Matt Turck

Software Daily (aka Software Engineering Daily) has been on my podcast rotation for a while, so it was fun to get a chance to be a part of it – thanks to Jocelyn Houle who moonlights as podcast host on top of her day job at Securiti. While this was done in connection with the publication of the MAD 2023, we ended up talking a lot of about venture capital and entrepreneurship in general, including some personal stories.

The video is below, and here’s the audio-only podcast: Apple, Spotify.

One of the cool parts of publishing the MAD landscape every year is the conversations that come with it. Here’s a fun chat I did recently with Joe Reis and Matthew Housley, co-founders of data consulting company Ternary Data and co-authors of the O’Reilly book, Fundamentals of Data Engineering (see their recent talk at Data Driven NYC). We covered a lot of things, check it out!

It has been less than 18 months since we published our last MAD landscape, and it has been full of drama.

When we left, the data world was booming in the wake of the gigantic Snowflake IPO, with a whole ecosystem of startups organizing around it. 

Since then, of course, public markets crashed, a recessionary economy appeared and VC funding dried up. A whole generation of data/AI startups has had to adapt to a new reality.

Meanwhile, the last few months saw the unmistakable, exponential acceleration of Generative AI, with arguably the formation of a new mini-bubble. Beyond technological progress, it feels that AI has gone mainstream, with a broad group of non-technical people around the world now getting to experience its power firsthand.

The rise of data, ML and AI is one of the most fundamental trends in our generation. Its importance goes well beyond the purely technical, with a deep impact on society, politics, geopolitics and ethics.

“It’s been crazy out there. Venture capital has been deployed at unprecedented pace, surging 157% year-on-year globally […]. Ever higher valuations led to the creation of 136 newly-minted unicorns […] and the IPO window has been wide open, with public financings up +687%”

Well, that was…last year. Or more precisely, 15 months ago, in the MAD 2021 post, written pretty much at the top of the market, in September 2021.

Since then, of course, the long-anticipated market downturn did occur, driven by geopolitical shocks and rising inflation. Central banks started increasing interest rates, which sucked the air out of an entire world of over-inflated assets, from speculative crypto to tech stocks. Public markets tanked, the IPO window shut down, and bit by bit, the malaise trickled down to private markets – first at the growth stage, then progressively to the venture and seed markets.

We’ll talk about this new 2023 reality in the following order:

(note: this is part III of the 2023 MAD Landscape. The landscape PDF is here, and the interactive version is here)

In the hyper-frothy environment of 2019-2021, the world of data infrastructure (nee Big Data) was one of the hottest areas for both founders and VCs.

It was dizzying and fun at the same time, and perhaps a little weird to see so much market enthusiasm for products and companies that are ultimately very technical in nature.

Regardless, as the market has cooled down, that moment is over. While good companies will continue to be created in any market cycle, and “hot” market segments will continue to pop up, the bar has certainly escalated dramatically in terms of differentiation and quality for any new data infrastructure startup to get real interest from potential customers and investors.

Here is our take on some of the key trends in the data infra market in 2023.

(note: this is part IV of the 2023 MAD Landscape. The landscape PDF is here, and the interactive version is here)

The excitement! The drama! The action!

Everybody is talking breathlessly about AI all of a sudden. OpenAI gets a $10B investment. Google is in Code Red. Sergey is coding again. Bill Gates says what’s been happening in AI in the last 12 months is “every bit as important as the PC or the internet” (here). Brand new startups are popping up (20 Generative AI companies just in the Winter ’23 YC batch). VCs are back to chasing pre-revenue startups at billions of valuation.

So what does it all mean? Is this one of those breakthrough moments that only happen every few decades? Or just the logical continuation of work that has been happening for many years? Are we in the early days of a true exponential acceleration? Or in the early days of a hype cycle and mini financing bubble, as many in tech are desperate for the next big platform shift, after social and mobile, and the crypto headfake?

The answer to all those questions is… yes.