Even with some of the most successful companies in the world being hardware companies — like Apple, Bloomberg and Cisco — investing in hardware startups has been out of fashion in “silicon” valley. ;)

From a software investor perspective, hardware is particularly hard because hardware companies:

  • can be riskier: it’s slower and harder (no pun intended!) to iterate until you find product-market fit.
  • can be less capital efficient: it’s more expensive to develop, manufacture, and distribute hardware products.
  • can have limited upside: it’s challenging to create long-term moats for hardware startups.
Image for post
Image for post
This is especially true for consumer electronics businesses.

But I believe that this “mantra” can be questioned today as Software is also eating hardware. The best example of this is AWS, which is now a $15B+ business. Can we consider it as the most successful HaaS product launch of the decade? …

Hi there, we’re Point Nine Capital a VC firm focused on SaaS and marketplaces. If you want to be kept informed of our new posts you can subscribe to our content newsletter.

Image for post
Image for post

This is the third year in a row that I have enjoyed writing and reviewing my annual “Geeky Predictions” — in case you’re curious (or bored?), you can also check the previous editions of the predictions (2017, 2016) and reviews (2017, 2016) .

I think 2018 will be the year in which every investor will be a “frontier tech investor”. We saw that coming — but today, in most of the companies we meet, there’s some form of machine learning and/or crypto and/or hardware. …

Last year it was the first time that I published my predictions and reviewed them publicly. I enjoyed the intellectual exercise of thinking over and subsequently reviewing them. So here I am again, this time reviewing 2017, just before writing about 2018.

Image for post
Image for post

It seems like this time I was more conservative, because I got several more right (10/20) 😜

Following the same format as last year, here we go:

#1 Security

Image for post
Image for post
No comments
  • [🤓 correct] Everybody will get hacked: governments, cities, business, apps, SMBs…
    We will learn to live with it :)

That was an easy one!

What’s more interesting is that not only do the number of incidents keeps growing, but also the severity of them: in just the first half of 2017, there were more records breached than in all 2016.

Image for post
Image for post
Free template at the end of the article


As the tech lead of a startup, a founder-CTO faces many tradeoffs allocating his time. The “business founders” want you to be shipping more features — the visible roadmap. But you need to balance that with many other responsibilities:

  • Recruiting, managing and retaining the right team.
  • Making tech choices, considering their short and long-term implications.
  • Setting and automating processes, paying technical debt, stopping fires when they happen, etc.

Those topics are not visible in the roadmap, but if they are not taken care of in time, they can cause big trouble. They are part of the “hidden roadmap”.

At our SaaSCamp, Samuel Fuentes, CTO at Ontruck, led a discussion about managing those priorities. In this article, I’m going to summarize the areas of consensus and try to open the conversation to a larger…

The New Search for Hard Problems

Image for post
Image for post
Paper: Who Finds Bill Gates Sexy?

How Did We Get Here?

At a very high level, the job of a founder primarily revolves around finding and solving a problem that can lead to a significant and sustainable business.

In the startup world, the solution to that problem often involves the use of technology to enable a new product, process, business model, or a combination of the three.

When building a product, defining a process or testing a business model, founders and investors face different degrees of uncertainty. That uncertainty or risk is determined by the state of the art.

State of the art (sometimes cutting edge) refers to the highest level of general development, as of a device, technique, or scientific field achieved at a particular time. It also refers to such a level of development reached at any particular time as a result of the common methodologies employed at the time —…

Image for post
Image for post

Exceptional investments == Taking risks AND Being right AND being contrarian

Investing in startups is quite different from other forms of investment. I’m not the first one to point this out and I won’t try to compete with Sarah Tavel (1) or Andy Rachleff (2) in explaining why VC is so weird. But in case you didn’t read their posts, this is the key argument:

Image for post
Image for post
Source: https://blog.wealthfront.com/venture-capital-economics/

To generate superior returns, you need to invest in very risky ventures. But it’s not enough to make the right bets — you must be right when other smart investors don’t “get it”.

In plain words, you must be right when everyone thinks you’re dumb — you’re wrong so often in VC … that you get used to that feeling! …

Image for post
Image for post

Investors in SaaS are lucky to have plenty of metrics to measure, because those metrics are good proxies for important business decisions.

When do you hit product market-fit? How do you grow in the future? How much capital should you raise? You can look at metrics to answer that!

About this series
This series of articles are drafted from our experience at Point Nine Capital on the top priorities for early-stage SaaS companies. Note that though more relevant for startups who focus on SMBs first and then go upmarket, the priorities are general enough to apply to most SaaS companies.

Looking top down, for SaaS companies everything is about growth and retention — capital efficiency is also important, but for VC-funded companies, that’s subordinated to the other two. …

At seed-stage, you don’t have many customers. You’re trying to get whoever comes into the front door. Thus, it might sound crazy to “reject” or “fire” some potential customers …

But at this early stage, it’s very important to find the “right” customers for you.

You want somebody who is aligned with your priorities in the short term.

About this series
This series of articles are drafted from our experience at Point Nine Capital on the top priorities for early-stage SaaS companies. …

Image for post
Image for post
Yes, the obvious goal of pricing is to make money — well done Rodrigo ;-)

Pricing is one of the biggest levers that you have in SaaS. The recurring nature of the business model makes any price increase, decrease or discount an important decision.

But at this early stage of your company, the goal of your pricing is not to optimise to make (THE real) money. The goal is to test if customers will pay something that will make your business work.

And your business will work if:

  1. It’s cheaper to acquire a customer (CAC) than whatever $$ they generate in a period of time (LTV). …

Image for post
Image for post

The market for developer tools is a deceptively large one. More and more great companies being built in this space — and Point Nine is proud to be investing in some of them like Algolia, Contentful, and Sqreen.

In this series of interviews, we’ll explore the early days of some of these companies. There are valuable insights to be found here for anyone building (or interested in building) a business in this space.

Here’s my first interview, with RainforestQA CEO Fred Stevens-Smith.

Image for post
Image for post

RainforestQA is all about helping companies with quality assurance and testing. They were part of the Y-Combinator 2012 class, and recently raised a Series A of $12 million, which was led by Bessemer Venture Partners. …


Rodrigo Martinez

Investor in Startups @PointNineCap - Hobbyist developer - Spaniard abroad

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store