View profile

The DL - Three Things I’m Investing In, Apple Wins the $2T Race, COVID Funding Stats, and Tech CEOs' Hottest New Investment

Revue
 
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
 
August 24 · Issue #62 · View online
The DL
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.

This week’s issue explores three areas where I am looking for new investments, a recap of the (very short) race to a $2T market cap, a look at startup funding during COVID, and how tech CEOs are investing in themselves.

👋 Referred by a friend? Sign up here.

Things I'm investing in
In case you’re wondering what themes I’m most interested in right now, here are three areas where I’m excited to find and fund new startups:
  • Low code platforms - This is a huge (buzzy) category, but many successful companies in this space start with solving one problem well and expanding from there. One area of opportunity is improving “interfaces” between teams by building solutions to reduce back and forth communication cycles. For example, Dyspatch allows marketers to build dynamic emails without having developers write code, and Streamlit allows data scientists to turn their python notebooks into web apps without additional developer time.

  • “Multiplayer” productivity - Legacy productivity apps like Word and Excel are “single-player,” but next gen apps like Coda and Smartsheet are built for “multiplayer” collaboration. Beyond documents, companies like Front and Figma have also built collaborative versions of apps like Outlook and Photoshop. The ability to collaborate in real-time creates enormous value for customers, and as we’ve seen with G Suite and Office, users are willing to trade off functionality in order to have better collaboration. Over time, there will be a “multiplayer” version of every productivity app, and this is a major area of opportunity.

  • Communities - Communities are valuable. Just look at Microsoft’s last three $1B+ acquisitions: Minecraft, LinkedIn, and Github (and maybe TikTok!). As products become cheaper and easier to launch, it’s harder and harder to build something that can’t be copied, so communities of customers and partners are an important moat for both consumer and enterprise companies. Whether companies start with a product and build a community (like Slack) or start with the community and define a product (like many open source projects), this is an area where there will be many exciting investment opportunities.

If you (or someone you know) are interested in starting or joining a company in any of these areas, hit me up!

🏇 Honestly not a very close race
Back in July, I asked readers which company would hit $2T first, and 90%+ of you said Amazon or Microsoft. Well, looks like we were wrong because Apple was the first company to cross the $2T mark last Wednesday.

The craziest part of this milestone is it took Apple 42 years to reach its first $1T in value, but it went from $1T to $2T in 22 weeks! (If you look closely at the graph, you can see the red line dips down to ~$980B in March). And this in the midst of the COVID pandemic and an antitrust investigation!

So are we still betting on Amazon for first company to reach $10T? Or is it going to Apple instead? At this pace of $1T every 22 weeks, they should get there in like 3 years.

Back to growth mode?
April data vs. August data
April data vs. August data
When the pandemic first hit in March, many startups and VCs were ready for “The End.” However, over the last five months, not only have companies like Apple hit new highs, startups like Brex and Airbnb are seeing more spend and more bookings than last year.

In this NY Times article from last week, one investor described the resurgence in startup activity as:
“People made enough bread and grew enough gardens and decided to start working on a start-up"

Anecdotally, we’ve been really busy with new investments at Madrona, but there does seem to be a slowdown at the earliest stages for seed/pre-seed rounds. Hopefully, we see that pick up later this year as well.

Other stuff Dan's talking about
💖 Zillow for dating - Lol. @TaylorLorenz is my favorite writer on Gen Z internet culture. Here’s her Twitter thread with some TikTok videos on how people “use” Zillow for dating
🏋️ Speakeasy gyms - “Welcome to the COVID-19 Prohibition era, when gym rats have gone underground.” Fun NPR investigation on the economics and effects of prohibition on prices and quality of goods
😡 So cheap it’s illegal - While Epic is mad at Apple for their 30% App Store cut, Sonos is mad at Amazon for selling Echos below cost. Seriously though, an Echo with a 5" screen is cheaper than a Macbook adapter (w/o the cable!)
💁‍♂️ “One of the best investments” - Because of tech’s obsession with youth, SF/NY plastic surgeons say their male clientele is 95% CEOs looking for an edge in the board room. Apparently, clients want the Elon Musk look 🤔

Please hit reply! (Or subscribe or forward!)
About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.
If you have thoughts, questions, or comments, hit reply! If you’re new, check out some of the DL’s top articles from the last few months:

🔥 Want to subscribe? Sign up here!
Did you enjoy this issue?
If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue
Seattle, WA