LOGAN: Jyoti, thanks for doing this. So I wanna get this right. So you're the founder of AppDynamics, sold to Cisco for $3.7 billion in 2017. Uh, but today you have three separate jobs-ish. So I, I wanna get this right. Harness mm-hmm. Traceable. Mm-hmm. And Unusual. So Harness has about 800 [00:02:00] people most recently valued at $3.7 billion.
LOGAN: Was that, that that couldn't have been an accident
JYOTI: Yes. , that's the, that was the goal I was shooting for. Yeah. And the valuations don't mean anything, but still, like, , you have, , a good number is a, is a good number
LOGAN: You sold AppD for $3.7B.
JYOTI: and it was kind of the five year mark of selling MD and I wanted to get like, , that was the goal five year, let's get, let's try to get to the number.
LOGAN: Yeah, that's great. Uh, traceable has about how many people?
JYOTI: About 175
LOGAN: 175. And most recently valued at $450 million. And then Unusual Ventures has a billion under management, roughly
JYOTI: like $1.2 billion.
LOGAN: And so you're the. You're the CEO of the first two, and you're a partner on the third. So you have, you have, uh, way more jobs than, than most people.
LOGAN: How, how do you actually spend your days? Like, how, how do you allocate your time across those different things?
JYOTI: first of all, I don't think of like, and a lot of people ask me this thing. That's probably the number one question. Like, how do you do all this?
LOGAN: It's unusual. I mean, I, yeah,
JYOTI: , I really [00:03:00] don't think in terms of time management, I really think of like, , where do I have to make impact? And I can even call it like impact management now. Just like if I'm not making impact, , it's not worth spending time on those things. And if you tuned for that, like, , where impact could be like, , if you're spending time, can you move the needle?
JYOTI: If you're not spending time, can you move the needle negatively as well? Right? So that's both impact on both sides. And I like to maximize most of my time on those. And that can change, like, , that can change because we end up spending a lot of time on things that, , it's not gonna move the needle one way or the other.
JYOTI: Uh, if I reduce that then creates a lot of time free up a lot of time. Like you're not doing just unnecessary things for the sake of it. Um, but , I obviously you have some patterns that you have to follow. , I follow some, like, , that's the, like the regularly scheduled meetings for harness happens on one day and , for traceable happens on one day and rest are kind of free flowing.
JYOTI: So I kind of try to keep like no more than one third of my calendar, which is like just locked up on things, , so it's like free flowing and I can figure out what to do.
LOGAN: And so does the [00:04:00] time end up balancing, I guess, over the course of the year, at any point in time it might oscillate, uh, up or down on the companies itself, but does it end up being 50 50 over the course of a year or some years?
LOGAN: Is it 30% here, 70% there?
JYOTI: Yeah. I, I don't
LOGAN: you don't even know.
JYOTI: I don't even know, I don't like to interact like that. Yeah. And it's, it, I look like, I don't care how the company's doing well, which are the areas, if, if some area needs a lot of work, like you, it requires like you have to really, really drill down and spend like, , 50 hours a week on something.
JYOTI: , you find time to make that happen. , if, if you don't have to do that, that's great, like, , but if you just, you have to find time to make forward progress. That's how I look at it. I don't, I don't look back at a year and say, where did I spend my time? It's like, , I look back at the year and say, what did we do in the last year?
LOGAN: Do you have overlapping investors between the two companies?
JYOTI: Uh, yes. Um, unusual Ventures
LOGAN: Yeah. So your venture firm invested in both? Yes.
JYOTI: And um, uh, one of the firms IVP is investor in both.
LOGAN: Did, did the other venture [00:05:00] investors ask this question, or is it like, Hey, you sold a company for $3.7 billion, so we're sort of just in the Jyoti Bonsal business?
JYOTI: it's a, it's a very natural question
LOGAN:Yeah, totally.
JYOTI: they ask me and, and they should ask me like, how do you, how do you do, , three different things. And , I tell them like, and I would, I do it as long as I think I'm doing a great job at it, , or if I think my time is becoming a constraint and doing, doing it right, then I will, , see that maybe I should not do it.
JYOTI: And. Your time doesn't become constraint if you, , look in more in terms of impact and how do you are making the, uh, doing the right things that will change the trajectory of the company in the right way. Second one is that, second is you still have to set the tone of the, as CEOs of the, of the, of the business as you're doing that, rebuilding the right, , bringing the right vision, the right, uh, , the alignment across the different leaders that's there.
JYOTI: Uh, but I also like to work long hours. , it's not, uh, for me like 60, 65. Maybe 70 hours is, is not, , abnormal. If I'm not, if not doing that, I feel like I'm slacking that but it's my choice. Like, it's not that I have, I'm so anyone is asking me to do it, , it's, uh, , I don't have too much interest in playing golf or like, , doing things that, uh, , this is what I enjoy.
LOGAN: when people gimme shit about having a podcast as well.
LOGAN: I'm gonna point at you and say like, if this guy can do all of that, then I can do, I can get behind a mic, uh, once a week to talk to
JYOTI: Why not? Like, , it's you if you are enjoying it, , and you can balance it. It's like I look at like, we are all smart enough, mature enough at this point, and all these, , when we are in our, our careers and lives that we learn how to manage, , different priorities.
JYOTI: It's not like, , when you have to really, really tightly track your time and figure out the priorities, like, , it's, but it's, it's all about prioritization.
LOGAN: You're, you're assuming a lot, uh, in the, that, that I am mature, but I appreciate that sentiment there.
LOGAN: I so, so do you keep, um, I, I'll let this topic go in a second, but you said you keep about a third of your schedule
JYOTI: unbooked?
LOGAN: and that's for things as it comes up and kind of variable things. Are there, [00:07:00] is there anything else that you do interesting with your calendar? Well,
JYOTI: I, I like to see like, , you have like almost like recording meetings, like, , weekly.
JYOTI: Sure. , executive staff meeting, , uh, every two weeks, , and both my companies, we have all hands meetings. Uh, you have like, , one-on-ones, things like that. Like, so, which are like just on the calendar either once a week, once every two weeks, once a month, once a quarter, whatever it is.
JYOTI: I, I like to keep them to fill no more than 35% of my calendar is my, normally my rule. So then the rest of the time, You can plan and you can, you can adjust on, , what's what you need to do, where to make the most impact. , you obviously need the recurring things to have the cadence in your business.
JYOTI: Uh, but what I've seen in many times, like your whole a hundred percent of the calendar is filled with just recurring things, but you don't have time to do anything else. So that's, that's why I,
LOGAN: why I,
JYOTI: I like to keep, keep simple, uh, and kind of make sure like, , have flexibility.
LOGAN: Does that time, the, the two thirds, does that tend to get filled with other meetings that are sensitive, uh, time sensitive in some way?
LOGAN: Or does it tend to get filled with deep thought and [00:08:00] stuff for you to where you can make the biggest impact? Or is it, am I looking for No,
JYOTI: No, it's really depends on what's going on. Let's say, , I, I like to spend time with customers, so that's like, that's there like, and I want to go and meet customers. Uh, I like to spend time like recruiting and like say sometimes you're recruiting for some key hire.
JYOTI: , maybe your whole two weeks or fill, , majority of the time you are spending in, uh, in trying to recruit the right person there. Right. So, , sometimes it's like, it might be just deep in the product with the product teams. I the deep thought of like, , I'm sitting in a cave somewhere and doing deep thought.
JYOTI: I don't think so. Yeah.
LOGAN: Yeah, yeah, yeah. That's a venture person.
JYOTI: but that happens also sometimes, like, , you just want to, , put your headphones and uh, , and maybe research something and think about something. But that's, that's to me is happening.
LOGAN: Yeah. Yeah.
JYOTI: all the time.
LOGAN: Now, uh, I talked to one of your investors, Matt Murphy from Menlo, uh, who worked with you as well at AppDynamics, and he said, um, he said that you have a number of really interesting frameworks and he was very complimentary about, uh, how you have been able to go about finding product market fit.
LOGAN: So I want to [00:09:00] ask about that, but one of the things that, uh, you did have a, a structured framework that I, that I heard you talk about was, uh, evaluating opportunities for entrepreneurs. And so I think you said there were three different components in how you thought about it, evaluating the market size, the actual need for the product, uh, in the market, and then the passion for the opportunity.
LOGAN: Can, can you talk about like that framework and how that, how you give that advice to, to founders?
JYOTI: , that's the number one question. Like, , people, uh, think of a lot of time like, I have this idea, should I quit my job and start a company?
JYOTI: Or should I start a company about it? And people ask for this thing all the time, right? As an engineer, I like to create frameworks for most things, at least some basic mental frameworks. So
LOGAN: that's, you have a lot of good ones, by the way. I'm gonna ask you about a bunch of 'em. Yeah.
JYOTI: so my framework on this is like, I look at like, , first of all you have to look at, , do people care about solving this problem?
JYOTI: , that's like, is this a real pain that people the world cares about? , second is the world. Many people in the world care about it, or there's a small number of people.
LOGAN: so that's the market size one. How big is this market?
JYOTI: know, and I look at, like, say someone [00:10:00] has an idea that, , I want to build a trampoline for dogs to jump on.
JYOTI: , do people care about it? Like, , maybe some people do. Like, if like a hundred people in the world care about it, do you really want to start a company on that? The third is then, , so you have to really validate that. And I look at like, , you have to talk to a lot of people to figure out, like, , is it a big problem that a lot of people care about?
JYOTI: Uh, is it real, real problem that people will pay for solving, uh, solving? And then if you figure those two out, then you look at like, are you really, really passionate about this problem yourself? And do you, I also, , ask people to look at like, are, do you have some kinda unique insight, expertise, something about this.
LOGAN: The why you, ,
JYOTI: , why you part of it? Because if it's a real problem that the world cares about solving, like, can you really win in solving this? Right? So then that, , if you, if you want to, like, if I have to start a company in fashion, something, , even though there's some real problems there that identify.
JYOTI: There's very unlikely that I'm gonna win. I don't really have any unique insight, unique expertise, unique something. So that's, maybe you should not start a company [00:11:00] there. So I look at it, the simple test, if you can, do that you're pretty convinced that the market is large? Pretty convinced that the problem is what?
JYOTI: Is, like people gonna spend money on solving this problem in some, some way. And that you are willing to, , spend a lot of time because you're passionate about this, this problem, and you have some unique expertise or insight. That's a good, good thing. Like, then you jump and start, try start the company.
LOGAN: Do you think about if the market is large today? Or do you pick a point in the future and say, Hey, can this be large if x, y, z happens?
JYOTI: It's a, it's a combination of things. I think. I do think, , and I, I've tried to create a framework around it, but didn't really work well on that, that topic. But still, I feel roughly about, like, I feel like two years is about a good, , future reference.
JYOTI: Like where you think like, , okay, it's our, I. If the market is not today, if it's, it's fine. If it's there two years from now, if it's gonna be five years from now, your startup may not survive that five years. Like, , you have to have in a very, very unique spot to have so much capital to survive through that.
JYOTI: So I feel like two years is the right. If you, if, if the, if the market is [00:12:00] right now very, very ripe, there's high chance you're late, you're a bit late, , and so I feel like two years is about the right time, like, , where the puck is going two years from now. Because you can find early adopters now if something is going to be like, , ripe and mainstream like two years from now, there will be good number of early adopters today.
JYOTI: That is, so you go after the early adopters, now two years from now, it starts getting more mainstream. , that's where most people are getting, getting to. So you are ready to go and capture the mainstream at that point. , that's kind of roughly, I, I like to, to follow the, the, as a rule.
LOGAN: Now you've, you've had to find product market fit a few different times, starting a, a few different companies as well as investing and having seen it.
