SendGrid IPO | S-1 Breakdown
Alex Clayton

SendGrid has dramatically better sales efficiency than MongoDB.

Mongo running sales/marketing spend at 80% of revenue. SendGrid at 26%. Mongo has the same kind of bad sales/marketing spend numbers as Cloudera.

The mis-application of user-based marketing disguised as “developer marketing” is a problem for a lot of VC funded companies being built around the direct SaaS cargo cult model. We’re seeing way too many of these high burn businesses like Mongo and Cloudera in the enterprise market. Too many tech companies imitating the worst practices of super-burn businesses like Uber, i.e. with subsidized user adoption.

I think we are seeing a SERIOUS issue of mainstreaming businesses into IPO with horrible income statements and complete disdain for profitability. As long as the VC community can exit these businesses to public market retail investors they think it’s all cool. It’s not. LTV is a myth that’s used to play valuation games. It’s voodoo economics with well-tended “thought leadership”.

It’s bad for the culture of entrepreneurism to see subsidized adoption being rewarded with an IPO. Back during the dotcom bubble period, investment banker Paul Denninger referred to these kinds of companies as “terrorist competitors”. Bank account full of VC and IPO cash to do lots of damage commoditizing the market. I think it’s back.