Dave McJannet, HashiCorp CEO: A Fortt Knox Conversation

well welcome to fort knox uh fort knox conversation with dave mcjanet the ceo of hashicorp uh it's great to have you with me dave great thanks for having me um so we're gonna do this as we often do and start off um talking about uh what's happening at uh hashicorp right now uh just sort of what your biggest challenge is at the moment i think like a lot of companies we we have all adjusted to an at-home world uh we've had a we have a unique advantage in that we're about a thousand people a thousand employees and uh have always been a remote company um we we have an office in san francisco but probably 10 or less of our employees work there and the rest are remote so we have a very remote oriented company but it's been a real adjustment to have everybody at home with their kids at home uh on the internal side and then number two uh all of us learning how to interact with our customers in the world of dpit uh remotely as they're working from home so you know it's been it's been a tricky time for all of us i think it's settled in over the last couple of months to more of a rhythm and i think we're all you know saying yeah this is what it's going to look like for a while and we're getting comfortable with it so talk to me about the challenge in in what you actually do providing tools to developers to navigate this sort of multi-cloud world that we're in right now i imagine that there's maybe more intensity around the need that large organizations have to to get productive and and move to the cloud so i hear about a lot of companies moving to the cloud more quickly than they were planning to and something tells me you know that they need the the pickaxes and the shovels uh together they do yes maybe it's helpful to give a kind of a high level lens of where our products fit because we're a little bit of a difficult company to describe given the breadth of our product portfolio we actually have six different products which is unusual for a company of our scale but they're all in the realm of how to interface to cloud infrastructure and if you think about the world of cloud it's very clear that there are multiple cloud providers and cloud is where people are delivering all their new applications that we use all day so the new application platform is it's not amazon it's not azure it's not google it's not alibaba it's all of them um so that's the backdrop that that exists in the market is people needing to interface to cloud and all the clouds have slightly different personalities and they work slightly differently and at the core infrastructure level philosophically they're all very similar but in practice they're all very different from so for example how do i tell amazon to spin up a machine how do i tell azure to snap in the machine those are different problems um so we have a series of products that address that consistency for how you interface to cloud so for example how do i give an instruction set in a consistent way that's a product called terraform at the security layer how do i address security across clouds so that i can authenticate the identity of something that wants to connect to something else in a consistent way so it's security across cloud the third one is networking so how do things actually connect to each other across cloud pretty deeply technical domains obviously um and we make all of our products available in open source so in a sense the market is standardized to a large degree on how they interface to cloud in a consistent way at the infrastructure level so so yes the the catalyst for for people adopting cloud is basically building that new applications and the past six months have been an abject lesson for most companies on the need to build digital applications interface to their customers so we've seen i mean for the it was wild to watch for the for the just to give a sense i think we literally got about 80 million downloads of our core products last year so it gives you a sense of the scale um and we had all-time highs in the month of march and the month of april and the trip didn't stop because all the cloud operators of the world were really busy and you saw it for people like zoom who uh i mean you saw how like that's an example of an application that runs on cloud how their usage just ballooned and so that requires you to have to use things like our products to spin up compute capacity so yes it's we've seen a massive acceleration in interest and really on the front end of engaging with us um and you know over time that'll certainly flow through commercially but yeah the uh there's certainly a tailwind involved here what is what is this environment doing for um a startup like yours that's in this period of rapid growth i believe you've been what is it doubling revenue every four years you've been adding people quickly and then this extra factor uh gets added in of all sorts of both external pressures and catalysts at the same time i mean how do you how do you manage all that so we as a company we've been around since 2000 and really 2012 2013 but really started scaling around 2016 so the past four years have been as the market is is accelerated to cloud the past four years has really uh been a remarkable time i mean i i think we went from 30 employees in 2016 to over a thousand today gives you a sense for how fast uh the employer growth has gone and it's not because we're trying to break any records it's just that we have that much going on uh that much pull from the market so i think growing fast at any point is really difficult um for lots and lots of different reasons i think there are some rules of thumb where it's hard to say double an employee base in a year without really breaking things culturally and and systematically so we try really hard not to more than double in a year um and that's the journey that we've been on for the last few years and so we've gotten you know we've gotten quite comfortable with this discomfort