Essays on technology & capital in the real world.

Taking Stock of the Seed Stage

The total stock of seed-stage startups appears to be shrinking, despite the AI funding boom.

File Systems for Agents

An emerging theme among teams building agents: the file system is the ideal memory abstraction for AI agents.

Tripling Down on Exa to Build the Search Engine for AI

Why we tripled down on Exa, the search engine built for AI agents.

The Engine That Builds the Engine

The codebase is a software company's crown jewel — what changes when AI becomes the engine that builds it.

Tokens Aren't Fungible

Open source LLMs are 90% cheaper than closed source models, yet they capture less than 30% of token share

The Missing Emotional Layer in AI: Our Investment in Nuance Labs

On the uncanny valley of AI avatars, and our investment in Nuance Labs to build AI's missing emotional layer.

Search, Perfected for AI: Why We're Doubling Down on Exa

AI agents are only as good as the context they retrieve — why we're doubling down on Exa.

AI-Driven Cyberattacks are on the Rise. Are You Ready?

The rising tide of AI-driven cyberattacks demands a new era of smarter, autonomous defense.

When Search Becomes Infrastructure: Changes and Opportunities to Watch

For 25 years search meant ten blue links; now it's becoming infrastructure for AI — and that shift creates new opportuni...

Apple's AI Reasoning Paper: Good Questions, Few Answers

A close read of Apple's controversial paper claiming to expose reasoning weaknesses in models like Claude and ChatGPT.

Tana: The AI-Native Collaborative Workspace

Knowledge work has evolved in waves — our investment in Tana, the AI-native collaborative workspace.

Observo AI: The AI-Native Observability Data Pipeline

Observability and security systems drown in operational data — our investment in Observo AI, the AI-native data pipeline...

Seed Valuations Aren’t Valuations

It’s not obvious what drives them

AI Enterprise Market Map: Cutting Through the Hype

Domain-specific apps offer the greatest ROI for enterprise AI — a market map cutting through the hype.

Goodfire: Building Interpretable AI

Why interpretability is becoming critical infrastructure, and our investment in Goodfire.

Exa: Redesigning Search for AI

The coming agentic web needs new infrastructure — our investment in Exa, redesigning search for AI.

Substrate: Building Compound AI Systems

The most magical AI experiences will come from compound systems combining many models — our investment in Substrate.

AI Benchmarking Is Broken

We should take AI models seriously, which means taking their evaluation seriously

The Venture Activity Index – Q4 2023

Capital deployment remains depressed, sitting about 50% below trend

The Series A Bust

Investors have lost faith in Series A as a sign of product-market fit. In other words, they expect more but believe less...

Building With Patronus AI — Automated AI Evaluation

Our seed investment in Patronus AI, the first automated evaluation and security platform for LLMs.

Securing AI Is The Next Big Platform Opportunity

Building with AI creates a new class of security challenges — and a new platform opportunity.

How Redpanda is Taking Data Streaming Mainstream

Monitoring that even (Franz) Kafka would approve of

The Venture Activity Index

Measuring the state of the venture "business cycle"

Why Lightspeed is Leading Redpanda's $100 Million Series C

Why we led Redpanda's $100M Series C as it reinvents real-time data streaming.

The Shadow Price of Venture Capital

Valuations are 60% too high relative to the volume of venture funding

Building With Contextual — Enterprise-Ready LLMs For All

LLMs are uniquely suited to enterprise data — our investment in Contextual AI to make enterprise-ready LLMs available fo...

Don't Discount Interest Rates

It's Jay Powell's world. We're just living in it.

Select Star + Lightspeed: Data Democracy for All

The modern data stack changed how organizations work with data — our investment in Select Star to democratize it.

We Don't Have Nearly Enough Startups

Where did the explosive growth in venture activity come from?

Old Valuations Die Hard

Private valuations substantially lag public tech valuations

It's Valuations (Almost) All the Way Down

Venture funding hasn't grown as much as you think

Beats and Misses Are Forever

Revenue surprises permanently shift the trajectory of SaaS companies

Layoffs Don't Tell the Whole Story

Hiring freezes matter more than layoffs

COVID Hurt Most Software Companies

COVID put software companies on a permanently lower growth trajectory.

The Dark Matter of Software Valuations

Exploring the vast "dark matter" of the software universe

Series A Rounds Are a Math Test

Low monetization requires extraordinary traction, and vice versa.

Funding Simply Shifts the Bottleneck

A frothy funding environment means more competition for talent. Funding gets easier; hiring gets harder.