LOGAN: How do you think about, um, what framework you apply to making sure the component outside of the market size. The second one was, will the dogs actually eat the dog food, right. Or will the dogs jump on the trampoline to use your example, what's the methodology and process that you go about evaluating this
JYOTI: Product market fit is such a, such a vague process. Like, , you ask 10 people, there'll 10 definitions to begin with. How do you go to product Market fit is really people, most people think it's [00:13:00] a, just a, just a dark art, ? So we have tried to create a framework around that. And, , I, I've brought in my experiences from AppDynamics and Harness and Traceable and, , everything that I've seen and, , at Unusual what we, we, we write a lot about it.
JYOTI: We have the unusual field guide to talk about it, which, uh, and to create, share the experiences kind of can bring it down into a few areas, like, which is one is that focus on. On real cold outreach to get to the, to have real conversations. What happens many times is like, , you start as a, as a founder, you find some friends and family, some investors will introduce you.
JYOTI: You are, if you're in a place like Silicon Valley, there'll be the Silicon Valley Echo Chamber. You'll talk to, like, , uh, people in Silicon Valley, and you just not hear the right feedback. Like, so if you can find people cold, who will be your likely target buyers at some point, and they will even take a meeting with you and you can validate something with them,
JYOTI: that's a, that's, that's a, that's a good sign.
JYOTI: So that's what we, I would say first part of the framework. Like, , don't just go in this warm meetings around, like, I remember at, , [00:14:00] AppDynamics, uh, I first started, uh, there as one of our investors. So let me introduce you to some banks in New York and , the administrator had a few connections there and, , I did a trip trip to Wall Street, , and, uh, this was like, company was four people and I did a trip to Wall Street, , I didn't have any, I didn't want to spend any money, so, , took up, , changed my shirt and, , washed my face in a Starbucks too so that I don't have to pay a hotel room.
JYOTI: But then I did the whole, like, I met like seven different banks in, in, in, in, in, in one, one day. Like back to back. Came back like, oh, great set of meetings, , high fives to, to our team. Like, , we have found the product market fit, like have great meetings. And then I started following up with those seven people.
JYOTI: Like, , hey, we are a great meeting in New York. And, uh, , following up on being a beta customer or something, no one even responded, , and that, that clicked to me is like, , that those people took the meeting because, , it was a warm intro. They wanted to be nice to the, to the person making the intro and
JYOTI: meeting was good because they wanted to be nice to me because, , they just, if you're a founder who are passionate about your thing, they [00:15:00] don't want to be like, , tell in your face, uh, that your thing is not good or they don't care about your thing or they don't need your thing.
JYOTI: And since then I realized like, , the best way to get real good feedback is
JYOTI: cold. Like, , you reach out to people cold on LinkedIn, if you're not been getting response from anyone, there's a good chance that like, , no one cares about your problem or like, , your message or what have you said talking about it, if people take the cold meeting with you, there's a good sign that that means there is a interest in this thing.
JYOTI: , if the meetings go well after that, where they don't really have an obligation of any kind to be nice to you, , that's a, that's a good sign as well. Right? So that's, that's really the first part of it. Second is, , do a lot of it. , people, a lot of people do, like, , I talk to three people or five people and , this one customer we talked to here, , they said this thing and they're excited and ready to go.
JYOTI: And, , uh, I'd like to tell everyone is like, , you gotta look at at least 30 to 50 conversations, , and the conversations to the point where the, the test is when you're hearing the same things, , it's the, if you start hearing the same things, that means you have [00:16:00] found, uh, you've done enough conversations that you're not really learning anything new.
JYOTI: It's the same things again and again. And the third is being iterative about this. Like, whenever the first thing you start with, like you say, this is the problem you're solving. This is why our differentiated technology solution to, to solve this problem is,
JYOTI: message and story will not be right the first time, right?
JYOTI: So you do five conversations, you'd trade and do another five, and you'd trade another five. You'd trade. By the time you're at 40 conversations, you've kind of figured out the, the solution. Of how you sell it and how you talk about it, and do you have the right product, market fit or not. So I, I like to promote that.
JYOTI: And that's what, , we talk a lot about that unusual as well, which is the, this kind of framework of go cold, , in, in outreach to a high volume so you're not like biased by a few. And it trade quickly on that. And then you have like a sort of a good definition of your 40, 50 people who are saying the same things.
JYOTI: You figure out how to like, , talk about this, the differentiation, the product, the, , the pain, that's the basis of a good product market fit.
LOGAN: So you've gone cold to these people, you've heard validation of [00:17:00] product market.
LOGAN: Mm-hmm. Fit being there, at least commonalities that they're using the same words. Mm-hmm. Now you start building the product and there's a balance between speed. Mm-hmm. And product quality, and there's a tension between those two. How do you think about that now that you've heard this feedback, going back to those customers and saying, Hey, we have it.
LOGAN: What's your framework for making that?
JYOTI: I think this one a lot comes down to what is the, the market, right? And if, if you're going in a market where there's no existing incumbent, speed is important. Like, , because the quality bar could be low, the quality as in like, , the completeness of features, et cetera. Like, , because it's, uh, it's something is better than nothing.
JYOTI: If there is nothing, the
LOGAN: MVP is low, the minimum viable.
JYOTI: you used to have this, uh, whole, uh, Lean startup thing, and people got too crazy on the Lean startup thing. Like, , people will come in, I build this thing very lean, and then this, this thing. Now look, if you're going in a market with a lot of incumbent players and like strong incumbent players, the Lean startup thing doesn't work.
JYOTI: Like no one is gonna [00:18:00] buy your Lean MVP. And so it's like, , you have to find something that's, uh, , many times it's like you have to get to at least the, , the, some kind of parity with the incumbent. If you want to go and replace the incumbent. And if incumbent has a lot of, , important features, you have to go and get parity.
JYOTI: And then you build the differentiation on top of that, right? So your MVP definition is very different. Depends on how strong the incumbents are. And so to me it's like, how, what you build out, it depends on that. Like, , it's like if you look at, say, , a great example was Workday, , when, uh, Workday was starting to like, we gonna be the SaaS version of PeopleSoft.
JYOTI: People will replace PeopleSoft with Workday. Now if you apply the, like, , the, let's start with a very small subset of the PeopleSoft features, and now no one is gonna replace PeopleSoft with Workday. So even your MVP one has to have everything that PeopleSoft will do. And that's the, and that's your, your differentiation is that you're SaaS PeopleSoft was not SaaS.
JYOTI: So that's, , but your MVP bar is high, so you have to finish that to go and build that market. [00:19:00] If you're going into a completely new market where there's no one there, then yeah, you start fast. So that's how I would balance it.
LOGAN: What about in, in the, uh, product development life cycle? So now there actually is a product that's out there in the wild and you've, you've either gotten it quickly or you've built for a while and, and you're trying to take feedback and there's a bunch of different constituents that can give you feedback, right?
LOGAN: There's your own intuition, which, uh, then there's salespeople out there talking in the field. There's what your engineering team thinks. There's what their product team thinks all of them are probably, ideally they'd be singing the same tune, but probably all have different competing priorities.
JYOTI: they are not, and they're competing priorities. And I would say the, the, the product leadership team in a, in a startup has to, or any company really, um, a startup, normally the, the, the founders and CEOs will be the product leaders. You have to manage that. , actually I've written about this framework in a, in a, in a post, uh, called, uh, like the, the four lists that someone has to manage.
JYOTI: The one list is, , what your, uh, what your customers are asking for, , and customers are asking for, Hey, I don't have this feature, I don't have this feature. I can't adopt. And if they're unhappy about something, they can, , [00:20:00] and, uh, so you have to, to build that list. The second list would be what your salespeople are saying that, , we don't have this feature, we're losing this deal.
JYOTI: Or, , our competitors are, are, , are really, uh, , putting things, uh, in the market that we can't compete with, , unless we have these things, et cetera.
JYOTI: the third list after that is your, your kind of like technical debt that builds up over time, like an architectural debt, quality, debt, , different kind of things, which the engineers are asking for, Hey, we need to stop building features and do this, otherwise everything will crash.
JYOTI: Or we will have performance issues, or we'll have like, , security issues or whatnot. Right. And the fourth list, , which is I call like the, the, the kind of your vision list, which is like what the, what, where do you need to grow? The, the, the, the, your tam your market, your opportunity, like the new, , many times when you start to start something, anything, like you have a big vision and you start with maybe 50% of that initially, and now you have to build the rest and, , maybe your vision is growing over time as well.
JYOTI: So that's the fourth list. So anytime you almost have to balance the four, like, , it's like, , your four lists. You any, let's say you're [00:21:00] doing a, like a planning for one quarter of engineering work or one sprint of engineering work. You pick some things from each of the list and say, okay, what's the, that's your, that's, that's your, your, your plan for this quarter or this sprint.
JYOTI: And things can change. Like, , you're losing a lot of customers, , on churn you may have to fill most of your work with the debt. And if you're losing a lot of deals to customers, to competitors, because you don't have like one feature that's like a, your competitor is kicking your ass on that one feature.
JYOTI: You have to, , prioritize that, , but it's normally you want a balance of balance of things along those four.
LOGAN: Do you, do you actually have those lists written out? Uh, and you're, you're checking 'em off and I'm assume some of 'em double overlap and you're,
JYOTI: they, yes, they do. Like, and , normally we'll have, like, , let's say the feature requests are coming from customers. , we'll make them like, , as a, as a list. And these are like, , mechanisms we'll use like maybe tags or something like, we'll, we'll, you can filter in, in Jira and you, so these are a list of all the feature requests coming from customers.
JYOTI: You're prioritizing it, the product managers are managing that backlog. , you have another list that's coming from, like you, a [00:22:00] sales rep people, not most likely sales engineers who are like, , maintaining a list of the feature gaps you have compared, , why you're losing a deal, et cetera.
JYOTI: And then the engineers maintaining their tech. And so these are all like, , um, the lists are, are there very openly for us, , and then we kind of manage bit the, the, when we plan, we, we, uh, , we balance them out. The framework works very well. Like, , I've been doing it for a, for this kind of thing for a, for a long time now.
LOGAN: Yeah. Yeah.
JYOTI: It's, it's, it's a simple framework, but I do think like, , having that mindset of like, , that it's always a balance of those four and you make a conscious decision on what you're taking from those. And , and also like, , sometimes you also making conscious decision on where do you spend your.
JYOTI: Your dollar's on. Right. , let's say, , the fourth bucket I call the fourth bucket is like the, the, with your vision kind of bucket is you're also expanding your addressable market. Like, because if you keep doing what you're doing in the first three buckets, maybe like, , you're fine for this year, but like, , I that's, that's how you look at, like, say you're doing 5 million revenue this year and your plan is to 20 million next year, that's, you have to start building towards like, do you have [00:23:00] enough addressable market and do you have enough, like, , you have to expand into adjacent areas for that going from five to 20.
JYOTI: , so you have to invest into, in, into that, that far ahead. Right. So it's key as well.
LOGAN: I've heard you say that you structure your teams as startups within startups, and you, there's, there's some way of operating in which you, you assume, uh, or that you encourage the team to assume that the other departments aren't actually good at their job and that they need to be the best at what they're doing.
LOGAN: Can, can you talk about like what a startup within a startup actually means for these different departments?
JYOTI: Sure, different things though. The startup within the startup, when I set it up, it's more around the product areas. Like, , it's like, say an. I look at like, , most companies will start with like one product or one, it like one product, one major use case that you are focused on, , and you'll start.
JYOTI: Slowing down on your growth if you only do that one. So at some point you have to go from one to two. So your second product to third product to fourth product. And like, , most of the markets, you have to keep growing into a platform at some point. Like, , if you want to be billion dollar [00:24:00] revenue, it's hard to do it without becoming a platform.
