Contrary Research Rundown #5
Research Rundown
In each of our light memos we highlight two sections: key opportunities, and key risks. One of the key risks that comes up most often is platform risk. Platform risk is the dependence that one company has on another. The dependence can come in many forms, whether its dependent functionally, like companies that rely on AWS, or for distribution, like Facebook's dependence on Apple for improving ad performance with user tracking on Apple devices. When changes occur within those platforms, a company can face dramatic, even existential risks. Take the Apple example; their changes to ATT dramatically impacted the way both large and small companies are able to advertise and acquire users. Another common example is Microsoft leveraging their existing distribution with Microsoft OS and Office, to create near-clones of tools like Slack, Notion, and more.
When we research the most interesting private companies, we not only pay attention to the threat of platform risk, but we also look for platform potential. Companies will often paint the picture of their potential by highlighting the multiple areas they could broaden their product and become more of a platform. The biggest question to answer when evaluating private companies is whether they'll achieve their vision of platform potential? Or become another victim of platform risk.
This week we dug into some examples of companies starting out as point solutions and "dreaming the dream" of becoming platforms. A company may start out doing something simple like labeling training data, gathering security signals, or offering a digital whiteboard. But the long-term vision revolves around establishing a broader platform.
Miro: As the need for digital tools to enhance collaboration has increased, Miro has stuck out as a cloud-based platform for whiteboarding. It allows users to connect with teams, collaborate, and communicate to improve team performance. Read the full memo here.
Illumio: As ransomware and cyber hacks continue to increase, companies need platforms to protect them. Illumio is a cloud-based platform for stopping breaches before they become a cyber disaster. They do this via a process called microsegmentation, a way of granularly segmenting a network. Read the full memo here.
Scale AI: Software may be eating the world, but AI/ML is eating software. Within the AI/ML lifecycle, companies need to ensure they have correctly labeled data. Scale is a provider of cloud-based data training and validation solutions for industries like autonomous driving, robotics, and retail. Read the full memo here.
Platform Risk: Momo Ong wrote a LinkedIn Thread on how big tech companies like Microsoft and Google take on emerging startups. He notes that these large companies Identify a rapidly growing B2B product and effectively copy it, and then add the new product to their existing bundle of products. The power of distribution over feature functionality.
Microsoft Takes On Canva With Free AI Graphics Tool: During its Ignite conference, Microsoft launched a new product called Designer. This is a tool for allows anyone to create and generate designs to share on social media. The app will be available for free or as part of the Office Productivity suite. The interesting part about this product is that it integrates with Open AI’s software DALL-E 2 which allows Microsoft Designer to generate visual designs when people enter a text or description. This product presents Canva with a formidable competitor. Just about a week ago, Canva’s Founder/CEO Melanie Parker sat down with Chloe Steinberg to discuss the company’s journey. To learn more about Canva, read our memo.
Layoffs in Startup Land: Carta’s Founder/CEO was on Bloomberg this week discussing the hiring and layoff landscape in tech startups and what the data from their customers tell them about the macro environment. Carta also discussed their recent expansion into multiple geographies. To learn more about Carta, see our memo.
Uniswap Labs Raises New Round: Uniswap Labs has raised $165 million in a new funding round as the parent firm of the world’s largest decentralized exchange looks to broaden its offerings. The company is valued at $1.66 billion. To learn more about Uniswap’s business and founding story, see our memo.
Patrick Chase at Redpoint ventures wrote a piece about how many of the largest open-source companies got their first 1k community members. Patrick’s pieces emphasizes the importance of building a community through research content, organizing local meet-ups and measuring community growth in the process.
Airtable introduces Connected Application Platform: This new product lets teams create powerful apps built on shared company data. It lets teams customize, share, and connect multiple apps across an organization, all on the same platform. Airtable CEO Howie Liu joined Bloomberg Technology to discuss the announcements.
TripActions Raises New Round: TripActions, all-in-one travel, corporate card, and expense management company, announced its Series G financing at a valuation of $9 billion led by Coatue. TripActions’ is a company capitalizing on the rebound in business travel. The company has become a leading solution for business travel.
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!