Aashay's Newsletter

Aashay's Newsletter, run by a Partner at Haystack, delves into the intricacies of seed investing, startup growth strategies, venture capital dynamics, and emerging trends in the technology sector. It examines the venture career cycle, the evolution of business models, and the impact of technological advancements on startups and venture capital.

Venture Capital Insights Startup Growth Strategies Emerging Technology Trends Investment Analysis Innovation and Market Opportunities Organizational Development Software and Infrastructure Corporate Governance Financial Management Personal and Professional Development

The hottest Substack posts of Aashay's Newsletter

And their main takeaways

Refocusing

275 implied HN points • 07 Jul 22
  1. The company decided to hold off on Series A funding due to market conditions and focused on refining their core aspects instead.
  2. After refocusing, the team honed in on product, customers, and hiring to strengthen the foundation of the company.
  3. The investor emphasizes the importance of patience, long-term vision, and avoiding distractions in a volatile market.

Tools & Platforms in 2023

98 implied HN points • 26 Feb 23
🕹 Technology Tools Platforms
  1. Entrepreneurs leverage technological advancements as building blocks for new companies.
  2. Tools are essential in the development workflow for startups, aiding in replacing repetitive processes.
  3. Platforms provide startups with unique data or distribution, enhancing their product experience.

Dealing with a hangover

98 implied HN points • 14 Jul 22
  1. There are software companies with high cash reserves and potential for varied outcomes.
  2. Companies with large cash reserves may face challenges in maintaining growth and avoiding stagnation.
  3. Entrepreneurs should focus on creative strategies to unlock markets and drive growth.
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4 questions on AI

58 implied HN points • 06 Dec 22
  1. Text-based prompting may change GUIs, but it won't happen overnight.
  2. The software business model is evolving with higher upfront costs and ongoing expenses.
  3. Ownership of distribution is crucial in tech, especially when launching new platforms.

Looking Back, Looking Ahead

314 implied HN points • 11 Dec 19
  1. Seed investing involves taking risks that venture investors don't want to take
  2. As an investor, focus on key activities like sourcing, selecting, winning deals, and managing investments
  3. It's important to define your own style and seek support from a close-knit network of peer investors

Announcing: RFS 100

255 implied HN points • 24 May 20
  1. Even the greatest innovators rely on inspiration from elsewhere for their ideas.
  2. Tech giants often borrow ideas from others to create successful startups.
  3. A new initiative called RFS 100 aims to share curated startup ideas from top investors and founders.

The Hype Cycle of a Venture Career

255 implied HN points • 09 May 20
  1. Starting a career in venture investing involves learning the business and the social dynamics of the industry.
  2. Experiencing the cycle of high expectations and disappointments is common in venture investing.
  3. Success in venture investing requires accepting uncertainties, gaining experience, and focusing on long-term results.

Dynamism

176 implied HN points • 13 Sep 20
  1. The evolution of the automobile industry brought in complexity and organization
  2. Software business models are shifting towards more specialized funding categories
  3. Startups should embrace uncertainty and dynamism rather than formulaic approaches

Looking Back, Looking Ahead II

157 implied HN points • 27 Nov 20
  1. Investment sizing in venture is based on conviction.
  2. Specialization among investors can impact valuations in certain sectors.
  3. Seed stage investing has become increasingly competitive.

Software Plumbing

176 implied HN points • 31 Jul 20
  1. Software plumbing involves companies growing together to support new applications and business models.
  2. Analytics companies like Snowflake and tools like dbt are enabling data-driven decision-making at scale.
  3. Companies focusing on banking access and privacy are paving the way for new business models and customer-centricity.

Gyrations

58 implied HN points • 26 Jan 22
  1. Heightened fears of interest rate hikes are impacting high growth tech stocks.
  2. The volatility in public stocks can influence private tech market actors in various ways.
  3. Despite market uncertainties, focusing on long-term innovation and community building is key for investors and founders.

Shopping Spree

78 implied HN points • 07 Sep 21
  1. The technology industry may see more M&A activity in the near future, especially smaller acquisitions in the range of $10M-$500M.
  2. Businesses are recognizing the importance of in-house technology assets for digital transformation, leading to increased acquisitions.
  3. There could be a talent consolidation trend through 'acqui-hires' as companies aim to quickly scale up engineering and product resources.

