Roy Daniel

The SaaS ecosystem is unbundling, and we're witnessing the "verticalization of everything." In the coming years, expect several major AI-powered vertical SaaS companies to emerge. It's an exciting moment for startups. Here's what we mean: https://lnkd.in/d7vqpEcJ Two major challenges face horizontal SaaS today: • UX often lags far behind the consumer apps we use daily. • One-size-fits-all solutions don’t meet the unique needs of specific industries. Interestingly, this dynamic also applies to AI—vertical AI, trained with industry-specific data, consistently outperforms generalist AI. These factors are coalescing to create an "unbundling" opportunity in B2B SaaS. Years ago, the Craigslist "online classifieds" model was unbundled into industry-specific marketplaces like Airbnb and Etsy. Horizontal B2B SaaS players are about to face the same. Industry-specific platforms, powered by AI, will "super serve" their niches, and the market for these is far bigger than people realize. More on our vision in the essay below: 

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There are two interesting and relatively new/emerging revenue models in hardware space. (1) Software Enabled Hardware Hardware is sold at lower but slowly improving gross margins (eg 20-40%), and software recurring revenues layered on top. Software sells at higher margins, enabling blended margins to appear in 50%+ category. These are applied in situations where hardware is not expected to be replaced or greatly improved upon in deployment for a significant number of years to come. Consider your car, or military equipment, or even infrastructure equipment. As always, there are often multiple business/revenue models utilized by different players in the same industry. (2) Hardware As A Service Hardware and software are bundled and sold with annually recurring revenues. Often multi-year contracts are signed to be able to amortize hardware over time, and enable blended gross margins over the length of the contract to be high (approaching 60-75%). This is more common in situations where vendor takes responsibility to upgrade hardware as needed along the way to provide maximum and highest functionality to the customer. Hardware inventory costs are, over time, passed on to suppliers or third party financing parties in lieu of few gross margin points. Consider robots as a service in factories (ala Formic), or AI-enabled equipment (eg Evolv, Lumafield etc). Hardware innovation will require deeper investigation, experimentation, and understanding of business/revenue models to fit customer needs as well as to maximize value for the innovating company. Strong and experienced management teams work hard to minimize sales friction, inventory costs etc, but also maximize gross margins, customer stickiness, and ability to upsell during the life of a contract.

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Just over a year ago, Imran Mahmud, MD introduced to me what was then called, Co:Helm. I was taken by the backgrounds and stories of Abdel Mahmoud, MD, Zahid Mahmood & Tahseen Omar and moreso their grit and determination to forge ahead with their mission of reducing the cost of healthcare. They soon got into the Sequoia Arc program with the backing of another friend, George Robson. And have been staying low and building ever since. Inbetween rebrandng to Anterior (formerly Co:Helm). And even more recently announced a new round to add more fuel. https://lnkd.in/e3V4qrRz Happy to be a supporter alongside Annelie Ajami, Dorothy Chou, Adil Mohammed, Andy Young, Caroline Mogford, Christian Arno, Felix Leuschner, Freddy Kelly, Leonard Picardo, Mandeep Singh, Michael Steel, Omid Ashtari, Noor Shaker, Sultan Murad Saidov, Yuelin Li and others in the ecosystem... [Anterior is giving clinicians a second set of hands—and fixing one of the biggest pain points for patients. It is a LLM-powered co-pilot for administration, handling all the work that comes before the clinical decision-making. Where it might take a nurse several hours to track down, organize and summarize hundreds of pages of records they need, Anterior can do it in seconds, allowing clinicians to increase their output tenfold and focus on what matters most: helping patients.] #healthcare

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This old post from Ben Horowitz highlights a common struggle among entrepreneurs – expecting the team to perform seamlessly without investing in training. People are not plug-and-play; they bring diverse backgrounds and perspectives. You gotta spend time training and educating on your business, the way you want to talk to customers, and the right experience you want for them. Training is a powerful tool and needs to be done regularly! https://lnkd.in/ekv8c6WD #Entrepreneurship #Training #BusinessSuccess

