TinySeed (the first fund I ever invested in) is raising Fund 2. They describe the goal as making an index of early stage B2B SaaS companies.

The memo is here, and it makes for interesting reading: tinyseed.com/thesis
3 things I think are true:

B2B SaaS is, like enterprise software before it, increasingly a playbook. Unlike enterprise software, the minimum business required to have a saleable product is achievable in single digit founder months.

These companies are getting better over time.
Money is flooding into B2B SaaS both from the traditional LP to VC fund pipeline and from, increasingly, “software money going to software people.”

I think the second should crowd out the first, especially where raw $ isn’t the deciding factor. It is smarter and more helpful.
The increased interest of PE funds in software companies creates a natural exit opportunity which previously was sorely lacking for reasonably successful software companies which didn’t reach sufficient scale to be interesting to AppAmaGooBookSoft.

Think “$N million a year.”
I think this counsels a group of founders to aim for a different trajectory than the traditional two (bootstrap or rocket ship):

Find a hole in any market. Write the relatively boring SaaS app that plugs that hole. Grow the business for five years and sell it to highest bidder.
This model changes the math, operating conditions, culture, etc of that company relative to traditionally funded companies. No changing the world. Probably less La Croix.

But darn if it doesn’t work; we’ve seen it happen up close many, many times. It is attractive to founders.
TinySeed, and similar efforts funding these companies, derisks and accelerates these companies through the sloggiest point of their existence, which is the first 18 months where the founder is alone and watching their savings dwindle wondering whether they should get a job.

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More from @patio11

18 Sep
I haven't shorted Nikola but FWIW I precommit to donating $100 extra to charity and tweet "Hah, shows what I know about public markets" if they are a going concern in 365 days.

If this is a new story to you: hindenburgresearch.com/nikola/
"Why not short them?"

Boring reasons, mostly along the lines of "I have spent about as much as I want to spend this year eating humble pie about my ability to outperform the financial markets, and do not have sufficient cycles to figure out what I'd need to do differently."
But the overwhelming weight of evidence suggests that they have a habit of, and this is a technical accounting term, "making shit up."
Read 8 tweets
18 Sep
I've had Josh on my podcast before as the salary negotiation guy ( kalzumeus.com/2016/06/03/kal… ).

The following is an interesting narrative on his business journey, which like most in our community has a lot of twists before things start really working out.
As somebody who knows a few bits of the story, let me highlight and give a shoutout to MicroConf, because I know there were a few conversations there that very materially impacted that business.

People *so* underestimate the value of community & implicit knowledge inside of it.
(You might reasonably assume that I do more advice-giving than advice-taking at MicroConf but a) I don't actually think that is even true on net and b) my businesses got *a lot* better after I found a likeminded peer group, including "the MicroConf crowd", to talk shop with.)
Read 4 tweets
18 Sep
A control fraud at a cybersecurity startup.

These are almost surprisingly rare, relative to the level of operational discipline, opportunity, and trust involved in the startup ecosystem, particularly at early stages.

forbes.com/sites/davidjea…
I honestly don't know how you don't figure out "Wait, sorry, that math doesn't work, and seriously what did you just say the story was with an account at Bank of America?!" in due diligence for a 9 figure round, but be that as it may, capitalism is pretty self-correcting there.
"Aren't employees even worse off than investors?"

I mean if an employee joins a company whose CEO would do this a) they're inevitably going to have an unfun time and b) in a sense they are inadvertent beneficiaries of the fraud, not victims, because guess where salary came from.
Read 5 tweets
18 Sep
The best startups aren’t just an artifact, they’re a change in human behavior centered around the artifact.
Substack’s big contribution to date is successfully bootstrapping a Schelling point:

Expert writers: I would write more but my only compelling options are day job or gift economy.
Readers: I get incredible value out of people I follow on Twitter.
Substack: I have a proposition.
Interestingly I think that Schelling point is probably going to be substantially bigger than the universe of Substacks (as currently conceived), both on their platform and off of it.
Read 5 tweets
18 Sep
An underappreciated and underpracticed-in-tech part of the hiring loop: candidates should come away from it, regardless of the outcome, willing to talk you up to their friends/coworkers/etc.
Every engineer you talk to will talk to somewhere between 20 and 100 engineers in the next year. What do you want them to say about you? "Oh yeah, I interviewed there once. My interviewer showed up twenty minutes late, butchered my first name, and then ghosted me."
There's a lot of nuance and complexity into how to deliver an amazing experience, much like there is in product-land, but so, so much of the industry would benefit from just repeatedly showing baseline competence on logistics and professional demeanor.
Read 4 tweets
17 Sep
I think this sort of epistemic humility is helpful for all sorts of things. There are fascinating and deep fields of human endeavor which *you will never learn exist.*

When you cross one of them off the list by accident, treat that as a fun opportunity to learn.
Also is a bit of irony:

a) c.f. Patio11's Law
b) I had never heard word one of Snowflake until the S-1 dropped either.

A necessary corollary of "software eats the world" is that the space of all software becomes approximately coextensive with the space of all human endeavors and, therefore, strictly beyond the comprehension of any single mortal mind.
Read 4 tweets

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