Breaking Apart the Rule of 40

Rules are meant to be broken, and the Rule of 40 is no exception

Schrodinger's Balance Sheet: When Equity Becomes a Liability

Preferred equity exists in a constant state of quantum superposition. It's neither equity nor debt, until it is.

Introducing a New and Improved SaaS Metric: Weighted ACV

ACV isn't as useful a concept as people think. We need a different SaaS monetization metric.

Companies Rarely Grow Into Their Valuations

Companies don't catch up to their valuations; their valuations catch up to them.

WebAssembly-ing the Pieces: Vectorized’s Data Policy Engine

Rather than ship data to code, which is expensive and latency-prone, why not ship code to the data?

You Can't Eat Relative Growth

In startup land, we talk way too much about relative growth. We'd do better to ground our thinking in absolute growth.

Do Wealthy Investors Have an Edge?

The super-rich earn more on their investments than the rest of us. Something nefarious, or something else?

PhDs Aren't Starting Companies Like They Used To

The burden of scientific knowledge and managerial complexity is crushing our best and brightest.

Awesome Developer Advocates Are Hiding in Plain Sight

Why you shouldn’t filter for social media following or prior experience

The Developer Productivity Manifesto Part 3 — Leaving Software on the Table

Quantifying the billion dollar impact of developer inefficiency

The Developer Productivity Manifesto Part 2 — More (Developers) Isn’t Always More

Adding more cooks to the kitchen rarely helps

The Developer Productivity Manifesto Part 1 — The Flywheel

Developer productivity is falling. But it doesn't have to. The solution? The Developer Productivity Flywheel

Four Challenges Facing Developer Productivity Startups

The biggest challenges facing developer productivity startups today

Robinhood Traders are Last to the Party

Robinhood traders get fleeced not by HFTs front-running milliseconds before their order hits but by other retail investo...

Why Developers Love Redpanda

Why Vectorized's focus on developer experience will unlock real-time streaming for the great majority of developers

There's Nothing Magical About the SaaS Magic Number

Magic number is a bad metric. Sales and marketing drives much less revenue than this not-so-magical number implies

Product-Market Fit is Lindy

The longer you search for product-market fit, the less likely you will find it.

Why We Will Never Have Enough Software Developers

Developers are dropping out of the profession in large numbers

Enterprise Software Monetization is Fat-Tailed

In enterprise software, averages are meaningless. Instead, focus on the tails.

An Image is Worth 16x16 Words: Transformers for Image Recognition (Paper Explained)

Large Transformer trained on large datasets outperform CNN-based architectures and achieve state of the art results on i...

Pre-training via Paraphrasing (Paper Explained)

Transformer model pre-trained on document retrieval and reconstruction performs well on both fine-tuned and zero-shot do...

Top Three Strategic Priorities of Developer Productivity Startups

What's top of mind for developer productivity leaders

Six Trends Shaping Developer Productivity

We interviewed developer productivity leaders. Here's what they said.

Why Don't VCs Index Invest?

VCs are picky, not because they have so many options but because they have so few.

The Value of College May Be Negative for the COVID Generation

You might think the value of a college degree has been increasing. You would be wrong.

Do College Degrees Matter for Software Engineers? Maybe

Do college-educated developers earn more? Yes, but less than you might think

Pandemiconomics: Viral Volatility

How the virus rocked stocks

Byron Deeter and Jason Lemkin on the State of VC and the Cloud

When to raise capital, what to expect from VCs, and the "new normal"

Remote Software Developers Earn 22% More Than Non-Remote Developers

Working remote even just a few days per month leads to higher pay

How Age, Race, and Gender Affect Software Engineering Pay

Progress on narrowing pay gaps among software developers

The Highest-Paid Software Engineers: 2020 Edition

Engineers are the basic economic unit of modern software development. The software production function depends critical...

How Uber and Lyft Dominated Ridesharing By Seeing Red Where Others Saw Blue

A quick visit to the Red Sea

Pattern Matching is Dead. Long Live People Matching

Venture capital is changing — for the better

High Retention = High Volatility

Why SaaS revenue retention is a double-edge sword

Waitlists are a Vanity Metric

Waitlists, registered users, and other cumulative measures better measure the size of your pride than the size of your b...

How to Conquer Cohort Analysis With a Powerful Clinical Research Tool

Entrepreneur's Ruin, or How Not to Go Bust

Meet Dev, the Highest-Paid Software Developer in America

The Growth-Share Matrix of Software Development

You Don't Understand Compound Growth