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Comprehensive #Seed VC Contact Database. Access a list of over 1,250 venture capital firms, 7,400+ VC professionals (including partners and principals), and 6,400 email addresses. https://payhip.com/b/cs7UQ #startup #startups #vc #venturecapital #investmentbanking #privateequity #managementconsulting #b2b #founders #entrepreneurs

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After working with over 200 employees, 10 joint-ventures and 5 exits, here’s my simple framework to set-up any collaboration for success: 1. Why: Clarify the reason why we’re working together. What is the project? And why are we doing it? 2. Value: What is each party contributing to the project? What are each party’s responsibilities? 3. Success: Clarify how success looks like in 3, 6, 12, 24, 48 months from now for the overall project and how we measure success of each party involved. I like the traffic light system (green for great, yellow for ok, and red for bad outcomes) 4. Compensation: How is each party winning based on the project and our contribution? 5. Termination: Agree ahead of time how lack of success looks like in each scenario (green we’re all happy, yellow we explore / analyse how to get to green, red we stop) and how it works when we stop working together. These are not exchaustive but just a list with the essentials in my opinion. This works in a lot of different types of relationships, could be an employee, a contractor, or even other partnerships and even M&A contexts. Wondering about the key elements you’ve seen are important to set-up any collaboration for success?

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🚀 There's a lot of publicity around Ilya Sutskever, former chief scientist at OpenAI, launching Safe Superintelligence alongside Daniel Levy and Daniel Gross. This new startup is laser-focused on creating safe superintelligent systems, emphasising safety and groundbreaking engineering. With a singular mission, they aim to revolutionise AI while keeping safety at the forefront. 🌟🔒 It will be interesting to see this develop as more information becomes available, but the securitisation of AI is such a topical conversation and cause of some problems . What are your thoughts on the future of safe superintelligent AI? #AI #Superintelligence #TechInnovation #FutureTech #SafeAI #Innovation #ArtificialIntelligence

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One of the biggest challenges for improving performance on Meta is teams beeing held accountable for daily (and sometimes hourly) results. This isn't enough time to try new strategies or products. So by optimizing towards a daily ROAS goal in the short term, might hurt performance in the long run as you could be missing out on new solutions.

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Attention New Zealand founders! 🇳🇿 Chris Tottman shares a brilliant takeaway from Vinod Khosla on building hugely impactful companies. 🚀 Dream big. 🔍 Plan small. 💪 Execute relentlessly. Where do you think NZ founders could use the most support? Is it Vision, Planning, or Execution? Drop your thoughts below! 👇 #NZFounders #StartupGrowth #AmbitiousGoals

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At Forum we look at thousands of deals each year across our Accelerator and Pre-Seed funds but only end up investing in a little over 1% of those startups.  As an early stage VC, I am in the business of saying no to nearly every startup I meet, and while there is nuanced rationale for many of the startups I pass on, a vast majority of businesses that don’t meet the qualification to get funded typically fall into one of two buckets. ▪ First time founders have a tendency to go out to market too early to raise pre-seed capital ▪   I’m sure most founders have heard some iteration of this from VCs that ultimately pass on their business.  In some cases it's a blanket excuse covering up for other pass reasons- perhaps a VC doesn’t believe in a team or isn’t bullish on the market opportunity - but in many cases founders simply haven't proven enough to the market to warrant an investment. I meet many teams with an articulate vision for the product that they want to build, but they either haven't performed enough customer discovery to prove demand for their initial wedge product, or need to raise pre-seed capital to build out an MVP.  In those cases, pre-seed investors are unwilling to underwrite those risks.  To be default fundable, teams need to be able to keep costs low, perform extensive customer discovery, and ship some version of an early product - pilots and early paid customers are key. A huge piece of this is having founding engineering talent on the team. ▪Not every startup is a venture opportunity ▪ By definition, a venture backed business is solving a problem within a market opportunity so massive and so desperately needed, that its growth rate is off the charts.   It spreads like a weed, absorbing almost unlimited amounts of capital to fulfill demand within its customer base.   Each year there are maybe 20 companies launched that ultimately have venture scale outcomes. The bar to reach this rarified air is unfathomably high and the reality is the vast majority of founders simply aren’t building for opportunities that have the potential to be one of these generational companies. Many startup founders view VC as the only viable option for capitalizing their business, but not every great business is a venture business, and most successful founders never take VC dollars.  In order to reach an IPO/acquisition large enough to generate venture returns, a startup needs a credible path to $100s of millions in revenue. This is the standard by which early stage opportunities are evaluated. The flip side to this, and I share this feedback often with founders I meet that are building interesting business in non venture markets, if you are able to scale to $10- $20M in revenue that can be a massively successful outcome for a founder.  There are investors who focus on these type outcomes, namely lower middle market PE shops, and the typical path to those deals is a bootstrapped business or a friends/family capital raise.