JYOTI: Uh, but it's very hard to innovate, , in the, and building a second product successfully, or a third product successfully for the companies. And that's where I, I, , like this, um, kind of a model of, uh, , when you're building a second product, almost start that as a startup inside the company, , and what that means is, like, , when you start your first product as a startup, as a real startup, you normally have a small team, maybe like, , five, six engineers working on it.
JYOTI: , uh, we're very driven about, , uh, making, finding the product market fit, building, moving things moving fast. , they're not, uh, slowed down by processes. And, uh, , the, the burden that comes with, with, with, with it. So when you're building a second product, you want to do the same thing, , which is not normally, not what, what normally happens.
JYOTI: Like, , if you have your first product is mature and selling and , you, so you at that time you have to mature your processes on quality and how you do engineering and how you talk to customers and you have like, , how you sell it. All of those are like, , designed for that mature scale.
JYOTI: And now you try to build [00:25:00] those same things on your product. Number two, it just fails. Like, so I like to do like, , product number two, build Exactly. Go back to exactly how you build your product, number one successfully. And it should not be any different, , when you build your product.
JYOTI: Number three, it's the same, same kind of thing, right? So, so I, I like to structure these. When you build new products into like your sort of a small startup inside the company and even the funding model is very similar to a startup. Like, , when we look at like, , let's say when you're building the, your, you're starting building the product, you normally need like five, six engineers.
JYOTI: And once you start getting to, let's say, , call it the, the seed stage startup for, right. And when you start getting to like, say half a million, a million of kind of revenue, then you kind of grow that to, , 10, 15 engineers. , when you start getting to, , maybe three to 5 million of revenue in that, then you start growing it to like, , 20, 25 people, , and, and that, that product kind of start up when you start growing it from like, , maybe 10, 15 million revenue, then you put it to like 30, 40 engineers at some point it starts like, you don't need it, but you, you can even tie your investment not too different than like how the, the, the, the venture kind of [00:26:00] investment work.
JYOTI: And to me that's model has worked so well. Like AppDynamics, we started with one product and we grew to like, , by the time we are, , we are going i p o and all that, we were, we were about nine products at that time. And , that was why we were growing so fast. We were growing like almost, business was almost doubling at that time because the nine products we were able to build. At Harness, I kind of brought in the same model and tried to, to kind of do a even more mature version of that startup within startup model of like how we go from one product to, to much more like, , harness. We, we are in the DevOps, uh, uh, platform space and we started with one product, continuous delivery, and just in a few years we have expanded into like, , we have eight products in the market.
JYOTI: We're really strong and competitive to the best in class players there. And people really ask like, how do you build all these things? Like, , you have CD and you have, , CI and feature flags and cloud cost management and. So my, where there're separate startups that compete in all of these markets because of the startup within startup model that the kind of, that we have been able, able to do.
JYOTI: So that's the, that's the startup within startup concept, which I really like that, , [00:27:00] it allows to scale. And to me the inspiration always been Amazon on this. Like Amazon has done a, like how Amazon became Amazon is this a fundamentally a model like this. Like that's how they have, , gone from like, , one product to second to third into like, , what they have gone into, into all these different markets and build, build amazing, uh, , products in these markets.
JYOTI: So it's kind of a similar-ish concept in the B two B, uh, kind of world that, that, that we bring in. Your second question was about like, , I think I talked about this, uh, at some point where, um, I want every department to be. , excellent on its own, , it's like, I call it like the, what's a competitive advantage?
JYOTI: Like, , some companies have that, your competitive advantage is your, how you do engineering, that you do engineering so well that, , it's hard for, that becomes your competitive advantage. Some companies have, like, , sales is your competitive advantage. Like they do, , the sales execution is so strong and that's your competitive advantage, , and people when say that, like, , the, the, the companies with engineering as a competitive advantage, like our product is so good, sells by [00:28:00] itself.
JYOTI: We don't need sales and marketing people. And the, the sales, sometimes the salespeople comes from really good sales environments, right? They will say, , uh, we had the fourth best product in our, in our space, but our sales was so good. We still beat everyone because , we are so good sellers, we can sell in a, like a comb to a bald guy kind of thing, right?
JYOTI: So start to like, , like, why not just have that as a mindset then? Right. , which is not a mindset. So to engineers, I like to say like, let's build a product that, , we can, , that is so good that. We don't need the best sellers. And to the sales guys, I tell them like, , let's bring the best sales execution like that.
JYOTI: You don't need the best product. , so we have both as a competitive advantage. And the other one I also look at is like, is the cus customer success? Like, , can you make customer success as a competitive advantage that your customers are saying, Hey, these guys are so good in supporting the customers that we want to buy from.
JYOTI: , that, and then I've seen that's a competitive like, , becomes a competitive advantage as well. You can have your marketing brand as a competitive advantage as well. So I like to say like, , if you, if you have one competitive advantage that your product is [00:29:00] great, but other threes are not, that's still fine.
JYOTI: But you get two or three as competitive advantage that buy on it on their own. They are, they're a big competitive strength and advantage. Why not? And then you combine them, then it becomes like, , real really powerful.
LOGAN: Before founding AppDynamics, you were a engineer at Wiley, which was kind of a V1to AppDynamics’ cloud, uh, version of the product.
LOGAN: Um, and you went from that to CEO. How many people did AppDynamics have?
JYOTI: about 1500
LOGAN: 1500. So, so you scaled along the way. Um, I'd be interested in that path and, uh, going from figuring out how to manage all these people and all that. But one of the things on the journey that I thought was particularly unusual that, that you've alluded to is you really found religion on sales and enterprise sales.
LOGAN: And even at the beginning when I asked you how you spend your time, you talked about meeting customers and recruiting, which are both sales. Was there a mentor or someone that sort of t taught you that [00:30:00] path? Or did you just figure out this was something you needed to become best in breed? Because especially at the time you were doing this 2000 8, 9, 10, uh, there was all the mm-hmm.
LOGAN: No salespeople, Optimizely mindset of let the product sell itself. We'll, never need salespeople again.
JYOTI: let me, uh, , let me correct on the, where I spend my time. The core of it, I'm a product guy, so the, where I like to spend the most of my time is product. Got it.
JYOTI: , it's like, um, so customers recruiting, , can take a lot of time, which is great. Uh, but I, where I run most of my time is product. And actually in most of my companies, I'm the chief product officer as well. Like I, , AppDynamics, I was the chief product officer. I don't hire chief product officer because that's my, I consider that's my job and that's my strength.
JYOTI: And same in harness. Like, , I'm the chief product officer. I run the, the product myself, like the product teams, , uh, I don't have a senior level, uh, product leader because of that, and that's where a majority of my time goes. So that's, , just wanted to, to, to, to
LOGAN: Yeah, yeah.
JYOTI: But you can't build, build, , great products without talking to customers, especially in our kind of space where the, the, the B two B [00:31:00] kind of enterprise, uh, kind of space.
JYOTI: So that's why you have to spend a lot of time with, with, with customers there. But being a product guy, , that's where the challenge is. Like, and how do you find religion in sales as well? Right. So I, I'll tell you, like at AppDynamics, you are about, um, Our product was very strong. , we had the best product in the market.
JYOTI: , we are, so, we are, we are, we are growing rapidly. , we are about like, , grew from the, the just launched the company we were in, uh, maybe seven, 8 million of a r r, uh, uh, growing fast there. And I met with Dave, David area, who's the, , uh, C at MongoDB now. He was, he was, uh, uh, let's say trying to figure out what to do at that point.
JYOTI: Uh, , uh, uh, he was just, he just left B M C at that time, and I met him for breakfast. And we were talking about this like, , that our product is doing so well. And I was also in this thing of like, , the product, it's all about the, the, the great product, which I, , that's my strength, my, that's my superpower is, and that we had all these advantages in our product, and Dave was like, , that's this all great.
JYOTI: But what, imagine like, what you, if you [00:32:00] have the similar kind of. Advantages on the sales execution as well. And, and if you can combine the two and , that's, that's really what started me, uh, , getting, uh, started me on that kind of journey on like, , can you combine a great product with a great sales execution?
JYOTI: , that what happens at that point, that was his, his challenge to me. Like, , can you combine the two, like, , you great product combined with great sales execution. Then I met with, uh, John McMahon, uh, right after John McMahon is many of your, the, , listeners and all will know is it's kind of a legend in the enterprise selling world.
JYOTI: Uh, um, , it came from this company, P T C, which became a legendary company on how the sales, , sales was done in a very scientific way. Um, and uh, so, , he became an advisor to, to AppDynamics and I learned a lot from him, , on what does. , selling means, , when I started as an engineer, I thought selling was like, , slick guys with like slick hair whining and dining and playing golf, and that's the only way [00:33:00] you do sell sales.
JYOTI: , it was kind of this kind of, um, almost like a black art. And which by the way, most people still think that's how it is, which really is not the case, ? So that's what, , uh, spending time with the likes of, like likes of, of John McMahon, , you start learning the, there's a science behind enterprise sales.
JYOTI: Like, , the science of like, , the. How it's all works. Like how can you do it in a repeatable, scalable kind of way. And that really fascinated me. Like, , that's, uh, that, that you then you don't have this like, , uh, , product. I know how to, how to build the great products, , but I almost felt like, , this is black art of selling, , after that.
JYOTI: And the only way you do that is, is product like growth, et cetera, which is what, , what we are doing at AppDynamics early on. And then we tried. Then once I learned that, , sales could also be more predictable and manageable and have a, there could be a science behind sales, , I just got very fascinated about it like that if you combine the two, then you get the best, uh, , best, uh, best opportunity there.
JYOTI: That's why we [00:34:00] ended up building at AppDynamics and , that's how I look at, , harness the, we have ended up, we have built it built. That's how we are starting to build at.
LOGAN: It's, it is amazing the McMahon tree that permeates, uh, Silicon Valley at this point, the number of great companies that have sort of grown up under his tutelage.
LOGAN: What, um, if, if, if you were a first time founder or a young founder that comes outta technical background, product oriented in that, were there any, any lessons in particular that you have about thinking and even approaching understanding sales? Uh, you mentioned the architecture point and that there's actually methodology behind it, but any interesting things that you learned along the way that, that might be, um, helpful to someone that's kind of first broaching this topic?
JYOTI: I think the, the, the number one, if like someone is new to understanding this is sales is a numbers game. That's really is the foundation of everything scientific about sales. That it's really a numbers game that you want to manage in the right way, which is like, , if you want to have a million dollars of business, I.
JYOTI: [00:35:00] Yeah, you, how many, , um, , sales opportunities, you need to have, you need to have maybe three to $4 million of sales opportunity. What does an opportunity mean that that it'll convert like from three to $4 million to a million dollars. What's the definition of it? , so that's becomes a qualification and all that criteria, right?
JYOTI: So you have a predictable rate of conversion from a numbers game, from stage one to, , some stage to the final stage, , to get to a sales opportunity, how many meetings you need to, to do, , and it's, it's, it's eyeopening for many first time, , um, um, engineer turned the founder CEOs and it was eyeopening for me.
JYOTI: Like, , like to, to get one customer. When I, when you realize, okay, to get one customer, we need to have about, about, , uh, somewhere around 15 to 20 meetings. And then you realize like, , that we are like obsessing with every meeting, which is good, which is good, but really it's the numbers game of like, , that I need to build the machine that I need 15 to 20 meetings.
JYOTI: , the 15 to 20 meetings will convert to like, , maybe five to, , uh, 5, 5, 6, [00:36:00] , uh, qualified sales opportunities that will get me like, , two or three, , close deals there. Something like that. Right. But that just realization that it's, it's a, it's a, it's a, it's a funnel with a, with a numbers game.
JYOTI: And what you need to is do is to manage the size of the funnel, right? Like at every place, but also the, the conversion rates at every place, right. And tune them in the right place. That's, that's the, , I would say the, the primary first time learning on the, from an engineer to, uh, , to, to have around sales.
