Founder-to-Founder: 10 Toughest Lessons Getting to the First $100m ARR

Please welcome Michelle Zatlin, co-founder and COO of Cloudflare, and Laura Bilazarian, CEO, co-founder of Teamable.

All right. Oh my goodness, is this what Chrissy Teigen feels like when she's on the late night talk show?

Maybe.

That was very weird.

I hope I, uh, live up to the challenge. So we're all really lucky here to have Michelle, who has a company, um, called Cloudflare. Um, and their mission is helping to build a better internet. Can you tell what Cloudflare does for setting context and then we'll, we'll go into it?

Yeah, sure. Hi. Um, so I was literally in your seats about 5 years ago. So Cloudflare, our mission is to help build a better internet. What that means is if you have a website, an app, a blog, an API. Cloudflare helps make sure it's fast, safe, reliable, and you have insights and control around the world. Um, and we're about 7 years old. Uh, and in the last 7 years, it's been quite the ride. Um, we have over 7 million customers now. Every day, about 20,000 new sites sign up for our service. Uh, we have about 600 people working at Cloudflare around the world. And, you know, our revenue's north of $100 million. So, uh, It's been quite the ride the last 7 years, and literally I was in your seats 5 years ago, so excited to be here today.

So the thing I'm in awe of here is like, this is massive, massive scale, right? Who wants to have a business that's $100 million in revenue and over 7 million users? And so what I've asked Michelle to do is try to give us some of the lessons that are counterintuitive. So the ones you can't read on Jason's blog, right? The ones you can't learn by talking to other founders your size. And she's been really generous. And like forensically gone back in time for us and is going to be really open. So Michelle, like you said, a lot of your lessons were around people. And I think this is something we all struggle with every day. First, tell about your founder and your founding situation because that's sort of DNA.

Sure. Yeah. So 3 of us started the company, Matthew, Lee, and I. And, uh, we were all really, really different. Um, and so if you're really early in your company life cycle and you're still figuring out who your founders are gonna be, or you're still not sure you have the right founders, I'll just share a little bit about Matthew Lee and I. I remember when I went to tell people— Matthew and I met at business school, so we were classmates, and so we had a lot of mutual friends in common. And I remember it was kind of the end of our business school experience, and I told people, hey, when I graduate, I'm gonna go move to California, and I'm gonna start a company with Matthew. And people looked at me and said, "Why? Why Matthew? Like, you guys know each other that well?" And then Matthew would tell people the same thing, and they were like, "Why do you want to start it with Michelle? We are just very different people." And lots of people now know both of us. And I would say that Matthew is very strategic and visionary. And if you need a startup idea, he is the person to go find at a bar. And he has more ideas than he knows what to do with. Um, Lee, who's the third co-founder, was the technical architect. So he was just the one, you know, figuring out the architecture, benchmarking everything, figuring out, okay, we're gonna do this, how do we architect it so it scales, which is really important having that, that DNA early on. And then I was much more, I didn't know a lot about the space, but I was really good at getting things done and saying, okay, well if we're gonna go there, what are all the things we need to do to get there? And also because I didn't know a ton about internet performance and security when we started, And we're a really technical company. I mean, we build infrastructure for the internet. I can kind of ask silly questions like, nobody knows what you guys are talking about. Like, how are we going to explain this in a way that people need it, but that no one understands? A lot of people don't understand the technical details behind it, and they shouldn't have to. How do we straddle both? And so I feel like I played a lot on that piece. If Matthew is sitting here, what he would say is Michelle helps make the trains run on time. Anyway, I tell all this story for those who are earlier in your— or even those of you that want to start a company. I think of a Venn diagram. Good co-founders have totally different skill sets than you. The thing is, people are like, "Oh yeah, that makes tons of sense," but when you're starting, it is so hard to have a co-founder that has a totally different skill set than you, because you literally almost can't relate to one another. You come to problems at different angles. You care about different things. I remember early on, the stuff that Matthew and Lee cared about, and I was just like, I didn't care about that at all, and I cared a lot more about like, what are people working on, and making sure people knew, and they didn't care about that at all. And so it was more having this like mutual vision for the company, a ton of respect for one another, and finding a way to work together. And so I think that if you can find co-founders that are different than you, you cover a lot of surface area. You need enough overlap to make things work, but it's hard. Now, fast forward 7 years later, obviously we're very good friends. We know each other in a totally different way, and so we've— We've gotten through that awkward getting to know, like working together phase. But early on, I think having diverse points of view was really, really powerful and a great starting point for Cloudflare.

