 Hello, welcome back to theCUBE's coverage here live in San Francisco, California. I'm John Furrier, host of theCUBE's CUBE coverage of AWS Summit 2022 here in San Francisco, where all the developers are. It's the Bay Area, Silicon Valley, and of course, AWS Summit in New York City is coming up in the summer. We'll be there as well. SF and NYC, CUBE coverage, look for us. Of course, Reinforce in Boston and Remars with the whole robotics AI thing all coming together. Lots of coverage, stay with us. Today we've got a great guest from Decibel VC, Sean Sikota, founding partner, entrepreneurial venture, is a venture firm, your next act. Welcome to theCUBE, good to see you. Good to see you, Matt. I feel like it's been forever since we've been able to do something in person. Well, I'm glad you're here because we run into each other all the time. We've known each other for over a decade. It's been at least 10 years. At least 10 years more. And we don't want to actually go back as the priest back of the old school, Web 1.0 days. But anyway, we're in Web 3 now, so we'll get to that in a second. We are, we are. It's a little bit of a throwback to the past though, in my opinion. It's all the same. The industry of the computing and software. We ran into each other in KubeCon. You're investing in a lot of tech startup founders, okay? This next level, next-gen entrepreneurs have a new makeup. And it's software, it's hardcore tech. In some cases, not hardcore tech, but using software to take something old and make it better new, faster. So tell us about Decibel. What's the firm? I know you're the founder, which is cool. What's going on? Explain what you're doing. I mean, you remember I'm a recovering entrepreneur, right? So I, I... No, you're never recovering. You're always an entrepreneur. Always, but we are also always recovering. So I started my first company when I was 24. If you remember before, there was Facebook and Friends. There was Instant Messaging. People were using that product at work every day. They were creating a security vulnerability between their network and the outside world. So I plugged that hole and built an Instant Messaging firewall. It was my first company. The company was called I Am Logic and we were acquired by Symantec. Then spent 12 years investing in the next generation of software companies. Early investor in open source companies and cloud companies and spent a really wonderful 12 years at a firm called NEA. So I feel like my whole life I've been either starting enterprise software companies or helping founders start enterprise software companies. And I'll tell you, there's never been a better time than right now to start an enterprise software company. So the passion for starting a new firm was really a recognition that founders today that are starting an enterprise software company, they tend to be, as you said, a more technical founder. Usually it's a software engineer or a builder. They are building products that are serving a slightly different market than what we've traditionally seen in enterprise software. I think traditionally we've seen IT buyers or CIOs that have agendas and strategies which purchase software that is traditionally bought and sold tops down. But today I think the most successful enterprise software companies are the ones that are built more bottoms up and have more technical early adopters. And generally speaking, they're free to use, they're free to try. They're very commonly community source or open source companies where you have a large technical community that's supporting them. So there's kind of a new normal now, I think, in great enterprise software. And it starts with great technical founders with great products and great bottoms up motions. And I think there's no better place to service those people than in the cloud and in your community. Well, first of all, congratulations. And by the way, you got a great pedigree and great background. You're super smart. I admire your work and your founding. But let's face it, enterprise is hot because digital transformation is all companies. There's no, I mean, consumer is enterprise now. Everything is what was once a niche, not I won't say niche category, but you know, not for the faint of heart, you know, investors. You know, it's so funny that you said that enterprise is hot because you and I feel that way now. But remember, like right now, there's also a giant tech and VC conference in Miami and it's covering cryptocurrencies and FCs and Web3. So I think beauty is definitely in the eye of the beholder, but no, I will tell you. And if tease is one big enterprise, because you got to have immutability, you got performance issues, you have IOPS issues. Well, and I think all of us here that are maybe students of history and have been involved in open source in the cloud would say that much of what we're doing is the predecessors of the Web3 movement and many of us I think are contributors to the Web3 movement. All right, the hype is definitely Web3. Yeah, but sure. Yeah, no, but now you're taking us further east of Miami. So, you know, look, I think what is in question with the case now and maybe it's more obvious the more time you spend in this world is this is the fastest growing part of enterprise software. And if you include cloud infrastructure and cloud infrastructure spend, it is by many measures over $500 billion and growing 20 to 30% a year. So it's a just incredibly faster part of the market. Let's get into some of the cultural and the shifts that are happening. Because again, when you have the luxury of being an enterprise when it was hard, it's getting easier and more cooler. I get it and more relevant. But there's also the hype of like the Web3 for instance, but the CEO of Snowflake wrote a book and Dave Vellante and I were talking about it and Frank Slutman has says, there's no playbooks. We