Borrowing Scale

117 implied HN points • 27 Dec 20
  1. Software startups are becoming cheaper to begin but costly to scale up due to expenses like engineering talent and operational costs.
  2. Emerging vendors are offering tools to help startups with scaling, reducing manual effort and costs.
  3. Startups are creating abstractions for complex systems and tools to accelerate development, potentially leading to significant cost reductions in scaling.

The nature of "the miss"

98 implied HN points • 04 Mar 21
  1. Opportunity cost changes with fund dynamics and pressures.
  2. Series A and B raises de-risk companies but long-term outcomes matter more.
  3. Focusing on missed opportunities can lead to FOMO-driven investing.

What I'm Interested In, April 2020

157 implied HN points • 10 Apr 20
  1. Focus on programming software robots for infrastructure orchestration and biology.
  2. Explore open source data protection focusing on data migrations and disaster recovery.
  3. Consider ways to make metrics a priority in organizations and empower operators with BI environments.

Soft Divisions

137 implied HN points • 21 Apr 20
  1. Business software trends shift to focus on team collaboration over individual work
  2. The traditional concept of teams in organizations is evolving towards more fluid structures
  3. New business software is adapting to cater to a changing landscape of organizational structures

Models and Markets: Looking to 2020

157 implied HN points • 20 Dec 19
  1. Global Operations Management is a venture scale market with opportunities for scaling internationally.
  2. Next-Gen Technical Architectures in enterprise infrastructure and IT companies are attracting venture capitalists.
  3. B2B Commerce Enablement focuses on building marketplaces and operating systems within specific verticals.

Areas of Interest, March 2021

78 implied HN points • 30 Mar 21
  1. Code and visual workflows are increasingly intertwined in enterprise processes and tools.
  2. Industrial biotechnology is showing promise in developing cheaper, safer, and more sustainable solutions compared to traditional chemical processes.
  3. Machine learning systems present new cybersecurity challenges in the enterprise, with the potential for increased attacks and misuse.

B2B and Enterprise Product Ideas - January 2020

137 implied HN points • 09 Jan 20
  1. Invest in collaborative enterprise search for businesses.
  2. Automate HR service delivery to streamline processes.
  3. Consider developing anomaly detection tools for production environments.

The round on the cover

58 implied HN points • 15 May 21
  1. Seed rounds are becoming larger, often exceeding $10M which is a departure from traditional sizes.
  2. Founders must navigate dynamic funding environments, with round sizes fluctuating and new financing structures emerging.
  3. Investors are faced with decisions on fund allocation, ownership percentage, and risk management when considering seed investments.

Entrées, No Appetizers

117 implied HN points • 16 Nov 19
  1. Some companies skip the seed funding phase and go straight to larger investments.
  2. Top-tier firms like Benchmark, Greylock, Lightspeed, and Sutter Hill excel in identifying technical founders for enterprise infrastructure.
  3. Some companies bootstrap with little initial funding before taking on larger rounds to strengthen their position in the market.

Short Run / Long Run

78 implied HN points • 20 Aug 20
  1. Perceptions of valuations in the startup world can vary over time.
  2. Second-order effects of markups in early-stage investments include illiquidity, fight for dollars, and overcapitalization.
  3. Markups in early-stage investing can act as short-term noise, potentially misleading investors in the long run.

Lessons from the Haystack Fund Management Panel

98 implied HN points • 21 Feb 20
  1. In venture capital, aim for outlier investments that can return 10X to see significant fund returns.
  2. Decide whether to play offense or defense with reserve capital in seed funds.
  3. Maintaining internal consistency and sticking to your original strategy builds credibility with investors.

The Governance Swing

117 implied HN points • 05 Sep 19
  1. Dual-Class stock structures in tech companies give more voting power to one class of shares, impacting control and decision-making.
  2. The debate over governance in public markets involves founders, investors, and institutional investors with differing views and motivations.
  3. In the early-stage market, the balance of power has shifted towards founders, with VCs focused on winning deals and providing support beyond governance.

Two Views on Infrastructure

78 implied HN points • 15 Jul 20
  1. Investor appetite for infrastructure software is evident in stock charts and public offerings.
  2. There are conflicting views on the future of infrastructure software: big cloud providers dominating or room for specialized services.
  3. Entrepreneurs weigh the challenges of directly competing with major cloud providers versus providing support services around existing platforms.

Minimum Viable Raise

4 HN points • 22 Aug 23
💼 Business Startups Investment Venture Capital Funding Entrepreneurship
  1. Startups should consider raising a little more capital upfront to have adequate resources for product development and market introduction.
  2. As software markets evolve, buyer expectations increase, and ventures now penetrate traditional sectors with longer sales cycles.
  3. Founders may need to adjust their mindset and be open to raising more capital initially to navigate the changing landscape of startup financing.

