When an unstoppable force meets an immovable object
What’s up with our pipeline?
That was a question raised in our office last week, as we turned over 28 days since the release of our platform into the wild.
Thankfully, it wasn’t a question because of the size of the pipeline. What it actually was, was a question about the substantial shift we’ve seen between pre-launch and post-launch in the makeup of our pipeline.
A month ago, 90% of our pipeline consisted of large enterprises. We’d done a substantial amount of work over the last six months with very large companies, and we had some really good opportunities. Only 10% were more software startup-ish companies — I’ve posted previously about the work we’re doing with Ubco, for instance.
Now, a month after launch, it’s completely inverted. 90% of our pipeline is software startups, and only 10% of it is enterprises. And when we look at booked revenue — it’s 100% in the last month.
So that was the question, what’s up with the pipeline? And I thought it was worthy of a post because I think there’s something really interesting happening in the software space — as virtually every startup pursues an AI/ML strategy in some way, shape, or form.
When an unstoppable force meets an immovable object.
A.k.a., when a well-funded startup hits the Venn diagram of the 3T’s of AI — talent, tooling, and techniques.
It’s no secret to any product owner reading this that the post-fundraising period of a startup is unique. All of the focus on getting the round done shifts overnight to delivering on the plan and demonstrating traction towards the goals.
There’s no other time like it. And for product owners, there’s a real mix of excitement, combined with a good dose of fear and anxiety about building out the roadmap and achieving the outcomes.
The freight train
The analogy I draw here is a freight train. You’re really loaded up now. You’ve sold the vision and got funded to achieve it. That momentum that is driving you forward is unstoppable. You just have to achieve — you’re the freight train.
There wouldn’t be a single software startup that doesn’t have the adoption of AI/ML in their product roadmap somewhere, whether it is looking to drive up user engagement with more value-added features or improve back-end scalability and performance. That’s the rails — taking you to the promised land.
The immovable object
The immovable object is something we’re calling the three T’s of the AI reality. The three obstacles that every organisation has to deal with on their journey — talent, tooling, and techniques.
The train wreck
What happens when a freight train hits an immovable object? Yeah… ouch.
We’ve been talking about these as obstacles for the last couple of years, so they’re not new. What’s changed is their size and significance. What were mere obstacles a couple of years ago are now major impediments to you achieving your strategy. Hence the immovable language.
Talent — there is a supply and demand mismatch globally for practitioners with the right skills and experience in this space. Salaries are up 25% in the last 12 months. So the assumption you can hire and keep the right talent to achieve your goals might not be valid.
Tooling — as there has been an explosion in the number of tools, there has also been an increased “gravitational pull” to the mega-vendors as they wield more and more power. As a result, making the right decisions on your tech stack and preventing inadvertent lock-in with the wrong vendors by avoiding vocal team members’ “religious biases” is a constant challenge.
Techniques — this is a new space. There has been a tremendous amount of process evolution taking place. Processes built for the “batch” world of business decisions don’t port to a “real-time at scale” world. How do you become aware of — let alone build — the contemporary best practice in this space?
So given all of this — what’s changed? Why are these high-growth, well-funded startups voting with their feet and beginning to seek out a different way?
Based on the conversations we’ve been having, there are three key reasons.
- Increasing maturity is driving more pragmatism. There is a general understanding that there is more than one way to skin this cat. But equally, there is a growing cadre of people who have a few scars on their back in this space — so they know it is not as simple as just believing one group of people over another. This is renewing the focus on value delivery — and speed to value as the most important measure.
- The technology is more interconnected. It is not quite at what I would say was a “modular” stage yet — but it is getting there. So even if you choose to not go “all-in” with a single platform or vendor, you can still be confident that the tech will connect. This is creating a higher level of strategic optionality for organisations around how they build things.
- More exemplars driving more global competition. Not only are there more apparent examples of this being done well at scale, but there is a growing realisation from NZ and Aus companies that our global competition is more advanced in utilising these types of technologies. There is a real “catchup” mindset. There is no time to waste.
Faced with catastrophic blunt force impact or a major derailment of their strategy, a growing group of product leaders would prefer to avoid the wreck. And are looking for a different way.
Thankfully, we’ve got a good idea of how they might do that.