of of being you know growing as fast as we possibly can and then along comes the sort of a macro shock and i think everything just gets i think the two things happen i think the first thing that happens is everybody goes whoa hold on a second we're not quite sure how this is going to play out and it introduces a level of stress to an organization where your customers are are all of a sudden their businesses are under pressure and so they stop their buying behaviors so the machine that you've created has to be recalibrated you have to say okay hold on a second do we need to slow things down a little bit and wait for the market to catch up and so we definitely went through that in the month of march and april to say hold on a second let's just recalibrate i think we came out of it realizing that the tailwinds of this are pretty profound as well in that this is going to bring forward a lot of the trends it's going to bring forward a lot of the shift to cloud in the same way that zoom and just they're just topical to talk about the you know the the video conferencing market's been brought forward probably by three or four years by virtue of what's happened and zoom's a beneficiary the same thing's happening on the cloud market and you see it in the in the revenues from the cloud uh cloud platforms themselves that it's bringing things forward so you still have these countervailing trends of both risk and you see the the tailwinds um and so it's it's a it's a challenge to figure out how do you calibrate yourself to to to that new reality and and uh yeah it's not easy on on for the business operation side on the on the people side this has been a really difficult time uh for everybody it's very unsettling for everybody and and keeping an organization focused and grounded and executing and delivering on the really really important role that we play for the biggest companies on the planet uh something that we work at every day but it's been a challenge well now let's talk about um kind of how you got to be uh where you are i think you've got an interesting uh path to the ceo seat um non-traditional in some ways but i see some parallels to other companies so there are two co-founders right um at hashicorp let's see uh i think uh we've got them here mitchell hashimoto and armand dadgar right right um and uh let's see yeah there they are uh on on your people page and so in a way the structure that you guys have reminds me of early google right when eric schmidt came in um because i mean not that not that the two of them aren't capable but that term adult supervision got used a lot and i think you know mitchell turns 30 this year and he's the older of the two um right you had a lot of experience in enterprise and in uh in tools that that developers really need to use to get work done how did that play into your coming on board as ceo so i i think yeah i think i find businesses that that work with other businesses are are different from businesses that work with consumers and i think that that is a real there's a real difference in in how these companies are built and created i had the great fortune of i'd worked in product development actually for a middleware company that uh that went public in in the 2000s and then i had worked in go to market roles at microsoft and then ultimately uh at vmware and then i had i had had the lead marketing role in a couple of companies that had decent runs so i had been working in the world of infrastructure and uh also in the world of open source so this peculiar combination of infrastructure and open source is a pretty small venn diagram so i had been introduced to armando mitchell about six years ago actually when they were even younger and they they had built a bunch of open source technologies and were trying to think about how to convert that into the vision of the the world's largest largest infrastructure company which they wanted to uh to bring to market and i spent about a year and a half with them uh just as a you know as as as things work in this part of the world there's a lot of overlap of commerce of professional and and and you know maybe more relaxed networks and i've been introduced to them by one of their investors who i had who's actually on the board of the company one of the companies i've done previously and we we just spent a lot of time talking about sort of how to build infrastructure companies how to build open source companies and i go back to this infrastructure company thing as being a unique thing i mean think about the role of infrastructure it's this quiet behind-the-scenes plumbing it's like the roads that get built that enable the cars and you don't you don't see it um but you know it's there and nothing works without it and uh we got to talking and they eventually said hey i you know i was working somewhere else the time they said do you want to come and do this to which i said well i wasn't looking for a ceo role i mean i certainly wasn't looking for a ceo role of a 30 person company with no revenue um and uh i think i was just struck by them honestly i think if you've engaged with with the two of them they're very very unique people who had a very clear vision of what it was they wanted to create and the self-awareness to know that there was a lot they didn't know and if they wanted to see the company reach its full potential that it would require partnering with other people and their view was if it takes giving up the coc to do that then we're fine with that and um you know it's kind of an amazing transition for someone that had you know had you know i've worked in finance i've worked in marketing i've worked in product development so i've done many of the roles but i've not done the ceo role before and uh you know there's a there's a leap on both sides that happens there there's uh there's a conviction that hey we like the behind the scenes role that these technologies play there's a particular nerdiness to them that i think we all like uh and uh and we