Awesome. And as you grew, let's start the first 50 people. What were some of the lessons that, you know, you wish someone had told you?

Oh my God. If I had known how hard it was to get to 50 people, I don't know if we would've started. It is so hard to convince somebody to come work for you when you're, you know, just a few people. It's actually easier when you're like starting out. I think if you're less than 10 people, it's easier to recruit. 10 to 50, someone has to be a little crazy to come work with you, uh, 'cause there are so many good job options, especially if you're in the Bay Area or New York or Toronto or Austin. You pick any big city, it's like there are so many other great jobs. Like, why would they take a chance? And of course, if you're one of the first few people, I think the economics really make a ton of sense. But like 10 to 50 is a really hard, hard, hard, hard time to attract folks. I remember we were growing like mad. On every metric, we were up and to the right. We had launched at a conference like this, actually. It was called TechCrunch Disrupt back in 2010, September 2010, and we were runner-ups on stage. I remember when we launched there, our signups just went up through the roof, and they just never stopped. And so we were like, we were just trying to keep our heads above water. And I mean, we were working all the time. There was 8 of us. And so hiring was a really big, big priority for us. And it's just like, it's hard to get those people to join at the right, the right people. And so some things that I think worked for us that hopefully will be helpful to those in the room if you're at that stage. I think this is when we got really crystal around what we were doing as a business. We did not start Cloudflare with this mission to say, "Hey, we're gonna help build a better internet." Actually, if you go back to our business plan in the first year of our existence, those words never left our mouths. It was more once we started to have traction, we started to realize the impact and what we could, and we started to almost fall more and more in love with our idea that we started to crystallize, "Okay, what are we really trying to achieve as a business?" It emerged a little bit more slowly, but as soon as we had that, oh man, was it really helpful as we tried to talk to other people and recruit other people to come join. Because all of a sudden, people are like, yeah, I want to be part of that. I want to come be part of the team that's helping to make the internet a better place. And so if you're sitting in the audience, and you're like, yeah, getting those people to come recruit, you can't compete on salary. You just can't. And there's lots of interesting things. But if you can find people who have the same interest in what your business is trying to solve or what your mission is, then it's easier. Because people are like, OK, I am interested in this. And I could really throw myself into it and take the chance to come join, I think that was really helpful. The other thing that I think that I did not realize at the time that I wish I had is businesses aren't like a linear line up. They're much more like step functions. And so what I mean by that is really early, when you're less than 20 people— and what I always say is the first version of Cloudflare really got built on the back of 20 people. I mean, it was just like, it's amazing what 20 people who have a shared vision, who are really smart, and like what you can accomplish together, it's incredible. But like the— and so the back of 20 people. And so you just really— I can't even remember what I was going to say. But anyway.

[Speaker:JASON M. LEMKIN] So you have these crazy missionaries now, right? And you know, some people say like, give them titles. Titles are free. You've recognized like, you know, you can't pay them, but titles are free. You didn't give titles. I think that's great. Talk about some of the things you were trying to avoid by giving titles. And now, I'm sure everyone has a title at Cloudflare. Talk about some of the pros and cons of titles.

