Hitting Hypergrowth with Amplitude's CEO, Spenser Skates: Take Your SaaS Company from $25M to $100M+

Hello, SaaStr! How are you all today? Phenomenal to see you all. I am very, very excited to be here at SaaStr among lots of other SaaS company builders. I think one of the things that becomes challenging as you grow is just to be able to have that community and talk to other folks who are running into the same things as you. So very, very excited to be here today to share some of my learnings in growing Amplitude from nothing to 25 to 100 to 250 and beyond. And then very excited to hear what's top of mind for you all in the Q&A. So looking forward to that at the end. Those of you who don't know me, my name is Spencer Skates. I'm CEO and co-founder of Amplitude. That was actually a pretty cool demo reel there. We need to get that for our website. We do, we're a digital analytics platform. So we help you do everything from product analytics, CDP, experimentation, session replay, and more. Check us out at amplitude.com. Alright, just to give you a little bit of background on the company, I founded Amplitude along with my two co-founders, Jeffrey and Curtis, back in 2012. It was born out of another failed startup called Sonalight. Like a lot of engineering teams, we had the hubris to think we could build our own internal analytics platform. And when that company failed, we realized there's a huge opportunity into helping people better understand their customers, what features they used, where they get blocked, what keeps them coming back, and what ultimately makes for a great product. Uh, today we're the leading digital analytics solution in the market. Our goal is to help every company build better products. Uh, more than 2,000 companies use this today, including the likes of Intuit, DoorDash, Atlassian, uh, Ford, Walmart, uh, Disney, NBC, uh, tons of other great companies out there, uh, using us to help them understand their customer journeys. Uh, 2 years ago in 2021, we got listed on the NASDAQ, uh, but that was just the beginning. One of the really important things, it's a conversation for another time, but as part of going public, you can't just have that as the end goal, you gotta be seeing beyond that. So, but really, really important milestone in our history. And like many of you, I really wanna build a generational tech company. And so today I'm gonna talk about, there's a lot to talk about when it comes to building a great company, but today I'm gonna talk about 4 key lessons that I've spent a lot of time really thinking about when it comes to what it means to build a great organization, a great and long-lasting sustainable business. So let's go ahead and get into it. Alright, so here are the 4 lessons I'm going to go through today. First, maintaining a culture of product innovation and how to do that. Second, how to build new products and how to— you need to treat them like a startup within a larger organization. Third, understanding executive hires. This is one of the least talked about but most leveraged things, particularly as a CEO founder, that you have for scaling your business. So I'll share with you my insight from this. And then lastly, making the mental switch. This is actually the hardest part of changing from an early stage founder to a large organization executives. It is not a natural thing. They're very, very different roles. So excited to talk through those and get to Q&A from all of you. So let's go ahead and dig in. Alright, lesson number 1, product innovation. Super, super important, particularly for, we're in the technology business, we build innovative products, customers expect us to continue to having the latest and greatest. One of the beautiful things about the SaaS model versus licensed software is that the product is always getting better when you use it. And so the core challenge is how do you keep this up over time as you continue to grow and scale? It's one of the hardest things to do by far. So let me go through, I actually want to talk about one of the fallacies people have here and misconceptions, and then that goes into, you know, how do you, how do you get around this? So most people expect that your ability to innovate grows linearly with your number of employees. So as you continue to add engineers and other folks onto your product development team, that your rate of being able to ship stuff and innovate goes up. Right. So it's just, you know, you go to a team that's 100 people, they'll be 10 times more innovative than a team that's 10 people. What happens in practice is actually the exact opposite. The graph really actually looks like this, where actually your ability to innovate goes down with the larger of an organization. By default, it goes down with a larger organization. And so you look at this and you're like, why the hell would I ever grow my team? It doesn't make any sense. Maybe just keep them small forever. And this is a very natural part, because what happens is your code base gets larger. There's more people, and so the ownership of great product and product success gets diluted. And every individual's ability to coordinate gets harder, right? There's n-squared connections in the company, and so it gets harder and harder and harder to keep everyone on the same page. For a lot of very natural reasons as an organization, actually gets harder to innovate on your product as you continue to grow and scale. And so the trick is, how do you change this curve to look something more like this? At the end of the day, I'll be okay, it's not gonna be linear, but can we at least get it to be monotonically increasing? Let's at least have it go