Scaling Smarter, AI Insights From Microsoft, and a Wild Raccoon Tale

This week, we’re exploring how intentional strategies, AI innovation, and a dash of creativity are shaping the future. On Founded & Funded, Jama Software CEO Marc Osofsky and Madrona’s Tim Porter share the blueprint for profitable growth that defies conventional wisdom. At our recent CIO Summit, Julia Liuson, President of Microsoft’s Developer Division, joined Madrona’s S. Somasegar for a fireside chat on how AI is transforming software development.The Aspiring for Intelligence team looks back and grades their 2024 predictions, and don’t miss the quirky tale of Groundlight using AI to outsmart raccoons — showcasing the power of AI for both everyday and industrial challenges. Plus, updates from our portfolio companies, including new executives at Amperity, Clari, and Esper.

Founded & Funded

Breaking Conventional Wisdom: Jama Software’s Blueprint for Profitable Growth

In the latest episode of Founded & Funded, Madrona Managing Director Tim Porter and Jama Software CEO Marc Osofsky discuss the intentional strategies that helped Jama achieve best-in-class efficient growth and the "Rule of 40," leading to a $1.2 billion acquisition in March. Marc breaks down his blueprint for scaling with purpose, embedding efficiency into the DNA of a company, and challenging conventional wisdom. 

Accelerating Growth:

• Conventional Wisdom: Scale your sales team rapidly to hit growth targets.
• Intentional Wisdom: Focus on improving win rates to double or 2.5x your capacity without adding headcount.

TAM:

• Conventional Wisdom: Prioritize the total size of your market potential.
• Intentional Wisdom: Target activated TAM—the demand being addressed in a given year—and aim to capture a larger share.

M&A Strategy:

• Conventional Wisdom: Burn cash and rely on strategic buyers for exits.
• Intentional Wisdom: Achieve profitable growth and rule-of-40 metrics to attract financial sponsors, giving you more control over the process.

Listen on Spotify, Apple, and Amazon | Watch on YouTube | Transcript at Madrona

Newsletter

Aspiring for Intelligence: Grading 2024's Predictions

With less than four weeks to go in 2024, the Aspiring for Intelligence team, Vivek Ramaswami and Sabrina Wu, looked back and graded themselves on the AI predictions they made in 2023, which were: 

• Open Source Models Eclipse Closed SourceDid it happen: No
• Apple Awakens (in AI)Did it happen: Kind of
• Multimodality Becomes The NormDid it happen: Kind of
• Agent to Agent Interactions IncreaseDid it happen: No
• The ROI Question Becomes RealDid it happen: Yes

As 2024 comes to a close, it’s clear that the AI landscape continues to evolve at a rapid pace. One thing that remains unchanged is the pace of development in AI grows unabated — it just goes to show the challenges of making predictions in such a rapidly moving field! Read their analysis of each prediction in this week's newsletter — and keep an eye out for their 2025 predictions coming soon! Read more and subscribe here.

In the News

GeekWire: How This Startup Used AI to Keep Raccoons From Invading My House

Madrona portfolio company Groundlight AI turned GeekWire Founder Todd Bishop 's raccoon problem into a clever AI solution — be sure to read the full fun story. After raccoons repeatedly broke into Todd's home through a microchip-detecting cat door, Groundlight's team deployed its computer vision technology to differentiate raccoons from the homeowner's cats, triggering strobe lights and radio sounds to deter the nocturnal invaders. The system quickly adapted, combining AI-powered recognition with human oversight to fine-tune accuracy. This quirky example highlights how Groundlight’s platform solves real-world challenges, showcasing the flexibility and accessibility of its AI tools for diverse applications.

Translating Proteomics

AI & Biotech — The Promise and the Pitfalls with Matt McIlwain and Vijay Pande

In this episode of Translating Proteomics, Nautilus Co-founder and podcast host Parag Mallick discusses the role of AI and machine learning in biotech with Madrona Managing Director Matt McIlwain and a16z's Vijay Pande. Their conversation covers:

• Advances that have enabled biotech to make use of AI and machine learning.
• How researchers are applying AI and machine learning in biotech.
• The future of AI and machine learning in biotech.

CIO Summit

How AI is Revolutionizing Software Development With Julia Liuson

It was an absolute pleasure to host Julia Liuson , President of Microsoft's Developer Division, and Madrona Managing Director S. Somasegar for a Fireside Chat at our recent CIO Summit.

Julia’s insights into how AI is redefining software development were both inspiring and actionable. From Github Copilot’s early days to its current role as a productivity multiplier for millions of developers, she shared practical strategies for founders and tech leaders to leverage AI for driving innovation, automating workflows, and scaling their teams effectively. Some key takeaways include:

Automate Technical Debt: Use AI agents to streamline updates, upgrades, and other maintenance tasks, freeing up engineering time for innovation.

Empower Non-Technical Teams: Equip business analysts and non-developers with no-code and AI-enhanced tools for prototyping and ideation.

Streamline Workflows with AI Agents: Use AI to automate repetitive processes, improving efficiency and employee satisfaction.

Prioritize Responsible AI Practices: Establish strong data governance and ensure compliance with usage agreements.

Thank you, Julia, for sharing your perspective with our community! For those who couldn’t attend, the full recording is now available on our YouTube channel — don’t miss it!

Portfolio Roundup

Unstructured launched a new Enterprise ETL Platform.

Amperity hired Rob Ferguson as chief revenue officer.

Clari hired Allison Carroll as chief customer officer.

Esper hired Bill Gelnn as SVP of marketing.

Echodyne was featured in an article in Advance.

Cohesity received a 2024 Geography and Global AWS Partner Award.  

Terray was featured in a Stat article about the companies tackling the challenge of designing small-molecule drugs.

Temporal Co-founders Samar Abbas and Maxim Fateev joined Techstrong TV for an interview and Maxim joined the Open Source in Finance Podcast by FINOS.

Qumulo CEO Douglas Gourlay joined the Distro Podcast.