Yeah. OK. So early on at Cloud— this is, I think, is one of those things where Mark Andreessen is in one camp of titles are free. You should give them to everyone to attract them to come join your company. And then there's another camp that's like the Mark Zuckerberg camp of Everyone should have to take a demotion to come work at Facebook. We really did not do a lot of titles for a long time at Cloudflare. I'll tell you the pros and cons that, again, I didn't realize at the time. This is how it happened. We had just raised our Series A. We raised a couple million dollars from Venrock. We were a small team, and we were going to our first board meeting. We were really excited. We were hiring our first non-founding team member. His title was going to be like VP of Technical Operations. For our business, it mattered a lot. I remember we went to this board meeting and one of our well-known venture capitalists said to us, "How many person has this person hired? How many person has this person fired? It's like, I'm fine if you haven't want him on the team, but like, why are you giving him a VP title?" He really pushed on it. We left that meeting and I remember we were driving back. It was down at their— We didn't have offices at the time, so we were down on the valley at their offices doing our first board meeting. I remember driving back to the I turned to Matthew and I said, "What if we just don't do titles?" And I'm like, "Of course we need a CEO. You can be CEO, but like, I don't know, do I really deserve a VP title? Does Lee deserve a CTO or VP title?" You know, and our board member's right. This VP that we wanted to hire, they don't really deserve it either. So what if we just don't do it? Of course people need functional areas. So like Lee was like engineering, and then I was user experience for a long time, and that was inspired what Marissa Meyers did at Google, and no other reason than that. I didn't wanna be sales or marketing, so I liked user experience. And we had folks who had joined technical operations and it served us really, really well. It was very flexible. It meant like you could get people to come join Cloudflare 'cause they wanted to be there for the right reasons. It didn't matter what their title was. And it was really easy to do that because I didn't have a title, the other co-founder didn't have a title, so nobody had a title except for the CEO. And again, people had—

How did you communicate with the world?

Well, again, I was user experience and Lee was engineering. I mean, co-founder and lead engineer. A lot of people would— engineers were all systems engineers. It was just simple, very simple.

And then where did it tap out?

Yeah. Okay. So I'll say two things of where it tapped out. So it doesn't work for everyone. And for us, the first thing I would think if you're thinking about, okay, do titles work or not? The thing that I would say is, what do your customers look like? So early on, we had a free service and a $20 a month service. That's what we launched with back in 2010. Now we also have a $200 a month service and we have lots of enterprises paying us $100,000, $1 million a year. We look very different today than when we launched. Because our initial customer set were a lot of customers who were on the free plan or paying us $20 a month, the fact that our organization was pretty fluid, didn't have titles, it reflected what our customer base looked like. That worked really well. I don't think if you're selling to large organizations or true enterprises with multimillion-dollar accounts, I don't think it'll work early on. So I think that's something like it kind of mirrors, or really if you're selling into very process-driven organizations, I don't think it'll work. But for us, we didn't have that. We kind of were this very big self-serve business. The fluidity matched what our customer base looked like. And so the fluidity really works for us as we scaled. It was great. And I'll give you an example where it worked really well, and then I'll give you an example where it didn't work well. It's not all, you know, there's always trade-offs on these sorts of things. So where it worked well was we had a really early team member who was amazing, still on our team, terrific. If we had given him a title, it would've been a VP title back in the day of technical operations, actually. Turns out today, not our VP of technical operations.

Still in the company.

Still on the team.

Amazing.

How do you change that? How do you keep these early folks, and people always talk about upgrading your team, and I hate that term because it feels like it's such a— such a, it's not really paying it. I don't think it does justice to the team that gets you to where you are. But there are people who, who, who cross the chasm, cuz it is true, the different folks, like, you know, to get you to the first, you know, million in ARR, the next 10 million, and then now we're over well over 100 million. Like the types of people we hire look different, but you still need some of those early folks who cross the chasm because they are the culture keepers of Cloudflare. They're the ones who really, you know, care. They know, You want them on your team and it's like if you, if you give them a title that they might not grow into over time, you either then need to have another VP and now you have a VP reporting to a VP, or you all of a sudden have to create a new title, like an, uh, uh, super senior VP. Yeah.

Senior VP. Yeah.

And all of a sudden it's like, oh my God, I don't wanna be talking about any of this stuff. So that, that's, that's a case where it worked really well. The case where it doesn't work well is, you know, it's hard on the team. As you grow. We probably waited too long. We waited well over 100 people before we even hired our first engineering manager to manage a group of engineers, and that was too long.

What specifically is hard on the team? Just not knowing who the decision maker is?

Who to go to. Again, we had this philosophy of, "Well, you guys are all smart. You get to work on what you want to do," but it turns out when your team is begging you for a manager, it's probably you waited too long. It's like, "Oh, yeah, they're begging, but really, maybe we're a little bit too late." Yeah. Um, things that, uh, you know, um, some processes that maybe didn't get implemented because all of a sudden there's not somebody, there's no centralization point to say, hey, this isn't breaking anymore, let's implement this. So I think we waited a little bit too late and, and, and we fixed it and we continue to, you know, fix it along the way. And so what that means is some people are unsatisfied, right? They feel like my career path, you know, how do I show career progression? Because people, again, they see their friends getting promoted at work to senior engineer and then a tech lead or an engineering manager, and they're like, hey, I want career paths. And how do you do that if you don't have it set up? And so I think that's the flip side of waiting a little bit longer, too long. And again, I think we maybe waited a little bit too long.