LOGAN: What about scaling as a leader? So you, you, you grew, um, from just yourself as a solo founder, uh, which I want to ask about, but then, uh, leading a, a very big team, um, what were some of the lessons about hiring people along the way? Like different executives, you brought in, different team members, uh, that you had from the AppD journey, and then that you brought over to harness.
JYOTI: You learn as you as, as you go. Right? , uh, a lot of times people think like, , the answers are all figured out. Like first time founders, I tell them all the time, [00:37:00] like it's the, it's. There's no point trying to learn everything, , upfront. , focus on what you need to do for the next 12 to 18 months and just try to learn that.
JYOTI: Like there's just Silicon Valley and the whole tech world is so bombarded by so much advice, by the way. And the
LOGAN: advice. Some guys even have podcasts for it, ?
JYOTI: , or like some guys who come and talk on podcasts and give advice, which are like, , I look at sometimes that advice could be overwhelming and, and too much like, so you really focus on what I, the way I like to think of is like, , what do you need to achieve in the next 12 to 18 months?
JYOTI: That's the next major milestone. What you need to learn in that for that, right? So you learn in that and then you, as you go, you achieve that and you don't think about the what beyond that, too much. And then you go to the next one and you learn there. So same it when growing as an engineer turned first time founder to like managing the business.
JYOTI: That's kinda how I look at it. Like when I just first starting, like what was the, the, the success criteria for me for the very beginning was like raise capital, uh, and, , hire a initial team of [00:38:00] maybe five, seven people, uh, and build a good product market fit. So when I look at like, , hiring team and learning skills for myself as well, it's really came down to those three.
JYOTI: Like, , I, I never raised capital before. Can I learn how to raise capital to get the company going? , I actually never recruited before, so can I convince like five, seven engineers, good engineers to come and join me as there, and then can I find product market fit and do I need people to help me through the, through either either of those three.
JYOTI: Right. So that's your ex your journey to building the team. Now you achieve that milestone, let's say, right? , which is like, say a year, 18 months later. Now your next milestone is in early sales. Like, , that you need to find people to do, , you, you have, as a company, you have to get to the first million or two of sales and get the, , the close your first deals when we launch a company outta stealth.
JYOTI: So you need some marketing expertise you to, to launch the company, get the messaging and positioning, right? You need to have like the sales expertise to get that early sales going to, , so you need to find the people with those skills and you have to learn some of those skills so , into some [00:39:00] level as well.
JYOTI: Then you start getting the next stage, like, , okay, now you are, , you have to start scaling your sales. Where like, , you can't just have the founders with a few salespeople, , selling, uh, , to have a, it's now you need to find people who are good in those skills. Like, , how do you build a scalable sales organization?
JYOTI: How do you do demand generation in a scalable way? , how do you do customer support in a scalable way? Your engineer engineering team is growing, so how can you do like, , more structured engineering, , at a, , at, at a scale. So now you start bringing those leaders and you learn how to manage them.
JYOTI: Like, and then you go to the next level, and now it's like, about scaling even more. And like you're running it, like, where it's not just one level of management. You have like two, three levels of management. What do you need to learn on that? You keep start getting closer to an I P O. It becomes a lot about financial management and financial tuning and, , the, the, the, the, , uh, so it's all different skills and I look at like, , it's best is to just.
JYOTI: Go as you, , uh, and go deep into that particular skill area and bring [00:40:00] the right people on hiring, , who are very good on those. Like, , so at any stage you want to partner and bring the right people, , who some you can learn from also. And , you who can, who have done some of those things before.
JYOTI: So you are, , as a, as a founder, you, you, are, you, it becomes easier for you. Um, I always look at like, , the areas where I don't know too much. I need to hire someone who's, who's extremely experienced and who has done that, that kind of job before in areas where I know a lot, maybe I can hire someone who's not done that job before and still fine.
JYOTI: Like, I'll still feel comfortable. So that's how I, uh, that's a framework I kind of done at what I did at AppDynamics. Like I never did sales before. So the first time I wanted to, like many people, let's just hire a sales rep or two or three sales reps, right? And I was like, if I can. The, I don't even know how to interview the sales reps and I don't even know how to manage them.
JYOTI: Like, , so can I hire someone who has done that before and like, , so I can learn and they know how to hire sales reps and they're more experienced. I don't need to teach them, , or I don't need to manage them, uh, in a, in a, in, in a high amount of detail [00:41:00] because I don't even know how to manage them, right?
JYOTI: So then I, , bring a VP of sales who knows how to do that, and then it becomes easier, and then you learn from them as you go, right? So then you can improve at some point, , maybe now you can do sales better, right?
LOGAN: In the interview process as well, you, you had said that you, you'll use that as a learning opportunity, and so maybe you use VP of sales as an example, or VP of marketing or something.
LOGAN: How do you go about using, if that role exists, using that as an opportunity to really learn, uh, and, and get better yourself at it?
JYOTI: , interviews are great. , it's almost like a, um, like a hack to learn about something. , say, let's say you want to figure out, like if you want to hire a I'll make up a VP of, uh, demand generation on for, for your company, and you have no idea like, what, what really to, to, to hire it.
JYOTI: To look for. Right. , we are, uh, so let's say you start interviewing people, , people will come in and you ask them, Hey, how would you, this is where we are. Like, , right now we are at 5 million of [00:42:00] revenue and we want to grow to, , 50 million of revenue over the next, uh, this year.
JYOTI: These are our constraint. We are not getting enough demand from here. Our product, like, is this, our competitors are like this? , how would you build a demand generation program for, for, for, for, for, for our business to solve these problems? And what's your experience of like, , success or failure of similar situations before that of?
JYOTI: Right. And someone who's, who has done that before, they'll tell you like, , okay, this is what, , your plan, , if I was in this, this role, this is the plan I would, I would build, this is what I would do. And they can also tell you like, , we tried these things in my last job here, this worked well and this job didn't work well and I've done this before where, what the learnings are.
JYOTI: And now you have that conversation for like, , with someone and you do with like, , if you do with like five to 10 people, you'll learn a lot. Like, you'll know like, okay, what is the right, , Plan for you, your company? Probably like, , it's almost like the, , the what, what I was talking about the product market fit.
JYOTI: Like, , at some point it, the conversation start become, sound sounding the same, same thing on this as well. Like, , [00:43:00] because you start learning in the interview process and then you can start the next, asking the next level of questions, , and then, , , like, uh, what your plan should be and who is the right kind of person for your company as well.
JYOTI: Right. So I, I have, I find interview process quite, uh, quite a good, , it's, it's a good hack to, to learn about, about something.
LOGAN: It sounds like it depends on the functional role that you would do this, but how do you think about hiring someone that's been there, done that? Uh, because, uh, inevitably if they're willing to join your company and they've been there, done that there, there needs to be a reason that they would go to theoretically an earlier stage business to go do it versus taking a chance on someone that can be in their ascendancy of their career who is very high potential.
LOGAN: And so, which one of those did you orient more
JYOTI: Um, , it's a, yeah, it's normally my teams have been a balance of the two, like half the teams would be on the, , young up comers, , you take a chance on them and you kind of build on that. And half the team is [00:44:00] very experienced people and so, It really depends on the person.
JYOTI: And , I normally would say I really like to take chance on, on, on people who are who, who are, who are earlier. But at the same time, I do think like, , every function in your company is at the, is is kind of like the same. You're taking some risk of lack of experience, uh, in, in, in the organization.
JYOTI: So you have to kind of balance the team out. , it's the, on how your executive team is like, , in some functions it's a good, bad, , good seniority and been there, done there.
LOGAN: And
JYOTI: it's hard to recruit, like, , being there, uh, done there people if you're earlier, . But yeah, that's the beauty of the, the startup economics and the startup world.
JYOTI: Like, , and the startup people like you, people who do want to come in earlier stages, , they who'd want to build, , they like the, they like the building. Like, , and you want those people. You want, like, that someone who has, uh, and maybe they've not gone like, , let's say you're bringing someone, someone who has gone from a, , 3 million to 25 million, uh, journey of a startup and , not now, maybe they want to go from.
JYOTI: , 10 million to [00:45:00] 75 million journey of, , this time, but the, like, that build up the journey, the hyperscale, those are the people you want to bring ideally. Right? And, but it's good that they have seen some of that, , what happens as you grow. And maybe they've not gone to the stage that we want to get go this time, but it's, it's still, those learnings are pretty powerful.
LOGAN: I heard you say that culture fit wasn't something that you hire for.
LOGAN: Um, why, why is that the case?
JYOTI: I find the concept culture fit very strange. Like it's the, the way I look at this, like, , so you're hiring someone from Google, a very different culture. You're hiring someone from Apple as a strong culture. You're hiring someone from Amazon as a different culture. Now if you ask them, like, , to assess the culture fit by.
JYOTI: , tell me how you did X, Y, Z in your current job. And they, if they're working Amazon, they will tell you, , this is how you do things. They're working at, , apple, they'll tell you in a different way what they, because that's how the company cultures are. So it's really judgment on the person, on the culture, on like how they operate.
JYOTI: , it's not really, so I, the way I look at them is like, , , my company has a culture harness, has a culture traceable as a culture, ab done mix as a culture. Can this person fit in our culture? [00:46:00] Which is very different than like, , a lot of the culture fit is all about like, , so I look at like, , can we teach them our, , , so we focus a lot on like teaching our culture instead of like, , uh, in, instead of trying to figure out the fit, et cetera, like, , it's, if someone joins Apple, they will learn how to operate in Apple culture.
JYOTI: Are they a fit there? At the time they joined? Probably not. But if they're not willing to change how they operate, that's probably is a bigger problem. , if someone join, joins Amazon, they'll operate in a very different way than they, they join Apple. So I look at like, can we teach people to operate in our, in in our culture?
JYOTI: Can we be deliberate about defining our culture is, , and can we create a deliberate framework around, around that? And so to me it's more about like, can people go and learn our culture less about like, , what culture, how they operate. And most of the culture fit then ends up about like, , is this a, , , uh, is this a person you want to grab a beer with?
JYOTI: Which is important thing. But the problem with that is like, , that creates a lot of the, the, the kind of, the lack [00:47:00] of diversity, , , everyone starts, , uh, looking and feeling and talking the same. And that's why I don't really think too much about, , it's like testing for culture fit.
JYOTI: , I look for like, , hire the right people, , who are coachable, , who are, , who are, um, , smart and coachable. Is, is the, is is what we look for. And then we coach them our culture, , but that's, , and that's, that's it.
LOGAN: Can you assess that in an interview process or do you need to do reference calls to figure that type of thing out?
JYOTI: Most of the times you can do interview process, , if you have a interview process done with multiple people in the interview panel, that write database, uh, you can, like, smart part is like, , a lot of it's like, , what they have done before, uh, is will, but how you, how you ask like multiple levels of questions in an, in an, in an interview on, , do they really have the depth in what they're talking about?
JYOTI: , they have the really, , push the boundaries of something to solve like some harder pro hard problems. So that's [00:48:00] you, you look for in that, , like you have, like, , if you have four smart people interviewing someone and they all say, okay, this guy's pretty smart. There's a reasonable chance that that guy’s or, or girl, uh, , And you have like, , now it's the same thing applies to the the coachable part. Coachable part. I like to look at like, , throw them different things and, , see how they're flexible. Like they're intellectually flexible on, on new things and learning and , how fast learner they are and how they like to learn new things, et cetera.
JYOTI: So you can make that as part of your, your, , interview process,
LOGAN: et cetera. Mm-hmm.
JYOTI: Uh, references are important for some roles. References are pretty important, but, , it's hard to do references on for every role. Yeah. Second is, I feel like most of the references are kind of bullshit. , it's like people don't say bad things, , you have to find the right references.