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Venture Capital Contact Compilation. Explore a detailed list of 1,250+ VC firms, 7,400+ professionals in the VC space (including partners and principals), and 6,400 email contacts. https://payhip.com/b/cs7UQ #startup #startups #vc #venturecapital #investmentbanking #privateequity #managementconsulting #b2b #founders #entrepreneurs

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Similarweb acquires 42Matters- an app intelligence data company. Smart acquisition and I would expect Similarweb to use their public stock to acquire aggressively. Lots of data and data technology would make sense as part of their company. 42matters' expertise in app store, engagement, and mobile SDK data promises to deliver more in-depth insights into app performance and user engagement. The integration of these advanced solutions is expected to benefit app owners by providing a clearer view of their apps' positioning against competitors and user interaction. The 42matters' dataset includes information from 12 app store platforms, over 2.1 million publishers, more than 2,600 SDKs, and upwards of 20 million apps. The combination of these two companies should benefit from the Similarweb distribution.

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Imagine you’re meeting a VC today and pitching your company. Now, also imagine the VC goes home tonight and tells his or her spouse about the meeting with you. How do you think the VC would (or should) describe your product to the spouse? Remember, this is for someone who doesn’t have any context, and probably doesn’t have time to listen the whole story. If you can think of a story version that's plain and simple -- how you want the VC to describe your product to the spouse -- perhaps that version should be your pitch in the first place?

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The Data-Driven VC Landscape report just named my teammate of 10 years Yuriy Groysman‎ a top 20 thought leader, and SignalFire‎ a top 20 VC firm. People said we were crazy for trying to build an AI-powered venture firm a decade ago, but Yuriy's pioneering work has unlocked new approaches to sourcing investments and supporting portfolio companies. https://lnkd.in/gKJZMjEV Some fascinating ways we're applying data to VC: -Integrating LLMs to summarize the products of potential investments and automatically route them to the right partner on our team -Generating email lists of qualified sales leads for our portfolio companies based on their ideal customer profile -Producing data-powered content like our recent State Of Talent Report on the movement of tech employees which was covered by The Wall Street Journal‎, Axios‎, Forbes‎, and more https://lnkd.in/gmJuFpGt Congrats to Yuriy and our whole product team led by Heath Black‎. SignalFire's CEO Chris Farmer‎ and I (also named to the list, but rightfully much lower than Yuriy) are excited to keep building our own tech to make support for founders scalable.

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As the world steams ahead towards AGI, Petr Baudis CTO of Rossum prepares founders / entrepreneurs in the SaaS world for how to maintain a defensive moat. Hope you check out his thoughtful piece below.

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Can probabilistic models, like LLMs and Nate Silver's election forecast model, ever truly be perfect, with no errors? According to Nate Silver: "We don’t talk about it much, but there’s a small amount of error introduced into the model because it’s probabilistic rather than deterministic. The margin of error on 40,000 simulations is about ± 0.5 points of win probability for either candidate; after 80,000, it declines, but only to ± 0.35." Sounds like a familiar refrain around Infactory as we discuss the limitations of LLMs... P.S. Vote!

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We have a packed house and waiting list for this Tuesday’s in person GTM roundtable in San Francisco. We are also thinking about having a seed, series A & B startup GTM session later this month on Zoom for those who live in other areas of the country or world. Please let me know your thoughts. #sales #gtm #ai #genai #startups #founders Rey Advising

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