Do you have a magic phrase for that, for people that want that progression?

Well, I mean, I think like normal, everybody does. I don't think that's just like human nature. I don't think it's bad. I just think people want to do different things in their career. And what I—

Do you have a magic phrase for getting them to accept that they're still progressing without these titles? Or did you get good at—

No.

No.

OK. So this is really interesting. If anybody knows what that is, tweet at me on @Zatlin. I'd love to know. I don't know what the magic phrase is. It's just— growth solves some problems. So I mean, I guess it's if you're on the right rocket ship or on the right bus. Who knows what seat you're— don't worry so much about the seat, but I don't think that works very well.

So let's go to that. So you do mention things are step functions, right? So I'm sure you had step functions. People don't have titles. You're charging, you're growing, but it's $20 a month. So multiplying that times number of customers to get where you wanna be and is hard. How do you keep momentum? During those flat parts of the step function with, with all that situation?

Okay, this is one thing that I really don't think people talk about enough. And again, if you're a founder in the room or a senior leader in a, in a growing company, I think you have a ton of control over it. So we started with, at a free plan, a $20 a month plan. It is really hard to show revenue growing up into the right when you use $20 a month. Like, you need a lot of $20 a month, like, customers to make the revenue chart grow right into the right. Now, When you're doing $100,000 contracts or $1 million, it's a totally different story. But those $20 customers, we have a $200 plan, revenue was not a good metric for us to communicate momentum early on. So we didn't use it. Now, if you read all the Y Combinator stuff and a lot of— actually, I went through a lot of the different decks that have circulated here even. A lot of it, people are really focused on revenue as a metric. Of course, that's important. I get it. The one thing you have as the founding team or is in charge of your business is figuring out what metrics do you want to communicate to the external world that shows momentum. And what I think you should do is pick ones that make it easy to show momentum. And so we picked metrics that made sense for us that changed really quickly, and that helped communicate both internally we were onto something. It helped make recruiting better 'cause we could say like, look, these are the metrics we care about and look how they're changing. When we go back to our board, we'd have the same board. Every time we have a board meeting, we open the deck with the exact same slide The exact same slide. And then we've changed it once to a whole, like a new slide with all the metrics that we, 5 KPIs we track. We just updated them after 5 years. 'Cause we said, hey, we're a different business now. And revenue made it on the second time. But for the first 5 years of our existence, revenue was not a metric that we used as one of our 5 KPIs. And so we used other things that, that matter to our business. I'll give you some examples because you should figure out what those are for your business. And you have a lot of control over setting the context for that. And I don't think people tell founders that enough. But you can pick. I just want to dig on something here.

You said you would change— so you would actually change the metrics that you were focusing on? How would that feel authentic to the employees of like, oh, this time it's customers, that time it's websites? How would that not seem inauthentic to the employees that had been there for a long time?

Well, no, we kept the same ones for a long time, 5 years. But then at some point when you start to generate over 5 million, 10 million in ARR, Then you need to say, "Okay, we're—" A KPI we care a lot about is revenue per employee. When you're less than $10 million ARR, it doesn't really matter. When you have over $10 million ARR, it matters a lot. That's something where we started to help, and it helped to say, "Okay, is our hiring pace in line with our revenue growth?" We want that metric to stay within a range. Smaller and earlier, it wasn't an important metric for us. Again, I think, of course, we had to report the financials to the board, so of course, we knew what our revenue was, but it was not one of our 5 key metrics that we ever talked about. I think it served us really well. I'll give you 1 or 2 examples of what we did use, because I really think, as a founder or as a leader in these early-stage companies, you have so much control over setting the context of what's important. For us, of course, we use number of customers and that's great, but those also grow slowly. It's like one for one. Another metric we used early, and again, it worked for our business, you have to find your version for your business, is this notion of page views that we're making faster or safer every month. You can think about it as every time a website signed up for Cloudflare, and they had about 50,000, let's say, page views a month, all of a sudden we had one new customer, but our page view count went up by 50,000, 50,000 page views that month. Okay. And then whereas if we got a really big customer that maybe did a million page views that month, then all of a sudden we were at a million with 50,000 page views and it grew much, much faster. And for us, the reason why we use that and why the board was okay with us doing it, it was How well were we delivering on our promise to our customers? We had to be able to execute on that growth. For us, there was a huge amount of work to execute on that growth and being able to actually deliver on the promise to all of that page views going through. That metric looked up and to the right and was growing really quickly, way faster than our $20 a month revenue graph. Again, page views isn't going to work for most businesses. Find one that does work, that helps communicate what you're trying to do as your business. And I, again, no one told us that when we were starting out. And I think, again, of course, LTV, CAC, all those things matter as you get bigger. But there are other things you can use to help bridge that will help you with your psyche, will help recruit, and will help you manage expectations with partners and boards and potential investors and all sorts of goodness.

