Cybersecurity Firm Tanium Receives $90M Investment

Today we’re thrilled to be able to talk about our newest investment,Tanium. We’re investing $90M. The first venture capital investment since it was co-founded in 2007. Collectively, partners at have maybe 200 years of experience in systems management; Tanium is a breakthrough like we’ve never seen. Tanium –> people responsible for large networks of computers and software, what Google –> people on the Internet. I don’t say that lightly.

The company is operating under the radar, but its customers could not be more enthusiastic. The product must be seen to be believed. It’s amazing. Tanium is a real-time query *and* control–100s of Ks of computers and virtual machines with natural language queries.

We are thrilled to be working with genius founders David and Orion Hindawi and their colleagues. Masters of the art and science of computing. More info: or email info@tanium.com

[tweet https://twitter.com/utekkare/status/480849907251548163 align=”center”] [tweet https://twitter.com/PeterVOrtho/status/480850167298809856 align=”center”] [tweet https://twitter.com/utekkare/status/480849907251548163 align=”center”]

Source Tweets: 1,2,3,4,5,6,7

Karl Marx and The Lumpenproletariat

The thing I find most interesting about Marx is how much he hated the poor and dispossessed. Lumpenproletariat: “Layer of working class lost to useful production, of no use to the struggle, an impediment to the classless society.” “Translated as slum workers or the mob. A class of outcast, degenerated, and submerged elements within a population of industrial centers.” “Beggars, prostitutes, gangsters, racketeers, swindlers, petty criminals, tramps, chronic unemployed or unemployables.” “Declassed, degraded or degenerated elements…innumerable young people also, who cannot find an opportunity to [become] producers.”

“Alongside decayed roués w/dubious means of subsistence and dubious origin, alongside ruined and adventurous offshoots of the bourgeoisie.” “Vagabonds, discharged soldiers, discharged jailbirds, escaped slaves, swindlers, mountebanks, pickpockets, tricksters, gamblers.” Maquereaux [pimps], brothel keepers, porters, literati, organ grinders, ragpickers, knife grinders, tinkers, beggars.”

“In short, the whole indefinite, disintegrated mass, thrown hither and thither.” The man did have a way with words.

References: Lumpenproletariat, MIA: Encyclopedia of Marxism: Glossary of Terms, The Eighteenth Brumaire of Louis Bonaparte

[tweet https://twitter.com/SvenPries/status/480086864448454657 align=”center”] [tweet https://twitter.com/adamgurri/status/480087481657085952 align=”center”] [tweet https://twitter.com/jaykreps/status/480088330097274880 align=”center”]

Source Tweets: 1,2,3,4,5,6,7,8,9,10

How We Learn Is Changing Rapidly

A personal meditation on how we learn, and how we learn is changing radically for the better due to new technology.

1989: I go to college and want to learn about how “real” computers work–VMS and Unix–the foundation of all of today’s phones/tablets/PCs/servers.

Only way: Get a job at a computer lab that owned such a computer; get access to the literal wall of paper manuals. Read those cover to cover; then what? Scientific/technical journals. Only with access to the research university library.

1990: Co-op job at IBM where I discovered a mainframe (!) search engine of science/tech journals; in 3 days, I had printed copies via office mail!

This posed a major dilemma: How many papers could the intern request before Big Blue would fire his ***? Tested it into the hundreds. All other relevant info was on the Internet–IETF RFC’s, free software code–but who had access to the Internet in 1990? Not many.

25 years later: Every smartphone is the equivalent of a million-$ Unix supercomputer from that time, plus *all* that info is freely available online. Science/tech journals are still not completely free, but even those walls are falling fast now due to Google Scholar/PDF searches/policy reform.

Regarding journals: The Aaron Swartz documentary is out. It’s a powerful memory of freedom of an information hero and warrior for progress.

The Internet’s Own Boy – Trailer from FilmBuff on Vimeo.

Why does this matter? Information is the foundation of progress; info about computers is the basis of key tools for progress as software eats the world. Means of production being put in hands of the masses for the first time in human history. I’m a broken record on this, but: profound change.

[tweet https://twitter.com/i_sidh/status/480068314698219521 align=”center”] [tweet https://twitter.com/lloydoftheflies/status/480070520528830464 align=”center”] [tweet https://twitter.com/smalljones/status/480063976349655041 align=”center”] [tweet https://twitter.com/bgrffn/status/480064547366379520 align=”center”]

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12

Google Launches Made With Code Initiative

I am super-proud of my friends at Google and their new push to help get more girls into coding: “The things you love are #MadewithCode“! From : “Fewer than one percent of high school girls express interest in majoring in computer science….hits home for me.” Along with several partners, Google is launching Made with Code, an initiative to inspire girls to code.” Including a “commitment of $50 million to support programs that can help get more females into computer science.”