JYOTI: Uh, , I feel like, , many times, instead of doing the reference call, you can, you can achieve everything from the reference by just having a list of references. If someone can't give you a good list of [00:49:00] references from their prior bosses, et cetera, like, , that's a problem if they give you a good list of references. You probably don't need to do the call because you kind of know, like, , if these people are willing to be this person's reference, they, , that's all, all good,
LOGAN: All good there. The flip side of hiring, which you've done a lot of is firing. Um, what have you learned about letting people go, um, that you might want to impart on founders or operators?
JYOTI: , that's always the hardest thing to learn for any, any, um, any c e o or any leader. but that's, that's, that's probably the single most important decision you have to make most of the times. First of all, like, , hiring is not accurate all the time. Like in whatever you do in the hiring process, , you're not gonna get like, let's say eight out of 10, right?
JYOTI: So now you have your two out of 10 that are not right. , it's, and now how long you stay with them. That's, uh, that becomes a important question. , I, I like the, the simple rule of like, , if you, if you [00:50:00] are again, going to a framework on my framework is I'm, if I'm defending someone fourth time I.
JYOTI: There's a problem, like when someone comes to me and say, okay, , this, this person is not working out, and , we have, we made a, like, , especially if you're a culture which is of openness, transparency, et cetera, right? Then, , and someone comes and like tells you like, , we have a, we made a mistake on hiring.
JYOTI: Like, this person is not doing a good job here, whatever it is, right? And I'm defending them, and, , that's, that's, that is fine. But if I'm defending second time, third time, by the time it's fourth time, I know it's, it's, uh, it's, it's, it's, it's a hiring mistake there that I have to defend whatever that that is.
JYOTI: And , obviously I'm taking those first three as a feedback and, uh, , and a, as a, as a coaching opportunity for the, , for, for that person. So they have the opportunity, but if they can't get there, that's a, that's a, that's a, that's a sign that, , you have to make, make a change.
JYOTI: But you can figure that out, , I think the harder ones are when you have to, when someone has worked well in the past and you have to remove, , them, that's, those are even harder. 'cause then, those require even more thoughtful thinking, right?
LOGAN: In the early days of AppD, I, I heard you say you weren't great at fundraising, uh, but now if you look, you've, you've done a fantastic job of fundraising with Traceable and Harness and what, what have you learned about the process of fundraising and maybe even sitting on the venture side of the table sometimes about selling a compelling vision and getting investors excited about the story?
JYOTI: Yeah. , it's, it's kind of funny, like, , at AppDynamics I had to pitch, uh, pitch almost like, , 30, 35, uh, uh, investors and got a lot of like 30 plus rejections before I got the first term sheet. When I starting was, was, was starting harness. I. , I had like 30, 35 investors pitching me and, and like, , giving me offers, right?
JYOTI: So that's, yes, that definitely advantage of the, of being a second time founder. So it's not just like, , that I've become so much good at fundraising, uh, but
LOGAN: were smarter, you were funnier. Every, yeah, every, all the above. They're just throwing money [00:52:00] at you.
JYOTI: When I was doing the 30, 35 rejections at, at Abdi, , what I learned was a lot of it comes down to like, , the right, right story on fundraising and the right story is, is, is, uh, storytelling, uh, that you have to do as a founder.
JYOTI: And the, the three things about the storytelling that you have to do, right? One is the why is this a big opportunity? 'cause the, the, the whole VC model and, , works. Uh, in big bets, like, , and you have, you need the big hits. And so if a, if a company is going to be successful, the chances are pretty low that most companies are going to be successful.
JYOTI: But if company is successful, that it's going to be pretty big, that it's going to be, , used to be billion was a big deal, and now it's like maybe more, more, more than that. But it might be back to a billion now. So let's say like, , would this be a billion dollar, uh, , company or not?
JYOTI: So you have to paint that, that story. Well, , if you're not painting that bigger story and , that's, uh, that, that makes it hard. Second is you have to, uh, paint the story of evidence. , a lot of [00:53:00] it's like, , every, you can paint the story of this is going to big, but if you no evidence, that's a, that's a, that going to be hard to sell.
JYOTI: And the evidence comes from, , either you have a product in the market already and you're showing traction, , or you have like, , uh, you have a lot of customer interviews and you can talk, talk from that, , or you have the, , um, , you have like some cases like a report and analysts and industry experts, , uh, creating that evidence.
JYOTI: Most of the times you have some product with some traction is the best evidence, right? Uh, and the third is the, Now it's, it's about you, right? You have to sell you like why you, right? Because any, any company you start, , you have to compete and you have to make the point like, , why you are the right founder or founders or the team to bet on why you would be the winners in, in, in, in that particular, particular space.
JYOTI: If you get those three, the, your business does become, become pretty pretty fundable. So when , , I, when I was getting all these rejections at AppDynamics, right, I was asking people, okay, what's, uh, [00:54:00] why? I think, why are you rejecting? And , most of the times VCs won't tell you why, , but, but let's say some, some are good.
JYOTI: And they will tell you like, in an honest way why. And then you start learning from that. , some was like, market is not large enough. I will hear that story quite a lot where like, , at this time this was like, , application monitoring, application monitoring. That's such a small niche market.
JYOTI: Like this is not like now where you have AppDynamics and New Relic and Dynatrace and Datadog and like, , observability monitoring like, , multiple, , companies with like billions and billions of evaluation. Uh, so market, market was small, wasn't the number one objection I would get.
JYOTI: And , at some point I had to start, , and I was, I realized that I'm not doing a good job in telling, like, the monitoring does seem like a small niche market,
JYOTI: But have like, , everyone building so much code in the world. And it's so painful to, to monitor and troubleshoot and fix when the problems happen in the code.
JYOTI: And, , to, to tell the story or to tell, like, , how many developers are there, , and how many like, , uh, application servers or , are being, uh, installed and , how much money being spent when something is [00:55:00] slows down and why could be a very large opportunity. But it was not very evident that application monitoring was a large opportunity at that time, ?
JYOTI: So that's something you had to, I had to become good at selling. Second was like, , um, It was not evident was the, , the, the evidence around it. Like, , how do you prove it like that it's going to be a larger opportunity. How do you prove a differentiating kind of things? So I ended up then like, , doing a lot of the cold calling, uh, kind of the customer conversations to create that, , that, that compelling, uh, evidence around it because I didn't have a product to show, , and I didn't have traction to show.
JYOTI: It was like, , in those days it was hard to, , build a product without any, especially products like that, without any revenue. The third was the, the, I have to sell my story, which was pretty hard for me to sell because I was like a first time engineer and founder. I didn't have too much experience, but still had that experience in the domain.
JYOTI: I had like a lot of patents in that area, , uh, , so, but that's, I had to paint the right, right story, right craft the right story. Obviously when you become like, , more [00:56:00] successful in one thing, then you maybe have, you can go, , easy on the other, other two areas side.
LOGAN: You wrote a blog post in 2017, uh, that we can link in the show notes, but it's about pitching the venture capitalist to work with. And I'm gonna read back the points to you and I would love to get you to elaborate on this framework.
LOGAN: Um, so the first one was, reach the highest tier of VC firm. You can, but don't go overboard comparing firms. Can, can you talk about what you were thinking in that and, and the perspective there?
JYOTI: It's a blog from, from back in the past before I became a vc,
LOGAN: Yeah, exactly. Yeah, yeah. Now update it. Update it would be Call me first and then Yeah, yeah,
JYOTI: yeah. The right vc, me and our firm. Yes. Uh, I would say, what I meant was like, , a lot of times people are like, , I'm getting, uh, like founders are figuring out, I have office on three firms and I want to, , figure out whom. And many times it's like, , this firm is higher in the ranking than this firm, so I need to go there. Like, it's it, and I would like, [00:57:00] I try to tell founders it doesn't really matter. Like you just, you definitely want to get into the, like these that you are, you have investors from tier one firms.
JYOTI: That's a good validation. That's like, , obviously they're, those firms are tier one for a reason, but they're all kind of the same at, at some level. Like, , it's the, and once you are in that, That tier. And like, , if you look at like the, and people go very overboard on like, , this ranking set, this invoice, this form is, is higher there and this form is this, and this is the number one form and this number two, and it's number three.
JYOTI: And, and so my guidance is like, , look for just that. You are in that, , you can attract the, the highest tier possible. And then after that, that becomes a material like what, which form
LOGAN: it's, and then the second point was, what really matters is the partner. Yes.
JYOTI: That's the second point. Like what matters is the partner.
JYOTI: Because partner is where you will spend so much time. Like if you're building a company, probably the partner will be deeply involved in your company for five years, 10 years, , uh, uh, could be longer even these days.
LOGAN: And it's hard to unwind. Uh, yes,
JYOTI: it. Yes. It's like, , it's pretty much impossible to unwind.
JYOTI: Right. , uh,
LOGAN: divorces happen all the time. Divorces from partners are [00:58:00] really hard.
JYOTI: Yes. , divorces are, are, are much easier compared to divorcing a VC partner in your board and VC partner in the board. If it's, it is not the right person, then it will create so much, uh, so much friction down the line.
JYOTI: And many times people are like, and I see founders are like, , I'm picking this firm over this firm, but it's okay. Who is the partner that used like, once the, it doesn't really matter which firm at some point the partner will be more important in, in, in your journey. Look for believers, that's an important point. , the, the, the nature of VC business, I think like about probably 80 to 90% investors just invest because of the fomo. Like, they don't really believe in the opportunity. They're like in all chasing, oh, firm X and partner X is doing, doing a term sheet. So I need to do that. And that's how most of the investing world rep unfortunately works.
JYOTI: I find them like the, the wrong investors. In any company I look at like, and if you have an option as a founder, look for people who are not investing in your company because other people are investing in your company, which is the majority of them by the way. [00:59:00] Uh, that they want to invest in a company because they sincerely believe in your opportunity, irrespective of other.
JYOTI: Other, , other investors chasing you, et cetera. And because the, the nature of the startup is that things will invariably go bad at some point, or some, like, some hard times will happen and people are not really believers in you or your company. , they will, it'll become, , much, much harder and hard times because of that.
JYOTI: Because they didn't fundamentally believe in it. They just chased you because this was the hot thing. , your company was hot or your category was hot, or your market was hot at that point, but they didn't really fundamentally believe in it. And that's what I look at. Like, , the one major criteria for most people to follow is like, find those, those investors who sincerely will believe in you, your company, your opportunity, your market, et.
LOGAN: How do you assess that? Is it, is it just in the conversations and getting a feel for how deep of a knowledge base they have in the category, or how long they've been thinking about it or? like how much research they've done in the category, how much, uh, knowledge they have, , [01:00:00] can they tell you about something like, , than, than others?
JYOTI: I'll tell you, like, , um, uh, my partner at Unusual Ventures, uh, , when we started, uh, John, uh, I remember like when I was raising capital for AppDynamics, , I was talking to a whole bunch of folks and, , John came into a, into the meeting with me, , and he, before I presented, he, he knew high level, , And he presented to me like, , their thesis on that particular, on that market, , a lot of industries I was talking about, like, , why monitoring market large enough, et cetera.
JYOTI: And he came with a thesis on why monitoring market is large and why the, the first generation of monitoring kind of companies like Wiley and all are not the right kind of companies for this next world. And, , there is a gap here that someone needs to be. And that was a presentation and thing that he had built on just for me actually.
JYOTI: He had it built before he had it like built. And I was kind of sold on that, like, , okay, this person already believes in this market and this opportunity and kind of what we are doing. So it becomes easier alignment going forward because it's, he already believes in that. So that's like, , that's a, [01:01:00] that's a good test in many cases.
JYOTI: I had another investor, , I was talking to who was like much before, talking too much before, and they were like really hard to, like they said, like they will not say no, but they were like just dragging me forever. And know, one, then one I had like, , uh, two or three term sheets and offers.