took the leap and uh they were willing to give me the the control to do so uh which is been a remarkable journey ever since so tell me even even before that then how did you get to be um kind of a specialist in understanding this type of technology company because your original training was as an accountant and then you went into like product management and then marketing and then you know marketing specifically for for this niche so take me way back way back let's start way back i like to start way back where did you grow up what were you interested in as a kid so i always find my story's not particularly interesting but because everyone everyone has their own unique unique journey and path i i identify very strongly as a canadian i'm a i i i um you know i think there's a tremendous amount of positive the canadian culture so uh you know i grew up in canada i actually immigrated to canada as a as a young team and then i decided to you know i was always kind of interested in a variety of things there was no one thing i was interested in i think as i got a little bit older i i knew that this idea of general management was interesting to me and that if i was going to focus on general management i should think about the first 15 years of my career as a skills acquisition exercise so i'm actually you know taking that view that it would be in my 40s where i i wanted to be in a position to be able to do something really interesting and also be able to credibly do it so i spent my first um it's actually kind of a funny story i i became an accountant i worked for kpmg uh in a couple different cities and then i after a few years i once became professionally certified i ended up leaving and i moved to south america uh and knocked on doors until i found a job where i ultimately ran the investor relations for one of the big actually the biggest bank in the country ironically uh how it happened so i sort of shifted into into financial services but i through a slightly different lens where i was just kind of interested i wanted to work in spanish and be able to live in a different world where that would force me to do that and then i moved back to the bay area um actually you know my wife my girlfriend at the time went back to business school and that was when i sort of made the decision i said okay well i can keep going down the path of financing it you know deeper into sort of the latin american portfolio management for equities or i could just go completely sideways and spend a few years doing other things so i eventually landed a job in project management which became product management inside a deep middleware company i think that was the transition it was sort of this conceptual shift to say i think it's about skills acquisition i think if you want to build companies you need to know how to do it and so i ended up making this transition into uh into the deepest part of tech i was just interested in it i read a lot of job not a lot of people go from accounting to investor relations and then end up on a path where they end up being the ceo of uh a startup with a five billion dollar valuation and and you know presumably growing so i'm i'm curious to to even get a little bit more granular and maybe your mindset um because you started off saying you know you're a young person and then you went to general management no young people i know 17 or younger are thinking about general management what are your influences that that have you thinking about either skills acquisition or the uh ability to be versatile to to to not be locked into one thing yeah i think um that's a good question i i i had been involved in some small businesses as a kid and i think i was keenly interested in the revenue side of things because i think i think revenue is a demonstration of value creation i think that that is a big part of it is sort of say like you know i'm willing to pay a dollar for this coffee because i got a dollar's value out of it to the company that created the coffee that yields is revenue and it's an abject demonstration of value creation i think so i think that's a big part of it actually i think it's sort of this you know it's like how do you find these roles where you can you can concretely create value and um you know i had some exposure to that uh you know for college and and creating small business sort of work in small businesses and it always just sort of appealed to me and i think i think there's also there's probably there's probably sort of a drive for independence i think is probably a big part of it i think what kind of small businesses so i i so where i so i ended up growing up in a small town outside of toronto and uh i started up um you know eventually got involved in like the local summer camps and i ran i ended up running the sailing program for a couple of different places in in around the lake you know you know three four hundred kids kinds of kinds of things and he just gave me my first taste of being in charge of an an enterprise where you know you could see how you were doing based on your ability to uh to generate revenue over over a couple of periods for your period so all through college that's how i paid for uh paid for school um and then my family actually having it having uh we had body farm where we would spend all of our time um we it's kind of a funny story but we we would actually uh we conduct farming commercial venison so so you sort of you get very involved in the math of that and how you create sustainable businesses for one period of time so i think i think it was it was sort of that initial experience but i also think so you're going from like sailing camp to commercial venison well i think we're we're interested in a lot of different things yeah and and my parents were yeah but i think yeah i think i think it it actually comes back to maybe a more meta theme of i think we you know as individuals careers are long and we want to be able to develop skills that are versatile so that we are self-sufficient