“Nowadays, coding isn’t just a skill useful for working at a tech company; engineering isn’t just for engineers.” “No matter what a girl dreams of doing, learning how to code will help her get there. Their future — our future — is made with code.”

[tweet https://twitter.com/anandc/status/479842450672848896 align=”center”] [tweet https://twitter.com/Bitcoinwoman/status/479842859366252545 align=”center”] [tweet https://twitter.com/Bitcoinwoman/status/479843500637167616 align=”center”]

Source Tweets: 1,2,3,4,5,6

How Our Virtual and Physical Worlds Improve One Another

Proposed: Unless you’re with your kids, what’s on screen in your hand is likely more interesting and important than what’s around you. Sounds extreme, yet how could it not be true most of the time? The screen in your hand contains the entire world vs immediate locality.

This is personal for me: I grew up in very small rural town; Kids in rural towns today grow up way more connected to the world than I did. People around you not interested in same things? No problem, the screen in your hand connects you to like-minded people everywhere. People around you can’t teach you the things you want to know? No problem, the screen in your hand gives you all the information you want. The place where you live doesn’t have economic opportunity for you? The screen in your hand gives you access to global opportunities, markets.

Bastiat’s “seed and unseen”: What we see are people staring at their phones. What we don’t see are their interactions with the world. And then it comes back around: Our online virtual world enhances and improves our local physical world and our friends and family in it.

Recommend reading David Gerlenter’s “Mirror Worlds“, on how our virtual and physical worlds improve one another:

Source: Tweets – 1,2,3,4,5,6,7,8,9

Responses:

Intellectual Generosity In Silicon Valley

One of the special things about our industry is how intellectually generous many of the leading participants are (no, I don’t mean me.) When I arrived in Silicon Valley in Jan 1994, I sought out all of the written material I could on startups and venture capital. I found exactly two books. An excellent but dry financial analysis of startup returns, and an excellent but dated book by Gordon Bell. So then I looked for magazines, and found exactly one: Red Herring. Which for several years was the best magazine about startups.

Red Herring Magazine Cover

Red Herring Magazine Cover

But, in 1994, Red Herring was ~8 (?) memographed pages, cost $12 (?), published every 2 months (?), and available at only a few newsstands. That was it. I knew there was more material at Stanford and Harvard business schools but I couldn’t get to it. There was nothing else. Today, 20 years later, the difference is *profound*. Many of the leading theorists and practitioners share *huge* amounts of info for free. That’s a big difference in Silicon Valley, but what I hear every day from people all over the world is what a big difference it’s making everywhere else.

A 14-year-old kid in Indonesia w/smartphone has access to 10,000x more info on tech and startups today than I did in Palo Alto 20 years ago and the cycle is closing: there is startlingly profound new thinking happening all over the world and coming right back to Silicon Valley. In our industry, it’s hard to underestimate the consequences of a positive feedback loop and this is a positive feedback loop.

Assumption *must* be: Tech entrepreneurship all over the world is going to expand a thousand fold in the next 20 years. How could it not?

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12

One-Bit Communication

YoLogoLots of mirth over “Yo” today but actually there’s a fascinating aspect lots of people are missing. Yo is an instance of “one-bit communication”, a message with no content other than the fact that it exists. Yes or no. Yo or no yo. Other instances of one-bit communication are: Police siren, flashing stop light, “Open” sign, light turned on, and taxicab roof indicator light. But the most interesting instance of one-bit communication is the global “missed call” phenomenon.

Missed call on a mobile phone is used as one-bit communication: “Used in South Asia/Philippines/Africa to communicate pre-agreed messages for free.” Aided by the fact that missed calls cost nothing to send/receive. “In Bangladesh, missed calls are 70% of mobile traffic at any given time.” So the hilarity around Yo includes two problematic biases: Bias that one-bit communication isn’t useful, and bias that all markets are like the US.

I’m not saying Yo will be the next $100B social media powerhouse. But instant dismissal makes little sense; let’s learn and keep our minds open. Excellent followup reading: Jeremy Wagstaff on missed calls.

Source Tweets: 1,2,3,4,5,6,7,8,9

As Software Eats The World

Tech people like me can sometimes come across as presumptuous/arrogant regarding the disruption of other peoples’ industries. It is possible this is an understatement. I am sure that some of my Twitter friends will expand on this for me.