JYOTI: I. And the guy was like, oh, , now you have the, once they knew that they have another offer, now suddenly the interest was like so high and they just wanted to, , make an offer then. And where, where they had an opportunity to be the first, for a long time when they didn't, ? So that to me is like also a sign that you're reading.
JYOTI: Like, , they're, are they really a believer in, in your opportunity or they only doing it because now they, now others are interested. Like, so that, so if you find people who believe in your opportunity, your company and you, that's the best because it's, uh, it becomes easy,
LOGAN: You said understand what kind of advisor they're gonna be. What did you mean by that?
JYOTI: , that's the hardest, hardest one, ? And that comes from some, uh, let's say, uh, experience over time and the, the, the, the learning set comes with it. What [01:02:00] I like to, , again, I have, I like to create frameworks as we talked about it, I think of like, , when VCs, investors are in your board, right? , you want their advice and help, and they do want to give advice and help, but I, I like to call them there like two dimension, two dimensions to it. One is the, how qualified they are, and second is how strong their opinions are.
JYOTI: , and so, , one di so let's say if you have like, highly, highly qualified and you have very strong opinions still, , still, still great. If you have like, , high, if you're not as qualified and you have very strong opinions, that's really bad situation to be because now it's like, , the, the investor has a lot of control in the company normally, , they have the, , uh, board seats and voting rights and all kind of controls, right?
JYOTI: And , now as a founder, you are almost like, , that's, you've someone who's not really that qualified and they hold very strong opinions. You are in a very, , strange place with that. Right. So I look at like, , [01:03:00] the, the, you have the other category where like, , someone who's, uh, , uh, strong, very qualified, but like still like, , softer opinions.
JYOTI: They, they're great as well. , those are probably the best ones. And, , you have the, you have the other category which is like, , you're not very qualified and you have soft opinions and those are fine too because , you're not at least being disruptive 'cause you can bring other board members and other advisors around you.
JYOTI: To me, the worst are the. People who are not very qualified and very strong opinions, which is common in the VC world primarily because, , the venture world is, the dynamic of the venture world is like in a few successes and people grow a lot of egos, , so the egos get very high, and the egos where you get the higher your egos get your, your opinions get stronger.
JYOTI: And if you're not very qualified and your opinions get stronger, then you become a sort of a bad advisor in the board. Right? So that's, that's what I was trying to, um, make the point in that case. Like, , if you can figure out like, , what is their advice style? Like, is it like, , that they, this is my point of view and opinion and I'm in the board and , if you, you have to listen to me as a, uh, and in a very strong opinion, then you better find someone [01:04:00] who's like very, very, very qualified for it.
JYOTI: ? Otherwise you want people who have like, , a softer style of giving opinions.
LOGAN: I wanna pull out a nuance in there is that, um, qualification as you're defining it doesn't necessarily just mean successes or experience there that oftentimes you can be fooled by just 'cause they were associated with a successful company early on and they saw that journey doesn't mean that they're qualified to weigh in on the inputs into your company.
JYOTI: a, that's a, that's a great question. Uh, yeah. How do you, how do you judge someone who's qualified to, to give you an advice or not? And I convert down to a very simple question now. Like, would I have this person in my board if they're not investing? , if, if you have, like,
JYOTI: If the answer is yes, like, , and this for a variety of reasons, like, , this person was maybe a former founder who I respect, or maybe a very seasoned investor that I respect, , in, involved in great companies or thought leadership in the market that I respect or like, , or, [01:05:00] or like, , uh, that would you take this person as a, to be in your board?
JYOTI: Or in some way involved in your company if they were not investor. If you meet the criteria, then you are in the, then, , then you are in the, that, that, that bucket. And that's to me is very important. Like, , uh, if you want to give someone so much control in your company as an investor, you, you, , uh, and you want to find the people who would be there, or you find people who are, their style is not like, , dictating their opinions on you.
JYOTI: Right. So that's, that's, that's, um, that's important. , it's, it's kind of nuanced to it, but when I look at like, , the investor founder conflicts and dramas and all that happen on happen later on, the root of that comes down to, uh, to to, to this particular area.
LOGAN: Anything you would add to that now, besides call you first, uh, uh, six years after you wrote
JYOTI: know, , that's a good question. Like after six years, I wrote this framework 2017, right? I would say yes. There is one thing I would add to it, which is the stage appropriateness. And very, very [01:06:00] important in the, when you pick the right investor, like what stage your company is, because the help you need in different stages is very different.
JYOTI: It's almost like, , kind of like a, like having a doctor, a doctor for. Babies is different than a doctor for, , when you are in a grownup versus when you're like, , you are if you're trying to, , uh, get help with cancer. So I do think that stage appropriateness element is important.
JYOTI: Like, , if you're starting a company, you need help on the very early stages of company building, like going from the zero to a million dollars. , and if someone is very, very experienced on the later stages and they're very, very good on the later stages, are they the right investor for you in that stage?
JYOTI: Right? So that , that that part is important. But otherwise what happens is, like, , you get investors, , who are not really the right fit, , there maybe there will be, would have been great fit for when you are early or would be great fit when you are late in the, in your, in your, in your, in a few years down the line when you need the help and the advice now, right?
JYOTI: So I think that's, that part is important. And, , we, uh, and I'll, I'll, I'll, I'll, uh, we talk a lot about that unusual ventures as well, like, which is the, the., when you have to build of the, that kind of mindset, like, , then we, if, where are you focused on, , what is the help we can provide at what particular stage?
JYOTI: Right. So, , and founders have to pick that because that's when they get the most specialized help, uh, that, that they need.
LOGAN: I wanna shift gears a little bit and go to the, uh, to the AppD story, but can you gimme the background of you? All the way up. Not your whole life story, but just leading to the founding of AppD.
LOGAN: So you were born in India. And then moved over to the States when?
JYOTI: I was born in India, did my, , uh, went to study computer science in, um, Indian State of Technology, the, the top engineering schools in India. And I was like fascinated by Silicon Valley. I was like, , at that time the Indian startup ecosystem was almost non-existent or very, very, very early.
LOGAN: What year is this?
JYOTI: This was, uh, year 2000.
LOGAN: Got it.
JYOTI: Uh, so I was, , Silicon Valley is a place to come. Let's, let's [01:08:00] go here. And I started, , where, where I learned my numbers game kind of thing to apply to a whole bunch of startups. And someone will, will, , will hire me. And I started applying to a lot of startups from India.
JYOTI: And I, I got into a, got in Silicon Valley as a, as a startup because that's what I wanted to work in, and that I wanted to work in a, in a Silicon Valley startup and learn the startup
LOGAN: Did you have any exposure to it as a kid? Like, how'd you even know?
JYOTI: , I had a, lot of exposure to, I would call it like a mom and pop startup concept in almost, I, I grew up in a small town in India and my dad had a, had a, like a.
JYOTI: Um, business selling, like, , um, um, ladies bags, , he had another business selling irrigation machinery. Like these are like small startups like, , small businesses and almost all my family members, like, , uh, uncles and, , cousins and all were kind on these small businesses because they were not too much other things to do.
JYOTI: So there was a lot of, so I, I had a lot of exposure on the small businesses, , I was, when I was a kid, , starting when I was like, maybe six, seven [01:09:00] years old after school or weekends you'll go to the shop and help your dad. So I kind of learned a lot of the small business thing there. So, , it was under startup in the tech startup sense, but they were like these small businesses that I was exposed pretty much as a, as a, as a kid.
JYOTI: Uh, and then I went done, done engineering and I almost like, , just, , I feel like, , I just. That's what I always wanted to do. Like, can I bring the, uh, bring the, the business and the engineering side together? And that's where like the, the tech startups in Silicon Valley and all of that just fascinated me so much.
JYOTI: I was like, let's pack the bags and, and come here, ? And, uh, I started applying for jobs and , one of the companies was like, , if you can, we can sponsor your visa if you, you can come here. And I went to my dad and was like, can you find way to pay for my flight? And, uh, , he paid for the flight and I got here
LOGAN: and, and so that was at the dot com, like right in the bubble.
JYOTI: right before the bubble was busting. Like, , I came here and the bubble was just right about busting, , so that was the, [01:10:00] and so that was pretty hard time. Like, , it was almost like, I think it's along those months. It was bursting around, , almost then. And, um, , and the, a lot of those start, like, the startups didn't survive there, but you learn a lot, , and like you work in startups and they don't survive and they go through that kind of bubble burst hard time, , it's kind of, uh, a lot of learning that happens through that.
LOGAN: And so did you bounce around? Uh, how'd you end up at Wiley?
JYOTI: Uh, Wiley was at that time, my third startup. , I worked at two startups before as, as an engineer. Um, and actually it was interesting that my, I was in the startup, uh, it's a company called Data Sweep, like, uh, manufacturing data intelligence kind of thing. Uh, Excel was one of the investors, and they were also investor in Wiley at that time.
JYOTI: And, um, and , I was, as an engineer, I was like struggling with like performance troubleshooting for our software that it was like hard to debug problems and fix things and all. And Wiley was doing the job and I was like, oh, this is a great product, , and, , [01:11:00] this is something I, this is the area that I, , I find interesting.
JYOTI: So I, , I, I got at Wiley and then one of the investors made the, the Connect at that time. Uh, and then the Wiley was a, was was a great story at that time. It's a great company. , we had a lot of good innovation, innovative technology. It was acquired by ca, which is Computer Associates. For many people who don't know for, from back, back in the day, used to be one of the biggest tech companies at that time in the enterprise software space.
LOGAN: 4 million or so about?
JYOTI: Yeah. 3.75 million, uh, which used to be a big amount. Sure. At some point
LOGAN: that was 2000. What year?
JYOTI: Uh, 2006. Uh, so that's, um, um, , it was pretty clear to me like, , the world is changing, , this was when the, , the a w has just came out, and so it was like everything will move into the cloud at some point.
JYOTI: Uh, , people are building this very distributed [01:12:00] software systems and the, the products like Wiley and the, the, all the previous, uh, generation stuff was not really designed for the next generation. Also clear, like, , ca compress is not where any new innovation is gonna happen around this. So new starters have to solve this, this problem in a, in a, in a, in a big way.
JYOTI: And that's where I was like, , , it's kind of, it met my, even though I didn't have a framework like that at that point, it kinda met my three criteria at least, that I was convinced that the market is large and it turned out to be large. , it's like even if some people didn't believe that time, it was large market.
JYOTI: , everyone has to, to monitor and troubleshoot and fix problems in the code. Um, that, , that people were struggling with it. I knew it firsthand because I, I saw the struggle how people were, the pain was real, , it wasn't like a fake pain. Uh, like that was one of the big pain points for almost every software engineer.
JYOTI: And then I also, , knew that I could build a grid, , that I was very passionate about it. Like I, I went from my previous startup to, because I was passionate about the domain. , I, I was working on that for, for quite some [01:13:00] time. And I knew that I could spend, , time and energy. I knew also I had expertise on it, , maybe I end have business expertise, but I had a lot of tech expertise on that particular area and, , that I could, I could solve that.
JYOTI: So that was kind of my, my connection. I, I still do remember though, I was still at Wiley and I was pitching to VCs at that time, and one of the VCs, uh, was like, , Hey, do you really believe in this thing? Uh, I said, yeah, I do. Uh, , so why are you still in a job? And, , that was, I was, um, I don't have an answer and I slept over it, and next day I quit the job.
JYOTI: It's like, yeah, that's a good, like, I do believe in it, so why I'm still doing my job. And, um, , because you have to like, put yourself in that. And I, I think it's a very valid question at that point. Like, , that this founder is asking us to put a lot of money and, , they're still like, , not willing to quit the job around this.
LOGAN: How'd you end up a solo founder?