up. So the more people that we add to the team, the more innovative that we're able to be. So how do you actually get there? All right, so first I want to talk about a very overlooked part of building and scaling great product development teams. And that is setting the right structure and organization. So there's an old saying where you ship your org chart, and this is kind of the root cause of why it is you're able— that your ability to innovate slows down as you continue to grow and scale. And so I think spending a lot of time going from a founder is thinking about how do I drive all the innovation myself to how do I think about how do I structure and create an org where I create really clear guardrails and really clear goals for each individual. Again, it may sound very basic, but almost every CEO that I talk to that goes past about 50 engineers runs into exactly this problem. They realize they haven't spent enough time on this. So I can't overemphasize it, spending enough time on this. The model that we have at Amplitude is we have deep functional experts that are supposed to be the single responsible person for each of these areas. So for governance, for data platform, for CDP, for analytics, for growth, for experimentation product, we've spent a lot of time at the executive level defining each of these areas and then giving responsibility across engineering, product management, and design to single individuals who are responsible for making them great. And so really what you're doing in a lot of ways is kind of replicating, uh, the conditions of a startup in a small team. Um, and your responsibility is to manage that as a portfolio, um, as the leader. And so again, may sound very obvious, but I can't tell you how many organizations that come to me and ask me, hey, Spencer, how are you able to keep up shipping the velocity of product you do at scale? And they just haven't spent enough time here. The specific mechanism that we do, which we've talked about on our blog quite a bit before, is we have pillars and we have leads for those pillars, and they're responsible end to end, full stop, for the success of their particular area of the product. So again, you ship your org chart, and so it comes back to this and spending a lot of time on this. All right. Second part is culture. It's not just enough to, you know, set the org chart, give responsibilities, and go. You actually also have to set the tone that this is what you value as an organization. In the early days when you're a small team and it's you against the world, it's very, very natural to have this feeling because, you know, you've got to ship. You know, it's like you've got to keep swimming, otherwise you're dead. And your product is worse, and there's a lot of needs and asks from your customers, and you want to be able to keep up with that. You actually have to be very explicit around setting this culture. I've seen a lot of companies that have done a good job of this. Facebook's a phenomenal example where they were one of the first to talk about moving fast and breaking things. Let me tell you a little bit about how we do it at Amplitude. So first, all hands. So we have all hands once a week. At every single all-hands we do, there is a product demo where we share something that's been shipped in the last week. It's considered a great honor to present that at all-hands to an organization of 700 people. And so just constantly talking about it and beating the drum and using the channels that you do have to celebrate and reward and highlight the importance of innovation. The next thing we do is we have a feature releases channel in Slack, and it is my personal favorite Slack channel, where anytime a new feature goes out, it's posted here. There's a write-up posted by the product manager and engineer, they post a GIF of what, how the feature works, and they talk about what customers are using that feature as well. And one of the things we look at, again, very arbitrary measure, but we look at, hey, how much stuff is going through that channel each week? And we want to make sure, and if there's If there's not stuff, then that's a problem. That's a flag to us that something is off. The last thing we did on the culture aspect was internal hackathons. So twice a year at Amplitude, we have the entire product development team pause what they're doing and take a week off just to work on things that they think are interesting and they think can provide customer value. And at the end, we have a demo and we present it to the company and we show all the cool things that have come out of that. And I remember in the early days when we first proposed doing hackathons, a lot of the early executives at Amplitude looked at me and are like, hey, this is crazy. You're literally telling people to take a week off and do whatever the fuck they want. Like, what the hell? Like, you should be telling them exactly what to do. But again, back to our culture of innovation, if that's something that we care about, we want folks to be able to take ownership and innovate on their own and drive that at Amplitude is, you know, providing opportunities for them to do that in different ways. Hackathon is a great way where you're expected to come out with something at the end of the week. So it's been a huge part. A lot of some of our great products, like recently we shipped warehouse-native Amplitude, and that actually started at a hackathon 4 years ago where someone wanted— thought, hey, what if there was a version of Amplitude where I could use SQL queries to connect to a database versus using the datastore we have. So huge, huge part of keeping up that innovation