The Three-Legged Stool of API Companies

98 implied HN points • 18 Sep 19
  1. API companies can be evaluated using the three-legged stool framework
  2. API companies need a utility source and an ecosystem of applications for success
  3. An integration ecosystem is crucial for API companies to thrive

280+ Vintage 1: The Fundraising Exercise

98 implied HN points • 05 Aug 19
  1. Fundraising is a key part of company building and should be approached thoughtfully.
  2. Discovering niche, unique content requires innovative curation and distribution methods.
  3. B2B software companies need to consider scaling into large enterprise clients while maintaining a product-first focus.

App Clips

58 implied HN points • 25 Aug 20
  1. App Clips are lightweight installations of apps that can be accessed without downloading a standalone app.
  2. Developers can integrate Apple Pay for quick payments and push notifications in an 8-hour window for App Clips.
  3. Consider focusing on API abstractions, marketing & attribution, and creating infrastructure for tags when building in the App Clips space.

Observer Effect

58 implied HN points • 07 Apr 20
  1. Observing a phenomenon can change its nature, known as the observer effect.
  2. In public markets, passive investing and market dislocation are influenced by this effect.
  3. In private tech investing, the observer effect leads to the distortion of businesses when capital floods the market.

Temperature Check

58 implied HN points • 19 Mar 20
  1. In times of uncertainty, focus on capital efficiency for business survival.
  2. The impact of the current macro conditions on technology companies is significant.
  3. Changes in the fintech market dynamics due to economic downturn and Fed policies.

Seed Funds and the Concentration Question

58 implied HN points • 04 Mar 20
  1. Some investors believe in concentrating their portfolios for disciplined management and avoiding dilution.
  2. Many early-stage funds opt for diversification to optimize for multiple opportunities and prove themselves.
  3. Experienced seed funds like IA Ventures, Baseline, and PivotNorth focus on concentrated positions, disciplined investment, and capital efficient businesses.

Coaching and Intangibles

58 implied HN points • 11 Nov 19
  1. Economic research highlights the importance of intangible assets like organizational knowledge and goodwill for return on capital and company growth.
  2. Newer platforms in coaching and talent management are offering similar capabilities to established companies like SuccessFactors, but with a more modern approach.
  3. Consumer mindfulness brands like Headspace and Calm are becoming large businesses, indicating a growing interest in personal and professional development.

Product Areas - September 2020

39 implied HN points • 07 Sep 20
  1. Focus on data integration for regulated or legacy industries like building vertical-specific data infrastructure platforms.
  2. Consider a developer-first approach to product analytics, replacing graphical interface with an API for extreme extensibility.
  3. Explore the future of automations beyond RPA and process mining by offering a library of automations to developers or setting up an app store for common automations within a company.

Currents of Capital

58 implied HN points • 16 Sep 19
  1. Capital cycle analysis focuses on understanding supply conditions in industries and the structure of components that feed the value chain.
  2. Capital cycle-driven investors prioritize analyzing supply over demand to identify investment opportunities.
  3. Venture investors can learn from the capital cycle analysis framework by focusing on emergent opportunities, taking idiosyncratic bets, and seeking businesses with strong moats.

Blurred Lines

58 implied HN points • 09 Sep 19
  1. Some tech companies are staying private longer because they may not want public scrutiny or believe public investors may not understand the long-term vision.
  2. Venture capital firms are expanding to include more services and capital bases, attracting investors from private equity and public markets.
  3. Traditional venture capital investors are moving towards larger funds and exploring investments in later-stage and public markets.

280+ Vintage 2

58 implied HN points • 12 Aug 19
  1. Companies are increasingly focusing on growth and development of employees, leading to the emergence of new tools to measure ROI and guide activities.
  2. As machine learning becomes more prevalent, there is a growing need for data-human loops to maintain data accuracy, sparking interest in low-code solutions.
  3. Exploring the concept of enabling the recreation of different team or function environments in the cloud, such as for recruiting or design, and considering the uniqueness of each organization when productizing this idea.

Observations & Notes - February 2020

39 implied HN points • 12 Feb 20
  1. Life sciences are adapting a bottoms-up approach with startups offering experimental services.
  2. Translation and localization for regulated industries require a mix of machine technology and human translators.
  3. Privacy-focused tools are becoming essential, catering to compliance and enabling expansion into regulated markets.