JYOTI: Not by design. It wasn't intentional, , it's just happened. Like, , I couldn't find the right founder, co-founder fast enough, , when things moved, , even though like, , I had 30, [01:14:00] uh, 35 rejections and all that, but still, like things moved in the, , in the next, in, in a few, in few months, like, I quit my job.
JYOTI: I was already kind of pitching to folks and like, , after I quit my job, maybe like, uh, like, uh, a couple of months, uh, things were moving and like, uh, getting offers and term sheets and the company has to get going. I couldn't find out, , the, the right co-founder, , and there were some attempts where like, , almost like the, call it the shotgun marriage kinda attempts that were actually the first offer I got from, uh, from, uh, VC
JYOTI: that I had to get a co-founder who was a E I R at the firm who was a very qualified, , very qualified person.
JYOTI: But I had to decide to have the person as co-founder, , uh, as part of the term sheet in like two days. And, , I couldn't get comfortable with that. , it's like, I just like, it's, it's, uh, to, to get, get there and, , that person was very qualified, became successful in his own ways, in a very major way.
JYOTI: Uh, but I just got [01:15:00] to a place where I didn't have co-founder, but then the first person I hired was one of the best engineers I know at Ali and, , said, okay, come in and, , join me here. And over time he kind of like, , even though he wasn't co-founder, but like, , he played a lot of the role a co-founder will play, which is like, , you are, , you're someone you can, you can trust and you kind of go through the, the hard times together, kind of, uh, , uh, that, that kind of role.
JYOTI: I advise you people to, to go solo if, , if you can find, find a good co-founder, but at the same time, like, , I won't find co-founder just for the sake of it, because it's very important. Like, it's, uh, it's, it's as important decision or even, uh, as like you picking the right vc, uh, , VC partner to be a board.
JYOTI: It's even more important, I would say. So. If you can, if the right person who like, you, know, who you trust, the right person who, uh, you, you respect and admire, , that's what you and, and , like the role they can bring. Right. , and you can have your good amount of clarity on it.
JYOTI: That's the, there you go.
LOGAN: [01:16:00] AppD seemed to have a pretty charmed existence from the outside in. I'm sure there was a bunch of chaos in the inside as there always are in startups. Um, any particular things that you wish, I mean, we've talked about a bunch of different frameworks and lessons learned along the way and all that stuff, but any particular thing that, that along the way you wish you knew when you were starting the business
JYOTI: First of all, charmed existence. That's a, that's a pretty fancy word, but, , I, I don't, I don't think anyone has that. Like, there's no startup I can guarantee you has charmed existence from outside. Yes. Inside. No one does. Like, , inside is always hard. Like, , you always have like, , from outside in the long term, it looks like a big, big straight line going like that.
JYOTI: Like, , it's, it's like you have, like the day-to-day is, is, is crazy. Uh, but yes, it, it, , we, I think the, the core of what we had at, right, and AppDynamics was the market was large and we were the early, uh, Can early believers that the market was large. Like, , that people, it, , it was kind of, we are in the, [01:17:00] the earlier stages of that application, observability kind of space.
JYOTI: Second was our product was very, very, very strong. Like we, we always were the, the, the best product in the market. We are, , we are, it was hard for people to catch up on the, the product innovation that we were doing. Uh, and then we started building the very strong sales, uh, , execution tied to it.
JYOTI: So, and , and then I always had the fundamental belief on customer success, , which, uh, many people find very odd that how much I talk about customer success, but that's something I was always obsessed with, that the every customer has to be valued, get value, and be successful. And so it, those are the things that made it kind of easy in some ways.
JYOTI: Like if you get those, the flywheel works with that, right? , that the, your market is large. So that's kind of a, , tailwind to begin with. , now you have the, , your product is strong and your sales executing well, and you have the, your customers are happy. The flywheel starts moving.
JYOTI: Right. , and then you can, you can keep growing from there.
LOGAN: Your major competitor, uh, ended up being your old. Boss from Wiley. [01:18:00] Any funny stories about, about that? Like, 'cause for people that Dunno, Lucerne started, uh, uh, new Relic and New Relic was kind of the mid-market version and Apdi was the enterprise version.
LOGAN: Any funny stories?
JYOTI: Yeah. , it was a strong, healthy comp competition like, , so Lou, I have a lot of respect for him. He was the founder at Wiley and he was my boss at Wiley. And he, , uh, so after, , we, , a, a lot of people violated the same realization that this market is just starting, , this, there's a lot of people building these modern distributed apps and things moving in the cloud and, , next generation solutions to it.
JYOTI: And so, so Lou started New Relic about a year before I started AppDynamics. And, uh, he, uh, He had a different thesis on a few things. , uh, uh, first of all the programming languages, , his thesis was the, uh, the, the modern programming languages like Ruby Xra become more dominant. And, uh, and they were growing very fast and they become pretty, pretty, [01:19:00] pretty popular, uh, there, uh, and, um, uh, that you could, , you don't need salespeople.
JYOTI: He had a strong thesis on, on that as well, initially early on. Uh, and, , he was a great mentor and advisor to me as well. So when I started AB Dynamics, actually we didn't think it would be competitive because we had a very different. Uh, , thesis on like, , that the, yes, the, the new languages like Ruby, et cetera, are getting in popularity, but a lot of large enterprise still codes in Java and there's a lot of pain points in Java.
JYOTI: So I wanted to focus on Java. So we actually had initially, , he was, , it's kind of most, a lot of people don't know, he was for the very, , for the f when I just quitting my job and starting, he was advisor to, to, to AppDynamics, , because we didn't think it was, uh, , that will compete.
JYOTI: People will be like, , okay, he was building for Ruby, , and I was building for Java and , I knew that Java was, was more large enterprise, so I need to build more to sell into enterprise and figure that out. And you knew like Ruby was more this kind of younger tech company, so he wanted to build a go-to market model around that as well, [01:20:00] which actually didn't really need salespeople.
JYOTI: So we actually starting started like that. But , a few years down the line, , , , uh, if you're, if you're good companies, you figure out where the, the opportunities are and they start to converge, right? The market start to converge invariably. So we, it did, uh, start to converge and we, we had a very strong, healthy competition for a, for a long time, , and we, we, we became very good at what our strength was, which is like, , selling for very complex, uh, , applications in, in larger companies, larger environments, , in java.net, those kind of programming languages.
JYOTI: New Relic became very good at like, , selling into S M B, high velocity languages like, , Ruby and P H P, et cetera. So, , it's, it's, um, and both became successful in, in, in, in, in, in, in, in, in a major way.
LOGAN: there's this now legendary story about selling the business to Cisco while, uh, employees were already in New York for the I P O stock listing.
LOGAN: Um, so can, can you tell that story, but then also how do you. Come to the decision to sell. Uh, I'm sure it's a emotional [01:21:00] and financial decision. So what were the inputs into that?
JYOTI: Yeah, I'll start with the story. I think many people might have heard that before. It's, it's, , we were go about to go public. A lot of people ask me, were you doing a dual track, uh, for your I P O versus acquisition? And I tell them, it's no dual track. We were just doing i p o and we had i p O planned for, , this was, um, February of 2017 and, uh, Thursday of that week of one of the weeks there.
JYOTI: And, uh, Cisco came in a few days, uh, before, uh, before. And , they made an offer and, um, I. I will go back to the Ian process. They made our, the, the, the first offer, , we said no to, and then they made the second offer we said no to, and then they made a third offer. And we said, , yep, we like, we should have to do it.
JYOTI: but we had like, , the, for I p o, we planned on that. We'll take our, like, , mostly our first, uh, 20, 30 employees and some of the people who played a big role in the, in the, over, over the time as well. So like in about 40 employees or so who will go to, to, to Nasdaq and will ring the bell and do an I P O.
JYOTI: And most of [01:22:00] these people, , uh, they're very obviously very, it's a very proud moment. Exciting moment. And , most of them are engineers, , and most engineers don't have a suit. Uh, , as . And they're like, , people were, oh, I'm gonna, they got a suit made for the I P O and everything was planned there.
JYOTI: And they were in, in Wall Street in, uh, in New York for that. And we announced our, our, that we are getting acquired, like. Like less than 24 hours before the i p o moment. And all these people were, were like in New York for the I P O and we are selling the company for like pretty good amount, $3.7 billion.
JYOTI: And everyone was said that, , what about my suit? Like, , I just got it for the I P O
LOGAN: I think Nasdaq had like cupcakes and stuff with their logos on it and all that. Yeah.
JYOTI: . So actually the good thing was, uh, um, we were able to make a deal with Cisco. So Cisco has a big clout on, on Nasdaq. So we made a deal with them on like, , Hey, can you, if we close the deal with you, can you still go and ring the bell on, on Nasdaq? And, , they did their work and like, , once the deal was closed like two, three months later, we actually did [01:23:00] go back and did ring the bell and did the same kind of thing, but which was, uh, , which was, which was a good
LOGAN: And so, so the decision, the inputs into the decision, I mean, obviously you said no twice.
JYOTI: I think, uh, big, if you think about like you, who are the stakeholders in, uh, in, in deciding if to sell the company or not? You obviously are the founders. , in, in Ab Dominic's case, I was the only founder. , you have the, uh, the board and mostly investors, let's say like, , your majority, uh, who are who own majority of the, the company.
JYOTI: And then you have employees who have like, , put in the, all the hard work in building the company and they all shareholders and they all have a lot of, lot of, lot of input. So certain price, uh, , it makes sense for all stakeholders at certain price it doesn't. Right. , the, for, for some stakeholders.
JYOTI: So, as , when I look as founder, for me it didn't, , so. If we went i p o, we would've went, uh, gone IP around. Our initial pricing was like 1.4, 1.5, uh, $1.4 billion. And we would've gone through like, , kind of the normal that, , the interest was very [01:24:00] high. So, , , repriced it higher to go, to go, , around 1.6, uh, or so. Uh, And, , the Cisco offer initially was kind of like, , not too far off, off from there. And it make sense, like, , why won't you go public? And uh, and uh, , if you go public and 1.6 billion, , it's, uh, we will, we will, we'll take that chance. And, , the final offer was $3.7 billion, right?
JYOTI: So, which was more than, uh, , uh, which is about two and a half X of what we would've gone i p o with and would've taken us, , a couple of years, uh, , at least to build towards, towards that. Like, , all the market valuations, change and all. But let's assuming the, the, the multiples and all stayed the same.
JYOTI: So you start looking at like, what's the risk, , in going forward from here, like, , three years from now, uh, , do you take that or not? What is the right thing for the, for the stakeholders involved? , personally for me as a founder at some point, it doesn't make really a difference from the, from a financial perspective.
JYOTI: Like it's still. , both outcomes are, are, are [01:25:00] financially, only so many beach houses you can.
LOGAN: So it It seems like you're still working anyway
JYOTI: Yes, because beach houses can get boring after some time, if you're too much on in there, but then, , you have the investors, , and investors have different opinions on that.
JYOTI: And then you have the, , the employees and, , we, it was, it was pretty hard. The, it was like a three days of process, like, , back and forth decision making. We were all hold up like, , three days. People probably had like two hours of sleep in three days, , in, in getting all this done.
JYOTI: And, um, it's, it's a hard decision. It's a very bittersweet decision also. Like, , it's like, do you end the journey? Do you continue, do you sell the company or not? , no one is, uh, at the same time it is like very, like, it's a great outcome financially for everyone. , we had 400 plus employees who made more than a million dollars, , so it's a, it's a financially very life-changing outcome for a lot of people.
JYOTI: People made like, , tens of millions of dollars as well. Uh, but it's, it's. There's no easy answer to it. Like, , I was really, really sad when it closed. Like, I can edit that. , [01:26:00] you're celebr, we at a big celebration party and you come home from the celebration party and you're kind of depressed.
