It turned out this was pretty popular among developers, but I have debated almost all of these points with other investors. I guess I'll also cop to "contrarian opinion" being the VC codeword for "pay attention to me." Sorry in advance.
In the spirit of strong opinions, weakly held... 👇
- You can’t “just build" a dev platform on top of your successful SaaS business. It’s a different customer and more importantly a different user.
- Developer Experience (DX) and Community/Developer Advocacy on the founding team probably more important than the second/third technical cofounder. Ditto Open Source community experience, for certain products and business models.
- Low code is infinitely more interesting than no code. The most popular programming language in the world is Excel. We are massively underestimating the number of people who can low-code in their area of expertise. The barriers to entry for coding are lowering every day.
- By the numbers, most developers live outside of Silicon Valley, and they work in all kinds of industries and typically on small teams at non-tech focused companies. SV engineers are great for PMF, but GitHub, MSFT, and CircleCI make their money on the rest.
- But Silicon Valley exports developer culture in the way LA does popular culture and NYC does (non-tech) business culture. 10 years ago, I’d never have predicted CI/CD, PaaS, cloud based source control, and agile methodologies would go mainstream.
- People underestimate the number of junior developers. The population of engineers by age is shaped like a pyramid, because of demand in the labor market. Implications to average experience/average current skill level, and to exponential growth of new tools. (Rust > Java.)
- There is a ~3M global developer deficit relative to industry demand. Even during a recession, and even after layoffs, companies will pay for developer tools that amplify productivity. Honestly, they don’t have a choice, because developers will use whatever they want anyway.
- Deep learning isn’t very popular for truly valuable business use cases. Much simpler models drive much more value. There’s an interesting bet that it will change, but it’s far, far from certain. That being said, deep learning is the coolest fucking thing I’ve ever seen in CS.
- Build v. Buy is pretty much always Buy for the vast majority of developers. This is not true at GAFA, but true at N, and most of the tech unicorns.
- Developer tools are not enterprise software. They’re not consumer software either. They’re a third thing that has elements of both. But the biggest developer tools companies have an initial go to market that looks like organic consumer growth more than enterprise sales motion.
- Accordingly, the best devtools investors will understand the developer user in the same way the best consumer investors understand consumer trends. I may be *slightly* biased, but... I think it helps to be a devtools user to understand developer experience.
- Open Source is not free labor. Building community is hard, sustained, work. It’s rarely ROI positive from a payroll perspective. But that’s not the point.
- Developer evangelists/advocates, technical writers, and Developer Experience (DX) designers may be the most critical early hires, and these are in even shorter supply than developers. These salaries will skyrocket, with good reason. Do not let these people go.
- It’s often hard to imagine the $1B business in even a popular developer tool. We should be more willing (myself included) to take a flyer on the consumer-style investment thesis: if the team is great and the tool is ubiquitous, a good revenue model will be discovered.
- But I really mean ubiquitous. GitHub is a multi-$B company at $7/mo/seat because literally everyone uses it. If you build a company with 5% of GitHub’s users (huge!,) can you build value worth $140/mo/developer? Some can. Look at Pivotal’s ACV when they filed independently.
A lot of developers Java, C++.
Important to understand developer customer segments. Too many VCs diligence call one and erroneously write off a product meant for the other.
- In general, tools like Heroku are the most often underestimated. Don’t forget the bottom of that triangle. The huge majority of developers really don’t want to configure kubernetes, and increasingly, they won’t have to.
- Silicon Valley, in the case of programmers, is a mindset as well as a place. Silicon Valley is still the best place for density of Silicon Valley culture, but there are plenty of Silicon Valley style developers elsewhere. Bet on remote developers.
- “Older” developers are underestimated. Experience is underrated. Many senior developers actually do keep up with trends, and leverage their experience in evaluating and building technology. Invest in “second career” founders. Especially if they are good at mentorship.
- The best technical skill is people skills. A developer of any background or experience level without empathy is not going to be a good founder. A highly empathetic founder who is a mediocre developer is far more likely to succeed.
- Bet on the trend of increasing diversity across all axes in programming. Access has never been better and awareness has never been higher. Silicon Valley leads the way, and the rest will follow.
- Will mostly stay out of the programmer wars, but if you care:
* tabs v spaces / IDEs / linter settings don’t matter and you should silence that debate if it enters your startup
* JS is great but the toolchain is shit and can’t be fixed (vector for disruption.)
* write tests
- What am I missing? Where am I wrong?
- One more. GPT-3 is melting the polar ice caps every time you ask Lawrence Fishburne to teach you about origami or build entry-level HTML with an English sentence, and nobody is talking about that.
(From my Tweetstorm.) Slightly edited here.