always ask the CEO, what's your playbook? And he's like, there's no playbook. Situational awareness always trumps playbooks. So in the enterprise playbook, oh, hire a direct sales force and SaaS kind of crushed that. Now SaaS is being redefined, right? So what is SaaS? Is Snowflake a SaaS? Or is that a platform? So again, new unit economics are emerging, whole new situation, you got Web3. So to me, there's a cultural shift. The young entrepreneurs, the user experience, they look at Facebook and say, ah, you know, they own all my data and you know, we know that cliche. They, you know, the other product. So as this next gen, the Gen Z and the millennials come in and our customers and the founders, they're looking at things a little bit differently and the text better. Yeah, I mean, I think we can see a lot of commonalities across all successful startups and the overall adoption of technology. And I would tell you, this is all one big giant revolution. I call it the user driven revolution, right? It's the rise of the user. And you might say product like growth is currently the hottest trend in enterprise software. It's actually user like growth, right? They're one and the same. So sometimes people think the product is what is driving the growth. So users pull the product through. Exactly, exactly. And so that's, that I think is really this revolution that you see and it does extend into things like cryptocurrencies and web-free and you know, sort of like the control that is taken back by the user. But you know, many would say that the origins of this movement may be started with open source where users were contributors, you know, contributors were users and looking back decades and seeing how it fast-forces today, I think that's really the trend that we're all riding. It's enabling these end users and these end users in our world are developers, data engineers, cybersecurity practitioners, right? They're really the users and they're really the beneficiaries and the most, you know, kind of valued people in this comment. I want to come back to the data engineers in a second but I want to make a comment and get your reaction to. I'm a GNXer technically, so for not a boomer but I have some boomer friends who are a little bit older than me who have, you know, experienced the 60s. And I've been saying on theCUBE for probably about eight years now that we are going to hit a digital hippie revolution. Meaning a rebellion against, the 60s was a rebellion against the 50s and the man and, you know, summer of love. That was a cultural differentiation from the other one, other group, the predecessors. So we're kind of having that digital moment now where it's like, hey boomers, hey people, we're not going to do that anymore. We hate how you organize shit. Right, but isn't this just technology? I mean, isn't it like there used to be the old adage like, you know, you would never get fired for buying IBM but now it's like you obviously probably would get fired if you bought IBM and I mean, it's just like the, the, I think, I mean- During the mainframe days, those renegades were breaking into Stanford, starting the Homebrew Club. So what I'm trying to get at is that do you see the young cultural revolution, also culturally just, this is my identity. NFTs to me speak volumes about my, I want to associate with NFTs, not single sign on. Well, absolutely and I think like, I think you're hitting on something which is like this convergence of, of societal trends with technology trends and how that manifests in our world is, yes, I think like there is unquestionably almost a religion around the way in which your product is built, right? We can use open source as one example of that religion. Some people will say, look, I'll just never try a product in the cloud if it's not open source. I think cloud native is another example of that, right? It's either, it's, you know, it either is cloud native or it's not and I think a lot of people will look at a product and say, look, you know, you were not designed in the cloud era, therefore I just won't try you and sometimes like it or not, it's a religious decision, right? It's something that people just believe to be true almost without necessarily caring about the narrative. I mean, the data drives all decision making. Let me ask you this next question. As a VC now, you look at, well, you've been a VC for many years but you also have the founder entrepreneurial mindset but you can empathize with the founders. You know, hustle is a big part of that first founder check, right? You got to convince someone to part with their money and the first money in which you do a lot of is about believing in the person. So faking it till you make it is hard now. The data's there. You either have it cloud native, you either have the adaption or traction so honesty is a big part of that pitch. You can't fake it. So you know, there used to be this concept of like the persona of an entrepreneur, right? And the persona of the entrepreneur would be, you know, somebody who is a great salesperson or somebody who tell a great story and I still think that that's important, right? It still is like human need for people to believe in narratives and stories. But having said that, you're right, the proof is in the pudding, right? At some point you click download and you try the product and it does what it says it's gonna do or it doesn't or it either stands up to the load test or it doesn't. And so I feel like in this new economy that we live in, really it's a shift from maybe the storytellers and the creators to the builders, right? The people that know how to build great product and in some ways the people that can build great products stand out from the crowd and they're the ones that can build communities around their products and, you know, in some ways can, you know, kind of own more of the narrative because