Marathon

Marathon is a venture capital firm that invests in founders who are obsessed with defining their categories. @gokulr @mbgilroy @alexgorgoni @ChaseAPackard

[Michael B. Gilroy @MBGilroy]

N of 1 operator and friend. A lot of businesses are trying to follow her but you just cannot replicate @jackiereses vast set of experiences across both Fin and Tech!

She’s also my most newly converted @nyliberty super-fan which is fitting coming from Baba!

[Michael B. Gilroy @MBGilroy]

Listen to how many times the CEO of @cloudwalk says “customer” and “product” throughout the course of this interview. That obsession has led to 100%+ growth on >$2.5B of gross revs and >$300M of Net Income. Obrigado my Brazilian hermano @luisbebop

https://t.co/OvADe6NADa

[Gokul Rajaram @gokulr]

The $100M CRO Bubble

[I loved this interview that @HarryStebbings did with Chad Peets and Chris Degnan. Tons of great, counter-intuitive nuggets on how to build and scale sales teams. I'm enclosing an executive summary below]

Chad Peets (Managing Partner, RPT) and Chris Degnan (former CRO Snowflake, $0 to $4BN ARR), interviewed by Harry Stebbings (20VC)

Summary: Two of the operators who built the Snowflake sales org sit down with Harry Stebbings to argue that $1.2M rep packages and $100M CRO offers are inflating a bubble that destroys the meritocracy elite hunters actually live for. Their counter for every other founder: stop hiring from monopolies, never compete on cash, performance-manage every quarter, and let the bottom 10% go before the A players leave first. The case is uncomfortable. The throughline is durability over headline growth numbers.

1. The Comp Bubble. Anthropic is paying individual reps $1.2M total packages and CROs hundred-million-dollar grants, and the math does not survive once burn gets graded again. Peets calls it a bubble inflated by endless funding, where growth numbers are the only thing anyone is grading. When burn stops being a board topic, every comp benchmark in the market gets dragged up to match. The consequence lands in 18 to 24 months: when the bubble pops, the comp models pop with it, and the 500 to 1,000 people earning $10M to $50M packages get hollowed out.

2. Group Quota Kills Hunters. Anthropic ships with a group quota model, which means the best rep in the room and the worst rep in the room get paid the same. Degnan and Peets are blunt about what that selects for: passengers, not drivers, in Frank Slootman's phrasing. Salespeople are capitalists who believe in meritocracy, and pulling individual differentiation out of the comp plan tells the elite hunters that the company does not value their function. The company ends up stocked with $1.2M seat-warmers who never had to open a new logo and never will.

3. Never Hire From Salesforce. A rep at Salesforce or ServiceNow has not opened a new logo in five years because the company is a monopoly and Wells Fargo was already a customer when they started. Peets hires the opposite resume: someone who sold an inferior product at a tier-three brand and still won deals, because that is the only resume that proves pipeline generation. Brand-name logos prove the brand was strong, which is a different question from whether the person was. Stop interviewing by company name. Ask for two or three new logos opened in the last 24 months, with the champion and the economic buyer named for each one.

4. Quality Of The Org Beats Industry Fit. Peets does not hire on industry expertise, and he actively avoids security people because most security companies are channel-driven and never built outbound muscle. The right question is who trained you. "Can I call somebody that I know and respect that this person worked for that says this person is world class?" MongoDB and Whiz under Dolly Ro are the templates: medic disciples who developed their people and held them accountable.

5. Raising A Round Means Nothing. Degnan's first job when a founder gets high on their own supply is to remind them that three guys writing a big check is not an accomplishment. The pattern he sees is CEOs claiming they can hire the best CRO in the world because they just raised at a unicorn valuation. There are four or five CROs on earth who can go anywhere they want, and the math on what they need is not the math on what this Series A has. The job of the advisor is to reset the expectation before the founder makes the offer.

6. Booked Contracts Beat ARR Theater. Monthly recurring lumped into annual recurring is a head fake, and so is "my peak day was 10 grand, extrapolated to $3.6M." Degnan never paid Snowflake reps on on-demand contracts because there was no moat, no friction, no time. A booked contract buys time: if Anthropic ships a feature next month, the customer cannot just flip the switch. Founders who pay sales on usage instead of bookings are funding the next competitor's switch-over.

7. The Forward-Deployed Engineer Trap. FDEs are a glorified professional services function, and the best engineers do not want that job because they want to work on the core product. The pattern Peets has seen: hordes of FDEs ship custom code that never makes it back into the product, and the customer is left holding the technical debt. There is a balance, and the enthusiasm has run past it. "The Forward Deployed Engineer is not as good as the core engineer that's building the core product. That's just fact."

