2025-05-31 04:40:57
Pricing changes are hard.
Fundamental shifts in go-to-market strategy tied to pricing? Monumentally difficult.
We recently dove deep into one such transformation with Barr Moses, CEO of Monte Carlo, during a Theory Ventures Office Hours. Monte Carlo, a data & AI observability pioneer, moved from traditional annual contracts to a daily revenue model.
These were the three most important takeaways for me from the conversation:
1. Monte Carlo customers were used to buying usage-based rather than contract-based & the alignment was an important & critical evolution. Ali Ghodsi said the annual contract is “selling like Oracle in the 1980s.”
2. The shift to daily revenue was a fundamental cultural change. First Barr asked every functional leader to pick who should own pricing. Ultimately, everybody but product decided it should be product. That settled, the go-to-market team “redefined the job functions for everyone in the go-to-market starting from scratch.”
3. Last, the company evolved through a cultural change, pursuing one key metric that everybody could align with : daily revenue. It was clear from our conversation that this is more than just a pivot. It’s a fundamental reimagining of the core operations of the company. The company embarked on an internal rebrand including “MCCC - The Monte Carlo Consumption Company.”
This involved “changing the language both inside of the company & with the board around one key metric.” As a VC, I felt 15 years of education about at ARR & ACV had been rightly thrown out the window. This daily figure brought “tremendous simplicity” & was crucial for optimizing for learning in the early days. It became, as Barr termed it, the “ultimate bet on yourself & your team.”
https://www.youtube.com/watch?v=NcVmzypt4JM&list=PLWyXqNxVbHP2qY4BL40Kst473-kF3TBPN&index=18
This move has had profound effects on the company :
- True Customer Alignment wiht Shared Risk, Shared Success: The model “forces the company to take part in the customer success.”
- Deeper Customer Insight: Success demands understanding customer roadmaps.
- Product Clarity: Usage focus drove insights, like fixing default permissions that inhibited adoption which wouldn’t have been obvious otherwise.
- Enterprise Predictability: Commitment models (RPOs) still offer budget predictability for larger clients particularly with longitudinal data.
Monte Carlo’s journey is a powerful testament: pricing reflects your entire GTM philosophy & commitment to customer value. It’s a dare few take so comprehensively, but the rewards in alignment & customer-centricity are immense.
https://tomtunguz.com/moving-to-daily-pricing/
2025-05-29 01:55:40
With Salesforce announcing its intent to acquire Informatica & Google’s announced acquisition of Wiz, 2025 is the best year in the last six in terms of M&A value.
These massive acquisitions, totalling more than $32b propel 2025’s year-to-date number to decade highs - exceeding the fast-money pre-Covid days of 2020.
But the total number of acquisitions with disclosed deal values (typically a few hundred million or more) is also greater than any year in the decade. At this rate, the total number of M&A could be twice the average in the last five years.
The IPO market remains relatively quiet. However, the recent quarterly earnings reports from Cloudflare, Snowflake, Microsoft and others demonstrate strength in the enterprise software market. Snowflake raised guidance for product revenue & Microsoft did as much for next quarter.
Combined with some hope of clarity in trade policy, perhaps the second half the year will shower more liquidity on startupland - a welcome reprieve to the parched conditions of the past few years.
These figures include both announced and closed. Sometimes announced acquisitions take 12 to 18 months to pass US, UK, & EU regulatory scrutiny. And so this is a bit forward looking of an analysis.
https://tomtunguz.com/2025-ma-informatica/
2025-05-29 01:11:26
I prompted Google's Veo3 : "a venture capitalist talking about a blog post "
Should I be worried?
2025-05-24 05:45:47
RT changhiskhan
If you love working on open source databases / storage formats / query engines: we need to scale @lancedb to a 1 Trillion rows in a single table. If that sounds like a fun challenge, DM me to chat.
2025-05-24 00:45:12
Only five months in, 2025 has been the year of stablecoins. A Fireblocks survey of banks conducted in May underscores how quickly the market is moving.
- 90% of respondents are taking action on stablecoins. 49% of them use stablecoin payments already. Only 10% are undecided on adoption.
- 58% of respondents use it primarily for an international money movement.
- 86% report infrastructure readiness with wallets and APIs or partnerships. 75% see clear demand from customers.
Why are so many banks and payment processors aggressively moving to adopt stables?
The answer is the same as every platform shift promises, a greater revenue opportunity. Stablecoins allow international expansion without the hassle and the cost of setting up bank accounts in different geographies.
Lower costs, faster settlement times, and recent government regulation have all catalyzed adoption.
Banks and payment processors can leverage this technology to compete in new markets with a differentiated offering. They are also less expensive because they eliminate middlemen (correspondent banks).
This slice of the population surveyed is likely a bit skewed towards early adopters, but the trend at this point is inexorable. With $250b in stablecoinsin circulation, I’m only $50b away from one of my 2025 predictions..
When the late majority adopts, we might see $1t of stablecoins & with it, an entirely new way of banking.
https://tomtunguz.com/250b-stablecoins/
2025-05-23 02:05:56
We’re looking for an investor to join our team.
We are seeking people who see alpha in ambiguity, who are passionate about crafting theories about the future & making them a reality.
The ideal person :
- enjoys researching themes & debating the future
- thrives working with founders to navigate the challenges of building companies in hypergrowth
- brings an accretive network to the firm
- values intellectual honesty & candor
If you’re interested, apply here : https://docs.google.com/forms/d/e/1FAIpQLSdNtJu7N_DSZgtcSrB-0vHaEKS0E_C0pfsUuUz3-zRJcaLVjA/viewform
