E53: Tomasz Tunguz on the Evolution of the Data Ecosystem

In this episode of Turpentine VC, Erik Torenberg welcomes back Tomasz Tunguz, GP of Theory Ventures. They dissect the investment landscape of data businesses through the lens of Databricks. They analyze the company's growth trajectory, competition with Snowflake, and its potential in the AI era. Tom presents bull and bear investment cases, discusses valuation metrics, and explores the strategic importance of data catalogs. They also cover the emerging trends in the modern data stack, potential market consolidation, and the impact of AI on investment opportunities.

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LINKS:

Tomasz’ website: https://tomtunguz.com/

Theory Ventures: https://theory.ventures/ 

Databricks: https://www.databricks.com/ 

Databricks' Accelerating Growth: https://tomtunguz.com/databricks-growth-2024/ 

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@eriktorenberg (Erik)

@ttunguz (Tomasz)

@turpentinemedia (Turpentine)

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TIMESTAMPS:

(00:00) Introduction

(00:40) Tomasz' initial thoughts on Databricks

(02:09) Understanding Databricks' technology 

(05:00) Unstructured data pipelines & applications

(06:11) Databricks' market opportunity & competitors

(08:05) Investability of Databricks

(10:24) Databricks vs. Snowflake: investment insights and market predictions

(13:10) Sponsors: WorkOS | Squad

(15:36) Bull & bear case for Databricks

(14:12) Unbundling of the database

(17:23) Databricks bullish outlook & investment considerations

(21:51) Databricks: a difficult technical problem

(23:15) The power of the data catalog

(25:25) Open vs. closed source: the Databricks & Snowflake dynamic

(28:58) The importance of compute workloads

(30:01) The modern data stack and the AI strategy

(31:31) Investor perspective and the evolution of the market

(33:30) The evolution of business intelligence 

(35:55) Databases & Al models

(37:46) The GPU market and NVIDIA's future

(43:09) Wrap