That's really good advice. So I know you're not charging $20 a month to all your customers now. Talk about your first big opportunity or how you thought about making the leap, and are there any counterintuitive lessons in that? Yeah.

Customers. We love our customers. Well, the best part of my job are the people I get to work with, and then the second best part of my job are our customers. So we really started with this free plan, $20 a month plan. And really quickly, this is what happened. Customers would contact us, and we had an enterprise advisory council contact us. That was, it was free, pro for $20 a month, or enterprise advisory council contact us. That's what our website pricing page looked like, um, back in 2010. And so people would sign up for the free and $20 a month plan. And then also we had these customers writing into the enterprise advisory council saying, I love your service. I use it on my personal blog. I want to bring it to you. I wanna bring it to my office, but I have to pay you more than $20 a month or otherwise I will get fired. That's right. Like, it just, I cannot in good faith go to my boss and say, hey, we're gonna pay this company $240 to run all of our performance and security and reliability infrastructure, which is a great problem to have. So it took us 2 years, 2 years, and trust me, I wish it had been faster to come out with what we called a business plan, which was $200 a month. So 10 times above what we were charging and kind of an enterprise plan, which was basically originally $3,000 a month and now it's up to $5,000 a month. 10, like a magnitude order. So it took us 2 years to get there. And so I think like the, the lesson I learned is to be, um, impatiently impatient. Like we always wanted to get there faster, but we weren't quite ready because the types, what your organization needs to do to service those larger customers are totally different than what we had to do for our freem $20 a month, um, customers. Like if we made a mistake and someone was on the free plan, They were very forgiving. If somebody was paying us, you know, $3,000, $5,000, our customers who were paying us $60,000 a year, they are not as forgiving, nor should they be because they're a real business and it's mission critical and it's totally unacceptable. We went through this whole transformation and then this happened. We got onto these larger account types and we have a sales team now fielding them, which is great because with our free plan, our $20 a month plan, we have no sales team. To, again, to close a $60,000 deal, like they want to talk to somebody. They want someone to like ask technical questions to. You can't just point them to your documentation. Like they want to talk to somebody. Um, and then once they sign up, you need to service them. Um, and so we, we build that all out. Um, and I remember this is what happened. So we were really, we, we started to get like better at these $60,000, $100,000 contracts. And then, and then like, and then it's like this oracle walks through the door. Where we had a customer, brand name customer, amazing internet property who were like, look, it was a $1 million contract. Our sales team was all over this contact. They wine and dined them and they were so excited and they were promising them the world. I don't remember.

What was their quota at the time? Do you remember? Pardon me? What was their quota at the time? Oh, I don't. You don't remember? I don't remember.