JYOTI: , because it's like kind of the end of a, , end of the end of the journey in some, in, in many ways. Uh, no way to do it. But I would say like, , you have to look at like, what's a risk profile? What's the, what happens for the next few years? Uh, also like how do you, , your business, well, , where the, the gaps and challenges were.
JYOTI: We had some gaps and challenges that, that, , that we knew, , that would made it, would have made it harder. Uh, but at the same time, in hindsight, the market actually exploded after that, , and the, the and, um, business, , Cisco did a good job with the, with, with the, with, with the, the acquisition for the first few years.
JYOTI: And after that it becomes like, , uh, becomes a bit different. Um, We would have been valued much more actually over time. So like it's now if you look back like, , five, six years later was the right thing to do or not, but I do think at that time it was the right thing for all shareholders.
LOGAN: Was there a specific conversation you had along the way or [01:27:00] like an input, you, you referenced the 400 plus people making a million dollars that, that really swayed you or was it just,
JYOTI: think that was the biggest, uh, point for me. Like, , it's like I 400 employees who can make a million plus here, , we are getting, uh, value that's like, , it'll take a three to four years to grow into that valuation. And so , do we take a chance with like, , all this financial impact that all the employees are going to get now or not right?
JYOTI: And like, just we could have gone public and, , and taken the chance in the public market for the next three, four years. And that was really, to me, the biggest factor on, on, on deciding that.
LOGAN: I wanna get your quick takes on the current state of the markets, uh, and where we are today. So, um, you, you've, you're operating two companies as we referenced, traceable and harness.
LOGAN: You've had to raise a bunch of money throughout the cycles for both. What's your perspective on the current state of the technology market, the venture landscape, all that stuff?
JYOTI: , I, I have a point of view, which is a little bit different than many people, I feel, is it's a, it's, it's a, it's a, it's [01:28:00] a great opportunity and actually a pretty good thing. The current state of the, the markets, , we all got the, in the tech world, we all got, let's say, bit too sloppy because there was so much money easily available.
JYOTI: The valuations were. Too high. Money was so cheap, interest rate was low, , all of that stuff. And companies were not really executing well. And I will start with like, even my own companies, like, , uh, , AppDynamics, as I mentioned, like, , was uh, was kind of gone through that fire test in the 2008, uh, recession.
JYOTI: I started AppDynamics in March of 2008, and we raised our round, et cetera. At that time, like, , um, uh, $5 million and September, 2008, the big crisis happened and , it like, almost like ‘09 and ’10 were like just really, really bad for any kind of fundraising. So it was really clear, like at that time, like, , we need to like, Operate in a very, very strong discipline.
JYOTI: , focus on the core areas, , focus on like, , that your product has to be very strong so you can, uh, reduce the cost of sales. , you have to, , don't do [01:29:00] things that like, , don't matter. , do things that, , create good amount of efficiency. And that became the core foundation of how AB Done Mix was built.
JYOTI: But the money was so easy and cheap in like the, , in the, the, the, for many years after that, like, , in the, the last four or five years before this or this correction, that it creates a company's culture in a, in not the best way. And including, I've seen that even in my own companies as well.
JYOTI: Like, , you just don't have any pressure to, to operate in the most, uh, optimal, efficient way. So I think this is a great opportunity that this is happening and this correction is happening. And, , it's so strange. Like, , you can pretty much, , operate the same, deliver the same outcome with significant lower cost, and, , much highly efficient kind of model.
JYOTI: If you pay attention to it and the money was so cheap, no one was paying attention to it, , so, which is kind of unhealthy to me, like, , as a, as a company, like most companies are not doing any profits and cash flows and , even as a public company, you'll be like five years, seven years, you're not cash flow [01:30:00] positive.
JYOTI: And so it's, it's a great opportunity in thatsense.
JYOTI: Obviously that's a lot of bad outcomes that come with it. Like there's a lot of pressure with the, in the, , the, to the employees, , layoffs and job cuts and, , the, the startups not being able to raise capital. All of that. Those, those things are there. I really think those are also not necessarily bad. Like we need to get to a right balance. 'cause we got into, as industry, we got into a two, two craziness there. Uh, , the, in a lot of startups that were getting funded and getting started and going, probably didn't need, didn't needed to be. So we have a more, uh, kind of the more, let's say the real.
JYOTI: Capitalism of tech VC, Silicon Valley kinda model that, that how it's all started. Like, , you, you fight and compete and, uh, the good ideas and the good execution and the good, good companies, uh, uh, , make it into it. And they generate a lot of, uh, profits and value and all that. And we were starting to kind [01:31:00] of dilute down on that too much.
JYOTI: So I, I, , I, I personally, I feel like, , it's, it's, it's a, it's a, it's a good thing in the long term. Short term we go through, obviously a lot of pain.
LOGAN: You have a do AI on one of your companies, uh, traceable ai, and then Harness, I think is leveraging artificial intelligence as well. What do you think about the, that market in that opportunity?
JYOTI: , AI is massive. You can't, can't deny it in anyways. , one thing I like to, , so at Harness we launched a lot of, uh, generative ai, uh, capabilities for, for, , software development lifecycle, , how do you do deployment and testing and everything? And people will say, oh, , you're on the AI bandwagon as well.
JYOTI: I said, okay, you should look at when we launch harness in the market, , five years ago. Five years ago when we launched in the market. We were the first one to bring AI into DevOps at that time. , it's like the, , uh, I was, uh, , um, so like, there was an article about in TechCrunch about us generating, uh, launching our AI now.
JYOTI: So, okay, look at the article. Five years ago in TechCrunch, when we launched the company, it was also all about ai. So we have been doing AI from five years ago, not just now. And [01:32:00] same with traceable. Like, , traceable is out there for like, , um, uh, three years. It has AI in its name and its fundamental technology.
JYOTI: From that, then I'm a strong believer in ai. I do think it's, uh, it's, it's, it's really the next frontier of, of, , how you, of kind of a technology that can apply to almost any discipline. So any discipline, whether it's like, , developer tools or cybersecurity or marketing tools, or sales management, customer support management.
JYOTI: I do think, , AI has a strong, strong potential there to make that whatever the workflow is, , anywhere from two x to five x better, , maybe even more, . Um, so. Everyone has to leverage that. You, I'm not a huge believer in like, , generic ai, at least for the startup, but I feel like, , AI for, for a purpose, for like, for the, whatever the workflow you want to, the problem you want to solve, that's massive and you, every company should do it.
LOGAN: One of the things that I think you'll agree [01:33:00] with is, uh, given especially that you're working still despite, uh, uh, not needing to after the success of AppDynamics is not living your life, uh, or, or not, not spending your time to then go live your life and working towards some end and not enjoying the, the journey along the way.
LOGAN: How, how has that impacted you? How do you sort of think about, uh, following your passions or, or your work on a day-to-day basis and advice for anyone that's kind of thinking through their career, uh, it's,
JYOTI: It's always a very interesting question on, on why you do what you do, right? Uh, so after AppDynamics was sold, and , I, I didn't have to stay there at Cisco at all, uh, because I was, um, the, the day-to-day responsibilities were already handed off. I, the first instinct was that I can retire now that I don't need to do anything.
JYOTI: I can, I, I should just retire. And I did retire.
LOGAN: You were how old at the time?
JYOTI: I was like, uh, early thirties.
JYOTI: Yeah, I retired as in like, , let's do things that, , actually [01:34:00] I was putting things on hold when I was doing AppDynamics, right? So I had like, , my big, uh, bucket list of things that I need to go safari in Africa and I need to hike in the Himalayas in Bhutan, and I need to hike Machu Picchu and I want to, , see the fjords in Norway.
JYOTI: And I had a whole list and said, okay, let's just do it. And like six months the whole list was done, , it's was, but it was great. Six months, , six months of my bucket list was done at that time. And I was like, okay, what next? Like, am I really gonna be like this? And this is what really what way?
JYOTI: And I, I, what I realized that I enjoyed the AppDynamic journey. It wasn't the means to an end to just do the, that what I'm doing. Like, I actually really enjoyed that. That's what I want to do. Like, that's what I, I like the, the, , kind of the, the, the. The tension of, uh, of operating, , uh, competing in the market and building good products.
JYOTI: And, uh, it's like, it's, that's what I enjoy. And that's when I started looking at like, , I need to not think about like, , [01:35:00] what's that? This is a, this is an outcome to something, but I, I need to do, because this is what I enjoy. But I like to build frameworks, right? So obviously I ha , I have to have a framework for something like this.
JYOTI: So I, I put a very simple thinking, like, let me list down. Like, , let's say, , 10, 15 years from now, what would I look back? What would I look at? Like, , I did. All the things I want to do. Right. , and , the, obviously I, I want, because one thing I, I decided that I cannot do that.
JYOTI: Let's do things. And once you achieve those things, then you do something else. Let's try to do a balance of everything. Like, so, which includes like, , fun family, , friends, , your intellectual challenge of work. what you, what what you like to do, , uh, anything that you want to do.
JYOTI: Like, , can I get a healthy balance of doing it? And that's what I look at. People say you're running three things and , or two companies full time and, , venture capital and everything.
LOGAN: Do you have, do, how do you balance anything? Your [01:36:00] time for everything?
JYOTI: I, I say I do actually because that's how I like to manage it. And, uh, because I, if I'm committing to this for the long term, this is what I would like to do. And I might be doing this job that I do for, who knows, like my whole life, uh, I can't put things on hold on other, other parts of the life. Right? , a few things you can, like, , actually I put a list and I said, okay, there are maybe one or two things I can put on hold, but not, not, not, not, and nothing else.
JYOTI: Like, , uh, I, I was very interested in philanthropy, but, , I decided that for me to need really go deep into it, I need to put on hold that one. Like, , that I will deal with 10 years later. Uh, but everything else I was able to, to balance. But I do think that's very important at some point.
JYOTI: Like, you have to do what you, , to be nothing wrong with like, , working for the end. Like, , let's say you, you have a passion that doesn't produce too much money. Uh, and so you want to work in a job that will produce money, so you have to do a passion. That's, that's also fine. But if you can find something where like, , what you're passionate [01:37:00] about and what you enjoy.
JYOTI: Can give you the lifestyle and the, the, , things that you need that's, uh, , then is, then is great. And if you have already the, the lifestyle and the, the money and all that you need, then it's great also because you can continue to do what you're, you're passionate about. So, I, I, for me, the driver always is being good at what you do.
JYOTI: I like the, , that kind of just the mindset of like, , if I want to be an entrepreneur in this space, I want to be very good at my craft. That's my craft. Like, that's, , okay. Like, , if I want to be investor fully, I want to be good at my, that craft. Like whatever the craft is, you want to be good at your craft and kind of the view to be good at that craft, you have to enjoy it.
JYOTI: , there's no way, like, , if you want to be a good pianist, you have to enjoy playing piano. If you are doing it just to, to an end means to an end, you're not gonna be, never be, , if you want to be great at, , uh, playing basketball, you have to enjoy playing basketball. You can't just be doing it for the, , the, , that it's, uh, uh, means to some kind of end, right?
JYOTI: So, I'm, I'm, I feel, I [01:38:00] feel happy. I feel fortunate that I found that this is what I, I like, , sometimes I, there are times when I feel I made a mistake, , that's the, it's crazy. And, and do I really enjoy it? , but, , those, those are bad days as , in, in the world of startups and things, , impossible to not have bad days.
JYOTI: But in general, I, I think like, , it's, it's good to find something you enjoy,
LOGAN: Well, Jyoti, thank you for doing this. This was great. I, uh, amazing frameworks and, uh, yeah, inspirational to see you execute on this job that you're, you're done being an outside observer on the AppDynamics path and then now Harness and Traceable, and Unusual. So thank you for doing this.
JYOTI: Great to be here and catching up also.