i think that's the big drive i think it's this push for self-sufficiency and the skills acquisition that says you know you could drop me into any any place and i'd be able to figure out how to how to make a business work and so the irony is yes we are we are on a you know hash course had an interesting run that um this is actually my fourth company uh that has gone through these runs where i was in the marketing seat for a couple of them you know those are also billion dollar companies so um you know the the last couple we did we did um so we did a company called spring source which became pivotal which went public at about a seven billion dollar evaluation and ultimately got required back into vmware you know that was a company i got involved in that about 10 million uh in revenue uh then we did a company called hortonworks where i ran the marketing again yeah got involved at two million in revenue and we're in public and you know it's a multi-billion dollar company so so sort of like you sort of learn how to do this over time um and so you know fast forward now yeah it seems perhaps disconnected over the larger arc but i think we end up specializing in this business building a bit for how to do this and understanding how to play the game i i like to ask um about the most difficult time in uh leaders either lives or careers but um you know specifically a time when you thought maybe this whatever your driving motivation or outlook on on career on life maybe this isn't going to work out where you came as close as you've come to rock bottom well what was that for you well i certainly knew i wasn't going to be an accountant forever [Laughter] was there a time when you feared you would and that was uh that was no no i don't think i don't i knew i wasn't going to be an accountant it wasn't for me i thought it was a really important way to learn the language of of uh of the world but not uh not financing you know i think i think there are lots of things that the shape your outlook um yeah i quit my job and moved to santiago chile to knock on doors to try and find a job you know there's some dark days there for sure but i think i think it's more about the outlook i think the i think maybe the things that influence your other things influence your outlook i think i think there are lots of different ones um you know my family emigrated to canada and so i understand what it looks like to be you know sort of sort of this need for independence i think is is a big part of it so i think that's probably the one i would point to it's it's a you know this this sort of acknowledgement that that you need to figure out yourself and um and i think that that sticks with you not not in professional sense but i think anybody that goes through the immigrant experience um you know understands what that looks like so tell me about that though what was it that was difficult about it or challenging about it in a way that kind of drove home to you the idea i need to figure out how to take care of myself well i think yeah i think canada is a phenomenal place in and it's it's a fundamentally immigrant experience i think and and there are many people from different places that emigrate to canada because that's that's where they can uh and i think our my family is from he's actually from um southern africa and and had been looking to immigrate for a long time and that was the only place they could get into and um you know you think about how what that kind of looks like to to make that decision to up and leave somewhere my parents at the time were in their mid-40s with teenage kids and you couldn't take any money with you when you left so you know that that that that sort of imparts a view of of you know it just sort of i think it creates this sort of um what's right word sort of like fanatical independence it might be the uh might be the implication of and i think but i think you also there's so many positives that come out of it too you become kind of fiercely independent but at the same time um so i'm not really that risk-averse either because because you know what it looks like and you know i think that there's that's hugely positive it's why i've lived in four countries uh there's a reason for that but you don't really think too much about up and and restarting because you've seen it you've done it before and i think when it comes to the business building venture that's incredibly empowering as well it's to say if not you then who um and and i think that's part of the reason why some of us get involved in this sort of repeated entrepreneurial ventures where you know there's something incredibly validating about the revenue generation side of it and building things of value that are concrete that are demonstrable and i think there's also it's also you know the really cool thing about these kinds of software businesses in particular is because the value chain is so clear the markets move so quickly that if you can identify a problem domain that needs to get solved you can monetize it very quickly because the markets move so quickly and so your role in the value chain is really really clear and i think that is a very cool thing to be able to point to it's why we do these things we've got a question that i think is is interesting from the viewer jason cannon uh how did you overcome the initial distrust of foreigners uh from chileans while doing business there did you encounter any of that well i think what you learn um what you learn when you when you're in all these different places is the fundamental sameness of people regardless of what country they live in what they're you know everybody has the same aspirations and the same concerns and the same objectives and and um you know my my experience in chile was was not that i think i think i it was almost the opposite where where i was able to land inside of you know signed it up like as i said running the investor relations for a bank called bank of santiago which is the biggest bank in