It was a big deal. Again, that's just a lot. It would've totally made our year, our revenue number for the year. It was a big deal. And I remember Matthew and I literally having a panic attack, like a heart attack. And we said, we are not gonna take on this customer. We can, we are not ready. And it was this, it was this, it was this friction where the sales team was saying, oh my God, they're brand name. They wanna pay us a million dollars. Of course we need to get there. We have to change, drop all our priorities and focus on winning this contract. And I remember thinking, no, no, we don't. No, we can't. We weren't ready yet. Um, and so what ended up happening, and it was not obvious, but what ended up happening, and this is really hard to do, is we, we told the customer, look, we admire what you guys are doing. We would love to be your vendor of choice, but truthfully, we're not ready to, to do this yet, but we'd love to keep in touch. And the next time this contract comes up for renewal, we wanna bite at the apple then. And fast forward 18 months later, we won the contract. Amazing. But it was that, like, it was, and I tell you, our, the salesperson was not happy. Yeah. Our head of sales, not happy. 'Cause they wanted to use it as a reason to get better as a company. Yeah. And I totally get that. I totally get it. You lean in a little bit and that company makes you better because they have higher expectations and that's great. And it's hard, but it's a good hard. But like, there's also a thing about, whiplash in the organization. I think as a founder or executive, if you're running a company, your job is to figure out, is this good for the company or is it going to be whiplash? We just thought at the time it was whiplash. Now, of course, you can't live life in parallel, so I don't know what would've happened, but I'm sure to this day we made the right choice. Yeah.

I really want to dig in here on some words you said because I think probably by the laughter, a lot of people can relate to this problem. So you have this big customer, like how did, what were the tangible things that made you know you're not ready, right? 'Cause as a founder, you're always doing things that you're not ready to do, right? And so how did you know like, no, honestly, we're not ready? Like how do you evaluate whiplash would be another way to ask the question, but I think like that's one piece and then we have to talk about the sales.

[Speaker] When the words were uttered, we need to drop everything and change our product roadmap to meet these customers demand, I was like, no, we don't. No, no, we don't. We're not going to do that because we have all these other customers. I mean, today we have 7 million internet properties. Back in the day, I don't know, it was probably a million. But it's like, we have a million other customers we have to care about too. This revenue is super shiny and it's very attractive, and yes, I agree, we will get there, but it doesn't have to be right now. Again, I think that it would've broken the organization. It just changed a lot of different sorts of things. I really don't think the customer would've been happy in the end because we were going through scaling, growing pains, which is what every company does. We didn't want them to have to bear the brunt of those.

How did you deal with the sales team?

One thing I've learned, which I also did not know when I started Cloudflare, is no is a really powerful word. You just gotta say no sometimes. And the answer was like, no, understand we want this. Go back, tell 'em we wanna stay in touch and we'll try, you know, let's be a good partner here. Now I work with great people and so they understood that. They were disappointed as they should be. That's their job. They should be disappointed. But, you know, you play as a team, you win as a team.

Interesting. And that customer came to you, right? Yes.

Okay, cool. Yes. They were unhappy with—

yes, yes. Cool. Are they still a customer? Yes. Congratulations. Cool. So let's talk about— so now you've obviously have a lot of momentum. You have, you know, the market pulling things out of you. Uh, you're making some really tough decisions. You know, it's time to raise money again, you know, somewhere in this. Like, what are— and as you rightly mentioned, there are a million things on how, you know, step 1, step 2, step 2. But what are the counterintuitive things that that you'll never read on a VC blog. What are the counterintuitive decisions you made around fundraising?

I feel like the amount of content around fundraising today is so much better than when I started Cloudflare. You guys are all really lucky. I feel like it's almost demystified much better, which is great. If you're the founder, good for you. That's awesome. Use it to your advantage. We've raised $182 million. So we've raised a lot of venture. But we haven't raised for over 3 years. So it's been a long time, which I'm happy about. So there's 2 things I would say that I don't think get talked enough about. Although, you joked earlier about things that you could learn by not following Jason M. Lemkin. Actually, out of every 100 things Jason writes, I agree with 99 of them. So it's like, you should just follow his blog, his tweets. He's got lots of great insights. And he talked about this recently, but I still don't think it's talked about enough. There's two things. The first is we always optimize for people, both the people we hired as well as investors along the way. What does that mean? I remember during our Series C, we had a great firm who wanted to invest in Clover, gave us a huge valuation. Huge. The person who was going to do the deal is a brand name VC, top tier, it's great. But our visions for the business did not align. These are the sorts of conversations we'd have. "Why do you have a free plan? Get rid of it." Sorry, it wasn't quite that forceful. More, "Why do you have a free plan? Are you sure that's a good use of resources and time?" It was almost like early warning signs of like, "Oh man, if we get married, we're going to have a totally different vision of where this business is going to go." That's all the stories that I hear about the horror stories you hear about investors and founders is often when the visions don't align. Those were what made us really nervous. There was also like, "Why are you in the city? You should be down in the Silicon Valley where all the talent is." They just did not— There was a lot of things we were like, "Oh." We walked away from that deal and we had gotten our board. The board was on board with it, and we walked away just saying, "This doesn't feel right." That was really hard. Really hard. Fast forward a few months later, we met a new— we kept getting to know an investor who we really liked a lot. A lot, a lot, a lot. I think they're just high-quality human beings, the best internet investors there are. It was Union Square Ventures out of New York. We knew them, but we kept getting to know them better and better. Eventually, they came in and did our Series C. Months later and at a much lower valuation than this other firm. Not because the business metrics were done, just because they were willing to do the deal with different terms, but we wanted them. I think that I know lots of founders, and you can read online of almost all— root of all issues is when they take money from somebody that doesn't have the same alignment as them and they chase the valuation. I really don't think that's a good strategy. We've never done that. I'd say we have a great relationship with our investors. So that's, that's one thing I learned. The other thing that I will say is it is a very connected world and, and don't burn bridges. No matter how awful someone treats you, you might need them. And I hate saying that, but it is true. And so it's a connected world. The world of tech, the Valley is so connected, but the world of tech, the world of business, and I'm amazed by how like how somebody who we met years ago has come back and played some role today. And like, that's not obvious in the moment where you just like want to tell somebody what you really think about them. Just, you know, it's a connected world.

