costs $16M to backfill $10M in churn ARR.
While this bodes well for the customer success (CS) discipline, it does not automatically bode well for the customer success department.
Those business-oriented CS teams who thought customer advocacy meant generating customers who advocate for the company will continue to thrive. But those checklist-oriented CS teams who thought customer advocacy meant internal advocacy on behalf of customers may well find themselves restructured. With new cost pressure, the idea of funding an internal K Street is unattractive compared to redeploying those resources to the underlying engines of customer success, such as product, services, and support.
There are, after all, two sides to being in the spotlight.
4. The Crux becomes strategy book of the year. Frequent readers already know that Good Strategy, Bad Strategy is my favorite book on corporate strategy. But my favorite part is how it eviscerates all the garbage that passes for strategy in corporate America.
In 2022, Rumelt published a second book, The Crux, which is more focused on how to build good strategy than on how to avoid bad strategy. I might have named the books Bad Strategy, Good Strategy and Good Strategy, Bad Strategy, respectively, but I suppose that would have been confusing.
I believe The Crux will become strategy book of the year in 2023 because:
It takes a positive approach more than a critical one. Readers generally prefer that, and I think it’s the one thing that held back Good Strategy, Bad Strategy.
It frames strategy around the plan to overcome a critical strategic challenge. I believe 2023 will provide many companies with clear strategic challenges that need overcoming. Demand will be strong.
He is logical, consistent, and practical in his thinking. Ruthlessly so. It’s literally therapeutic to read Rumelt if you’ve spent enough years in the C-suite.
Unlike business books that promise a magical answer (i.e., if you could just get <blank> right, then everything else will work), Rumelt offers a magical question: if you could just figure out the crux of your strategic challenge, then everything else can work.
The last point is not just verbal sleight of hand. Most business books preach a magical hammer (e.g., positioning, storybranding, category creation) — learn to use this one tool and it will fix all of your problems. Rumelt does the opposite. He sets you on a search for the magical nail. Find that one problem — that central knot or apparent paradox — that, if overcome, will enable your success.
As he said in his first book, “a great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental problem of comprehending the situation.” So true, yet so rarely admitted.
5. The professionals take over for Musk. While he’s calmed down a fair bit since I wrote my original draft in December, I nevertheless believe that Elon Musk will hand over the CEO reins of Twitter in 2023. The announcement of his intentions isn’t exactly news, but the question is will he actually do it? I think he will, largely because it won’t continue to capture him the attention he needs and because the shareholders of Tesla will basically demand it.
I disclaim that I am not a Musk fanboy and that, in general, I am disappointed by the PayPal mafia, which I once saw as so full of promise. Perhaps my expectations were too high, but as both the Book of Luke and JFK have said, “to whom much is given, much will be required.” Particularly, in Silicon Valley, where early success can launch a virtuous cycle of opportunity.
6. The bloom comes off the consumption pricing rose. Consumption pricing has been a hot topic for the past few years with many boards pressing companies to adopt consumption-based models. The conventional wisdom was roughly: if you want Snowflake’s NRR of 160-180%, then you need to adopt their consumption-based model; you can’t get there with per-seat annual SaaS or editions and upsells.
While consumption-based pricing tends to break SaaS metrics and while Snowflake is quick to explain that they are not a SaaS model, there has been significant pressure on enterprise software vendors to include at least a consumption-based component in their pricing. While this makes sense when passing along cloud-based infrastructure charges that scale with usage, when done in general, they forgot two things:
To ask the customers. Wall Street loves 180% NRR, but what about Main Street? Do CFOs like when their software bill compounds upwards at an 80% rate? Methinks not.
The tide also ebbs. During rising tides, users go up, usage goes up, and value delivered presumably also goes up. So maybe that 180% doesn’t sting as much. But what about when these drivers go down? As Buffet said, only when the tide goes out do you see who’s swimming naked.
In 2023, we’ll see there are two types of consumption-based vendors: those with crafty CROs and those with purists. The crafties will have already structured ratcheted deals that can only go up year over year. The purists will not have built in that protection and will see consumption-driven churn as a result. By the end of 2023, we’ll have many more crafty CROs and a lot fewer purists.