mindset as we grow. Last thing I just wanted to share with you all here. So one of the things I would do in product reviews with the team is I would always ask the question, what customer is going to use it? One of the things that can happen as you grow as an organization is you start to get more and more abstracted from your customer. So while the PM's job is to talk to the customer, not mine as an engineer. Well, you know, hey, it fits within this theoretical strategic framework that, you know, some VP or some executive has put out there. So that's why we're building this. And so the question I would ask is, what customer is going to use it? One of the wonderful things about SaaS and B2B is your customers will literally tell you what they want and then pay you money for it when you build it. So if you use this as your North Star, build what your customers ask for, it's hard to go wrong. It's hard. It's very hard to go wrong. As an organization. But again, so many companies don't do this. So many companies get far from this as they grow, and that's why you get crappy software, and that's why you get a lack of innovation. And so I ask this question so much to the product team that they put my face and this question on a shirt, as you see here, so that I wouldn't have to ask it all the time. They could just remember it. So anyway, fantastic. Something that you continually have to beat into your organization, and a big part of what has made Amplitude continue to be successful as we've grown as a company. Alright, that's lesson 1. Let's go on to lesson 2. Treating products like a mini startup. So this is something I see, going back to shipping your org chart, this is something I see organizations get wrong. One of the rules in SaaS is as you get to $100 million in revenue, you want to start to find new pieces of value outside of your core offering. So what are other adjacent things that the same buyer or the same user can get value out of that's not the core. And pretty much every company that has gotten to a billion or more in annual recurring revenue has been able to do this successfully. The challenge is this is really freaking hard. It was hard enough to capture lightning in a bottle the first time and find product-market fit for your first product. How the hell are you going to find it for your second product? So I want to share a a few tips that we learned after a bunch of failed attempts. A lot of companies will create a new product innovation team, but the problem is they have that innovation team sit right next to the central product team and be folded into all the same efforts. And the problem is the things that work for a mature product at scale just are completely the opposite of the— of what you want to do when driving innovation for the first time. So as an example, your product team may do set quarterly goals and have quarterly plans. And it turns out when you're trying to innovate, quarterly goals don't really help you that much. They may set long-term product roadmaps to be able to commute— communicate to customers. Again, when you're innovating on a new product first time, you don't have a long-term product roadmap because what you may do may change next week or even tomorrow. Another thing that is done is coordinating with other teams, whether that's go-to-market or compliance teams like security or teams like the support team to understand what the new product is. Again, makes a ton of sense for a mature product with tons of users, but exactly the opposite of how you want to run a new innovative experiment. All of those things that help a central product team be successful are huge distractions for your early innovative team. And so as a leader, your job is actually to sequester them off from the rest of the organization and protect the team from those distractions so they're able to innovate and drive really, really quickly. So I'm going to give you just two quick stories as examples of how we did this at Amplitude. So the very first new product that we did successfully was experimentation outside of analytics. And the way we did it, the first time we tried to do it, we actually had them be part of the quarterly planning process and go through all the same processes. And we're like, yeah, we're one team. You know, that's how we should operate as a company. But actually, no, it was really important. So we ended up failing and having to do a redo of it the subsequent year. And what we did the subsequent year is we sequestered them off so we wouldn't actually include them as part of quarterly planning. The only meeting we had was a meeting every 2 weeks where I would ask the same question, which is, how many paying customers do you guys have this week? And it was just get them to maniacally focus on that and not worry about anything else. Don't worry about how it integrates with our existing product. Don't worry about what the long-term roadmap is. Don't worry about what metric we're trying to optimize yet. Don't worry about being in compliance or what have you. Just get something out there that has paying customers. Let's do that. And we ended up doing to great success. Experiment is now our second largest product after the core analytics. The second example is, so I mentioned we recently launched a warehouse native version of Amplitude. One of the things that happened was our go-to-market team wanted to get involved in the launch of that new product. They're really excited. They're like, man, customers have been dying for this. They've been asking for it forever. Like, you know, the partnerships team wanted to get involved so we can set up our partnership with data