VCchat

Workloads will move to cloud architectures full-stop. Happening with customer-focused apps, but will soon happen for workloads of all types. Many are well-suited for AWS and that busienss will continue to grow.

AWS is pounding hard into the enterprise and forcing lots of incumbent players to be more agile. What trend do you see there? More deals in enterprise cloud?

@sraney what is your take on the security startup landscape as it relates to cloud?

It's interesting to see AWS moving up the stack with Email and File Storage. That's going to put some pressure on the ecosystem.

I agree Tomasz that will also create "new models" for distribution; At ServiceNOW conference they are deploying a marketplace too; IBM, AWS, ServiceNow - hmm a flywheel oppty?

lost the thread for second...however, big believer in private clouds. Openstack is best option today, but really way too challenging to implement. We have invested in Platform9, a company which dramatically simplifies what it takes to launch

@sraney what are your thoughts on collapse of Nebula which precisely tried to simplify Openstack deployment?

I think there certainly is an opportunity on these market places. We're seeing it with some of our portfolio companies.

@sraney saw it first with heroku and their app store.

these market places offer huge channels, but demand better product integrations with the platform, and a simpler product.

Should startups dedicated resources (engineering) to support all the clouds? AWS is different than BlueMix etc

@cloud_opinion haven't spent time with them in a while, but seem to have done it by prescribing particular hardware configurations. Didn't seem to integrate nicely into existing data center infrastructure. Great guys over there though. They were early

It's a new way of building companies that changes the way outside sales teams work.

What is the formula for success? Why do some startups scale rapidly and succeed and other can't

Outside sales teams aren't permitted to be outbound.

That's a big change from the previous models.

What do you mean this "flips things upside down"?

Well, the traditional model has the enterprise teams at the top of the pyramid going outbound to find new business and the inside sales teams pursuing inbound leads.

The new model is different in that only the SMB teams go outbound. The mid-market and enterprise sales teams are exclusively farming from the existing user base.

@ttunguz what does that do to CAC for SMB wins? Seems like it would be unacceptably high

why? if it's driven by freemium, content, etc, the way it's done now, overall CAC should fall

@ttunguz ~ earlier you said there is a focus on existing mid and enterprise customers, yet in a start-up environment those may not exist... then what ?...

got it...misread outbound vs. outside. does this only work for collaboration platforms like asana & atlassian, or are there other examples of success?

hubspot, new relic

gr8 questions - i see global being a big wildcard esp in asia

Two schools of thought. Still on front-end of a massive change to cloud services (still just 2% penetrated). Huge opportunities and these companies are growing at unprecedented rates. Clearly some FOMO going on with investors w/ different risk tolerances

Because $1 in public markets is only worth 20cents in private equity rounds </joke>

We have seen the idea of forward pricing take hold. Private investors basing no on TTM or even NTM, but really a couple of years out expecting flawless execution.

Has resulted in a disconnect between public and private market multiples. 3 IPOs in the last 6 months where IPO price was below the last round price in private markets

Which IPOs?

Apigee, Hortonworks and Box

Zenefits is growing faster than those companies ever did

really? do you have stats comparing wday first 24 mos vs zenefits 24 mos?

Not surprised w Box, but didn't know about Apigee and Hortonworks.

Zenefits has grown MUCH faster. But it has a completely different business model than WDAY. It is SaaS-enabled but really a fundamentally different type of product/revenue model

Agree. It's interesting when people call Zenefits SaaS.

Andy is brilliant. He sees the world in a completely different way than most people. Each conversation is eye-opening.

As should be evident by now, he dreams very big! No idea is too outlandish, too difficult, etc. He is the kind of guy that changes things for the better

What was the coolest conversation you had with him?

And he loves gadgets like no one else, so he's always got the new new thing.

He pitched Android to a couple of us years ago. We told him he needed deeper pockets than a VC had to make this happen. He went out and found them.

@sraney what I like most about that is the honesty, and you were right obviously.

Andy is doing amazing things now at Redpoint and Playground

~ not sure i understand your comment relative to the importance on profitability...

right now, the public markets value growth much more than profitability. the supermajority of tech IPOs aren't profitable.

and investors are willing to believe that the huge growth rates eventually will translate into very profitable businesses

it's probably true for many companies, but likely not all of them. and so there's some risk in making that bet.

Conventional wisdom is scale companies could be profitable immediately if they just chose not to grow as fast

I find it interesting that many companies that are grow their user base extremely quickly sometimes take years to make a profit. Also what is the importance of cash flow for a startup when you are deciding to invest or not?

btw here is the blog post from @ttunguz http://tomtunguz.com...