their product speaks for exactly. The volume. And back to the user-led growth. Exactly, and it's the religion of I just love your product, right? And I am, Doug Song, who's the founder of Duo Security used to say, hey, like, you know, really like in today's world of like consumption-based software, like the user is only gonna give you 90 seconds to figure out whether or not you're a company that's easy to do business with, right? And so you can say and do all the things that you want about how easy you are to work with, but if the product isn't easy to install, if it's not easy to try, if it's not, if the, you know, to speak to the user. Well, let me ask you a question now that for the people watching who are maybe entrepreneurial entrepreneurs, masterclass here is in session, so I have to ask you, do you prefer an entrepreneur to come in and say, look at John, here's where I'm at. Okay, first of all, storytellers find whether you're an extrovert or introvert, have your style, sell the story in a way that's authentic, but what do you prefer to say, here's where I'm at. Look, I have an idea. Here's my traction, I think. Here's my MVP prototype. I need help. Or do you want to just see more stats? What's the preferred way that you like to see entrepreneurs come in and engage with you? There's tons of different styles, man. I think the single most important thing that every founder should know is that we don't invest in what things are today. We invest in what we think something will become, right? And I think that's why we all get up in the morning and try to build something different, right? It's that we see the world a different way. We want it to be a different way and we want to work every single moment of the day to try to make that vision a reality. So I think the more that you can show people where you want to be, the more likely somebody is going to align with your vision and want to invest in you and want to be along for the ride. So I wholeheartedly believe in showing off what you got today because eventually we all get down to where are we and what are we going to do together. But I think the single most important thing for any founder and VC relationship is that they have the same vision. If you have the same vision, you can get through bumps in the road. You can get through short-term spills. You can all sorts of things in the middle of the journey can happen, but it doesn't matter as much if you share the same long-term vision. Don't flake out and be fashionable with the latest trends because it's over before you even get there. Exactly, I think many people that do what we do for a living will say ultimately the future is relatively easy to predict, but it's the timing that's impossible to predict. So you sort of have to balance the, we know that the world is going this way and therefore we're going to invest a lot of money to try to make this a reality, but sometimes it happens in six months, sometimes it takes six years, sometimes it takes 16 years. What's the hottest thing in enterprise that you see the biggest wave that people should pay attention to that you're looking at right now like Decibel Partners, Decibel.vc, your site. What's the big wave? What's your big wave? There's three big trends that we invest in and they're the only things we do day in, day out. One is the explosion in open source software. So I think many people think that all software is unquestionably moving to an open source model in some form or another. Tons of reasons to debate whether or not that is going to happen and on what timeline. Been happening forever. But it is accelerating faster than we've ever seen. So I think it's one big massive wave that we continue to ride. Second is the rise of data engineering. I think data engineering is in and of itself now a category of software. It's not just that we store data, it's now we move data and we develop applications on data and I think data is in and of itself as big of a market as any of the other markets that we invest in. And finally it's the gift that keeps on giving. I've spent my entire career in it. We still feel that security is a market that is under invested. It continues to be the place where people need to continue to invest and spend more money. And those are the three major trends that we ride. And security, you think we all need to do over, right? I mean, do we need to do over in security or what's the core problem? I keep using this word under invested because I think it's the right way to think about the problem. I think people generally speaking look at cybersecurity as an add-on. But if you think about it, the whole economy is moving online. And so in some ways like security is core to protecting the digital economy. And so it shouldn't be an afterthought, right? It should be core to what everyone is doing. And that's why I think relative to the trillions of dollars that are at stake, I believe the market size for cybersecurity is around 150 billion dollars. And it still is a fraction of what we're protecting. And national security even is booming now. So you get the convergence of national security, geopolitics, internet, digital. That's right, I mean, arguably, right. Arguably, again, it's the area of the world that people should be spending more time and more money given what's at stake. I love your thesis. I got to say, I got to love your firm, love what you're doing. We're big supporters of your mission. Congratulations on your entrepreneurial venture. And we'll be talking. We'll maybe see a KubeCon. Absolutely. He's certainly EU, maybe even North Americans in Detroit this year. Huge fan of what you guys are doing here. Thank you so much for helping me on the show. Guess about VC Johnson, here on theCUBE. Check him out. Founder for founders here on theCUBE. More coverage from San Francisco, California after this short break. Stay with us.