The early returns indicate that while consumption-based companies are seeing bigger hits to NRR, that they are nevertheless driving higher overall growth than their subscription-based counterparts.
Much like my PLG prediction last year, I don’t think consumption-based pricing is dying. But I do think 2023 will remind everyone — some via a slap in the face — that there are two sides to the consumption-based coin.
7. The rise of unified ops. The last decade has seen the rise of the “ops” function. Back when I was young, we didn’t have ops. If you wanted reporting or analytics, you’d go to finance. But as functions become more automated, as each VP got their own app, and as CEOs and boards applied more pressure for quality reporting and analytics, each function got their ops person. Salesops, marketingops, supportops, servicesops, and successops. Sometimes these consolidated into revops or bizops. Often, however, they didn’t.
What ensued was depressing. Siloed ops led to QBRs that resembled tag-team cagefights. When the CRO and the CMO were fighting, they’d tap in their respective ops heads to continue the brawl. My CXO versus your CXO. My ops person versus your ops person. My numbers versus your numbers. My model versus your model.
During an interim CMO gig, I worked with the CRO to unify the sales and marketing ops teams into a single revops team. Even though we were separate organizations both reporting to the CEO, we would have one unified ops team — and we didn’t care who it reported to. Attend both our staff meetings, but one set of numbers, one model, one forecast. What that gig ended, the first thing the new CMO did was disband it. Let the cage fights begin again. It’s human nature.
That story notwithstanding, I think 2023 will see the rise of unified ops. Why?
Cost pressures, and the need to increase efficiency. One single ops team, driving one set of modeling and reporting is cheaper to operate.
CRO consolidation. As some customer success teams are integrated under the CRO, there will be a natural tendency to integrate salesops and successops.
Model wars. CEOs get tired of having to say, “which model?” The saleops model? The FP&A model? The marketingops model? Why isn’t there just one? There should be.
Battle fatigue. Siloed ops isn’t just inefficient, the conflicts it generates are highly visible. Over time, people get tired. A great ops leader should be an independent trusted advisor to the business, not a personal pit bull in each CXO’s corner.
Resource flexibility. A single team can move resources dynamically to meet the challenges at hand.
Software standardization. Rationalizing SaaS costs and eliminating stack redundancy is easier when the various ops functions are in a single team.
End-to-end funnel analysis. Breakpoints in the funnel cause problems — e.g., sales doesn’t just want 500 oppties generated this quarter, they want the good ones. But which are the good ones? The ones that close. But which are the good ones for success? The ones that renew and expand. How can we generate those? One team, looking end to end, is in the best position to do this analysis.
For all these reasons, I believe (and hope) that 2023 will see the rise of unified ops.
8. Data notebooks as the data app platform. I’ll preface this by saying I’m an angel investor in Hex, who raised a $52M round from A16Z last year, so I’m excited about data notebooks for more than one reason.
While data notebooks are old hat to most data scientists, for business analysts and business users, they are still relatively unknown. Descended from Jupyter notebooks, today’s data notebooks (e.g., Hex, Notable) generally position as something larger, platforms for collaborative analytics and data science.
When it comes to Jupyter notebooks, this tweet was my introduction to the subject, which got me reading the underlying notebook by Kevin Systrom.
The highest quality Jupyter notebook I’ve ever seen was just posted by… <checks notes>… ex-CEO of Instagram, Kevin Systrom?
All of us data scientists can hang our heads in shame.
Systrom’s notebook is basically a research paper, built in collaboration, with equations; embedded, executable code; its outputs; configuration management; dependency graphs; and more. Compare that to the unmanaged spreadsheets you probably use to run your business today.
So the idea of generalizing this to data problems and data users of all types was instantly appealing to me. I remember when I first met with Barry at Specialty’s, he framed the problem as wrapping models. As data scientists, we can build models, but we need to wrap them in apps — what we’d now call data apps — so users can use them. Much as a spreadsheet has a builder and a user (think: lock down all the cells but a few inputs), a more sophisticated model can and needs to be wrapped as well. But wrapping a model means effectively building an application, and with that comes a dreaded backlog for building and maintaining those applications. It was a flashback to enterprise reporting circa 2000 (back when you had the report backlog) and I was instantly hooked.