Bite your tongue. But on the other side, you know, you're punching above your weight. You have this, you know, personality as a company, as a human. How do you like let that shine and bite your tongue? You know, like what's the— What's the balance?

This is the thing that has the greatest asset you have as a founder is you can have a personality. You think of Google, you think of Amazon, you think of Apple, you think of Facebook. All those people, they have rules by the SEC, everything that needs to be vetted by their communications team. You have none of that. I think that really played to our strengths early on. Matthew definitely has a personality, and he's got lots of Twitter followers, and he speaks, and we write blog posts where we draw lines in the sand, and I think that's worked really well for us, and it can for you too. Like, it's really, you can play it up. People are looking for great content, so whether you write on your own blog or you place it in other places, people want to hear from you, and you can have a point of view or say things a little bit more firmly that somebody who has a comms team that has to get it totally sanitized, like you just have a different set of rules and like that only lasts for a certain amount of time. So you should use it to your advantage.

You still have a personality, so it's going for you. Yes.

Yeah, I still do.

Now this is a bit counterintuitive for the space you're in. So I mean, I've, you know, security reviews are a big part of what we're doing now as we're going upmarket. And like the speech I give before we go in is don't have a personality, right? Like, because I consider it a liability. Like, Has there been anywhere where it came back to bite you, or you think it's just been an asset all the way?

There are no silver bullets in life. So yes, there are definitely times where it's come back to bite us, and we've just adjusted. This is my rule, how I think about it, is whatever I write publicly or even internally, I want to be proud that that gets attributed to me 5 years from now. And so it's like, the company I want to be in 5 years, Will I still be OK if I said that? So that's like my measure of whether what we're saying is OK. And I think if you stick to that, you're fine. You can go a long way because people want— they want a point of view. They want personality. I mean, I'm not saying don't be a jerk. I mean, just say like, actually, this is how I see it, or this is why I think it's that way. It's refreshing. It's authentic. People like it. It's great. The one thing I will say, and And this idea of momentum, and when you're small, you wanna punch way above your weight. And that's what you're trying to do. You're trying to punch above your weight. I use that analogy, puffer fish. Actually, it's so funny. I use this all the time. You wanna be a puffer fish. You wanna be a little ahead of your skis, but you don't wanna be so ahead that you're a fraud. And that's a really fine line, but you do. And so I remember early on when we were raising money, Originally, we were raising like, I don't remember, $5, $8 million, and the round just really was our Series B. I remember all of a sudden, the numbers ended up being $12 or $15, and we ended up raising $20. Matthew and I literally had to practice in the mirror saying, "Hey, we're raising $20 million," because it just felt so crazy to us that that was even a reality. This is something where it was like a pufferfish, where you practice, you're like, "Okay." Yeah, you walk in a room saying, yeah, we're looking for $20 million. The other side thought it was perfectly normal. So this is an example of something. But again, there's a fine line to being a fraud, and I think that's really important. Yeah.