8. Performance Management Is Quarterly. Healthy sales orgs cut the bottom 10% every year, which works out to two and a half percent every quarter, and most companies are not doing it. Degnan's confession: he got lazy after Snowflake's IPO, stopped inspecting one-on-ones, stopped checking forecast calls, and the rot showed up at the second-line manager layer. Bringing Peets back in was the kick. The A-player test: if you tell a real hunter that the bottom 10% gets cut annually, the answer is "you fucking better." If you don't, the A players know they should not be there.

9. Eight Face-To-Face Meetings. The proxy for a working sales org is the second-line manager's travel schedule. If they are at the bottom of the travel report, they are not working. Degnan found a North America lead at Snowflake who had not been on a plane in five weeks, and that was the problem. Flight count predicts revenue better than any AI dashboard.

10. Pick Up The Phone. Every CIO is inundated with AI-generated prospecting emails that have the wrong name and the wrong company, and the volume only grows. The thing that still works is calling, leaving voicemails, texting, calling again. Peets does not let his guys send LinkedIn notes; they have to get the phone number. Nothing replaces a human relationship when the customer's job is on the line if the product fails.

11. Forecasting Is Still Data Driven. Doubling from 50 to 100 used to be a celebration, and now it can put a company out of business, and the way you build the number has not changed. Take productivity per rep, multiply by headcount, factor in attrition and ramp, and you can call the year inside 90 percent. The new wrinkle is the windfall clause: if a rep stumbles into a $20M deal, the company gets to reset the comp plan rather than pay $4M in commission. Degnan invoked his five times at Snowflake.

12. The Exit Drought. Liquidity options have collapsed: the public market is closed below a billion in ARR, tech buyouts are gone, and "look at xAI and Cursor" is not a deep enough exit universe for the rest. The workaround is secondaries and tender offers, which is why CROs are now negotiating the right to sell 20 percent of their shares annually inside the comp plan. The result is two-class workforces inside the same company: tenured executives sitting on tens of millions in liquid stock next to junior reps who have not hit a vesting cliff. The cultural cost of that gap is the next thing founders will need a playbook for.

[Michael B. Gilroy @MBGilroy]

I have been long fintech in LatAm for quite some time. Beyond Silicon Valley, you'll be hard pressed to find a population w more resiliency & entrepreneurial spirit.

I'm excited to chat w my good friend @ggiaco Founder of @GetClaraCard during @WebSummit in Brazil.

@MarathonMP is also co-hosting an event with our good friends at Monashees during the conference.

https://t.co/uCxkaPCEfV

[Marathon @MarathonMP]

@MikeCjunior @immad @mercury 💪🏽💪🏽💪🏽

[Michael B. Gilroy @MBGilroy]

The @mercury team is very methodically building next major F.I. There is a very carefully curated software suite underpinned by world-class risk / compliance and now the benefits of a bank without needing to trade like one. This is a $100B company in the making.

[immad @immad]

1/ Today @Mercury received conditional approval from the OCC to establish Mercury Bank, N.A.

I started Mercury in 2017 to build the bank I wish had existed as a founder. Nearly a decade later, we’re getting there.

🧵

[Gokul Rajaram @gokulr]

DESIGN: THE FIRST AI CASUALTY

I'm increasingly sure that 2026 signals the end of product design as a full-fledged stand-alone function within companies. If so, it will be the first role / function to be eliminated by AI on a go-forward basis.

Instead of hiring FT designers, startups are hiring / will hire design consultants to create a design system that the founder likes (this takes a few weeks max). Once the design system is finalized, PM/Eng feed it into their AI tool of choice to generate prototypes. The design system is refreshed annually by the same consultant.

Larger companies will likely not backfill design roles and will do some targeted attrition to reduce the design department to 20% the size it is today.

If you're a designer, I think you have two choices:
1. Become an entrepreneur: Start a design agency and become the go-to resource for design systems for startups and even larger companies. This can be a good recurring revenue business.
2. Become a builder: Add PM/Eng responsibilities to become a product builder.

Would suggest you embrace this proactively vs waiting for the other shoe to drop.

I'm really sorry about this - some of my best friends and the people I admire most and have learnt the most from are designers - but it seems inevitable.

[Gokul Rajaram @gokulr]

THE BUILD CEILING

In the past few weeks, I've seen two different startups lose enterprise deals: one $1M ACV killed at the final stage of approval, another seven-figure ACV (that's been a customer for 2+ years) now on the chopping block. Same reason both times: the buyer decided to build internally instead.

This is the new last-mile risk in enterprise sales.

If you're selling application layer or workflow software to any team inside an enterprise, think hard before crossing $500k ACV. Above that threshold, your real competition is an internal employee plus an AI coding agent: not the next vendor on the shortlist.

The math has shifted. A mid-level engineer or a domain expert with Claude Code or Codex can now replicate a functional workflow tool in weeks. Not a perfect one. Good enough. And "good enough" is all procurement needs to justify the kill.

