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Building Platforms in a New Age: Lessons Learned from a Conversation with Jon Jones, AWS

“It is a great time to be bold”, “this is probably the most unique time in any of our lives”, “I would look at what is on the edge of possible right now.” These closing remarks from the panelists of the Scaling for Success: A Conversation with Jon Jones, AWS panel at The Montgomery Summit 2024 presented by March Capital highlight the significance of the developments happening in AI.

Generative AI is expected to add trillions of dollars of value to the global economy over the coming years. At March Capital, we look for early signals of success in private companies driving this transformation.

Our job is quite similar to the role of Jon Jones, Vice President of Go-to-Market and Global Specialists organizations at AWS. Jon specializes in identifying and supporting technology businesses that can scale on AWS; Jon has helped over a dozen companies reach over $1B of spend on the platform. We are proud to say that March Capital portfolio companies have contributed over $2B of business to AWS over the last decade. ASAPP and ThoughtSpot, for example, are two current portfolio companies working closely with AWS.

We were honored to have Jon lead a session at the Summit on what it looks like to scale for success. The discussion included a 15-minute fireside chat with me, followed by a panel with four exceptional founders and operators seizing the AI opportunity: Gustavo Sapoznik, Founder & CEO of ASAPP, Margaret-Ann Seger, Head of Product at Statsig, Jason Warner, Co-Founder & CEO at Poolside AI, and Vipul Ved Prakash, Co-Founder & CEO of Together AI.

Below I summarized my three main takeaways from the discussion:

  1. The AI opportunity is unprecedented

According to McKinsey, Generative AI will improve ~50% of tasks performed by humans today, unlocking upwards of $8T of value in the global economy in the coming years. McKinsey also notes that the adoption curve for Generative AI has been much faster than that of previous tech evolutions, leading to a potential increase in the software TAM of over $500B by 2030.

Anecdotes from our panelists show what this could look like in practice:

  • ASAPP is a Generative AI native contact center automation platform. Gustavo believes AI has the power to automate the call center function entirely: “People spend hundreds of millions of dollars on call centers, [yet] people hate calling.” ASAPP’s mission is to make this pain point go away.
  • Poolside AI helps users to generate code through natural language queries. Jason described the opportunity ahead “akin to the introduction of electricity” and sees the role of AI in his industry as a superpower and an enabler. Similar to how literacy was once a stated job requirement and is now a common skill with varying levels of proficiency, Jason believes software development will be democratized but specialists will still exist.

Whether it’s the complete automation, or meaningful enablement of enterprise workflows, AI promises to transform how work gets done.

  1. Large market opportunity, scalability, and efficient go-to-market are critical early indicators of success

In our 1-1 conversation, Jon and I agreed on some of the common criteria we look for in companies early on:

  • Large market opportunity: You cannot build a big business in a small market.
  • Scalability: Successful companies can support exponential growth with limited resourcing. At CrowdStrike, we saw this firsthand when GE was able to purchase CrowdStrike’s product, download it, and install it with minimal support. This was the first example of a true self-service cloud-based software in cybersecurity—something many believed was impossible.
  • Efficient go-to-market: The ability to leverage partnerships early on is a leading indicator of talent and platform value. Jon highlights the critical importance of both formal mechanisms—formal partnerships, marketplaces—as well as “informal mechanisms”—relationships—in early go-to-market success.
  1. Generative AI can steepen the growth curve for breakout companies

The average SaaS company takes ~5 years to reach $10M in annual revenue and ~10 years to reach $100M. Can technological advancements change the slope of this curve?

 

Jon shared data on building high performance supercomputers (HPCs) that support this hypothesis:

  • Capacity for innovation is growing: Compared to 10 years ago, access to compute is nearly limitless.
  • Time to innovation is shrinking: The time it takes to stand-up capacity to support high output workloads is approaching 0.

In short, barriers to innovation are diminishing as technology advances. We believe this trend will play out in the enterprise as innovation becomes more accessible through Generative AI, ultimately improving scalability through automation and steepening the growth curve for startups.

This hypothesis also influences our growing interest in vertical AI applications. The democratization of AI enables the full automation of historically bespoke and manual vertical tasks, opening new markets to software disruption. As the surface area of software grows, and the ability for companies to scale increase, we believe it is a great time to be investing.

In summary, we are living in an unprecedented time with Generative AI changing the fundamentals of what it means to build and scale. The opportunity is substantial, and the barriers to seizing it are diminishing. At March Capital, we are excited to work with AWS to help the next generation of enterprise platforms scale. To watch the full session, click here.

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