How do you know the difference, though? Right? Because you felt like a fraud. OK, well, I'm not good at it. Saying $20 million, but you weren't. You know, like, how do you know where— Well, that's not a fraud.

That's just practice. No, you're not.

You weren't a fraud, right? So as a founder, you have to continually push yourself past feeling of fraud? Like, how, you know, what are some like stopgaps you have for yourself to know if something is just too much?

Yeah, well, I think that that's why you need— you need to, um, I think you need the rate at which you learn is really important. Actually, it was George Lee who runs the investment banking at Goldman Sachs. This is his line, not mine. And you know, if you think about somebody like Goldman or Morgan Stanley, like they meet with all the founders and they, they do a really good job meeting these companies early. and then they see them. They're trying to get to know Snapchat when it's like 10 people. They do that really, really well. What George said once that I thought, "Oh, that's so smart," is the best founders are the ones where they have a really high rate of learning, the ones who learn really quickly. Then I heard Evan Williams speak once, and he's like, "Everyone's just making it up as they go along." I'm like, "Yes." Those two things together, I was like, "Yes." It's not like they're— You asked— You go to every single session at this conference, and I'm sure— People will tell you 5 different things than I just told you and they were successful and someone else. You ask 10 people, you get 8 different answers. There's lots of different paths of success. At the end of the day, you have to listen. You have to get feedback. There's so many resources, whether it's conferences like this or you meet people or you read online. There's lots of inputs of what you want to do. You talk to your mentors. You talk to your co-founders. You ask your team. At the end of the day, you have to decide what's right for your business. and like only you and only truly you will be able to decide. And that's just— that, and if you get it wrong, then you adjust. There are very few things that you, if you make the wrong decision, that is company ending. There might be a couple, so take those, but otherwise it's like better just to make the decision and adjust along the way. And you have to change it, you change it. And I think that's been— it's like the back to the momentum. Momentum is more important. Than analysis paralysis. And it's really easy, especially as you get bigger, to be like, oh, I have to make the perfect decision. And she's like, no, you don't. You just have to make a decision. That's really good.

Yeah, keep the momentum. Decide and commit is more important than the optimal decision. I think that's a good reminder. And so as you get bigger, you have to communicate these decisions. It's not the three of you in a room. And then it's many, many people. And how many people are actually at Cloudflare now?

We have 600. 600. We'll be 850 by the end of the year.

Yeah. Well, congrats. Yeah, it's a lot of people. But you're also doing a lot with not a ton of people. Talk about some of your communication tips throughout the ages.

Sure. OK, this is also something that's not obvious when you start that I wish we had known. I think that you can never overcommunicate. I mean, it sounds so obvious now. But when we started, we were— you know, 8 people, 20 people, all in the exact same room, communication was easy. We were just sitting next to one another. You're talking to each other all the time. You overhear every conversation. We were not a distributed team at all. We were all in the exact same room for a while, and it was amazing because the speed at which you can move is great. But that quickly changes as you grow, right? All of a sudden, you have people in other offices, or people are working different hours, or whatnot. So we do a couple things that I think I didn't realize when we were setting it up that's been really helpful. So we have like a weekly meeting. We call it beer meeting. For us, it was end of day Friday. We just moved it to Thursdays. And it's just like a weekly cadence of things that are going on. So whether there's something really good or really bad, we always have the meeting. Most of the time, it's kind of not— there's not really good or bad information. It's just like, here's what's going on. but then when there's something really great happens, it's a thing to communicate, and when something really bad happens, you don't have to set up a town hall. It's just like always there. It's this regular cadence, and that has come in to save us so many times. It's a great thing. We also plan quarterly. We have a quarterly kickoff. We do all those sorts of things. The one thing I'll say, and then I'll let everyone get on with their day, is that the one thing that we— something that I learned about communication that we did not do well is we did not write enough stuff down. You're moving so fast, you just think like, "Oh, what a waste of time. Let's just get it done." It still haunts us today that we don't have things written down from back when we were 20, 30, 40 people. So I really don't think you can— You can never start too early. Awesome.

And Michelle, you also said to take more photos. So let's do the selfie thing. Oh yeah, let's do the selfie. Awesome. And everyone take more photos along the way.

Yes. Yeah. Anyway, thank you everyone. Thank you. Awesome. Thank you.