Capital Chronicles #30

Hello there! Welcome to Capital Chronicles, saving you hours every week with ~2-3 minute summarised insights from the best venture builders, investors and capital allocators out there.

As subscriber #TBD, read on for the latest…

🛠️ On venture building…

Execute a GTM strategy in stages to get to GTM fit (Growth Unhinged): a successful GTM strategy progresses through three core milestones: Problem-Solution Fit, Product-Market Fit, and Go-to-Market Fit. Reaching GTM fit requires: (1) getting initial traction with an Early Customer Profile (ECP) before targeting the Ideal Customer Profile (ICP); (2) Developing differentiated positioning by emphasising Unique Value Propositions (UVP) and Unique Selling Propositions (USP); (3) Identifying 2-3 effective GTM ‘motions’ that are predictable and scalable.

Get to GTM fit by targeting Early Customer Profiles, crafting compelling value propositions, and establishing 2-3 reliable go-to-market motions.

🧭 On venture investing…

Generative AI is changing the power dynamics of data gravity in enterprise software (Tidemark): systems of record traditionally benefited from data gravity, giving them a strong competitive advantage. However, AI's ability to integrate and harmonize data from various sources is weakening this advantage. AI is powering an "Operational Data Layer" which can make data more accessible and actionable across different systems. This shift has significant implications for both incumbent software providers and challengers in the market.

Create a compounding data advantage with AI by going after the operational data layer and help customers consolidate multiple data pools.

📖 Learning resource…

Different stages of VC (seed, early-stage, late-stage) present unique challenges and opportunities for venture capital indexing (SignalRank): Y Combinator and its affiliated funds represent a form of "beta" for high-quality seed VC investments, but early-stage (Series B) investing may be the earliest point where a "true" index strategy can be deployed in VC. Late-stage/pre-IPO indices face challenges in delivering top-tier VC returns due to most value accruing at earlier stages and post-IPO performance risks.

Learn how an indexing strategy generates mean returns for investors by accessing some of the best investments at scale.

📊 Market insight…

AI unleashes $4 trillion in market value (Battery Ventures): While cloud providers are aggressively expanding AI infrastructure to capture $2T in new revenue by 2030, enterprise adoption lags expectations with a 42% deployment gap and challenging sales environments despite stable revenue multiples (~7.5x). AI is driving fundamental business model shifts from traditional software to 'services-as-software,' with private markets maintaining a 3x valuation premium over public peers and the 'hundred billion dollar club' doubling to $16T post-ChatGPT.

Gain insight into the AI and cloud markets from Battery Ventures’ comprehensive analysis.

🎲Lucky dip essential reads…

• Paralysis by analysis and the power of big insights

• The number #1 reason why sales reps fail

• A guide to selling your company

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Have a great week!

Josh