Welcome to Storyflo Daily Startups. I'm Stella.
Today's biggest story is a resounding 'yes' from the startups world - the public software basket is back green for 2026. After a tumultuous start to the year, the aggregate losses from the sell-off have been pared, and a chunk of the group is now putting up a monster year. Salesforce, HubSpot, Snowflake, and other household names have all seen impressive gains, with some companies like DigitalOcean and Datadog experiencing whopping increases of over 200% and 76%, respectively.
As SaaStr points out, this bounce is not a return to old highs, and the industry is still climbing out of a deep hole. However, this is a huge milestone for startups, and it signals a renewed sense of optimism in the sector. With the AI boom showing no signs of slowing down, it's no surprise that the companies that own observability, security, and the raw compute layer are getting paid. These are the picks-and-shovels of the AI business, and they're in high demand.
Speaking of AI, SaaStr's recent AI event has left many startups invigorated and motivated to build on top of Large Language Models (LLMs). However, as we learn from Vivun's CMO, Jarod Greene, buying an agent for every job may not be the most effective strategy. What happens when you have dozens of agents stitched together inside one sales org? It can lead to context loss, slowed execution, and a failure to deliver the information the customer needs.
For B2B companies, a great first VP of Sales hire is essential, but the real secret to success is not just about finding a sales leader; it's about finding someone who understands the product and the market. As SaaStr advises, for at least your first few reps, hire someone who you personally would buy your product from. This may seem simple, but it's a crucial factor in building a successful sales team.
In other news, enterprise AI agents are stalling, not because of model performance, but because of permissioning. Workday's Sana agent system of record is making its existing system of record the governance layer for agents, addressing the biggest hurdle - ensuring agent accuracy, especially for HR and finance users.
Finally, it's worth noting that as AI moves deeper into healthcare, regulatory rigor is becoming a competitive edge. Startups like Heidi are leaning into tougher expectations, investing in governance and compliance to ensure the tools they develop can be trusted in real-world settings.
That's all for today's briefing. I'm Stella.
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