warehouse companies like Snowflake. Marketing team wanted to do a launch on it. A lot of the, our account executives and CSMs wanted to know what the details of the offering. And so my co-founder who was in charge of the effort got so bombarded with meetings, he was spending so much of his time coordinating with the rest of the org and not enough time innovating on the product. So I said, alright, no one is allowed to talk to him. We're gonna have a once every 2 weeks meeting, and if you want to talk to him, that's the meeting you go to, and otherwise You're not allowed to bother this team, and they just need to get something that has paying customers and get shipped out the door. So again, another thing that happens as you grow as an organization is a lot of people want to be part of the new hot, the new innovative thing, and you've deliberately got to set them up from a leadership perspective to insulate them from that. All right. One other method as a corollary I want to call out as part of this is acquihires. Acquihires are actually a really phenomenal method if, if you're at the scale of a company where you can bring in a bunch of talent. We've done this twice at Amplitude, once with ClearBrain and once with Iteratively, and it's been a great success for us. You are bringing in a set of people who are already familiar with the space because they're working on something adjacent. You have them join your company, you have them rebuild their product in the context of what you're already doing. And it's fantastic for a number of reasons. So one is you don't have to get them up to speed in the space. I think another is that they have that startup innovative mindset. And so they're kind of an injection of fresh energy to the team. And it gets people really motivated and fired up to work with a team that's focused on shipping, that's focused on talking to the customers and being close. And so this helps a ton, both with innovating on a new product, both iteratively, and Clearbrain ended up becoming our CDP product and our audience targeting product. And it also helps with the first part I was talking about, which is helping maintain that culture of innovation. So another thing that can be a useful tool in your toolkit. All right, let's go on to the third lesson. So the three stages of executive hire. So this is one that is just not talked about that much because it's an uncomfortable talk— talking. It's an uncomfortable thing to talk about is like what makes someone a good fit for one stage versus another. And, you know, people will say platitudes like, oh, it's important to recruit and hire well, but okay, what does that actually look like? So I wanted to share with all of you my learnings on this topic. So let's first start off with the early stage. At the early stages of a company, there's not a ton going on in your business yet. You may not even have a product or a fully featured product. You have zero brand awareness. You have almost no customers. Nobody gives a shit about you. Like, it's just you're— it's you against the world and you need an executive who is strong at operating in that environment and who can make something happen out of nothing. And so one of the biggest mistakes a lot of very early stage companies get, and you've heard this before, is they'll hire some big company executive from Microsoft or Google or Amazon that's not used to operating like a scrappy startup. And so before, when you're in the early stages, when you're a few million in revenue, when you're early on before anyone cares, you need executives who are willing to embrace that. How can you get a lot done and make stuff happen with not many resources? So example, at Amplitude, early on we didn't have a marketing function. And so how were customers going to hear about us? Well, our CRO, Instead of saying, oh, we're gonna go, let's create a marketing plan and let's hire out this team and let's do it, it's like, no, let's actually just start trying to host events with the team that we have. So we ended up hosting events like, we called them growth clinics, or having a webinar just to share some of the insights we had learned about analytics with other customers. The other thing is, it wasn't even the CRO's area of expertise. He hadn't actually run marketing before, but that was okay. It was more the mindset of, hey, Hey, let me make something happen. And so it's very, very— you're hiring people who are very much like you as founders in terms of being scrappy and being able to make something happen out of nothing. So that's, that's early stage. What happens, though, is as you start to get to the tens of millions, you start to transition as a SaaS company. And this, this, this one took me a while to learn. Once you're at the tens of millions in ARR, at this point, your product works, people are buying it. You're not just making stuff happen. The goal is how do you scale this successfully so you can get to, you know, 10, 20, 30, 50, 100, beyond. And so you have something that works, you know, okay, if I target this type of customers, if I have these sort of conversations, if I am able to offer these sort of product capabilities and guide them along the way in this way, they will buy and do business with us. And so you change from someone who is very scrappy and just making things happen to someone that's taking something that's already working and scaling it. So how do I hire my nth account executive, or how do I hire my nth engineer, or how do I repeat that webinar that really worked and do it 100 times over? And that's a very, very different type of executive. So I think of this as the mid-stage scale executive. The