the country and as a result i was sort of thrust into a slightly different world which is actually a bit un unnerving to me um i was 25 years old and i was having you know i would have lunch with the ceo of the bank regularly inside his wood paneled dining room um and i think that's so my experience is a little bit different i think because of the role i was playing um my role you know my experience was an incredibly positive one and and i found that again that sameness of people was the same regardless of where you are and the chilean culture was one that really really appealed to me i would have happily stayed there that my girlfriend came back to uh grad school um yeah so i think if someone's made the comment there about revenue as an indication of value creation i think um you know i reflect on when we took out the last company public that we did uh when i was speaking at the through the day of the first day of trading you know it's sort of encouraging folks to think about value creation and revenue is an articulation of value creation and i think there's something there's something we should all be proud of when you create businesses and people people you know they get excited about revenue growth but i can tell you like it's because you're creating value and just the way the math works that i i'm willing to pay some something because i get that much value from it they recognize that as revenue that is then rendered into their evaluation as a function of value so so it's something very simple and very clean and it's why hashicorp is a company you know we're very much behind the scenes company and we are not one that you know clamors to be on the front page of the news because we play this really critically enabling role behind the scenes uh and the only thing you really get to see is well the investment community certainly gets excited about it and it's it's not for any other reason other than the value creation that they can see and that manifests in revenue so it's fun for us um i like to ask out of sort of that that difficult experience and you talked about um being a an immigrant as a teenager to canada and getting a sense of how you needed to take care of yourself and this but i find that oftentimes out of these challenging experiences or kind of death valley experiences there's a core belief that that forms out of the way you manage to get out of it so i think you've talked a little bit about that about some of the skills capabilities versatility that um that you sort of gained as you grew but um put a finer point on that if you would what what is a core belief that you got from that period of difficulty and growth well i think yeah someone asked me uh in an interview last week you know how's your leadership style changed over over the course of time and it kind of made me smile because i think i think we are who we are and those those values are really relative somewhat early formed and you may have different leadership skills that you express but kind of your authentic self is your authentic self at this point and a lot of that gets formed early i think that experience i mean those experiences and generally i think i think they're very humbling and i think as a company you know certainly this one and the other ones we've done like that's a core trait it's it's there are a lot of smart people in the world much smarter than us you are and uh and i think we we all do well to it's to remind ourselves of that um so so there's this grounded view that you know that we're in an important position all the time and there are many much smarter people in the world that that are not seeing what we're seeing i think that's that's a big one i also think i also think the curiosity is a big one and i think those are there's an element of the intellectual curiosity there are lots of things in the world that are interesting i think once you get out of your lane and you start to look you see the patterns everywhere you know how to build businesses how to navigate oceans like all these kinds of things are interesting i think like sort of like the intellectual curiosity bit has been a big one i think the yeah it's sort of the you get an acute interest in the in how systems work i think because you're thrust outside of and you sort of like well how does this stuff work um and and uh i think that's sort of those things becoming in grand i think like the moving to a new country uh kind of the restart and and having to navigate it does force you to think about some of those things like well how does the college system here work like how how how does it work and you realize actually the immigrants you have no idea right uh you really have no idea how they work and i think i think it's sort of this outside view that forces you to say like let's let's really let's try to distill the system here so yeah i think but i think the big one is is sort of you know you recognize that like the core sameness of people everywhere and the the sort of the the relative skills that you have uh are not that meaningful um i mean you think about you know how how many immigrants you know we have and we have many friends that have to do this that that their certifications are not recognized when they change countries and so they end up driving cabs and uh you know doing doing the things that you would expect and um they're much smarter than us yeah i i talked to um max levchin about his immigration experience and he uh said something very similar about what his parents uh had to do um when they immigrated uh talked to tony xu uh from doordash uh same thing you know his mom ended up working in restaurants while she was building up the capability to to go back to the traditional medicine that she practiced so yeah that um that resonates quite a bit well now i want to sort of move into some just general questions period if there are more that come in from those who are watching and listening that's that's fine too but um what do you think it is that perhaps