Twilight Zone
[Week 25, 2022] 📈🚀 Cloud stocks rip 15.1% in 2nd best week of 2022, 🥊 Crush your competitors' wills, and 🤔 Right to win.
100mm ARR is now 200mm because of inflation.
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Cloud stocks ripped 15.1% for the holiday-shortened week ending June 24, 2022 notching it's second best week of 2022.
📉 10Y rates fall. Federal Chair Jerome Powell testified to Congress on Wednesday and Thursday that the central bank is “strongly committed” to bringing down inflation and remained confident that the economy was strong enough to not tip into recession.
😬 Zendesk buyout blunder. Zendesk agreed to be acquired for $10.2 billion (a 30%+ premium to Thursday's close. Great outcome! Except they turned down $17B in February.
The question now: is inflation/recession risk over? Or is this just a bear market bounce? A few great charts to ponder.
🌚 Which way are we going?
Gavin Baker pointing out we're in the Twilight zone with management publically remaining bullish on prospects while the market proactively prices in interest rates increases, recession warnings, and tech layoffs.
1) Listening to a call.
I felt like I was in the Twilight Zone reading transcripts from the BofA tech conference and William Blair conferences in early June. More so this morning.
Co’s are still shockingly bullish and the mkt/analysts making it so easy for them to cut numbers.
Some poor analyst at Guggenheim also put together a comprehensive list of macro impacts from Software earnings conference calls:
RIP guy who put this together.
☝ Time to upgrade
Silver lining to weakening talent market
it’s finally a market where good founders can upgrade
🥊 Frank Slootman on Winning:
I've always quoted US Grant and other people. They defined winning as breaking the enemy's will to fight. Not just kill them. It was breaking their will to fight.
Frank Slootman
Snowflake CEO Frank Slootman on competition:
There can be only one
🤔 Right to Win
An oldie but a goodie from BucknSF.
Everyone wants to be a multi product platform, but "we can cross-sell" is simply not good enough.
Good Examples: NOW moving into workflow + CRM launching platform + DDOG expanding into APM
A lot of SaaS companies trying to become a “platform” by launching multiple products. But, often they launching into markets where they don’t have a clear right to win.
Parker Conrad views expansion happening from core systems of record.
Read our full write up on Rippling: ☁️ Parker Conrad is Back
My view of this is that expansion happens from core systems of record outward, and not in the other direction. It's about what underlying data you have and whether that data is a compelling primitive within the adjacent product category.
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