The underlying dynamic: enterprise teams are now being evaluated on AI nativeness. Finance, HR, ops: every functional team has an AI transformation mandate on their 2026 OKRs. The fastest way to demonstrate AI chops is to kill a vendor tool and replace it with something built internally. The switch signals more than cost savings. It signals that the team can build.

At $50k ACV, nobody staffs a project to replace you. At $500k+, the VP has a business case that almost writes itself.

Pipes products are largely safe: build complexity is high and switching cost is real. But dashboard-style workflow tools: approval flows, reporting layers, lightweight data apps, form-based operations software: these are exactly the category a mid-senior level employee with domain expertise and an AI coding agent can ship in a sprint.

Call it the build ceiling (TM). Every application layer startup now has one. Most founders don't know where it sits for their category.

Founders selling workflow software: understand your build ceiling and audit every prospect and current customer. And proactively price below the build ceiling: the price point where the ROI of replacing you never pencils out.

[Michael B. Gilroy @MBGilroy]

Retail investors completely miss this scaled private market performance. Much of this is driven by a supply/demand imbalance at the super late stage of the ecosystem coupled with an elite level of mental gymnastics.

These companies will only go public when they have completely exhausted their ability to raise capital at an up-round at which point they have such a valuation overhang they're forced to face the music OR compound forever at breakeven hoping they can grow into it.

We are all hoping that these LLMs will make enough money to wash away the sins of the monster co-invests that are happening everywhere... DPI and IRRs beware.

[Michael B. Gilroy @MBGilroy]

And shoutout to our favorite fintech infra business in the world @Lead_Bank and @jackiereses who played a HUGE role in supporting @atlascardhq from day one of the pivot. @Forbes @JeffKauflin did a nice job covering this important moment for the business

[Gokul Rajaram @gokulr]

Four years ago, @atlascardhq faced existential challenges that could have doomed it. Instead the team went all-in on super serving a specific segment of its customers, and now has built a consumer brand that’s growing rapidly without ad spend, and has an exceptionally retentive and highly engaged user base. Forbes article linked below:

[Michael B. Gilroy @MBGilroy]

Trend ✅
TAM ✅
Business Model ✅

Excited to work with @eladgil and Co

@MarathonMP @gokulr @AlexGorgoni @ChaseAPackard @gggeverettt

[Atlas @atlascardhq]

We’re proud to announce our $40M funding round led by @eladgil and Verified Capital, alongside @01Advisors and @MarathonMP. This capital will expand our foundation, advancing in-house technology and operations, and enhancing our dining, lifestyle and travel offering.

[Gokul Rajaram @gokulr]

CHELSEA FURNISHED OFFICE SPACE AVAILABLE

The @MarathonMP NYC team is moving to SoHo, which means we have a furnished, move-in ready 1-year 3400 sq ft sublease in Chelsea (25th & 7th) that can comfortably fit 25-30 people. The 1 year lease provides a lot of flexibility.

If interested, please reach out!

[Michael B. Gilroy @MBGilroy]

For some odd reason I feel @jackiereses would also be an excellent farmer..? @Lead_Bank is 10 steps ahead of the few coming after them with a team, infrastructure and bank that will stand the test of time (cycles). 🫡

[Gokul Rajaram @gokulr]

Atlas Card (@atlascardhq ) is a superb example of how to disrupt the legacy incumbent by radically improving the consumer experience. Kudos @patrickmro and team Atlas!

[Gokul Rajaram @gokulr]

First time founders are seduced by a firm’s “brand”, sometimes at the exclusion of everything else.

Those that have gone through the fire before and have seen firsthand what really matters, are experienced enough to look beyond the veneer of the brand and evaluate the substance of what the firm and partner offer.

Perhaps not a coincidence that a large % of our founders at @MarathonMP are repeat founders.

[Harry Stebbings @HarryStebbings]

Eight moats of a sustainable company in 2026: @gokulr

1. Data (Google)

2. Workflow (Veeva)

3. Regulatory (Coinbase)

4. Distribution (Intuit)

5. Ecosystem (Shopify)

6. Network (Facebook)

7. Physical infrastructure (Amazon)

8. Scale (NVIDIA)

What is the most important for you @honam @rabois @shaunmmaguire @JaredSleeper @karimatiyeh?

[Harry Stebbings @HarryStebbings]

Most podcasts are BS because they are fluffy and lack substance.

This is the densest, most insightful episode you will listen to this year.

@gokulr breaks down the 8 defensible moats you need for your company to be successful in a world of AI.

1. Data (Proprietary and inaccessible)
2. Workflow (Deeply embedded operations)
3. Regulatory (Licenses and contracts)
4. Distribution (Exclusive proprietary channels)
5. Ecosystem (Third-party platform reliance)
6. Network (Marketplace liquidity density)
7. Physical (Infrastructure and atoms)
8. Scale (Low cost through volume)

(Links below)