many people are missing right now about um how the technology tools that are available are going to change the landscape say five years from now you know i think uh so we're students of history when we when we when we start looking at at uh business building ventures where we kind of look at history and in the world of i.t there are platform transitions and so we always talk about hey 30 years ago every new application went on a mainframe you know up until now every new application goes on a server and now every new application goes to a cloud platform so i think i'm struck by this tidal wave shift of the world is going to cloud every new application in the world by and large is being built on amazon azure google alibaba oracle cloud maybe maybe a few others and i think the scale of that is not appreciated i think you think about all the worlds shifting to run their servers on amazon azure google alibaba and you just think about the scale of that every data center in the world quietly you know pausing and having on the new growth happen on on on cloud but i think the scale is underappreciated i think how early it is is underappreciated and if anything's been demonstrated over the last six months it is that the cloud platform is the right model for new applications pick zoom they were able to scale from 10 million daily active users to 200 million daily active users and nobody noticed the only reason nobody noticed is because it runs on cloud infrastructure and they just spun up more compute more compute more compute and it's effectively infinite like that's the big one it's the scale of what these this platform shift is going to be i think the second one is is how technology gets adopted is different today than it was uh a decade ago so in the platform transitions of old it used to be oh oracle would knock sales knock on your door with some sales people and say hey i've got your new version of stuff that runs on cloud and that's just not the way it works anymore uh we are all connected to the same network by virtue of being on a common internet and that means we can all now discover the best products to use and that's what's happened uh you know i looked on on one of this one of the places online this morning for this place called docker hub which is where a lot of software is open source software is downloaded console one of our products has been downloaded 500 million times and you go like that's almost inconceivable so so it's that second shift of the way software is getting distributed into the hands of the users that discover it which is incredibly disruptive to the i.t landscape and i think all the big companies on the planet are struggling not just with this platform transition the cloud but also the shift of distribution to direct to practitioner while to watch what is and you you kind of allude to it i think in a way there when you're talking about the scale of docker downloads and and perhaps adoption what's the role of freemium in the enterprise going forward because we we had we've had several runs at it and one of the more recent runs that i think of is like box and dropbox and their sort of way of going at at freemium which um was really high cost for them and they had to sort of move away from a focus on it is there a different uh model for freemium that's important to think about as we think about the enterprise going forward i think that's why you've seen open source be the way these businesses are being built i think i think what you're seeing now yeah i mean obviously we've seen a bunch of s ones covers come up over the last week and you've seen people like snowflake and others you're like wow these companies are huge and and um but i think what you really are just seeing is these are the companies that are maturing out of the last wave of disruption that platform transition to cloud and mobile that happened around 2007 2008 so profoundly the companies that were built around that are now just coming to market and they use different models and i think i think in the infrastructure market it's open source and so a lot of the companies that have gone public whether it's elastic or or you know even hortonworks and cloudera those are open source tech companies because that's how freemium works in the enterprise at the infrastructure layer we make our products open source so they can be downloaded by anybody there's no gate and then we build a commercial version that allows us to address the organizational challenges of running that stuff at scale i think that's what you're seeing is you're seeing uh maybe less so the free pre or premium model and more the open source model of the infrastructure layer so you need to kind of strike these markets because they all work slightly differently and at the infrastructure layer it has to be uh open source at the application layer yeah you see more premium where people are you know an application being like box or like snowflake or like you know then it's a bit more premium um because that's how you get the distribution we have the benefit of allowing it to be open source and so uh you know we literally you you know we got i don't know 80 million downloads last year uh and that's someone just coming to a repo and downloading it running it on their own machine that they pay for and then reaching out and engaging with us when they hit a particular scale point um another question that we got from roland de silva really asking if you can share some insights into how leadership capabilities and company culture evolved i know you just said that you know you sort of are who you are so at an individual level maybe you pull out different tools and different aspects of yourself but maybe you don't fundamentally change but for the company um how certainly when you came in you came in because the company needed a different type of leadership capability than it had um what are the continuing shifts in the needs of the company for leadership for culture as you move forward