other part about this, and this is part of why this transition is hard, is some of the folks who are really good early on may not be good for this stage. And so this happened with some of our early executives that were really good at lighting fires and making stuff happen. But again, when it came to doing a deliberate, systematic process that worked at scale, had a really hard time. So a great example is, you know, the sales leader I mentioned in the early days was different from the sales leader we needed at the mid-stage because instead of just making stuff happen with events, we needed them to roll out things like MedPick, hold teams accountable, do accurate forecasting. Setting the right territory strategy. So the skills end up being quite different. All right, last stage of executive hires, and this is one I am still in the process of learning and has been different for me, is hiring late-stage executives. So at this stage, you are no longer hiring executives who are doing the work themselves. You are instead hiring executives whose job is to hire other leaders who then do the scaling work and building out the teams. And so this one, this one was hard for me to wrap my head around culturally because I'm like, man, I want people who actually do work, who not— you don't just, you know, sit in their office all day and hire, you know, out of their Rolodex and build out this big team and actually not delivering value themselves. But this is actually what you need at the late stage. Because once you get to $100 million and beyond in ARR, there's so much complexity in the organization. You have all these different functions within marketing. There's product marketing and comms and demand generation. Within sales, you have revenue operations and account executives and solutions consultants and all your geo territories. You have partnerships and you have customer success managers and solutions. And the list of functions goes on and on and on and on. And so one leader is not capable of leading all of those functions by themselves. Their superpower actually needs to be in hiring other leaders. And this can be very disorienting, particularly if you're a founder who is of the mindset of like, hey, I take pride in being on the front lines, leading by example and doing work myself. It's actually not your job anymore. It's your job to hire other leaders who— to hire executives who then hire leaders who are good at that. And you get all these stages of indirection, but Again, very important for scaling. This has been the biggest organizational challenge at Amplitude by far as we've scaled past 100, and the biggest learning for me. You know, great example, last year we hired a new president, Thomas Hanson, who is just exceptional at this. Able to hire out teams 10 times more quickly and evaluate folks 10 times more quickly than I can, as well as run them and hold them accountable to delivering on things. It's been a night and day change. In how we've operated as a go-to-market team. But again, a very different executive from the previous stage. Someone who may be good at scaling teams may not be good at hiring other leaders. So you have to be very, very deliberate about that. The last thing I want to talk about this is that the emotional element of this is the hardest part. And this is the part that people don't talk about much. Difficult to move on from people who have helped build your company. So this was an interview I saw by Larry Ellison. And Larry, you know, if you know him by reputation, he is one of the most ruthless motherfuckers out there. But even it was hard for him too, because he had so much loyalty to the folks that helped build the company and help build Oracle. But he knew it was different for the next stage. And so in some ways, this is Knowing the right playbook is one thing, but being able to do it, implement it in practice, is another. And so as a CEO, your job is to be in front of the company far in advance of when you need to make these leadership changes and how. And this is the hardest part of getting over it. This is the hardest part where CEOs struggle. Alright, last thing I want to touch on is a, is a thing I'm still learning on, which is making the switch from becoming an early-stage founder to being a late or late or large organization executive. So let me go through it. As part of being a large organization executive, the way you manage is very different. I think a lot more about talent and how to get the right talent to do things, and that's the rate limiter on the growth of Amplitude, than actually trying to drive some initiative myself. So initiatives myself. So I want to give a few examples. So you have to say no a lot more. And that sounds obvious, it's actually quite hard in practice. Let me, I want to give you kind of a few examples of this. You know, I used to obsess about every single person at Amplitude getting a great experience. And so every single employee problem, if they didn't have a good experience with the manager, with another team, with how they're compensated, whatever was going on, that became a Spencer problem. And I held onto that for for way too long. You know, I ended up— I remember trying to do that all the way through about 200 people where I want to meet every single person. I want to check in with them. I want to have— make sure they have a great experience. But very quickly, and for a while it actually worked. We had super high engagement. We had super low attrition. We had less than 10% attrition. We had like a 4.9 on Glassdoor. Like it was the best place to work ever. All these amazing things. I was really proud of the organization