From this side of the aisle, though, it’s less smugness, It’s more the result of hard experience and learning from our own lives and careers. In tech, our *own* businesses are disrupted by technology changes and new competitive entrants at whiplash-inducing rates. It’s shocking how quickly you can go from the hot disruptive upstart to the stodgy disrupted incumbent in tech frequently within 5 years.

I’ve probably been on the receiving end of disruption 30 times in the last 20 years, almost as many times as I’ve been on the giving end. Now, on the one hand, you might say, “How can people live like that? What’s wrong with a little stability?” But, what we see is: Frequent disruption is the handmaiden of rapid progress and it’s a blast to create and work amid rapid progress.

It’s not just the rapid progress of tech. It’s also the rapid growth of companies, and even better, rapid development of *people* and their talents. It’s hard to stay in tech for any period of time and not get good at rapid adaptation, skill acquisition, and new product creation. As software eats the world, the same disruption dynamics always present in tech are now applying to many more industries, fields, and professions. Rather than superiority/contempt, what a lot of us feel is deep sympathy/understanding, even if that’s not always how it comes across! Now we all have the opportunity to learn together, to make many parts of industry/life more innovative/dynamic, which is better for everyone.

[tweet https://twitter.com/mattkanessurbn/status/479301127809155072  align=”center”] [tweet https://twitter.com/SteveKoss/status/479301853323071489  align=”center”] [tweet https://twitter.com/GallowayHeather/status/479302083909545984  align=”center”] [tweet https://twitter.com/NelsonMRosario/status/479303481627770880  align=”center”] [tweet https://twitter.com/pmarca/status/479304862526492672  align=”center”] [tweet https://twitter.com/pmarca/status/479305325086904320  align=”center”] [tweet https://twitter.com/pmarca/status/479307770601017344  align=”center”]

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12,13

Questioning Christensen’s Theory Of Disruption

A fascinating question around Christensen’s theory of disruption: “OK, smart guy, why haven’t Apple iPhone/iPad been disrupted by Android?” I count five possible answers, there may be more.

  1. The theory of disruption is hucksterish management consultant fraud. (This one I do not agree with.)
  2. Right now Apple *is* the disruptor–iPhones/iPads vs Windows PCs. Many are surprised by the rapid rise of direct substitution, including me.
  3. Apple *is* getting disrupted right now: Android phones are outselling iPhones somewhere between 5:1 and 10:1 worldwide right now.
  4. Apple isn’t getting disrupted *yet*, but will be soon. This is what many in Silicon Valley believe, but Apple does not.
  5. The most interesting one: The current theory of disruption is incomplete and does not have a broad enough concept of end-user quality.

In this line of argument, disruption theory was born in the Microsoft/Intel era, when everyone expected computers to have, um, certain issues. Apple brilliantly redefined the conception of what was possible from an end-user quality and integration standpoint, against prevailing assumptions. We have attempted to generalize *this* concept into “full stack” thinking, which many of today’s best startups are also pursuing. It’s possible disruption theory needs to be evolved to accommodate these newer patterns and knowledge. But it’s also possible all such “full stack” patterns are just integrated approaches that themselves will be disrupted in the future.

Time will tell. In Silicon Valley, these topics are central and being debated both in actions and words by ultra-smart people every day.

References: Full Stack Startups, Disruptive Innovation

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12,13,14

A Few Thoughts On Timing and Staging Of Capital Into Modern Tech Startups

A few thoughts on timing and staging of capital into modern tech startups. Start with the fact that 2003-20011 seed rounds were ~$500K-1M. As points out, now you see more startups raising $2-3-4M or even more in “seed” financing, often in multiple tranches. So then, think about the startup that’s raised $3-4M or even $5-6M in “seed” funding that goes to raise a “Series A” from VC firms.

Venture capitalist looks back across the table: “You’re not raising a Series A, you’re raising a Series B. You already raised your Series A [in seed $]”. This can take the startup by surprise, because it really affects how VCs think about progress and milestones, is key to raising new round. VC’s assume Series A is to build, product and get first beta customers; Series B is to build the business around the product and get to revenue.

So a startup that raised as much cash as a Series A in seed funds, but hasn’t achieved actual Series A milestones, can be in real trouble. VC says: “You said you’re raising A but you’re actually raising B, and you haven’t accomplished enough to merit a B. Thank you, but pass.” So the risk of calling $3-4-5-6M “seed” raises “seed” is that the founder can fool himself/herself heading into the first real VC raise.

The rise of the “New Series A” by firms like A Capital is intended to address this issue head on. In effect, a $3-5M seed round or a $3-5M “New Series A” is a recreation of the original conception of an A round from historical VC. Takeaway for founders? Think very hard about timing and staging of capital versus progress and milestones. This matters a lot for raising A/B/C.

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12