Contrary Research Rundown #11
Category Leadership, Top Memos, and More!
Research Rundown
In large, multi-faceted categories you often see similarities among companies who quickly jump to leadership within their relevant space. This past week we touched on two such companies, one with Notion in the productivity space, and one with Wiz in cloud security. Often, these products still have a lot of work to do to reach feature parity with any existing legacy solution. But the quality of the product experience is so high, they start to see rapid adoption.
As we dive into private companies, we often see category leadership emerge from companies who are both serving the most important priorities for the existing market, while also innovating around how the space is likely to evolve. We've seen that in data infrastructure, where companies like Snowflake and Databricks are both racing to become the data center of every company's universe. We've seen it in DevOps, where security and interoperability are emerging as critical pieces. And we've seen it in cybersecurity, where the transition to the cloud is the dominant trend.
Since launching Contrary Research two months ago, our memos have been read over 100K times. As we look back at the "greatest hits," we thought we'd reflect on the memos that have gained the most attention. Below is our list of top five memos.
Snyk: The number of vulnerabilities found in production code reached a record high for the fifth consecutive year in 2021. One study shows that 67% of developers have shipped code with known vulnerabilities. Snyk is inserting security capabilities at the command line. Read our full memo.
Replit: Building technology is something only a small percentage of people can do. In 2021, there were only 26.9 million software developers worldwide, less than 0.5% of the global population. Replit is built to increase that number. Read our full memo here.
Ramp: They focus on improving customer spending habits. Ramp’s model incentivizes companies to spend less, and helped customers cut expenses by ~3.4% per year. Ramp claims to have delivered more than $135 million in savings. Read our full memo here.
Canva: As everyone spends more and more of their time online, the ability to design digital content with has become top-of-mind for everyone. That change in behavior has led to a $41 billion market for Canva to serve the long-tail of content creators. Read our full memo here.
Discord: Nearly 5 billion people are using the internet, and a staggering 76% of them participate in some kind of online community. As more content, communication, and relationships move online, Discord looks to serve budding communities getting build up. Read our full memo here.
Zendesk is officially taken private in a $10B acquisition. The world of private companies can grow from new companies and legacy public companies going private. After being founded in 2007, Zendesk grew to 20%+ market share in the customer support world, and surpassed $1B in revenue in 2020. We'll see what opportunities they'll be able to tackle, away from the mark to market of being a public company.
Parker Conrad, the CEO of Rippling, was on Invest Like The Best talking about building compounding companies. He covers the evolution of SaaS, and how the progression from on-prem to cloud enabled point solutions, but the future of building software will revolve around deeply integrated tools.
Earlier this month, Forbes published their Future of Work 50 list featuring companies like Calendly, Guild Education, Loom, Airtable. The list features companies that have had the most significant influence on the evolving world of work.
During ObservabilityCON 2022, Raj Dutt, the CEO of Grafana, shared an in-depth look on the history of Grafana, and the observability space. One way Grafana has differentiated itself has been by focusing on interoperability. "We want to prioritize interoperability for whatever the next great logs or metrics database is, whether it’s ours or not.” You can learn more about Grafana in our research memo.
As the world of AI has continued to explode over the last few months, it's been difficult to keep track of the latest news and tools. Ben Tossell has an exceptional newsletter covering what's happening in the space. One resource he highlighted recently is Futurepedia, a directory of AI tools.
Barr Moses, the CEO of Monte Carlo, shared some predictions in the data engineering world. Data specialization and performance will be increasingly important, and command more budget. Tomasz Tunguz, previously an investor at Redpoint, contributed to some of the data engineering predictions around cloud cost optimization.
Healthcare continues to be a cesspool of cost complexity, and inefficiency. Mark Cuban's pharma company, Cost Plus Drug Company, is attempting to change that. Blake Madden, a writer at Workweek, covered the company's story in a thread this week.
Contrary Research Fellowship
At Contrary Research our vision is to cover hundreds of companies. We can't do it alone, nor would we want to. We focus on bringing together a variety of different perspectives.
That's why we're opening applications for our Research Fellowship. In the past we've worked with software engineers, product managers, consultants, and more. If you're interested in researching and writing about tech companies, apply here!