we had built. Until it didn't. As we got past that 200 milestone, I no longer could be in the weeds in every single thing. And so what happened is we went from 10% attrition overnight to 30% attrition, a 4.9 Glassdoor score to like a 3-something. All these organ— I was happening was I was covering for all this organizational dysfunction where instead of holding leaders accountable and getting leaders to step up, I was covering those gaps for people. So very, very important lesson that you can do unscalable things up to a certain point, but then the paradigm shifts on you. All right. I want to actually do a quick quiz. I'm going to do two— we're going to do two quiz sessions. I'm going to ask you a question. I'm going to ask you all a question. We're going to see who has the right answers here. And then we'll go ahead and go to Q&A. All right. So let's try to make it real. All right. So say you have a sales leader who needs to get better with forecast accuracy. Two things you can do for that person. Okay. So the first option is you could try to figure out how to get great at driving forecast accuracy. You could talk to the board, other sales advisors, ask them how to get better, share that perspective with the sales leader, try to coach them and hold them accountable to that and grow them. So that's option one. Option two is, well, you know, maybe it's not your job to coach them, but maybe you should just make it clear to them. So maybe you should create a set of metrics and dashboards that make it clear if your sales leader is actually hitting what you want on a forecast accuracy basis. Okay, so here's the two different options. All right. How many folks here think the correct answer is option 1? All right. Way in the back there. Awesome. Love it. All right. How many folks think correct answer is option 2? All right, head fake. Both options are actually wrong. So the right way to do it, you don't need to create a set of dashboards to justify that they're good or bad at forecasting. You can just share the feedback. And if they can't fix it, you know, you need to uplevel them. And having that confidence in your evaluation of that sales leader and that executive is really, really core to being able to scale. You can spend a lot of time trying to coach people up or try to cover for weaknesses or try to create systems and processes that help make things clear, but it's better, it's much easier, and much more scalable just to be direct with someone about it, and own and just say, "Hey, I need you to do this," and if they can't do it, find someone else. Your job is not to lead by example, your job is to evaluate the performance, and that's a very, this has been the hardest switch for me mentally. Alright, similar example. Say your head of sales, by the way, one of the themes you might see here is head of sales tends to not get along with a lot of folks in the organization. Very, very common thing you have to be very deliberate and watch out for. Say your head of sales comes to you complaining that your CFO won't approve your deal. What do you do? Alright, first option, option 1, we need every single dollar we can get, the CFO's being unreasonable, let's just push it through. Option 2, I'm sure the CFO has a good reason for doing that and it is important we follow the right process. We need to be consistent. Alright, how many think it's option 1? Hell yeah, hell yeah, you guys are early-stage founders. Nomad, do it no matter what it takes. I love it, I love it. Alright, who thinks it's option 2? Alright, alright, I already set this up from the previous question. Right. Both answers are wrong. So the right answer is what— ask your head of sales, what did the CFO say when you talked to them about it? One of the things that is absolutely wild to me as you grow as an organization is people won't give the feedback to each other directly. They'll have one-on-ones with lots of— with you, with lots of other people complaining about, well, this person didn't do this. And you've got to be able to stamp that out by saying, hey, it's your responsibility to have the conflict and communicate with the CFO and have it out with them. And after that, if you can't do that, then both you come to me and I'll resolve it and I'll tiebreak it and I'll make a call. But you have to be able to give them that feedback. And even very large organizations, very mature executives that have, that have, you know, spent 20, 30, 40 years building their careers still get this wrong because it's so much— it's harder to have that conflict. It's uncomfortable. But you got to hold that line because it doesn't scale otherwise. Everyone's going through you. You're not going to successfully scale as a founder. Alright, fantastic. So that's my lessons for today. We're going to do Q&A right after I give you these takeaways. So first, iteration fuels output. Never stop iterating, never stop innovating, especially later in your growth. That becomes— it's the single biggest lever you have for long-term organization success and being able to deliver shareholder value and build a successful company. Second, treat your new product like a startup. So replicate that experience as many ways as possible, and that will help you continue to drive innovation on new product lines as you scale. Third, as a founder CEO, your job is to ensure you have the right executives. This change is hard but necessary part of scaling. And finally, the early-stage, early-stage founder to large organization executive mental switch is challenging, but you got to embrace it if you want to continue to grow. Awesome. All right. That is it for my talk. Thank you all very much.