i mean the start the startup experience is such a fascinating one to me and i think i think having seen it now a couple times there are patterns to it and i'll come back to that in a second there are so there are patterns no question around phases where it starts because i don't think arnold mitchell needed me to give the company a different kind of a leadership they just needed someone else to collaborate with that had maybe seen the patterns before i mean they are plenty capable um they just haven't seen it before um we use the elon musk edict which is a company is nothing more than a group of people aligned around a common idea like that's the truth particularly in the world of software okay my thesis is against the backdrop of what's happening in the market my thesis is that the market needs this uh problem solved and that's that's our common idea so we are unequivocal about that common idea but we're actually aligned around two principles two two common ideas one is around the mission of a company and the other one are the principles through which we're gonna operate uh in the pursuit and retirement of that mission i think that's the important bit is absolute clarity on those two things is yeah our company phase is going to change you know our product proposal is going to change but these things are unequivocal number one is what's the common idea of the mission that we're pursuing and number two what are the principles with which we're going to retire that mission and i think if you keep reinforcing those that's how culture's created um internally it's sort of alignment around those principles now that the journey is fascinating because 0 to 10 million is a phase 10 to 30 million is a phase 30 to 50 millions of phases these are all phases that you go through as a company and you almost have to restructure things every time you go through those phases because people's jobs just aren't enough hours in the day anymore to do the job the same way when you hit those skill points but if you if you keep those principles clear you go through the phase shifts with with clarity and that's how you build sort of these enduring cultures that uh that are almost dogged in pursuit of their mission and and self-police right humility is is at the top of our list of principles that you look you look at on our website we publish them uh it's it's it's non-negotiable and and the the company self-regulates around it it's really cool to watch um in a forbes article one of the founders was quoted saying initially we thought the strength of the product and adoption of the community would be enough for us to build the company and spending more time with dave he really opened up our minds to the fact that to make a really big impact on the industry the strength of the product isn't enough what what more is needed well you know we heard people are people and and and enterprise software is about trust at the end of the day think about what our products do it's nothing less than how i spin up the infrastructure that's probably running this this video conference it's nothing less than like it's probably how they do identity-based security and networking under this application like this is serious stuff for serious people and we never lose sight of that and i think that the once once you acknowledge that and you go hey the person at the other end of the table is making a bet that i am a trustworthy partner to deliver on this promise over a long long period of time um that's what it takes to build big companies in the in the world of enterprise software unquestionably it's not that i have the coolest products is because in fact this came up with one of the the very first seven-figure deal we did the the um the basic point the person made was we love your product we love your company we love everything about it but it was clear to us that this organization did not know how to partner with a company like ours because we're just a big global 2000 company and we're messy and we we don't know what we're doing and we're not you know it's hard to work with us and you have to solve that part for them it's like the products work i mean i don't know most the companies on the in the forbes cloud 100 use our products as the basis of their offerings but the enterprise wants you to sell something different for them like these products work there's no question it's like help me make them work over a two three four five year period so by committing customer success support blueprints prescriptive guidance like do the hard stuff like building products is easy building companies is hard and i think that's what they're asking for how do you do that blueprint wise because that sounds like some of the stuff that you specifically knew how to do from some of the companies that you had worked with before is there an order of here's the sort of person that you hire or and they bring in a certain kind of team or how do you do it i think they're all different they're all they're all different i think that there are i think you end up saying hey in any company there are basically they're basically four plans it's not complicated there's a financial plan a people plan a product plan and a go to market plan and it goes in that order i declare what my financial plan is that drives how many people i can hire that drives what i can build that drives taco to market so you have to decompose the company into those initiatives and and say hey this is going to take time how do i create the structures in each of those things to make it go over time so you just need certain kinds of people you're going to need someone to run the go to market side you're going to need someone to run the product side you need someone to run the people side and someone run the finance side now at different phases of the company different things matter more so the like the zero to 10 million dollar phase for most companies is just about trying to find repeatability and trying to find can can this