While I’m not sure I agree with Martin Casado that all SaaS apps will be remade as data apps, I do believe the world is ready for data apps. I see them, perhaps in a more pedestrian fashion, as these integrated notebooks of code (including not only Python but SQL), no code alternatives, sequencing, models, narrative, metadata, and collaboration — and wrapped and ready for consumption. That’s why I’m a big believer in data apps and I see data notebooks as the platform for building the first generation of them. Check out the Hex demo on their home page for a five-minute look.
9. Meetings somehow survive. To paraphrase Twain, reports of the death of meetings have been greatly exaggerated. While I’ll confess to the imprudence of giving Death By Meeting to my boss shortly after its publication, the death of meetings is an entirely different matter. In January, Shopify announced what appeared to be a total meeting ban, but in reality was a ban on scheduled recurring meetings with three or more people along with a two-week cooling-off period before meetings could be added back to calendars. Nevertheless, this resulted in the cancellation of 10,000 meetings.
The death to meetings crowd makes a number of mistakes in its thinking:
That everyone is engaged in individual work, like coding or writing. How should, e.g., an HR business partner add value by not meeting with people? Or an BDR manager?
That managers somehow do not contribute to building a company. Great, let’s get 100 developers all reporting to the CEO and see what happens.
That all meetings are bad. There’s a clear baby/bathwater issue here.
That online alternatives can replace meetings. The limitations of email and Slack are well known. They’re great for some things and rotten for others. My personal rule: never try to resolve a hard issue over either.
That cadence is unimportant. I believe that the cadence of regular meetings says a lot about a company — e.g., a weekly vs. a monthly forecast call, or a monthly vs. quarterly sales close.
That meetings cannot be improved. In reality, the goal with meetings, as with any tool, is to use them when appropriate. The quest is to focus on making them better. I say quest because to do so is both difficult and endless: as this article from 1976 demonstrates.
10. Silicon Valley thrives again in 2024. While I believe 2023 will be a tough, character-building year for startups, we must remember that this is simply another cycle of creation and destruction in Silicon Valley. The bad news is that companies will be increasingly faced with difficult, sometimes existential, decisions. The good news for me (at least) is that demand for gray hair seems to go up when the markets go down. The good news for everyone is that this is simply a cycle, one from which we shall emerge, and when we do so, the world we emerge into will be more rational and fundamentals-focused.
[1] I inadvertently published an incomplete version of this post on 2/1/23 around mid-day. While I instantly removed it from the blog, LinkedIn, and Twitter, I was unable to recall the post sent to email subscribers. Please accept my apologies for this mistake. While there are a few tricks one can use to avoid such problems (e.g., publish later, don’t create in the WordPress editor), I was on approximately draft 67 of this post, meaning that 66 times I correctly hit “save draft,” but alas once hit “publish” and off it went.
I’m Dave Kellogg, advisor, director, blogger, and podcaster. I am an EIR at Balderton Capital and principal of my own eponymous consulting business.
I bring an uncommon perspective to enterprise software, having more than ten years’ experience in each of the CEO, CMO, and independent director roles in companies from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of Host Analytics, where we quintupled ARR while halving customer acquisition costs, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of the $500M Service Cloud business at Salesforce; CEO of MarkLogic, which we grew from zero to $80M over six years; and CMO at Business Objects for nearly a decade as we grew from $30M to over $1B in revenues.
I love disruptive startups and and have had the pleasure of working in varied capacities with companies including Bluecore, FloQast, Gainsight, Hex, Logikcull, MongoDB, Pigment, Recorded Future, Tableau, and Unaric.
I currently serve on the boards of Cyber Guru, Scoro, TechWolf, Vic.ai, and Widewail. I have previously served on the boards of Alation, Aster Data, Granular, Nuxeo, Profisee, and SMA Technologies.
