E161: US strikes Houthis, market instability, Q1 rate cuts in doubt, Carta's major mishap, DEI
Jan 13, 2024
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The hosts dive into tensions in Yemen with U.S. strikes against Houthi targets, questioning the effectiveness of military intervention. Market instability is analyzed, with doubts cast on upcoming rate cuts amid rising inflation. They discuss a major error from Carta and the complexities of SaaS tools in startups. A heated DEI debate emerges, weighing representation against artistic merit and corporate strategies. The group also explores innovative software solutions aimed at resolving communication issues in the corporate landscape.
Trust and privacy are vital in the cap table software industry, highlighting the importance of companies prioritizing security and integrity.
Building defensible SaaS software requires deep product logic, extensive features, ongoing support, and network effects to stand out in the market.
Chamath's 80/90 incubator aims to disrupt the SaaS landscape by developing and launching software products with 80% functionality at 10% of the price, potentially impacting pricing models and go-to-market strategies.
Deep dives
Carda's Violation of Trust and Selling into the Secondary Market
Carda, a cap table software company, faced a major violation of trust when employees began contacting angel investors and early-stage backers directly, offering to buy their shares in companies without their knowledge or permission. This breach of their own terms of service led to public outcry and damage to their reputation. As a result, Carda sold off their secondary business. The incident highlights the importance of trust and privacy in the cap table software industry, and the need for companies to prioritize security and integrity when handling sensitive investor data.
The Challenge of Building Defensible SaaS Software
The discussion around Carda's violation of trust and the subsequent emergence of alternative cap table software options highlights the challenge of building defensible SaaS software. While some categories may lend themselves to easy replication, many SaaS products require deep product logic, extensive feature sets, and ongoing support and training to stand out in the market. The presence of network effects, such as a large user base and established integrations, can provide some level of barrier to entry. However, the evolving landscape and increasing competition mean that pricing and feature parity are significant considerations, leading to continued downward pressure on prices and the need for ongoing innovation to remain competitive.
Chamath's 80/90 Incubator and the Future of SaaS
Chamath's proposal to launch an incubator called 80/90 aims to challenge and disrupt the SaaS landscape by rapidly developing and launching software products that offer 80% of the functionality at 10% of the price. With the rise of tools like auto-complete and co-pilot, building SaaS software has become increasingly efficient. The goal is to create a set of tools that integrate elegantly, automate low-level negotiation, and reduce the need for traditional sales and marketing efforts. The aim is to provide more affordable and accessible SaaS options, potentially impacting pricing models and go-to-market strategies in the industry.
Discussion on liquidity for private companies
The podcast episode explores the lack of organized liquidity for private companies and the potential benefits of implementing more structured trading opportunities. It is argued that organized liquidity would allow companies to better manage their fundraising processes, retain talent, and provide shareholders with opportunities for liquidity. The example of SpaceX's regular tender offers is given as a successful model for providing liquidity without compromising the control and stability of the company.
Carta's secondary market and its challenges
The podcast delves into Carta's attempt to organize a secondary market for private company shares and the challenges it faced. It is suggested that Carta's approach, which involved individualized secondary transactions, created problems and compromised trust amongst its customers. The need for a more official and organized process, similar to SpaceX's tender offers, is highlighted.
The intersection of politics and art in Star Wars
The podcast episode also discusses the intersection of politics and art, focusing on the recent controversy surrounding Star Wars. The debate revolves around the hiring of a director who allegedly plans to politicize the franchise, sparking concerns amongst fans. The importance of balancing artistic expression and inclusivity is explored, with references made to the political and social undertones of the original Star Wars trilogy.