work and the founder and the initial team are doing much of the engagement once you get a bit past that you need professionals and then what you went into is you want to now you've gotten customers convinced to use your products but they're struggling to implement because they don't have the expertise so then again like clockwork you have to build a system integrator community of partners around you that you can go to market with to make sure that those companies are going to be successful i think it's more like that there's no blueprint per se but there are principles um and every company is different in terms of how they how they got there but you know those four plans are the basis i think uh you know what struck me initially when i got involved with hashicorp you say okay when i squinted out this mark like startups are bets is that maybe how to think about it um startups are bets as to how markets are going to unfold first and foremost that's what they are if you're right about that bet then you have the opportunity with good execution to build a company but having good execution without getting that market bet right is never going to work and i think that's the key for all these companies is their intellectual games uh of like it's like it's like a chess game that says hey i think that this is based on what's happening in the market i think this is how it's going to play out and then you know what happened to me when i got to hash court once we sort of got that puzzle unlocked you sort of sit back and go whoa this is going to be a big company because if that bet comes true we are not just participating in one market we're participating in four and oh by the way they're the four biggest markets in all of it so i better hire an executive quick and get in front of it sort of happen now here's the question that uh every startup ceo loves uh when's the ipo or if you don't if you don't have a specific date in mind how do you decide i think um so so we we are yeah i i am an accountant and so i am very i am like core conservative um and we and have been fixated in not getting over our skis financially so we very deliberately constructed a very efficient business at the scale so um what we've done is we've fundraised uh for a couple of reasons one obviously because as our company gets bigger you want to have a bigger buffer but a big part of it is making it clear to our customers that we are funded to be a strong independent company right again this is serious things for serious people i mean it is literally many of the applications you use every day including swiping your credit card and everything else go through this stuff and so that is our true north is this stuff is important and we need to be conservative for our customers when we take their money we're making a commitment that we are here for a long time so our financing has been deliberately conservative to allow us to do that again just different from other categories of companies that don't have that existential role and so we we take we we are and that is we are well capitalized for the foreseeable future um we will take our lead from our customers i think there is something really interesting that happens and i saw it in in the previous life where your customers are more comfortable when you're publishing your public company and you know when this is not like we're selling a database to somebody that they can rip out like if they start working with us they know when we know we're gonna be partners for a long time so there's a comfort level from them knowing we're in the governance of the public markets which i think is largely the catalyst and i think that's where we'll take our cue from so you talked earlier about trust and the importance of trust in the area of enterprise and devops or whatever you want to call the space that you're operating within are you saying that you're going to reach a certain point as a company where the next leg the next level of trust that's demanded from the customer base is really gonna um draw you toward being a public company yeah i think i think trust is something that we just demonstrate over time i think it's it's more comfort i think is is probably a better way to think about it is yeah uh you know there's a there's a reason that say for example snowflake um servicenow uh went public when they did they could have stayed private for a long time that but when you're working with the global 2000 which we do and we're you know we count hundreds of the global 2000 today as our customers i think we're eight of the fortune 10 or something like that um you know those are important companies and and they their comfort comes from knowing that we're in the governments of the public markets i think that's more the catalyst it's not about trust per se because that's something we demonstrate every day uh it's more about long-term comfort as a partner because we're a partner to these companies like they can't do what they need to do uh without a vendor playing this role they need us we need them and uh we know we're going to be friends for a long time snowflake servicenow one of those saluting companies yeah i'm a fan of frank simone i'm uh we're both we're both we're both sailing fans but he's obviously a bit more serious than me but but um yeah i'm uh i think he i actually think he's one of if not the best uh ceos in in all tech well i've i've enjoyed certainly having him uh on fort knox as well um well dave this has been a great conversation i appreciate your time and uh your candor all the things that you shared yeah thank you thanks for having me and everybody thank you for joining us thanks for your questions uh for your comments got a lot more great uh fort knox one on ones that you can expect to see coming in the days and weeks ahead uh and with that we'll see you next time

Channel: Fortt Knox

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Id: HCQnfWsAfEM

Length: 50min 40sec (3040 seconds)

Published: Wed Sep 02 2020