Maintaining A Proper Balance Between Inspiration And Paranoia- Delphix CEO Chris Cook | Greymatter

Hi everyone, my name is Ashim Chandna and welcome to Gray Matter. In this episode we feature Chris Cook, Delphix President and CEO and veteran technology executive. Delphix is a fast growing enterprise software company. The company just passed its 10 year anniversary, is now north of 100 million in recurring revenue, has over 350 enterprise customers, today, has over 400 employees in nine offices around the world, customers in over 30 countries. The company is really focused on allowing its customers to have data that flows freely, quickly, securely to speed innovation. It's personally been a privilege to be part of Delphix from the start. I still remember 10 years ago when Jed, the founder came in and presented the vision for the company. And it's been wonderful partnering with Chris, the management team and Jed to see Delphix grow and really partner with large enterprises around the world. Chris, welcome to this podcast.

It's great to be here. Ashim, thanks for having me on this podcast.

We're gonna dive into advice for companies and businesses to leverage data management in their companies and also talk about some leadership lessons that Chris has learned across his career. To kick things off, Chris, we'd love to just hear a little bit more about your background in enterprise software. You joined Delphix in April 2016 as President and CEO and you came from New Relic right before. What was your deciding factor to join and lead Delphix?

It was pretty amazing, Ashim, that Delphix was so similar to some of the companies I've worked with before. Over the history of my career I've had the good fortune to work with three specific companies over about a 25 year period of time. And in those cases we were able to grow the business by anywhere from 15x to 20x. So really explosive growth. In all cases. I was not the founder and I'm not a founder type of a person. I'm more of a scaler. And in all those instances they really kind of had three things in common. They were all had really visionary founders that built amazing products that solved really hard problems. I think that's important. They had pretty broad markets that were not limited to one vertical or anything like that. So, you know, a lot of room to grow and to expand. And all of them had pretty strong early validation from customers that there was a lot of value there and the people and the cultures really were teams that saw tremendous potential. So you know, I saw all those things in my past and when I came across Delphix I saw all of those things as well. And right now I'm trying to Write a new chapter of that story, I guess.

That's awesome. And so right before you came to Delphix, you were the president and COO of New Relic, where you helped to scale the company, eventually leading to successful IPO in 2014. So maybe just talk a little bit about how your experience at New Relic prepared you for the CEO role at Delphix.

New Relic was actually a very different role for me. I'd been in supporting enterprises and selling to enterprises and delivering products to enterprises for my whole career. And New Relic was the first time I really went into what was an SMB kind of a model. It was a high volume model. It was different for me. I'll never forget the chairman of the board when I was interviewing said, don't bring your enterprise crap here because you're going to mess it up. To me, in the early days, it was very much a learning experience because I was trying to learn how that business worked. And there were a couple of really fascinating things. I think Lou Cerny and the team there did a tremendous job of really focusing on the consumability of the product. They took an approach of like trying to build a product that assumed there would never be a salesperson, never be a services person, never be anyone to educate the team. And so the product itself had to kind of sell itself. It had to be really easy to consume, no friction. And they spent a lot of time and energy to do that. I think that was really a critical thing. And I think advice I would give to any entrepreneur who's starting a business is take the time then to make it easy, because once you're in the marketplace, it's a lot harder to make those changes.

So you've been at Delphix now for over two years. You know, what are some of the transitions or the one transition you've been the most excited to see?

The thing that was so exciting is there was like this hidden gem inside of Delphix which was the people we serve are people who, who consume data and use data to drive innovation and to do it at speed. The reality is that our offering is really unique in the market, but I don't think we actually were positioning it properly. So for me, in the first two years, I really found that we had a tremendous market, that even with the early successes in the company, I think the market and the people we were selling to and targeting was a much, much different market. And so in it was exciting for us to be able to define that new category. It's something we call DataOps. And committing to that and committing to building that category since we relaunched the company last August has been really a defining moment and a great pivot for the company and for our future.

You got to New Relic when it was very early and you know, we scaled it all the way through ipo, got to Delphix at a certain size and are now scaling it significantly up from here. Any differences in scaling these two companies?

They're actually super different. At New Relic, the initial focus was really on smaller businesses and with smaller spend, it was really a volume play. ASP was I think at one point in time less than 10k and then it was over 10k. But I mean, it's pretty small. ASP per year, per customer. Delphix is really focused on a different target. We're really focused on the top 5,000 companies in the world. And our ASP is really more than 20 times what the new relic ASP is, but obviously lower volume. So what I really learned also was even in that really successful model for New Relic at the time, really felt like for us to have long term success, we had to serve the enterprise. And so we made that pivot into the enterprise. It was really, really challenging to go from an SMB model to the enterprise. They did it really well and it's been very successful. But what I learned was that the enterprises still have a lot of money to spend and serving them well is very hard. And I think we do that very well at Delphix.

That's great. Ever since you've been at Delphix, I've observed that people really like working with you. I'm curious, what are your thoughts on leadership? Let's say a first time CEO of a younger company or an entrepreneur who's starting or running a growing business? Yeah.

Oh man. I have a lot of memories. Many fond, some not so fond, but they're all lessons. Right? And what I would say with regard to leadership is there's a few things. I mean, first of all, I think people don't always see the path to success, but as the leader, you have to find that path. You have to believe it, and you have to get your team to believe it. I can remember times, especially earlier in my career, where I had a vision for what I thought we could accomplish. And I found that the team was, you know, there was fear, they were afraid to go for it, they were afraid to really stretch that far. And sometimes you have to just take that into account and say, all right, they don't believe. And so I've got to help them. Believe. And I've got to get in with them and then help them drive to that conclusion. And what I found over the years is people surprise themselves all the time. And time and time again, I've proven that as a team. If you believe you can do a hell of a lot more than anyone thought you could do when you first got into it. That's probably my most valuable lesson, is trying to help people overcome that fear. And I'll just share one other thing. You have to get them to trust you and believe in you as a person. So I think being an authentic leader, being very transparent, looking people in the eye and making that connection and having them say, wow, this guy, he thinks we can get there. And so if he thinks we can get there, then why shouldn't we think we can get there?

So what do you look for in people when you recruit?

It depends on the role, I think. But I think the first thing is to be really clear what the job is and what the expectations are and how you're going to measure success for that role. I think clear articulation of what's expected is and what's needed for success makes it easier. So, you know, what I need out of a CMO might be different than what I need out of a head of engineering, for instance. But the personal traits, I think, are very common for me anyway. I really want somebody who's really curious. We talk inside Delphix about having a childlike curiosity because I just really love the whole concept. When my kids were young, you can just like see them learning. And I think as we get older, we get worse at that and we're not as curious. So I like a childlike curiosity where people are like, I want to figure this out and I want to learn. So that's a big part of it. And then I want people who are active listeners. I think that's a skill that unfortunately is not as common as you would think. I think people are oftentimes, especially in an interview, as you're evaluating people, they want to make sure you know what they can do. But I'm more impressed with people who can really listen, take in what you're talking about, think about it and contextually, without coming like, hey, I pre thought this answer just really engaging on an authentic way. Those are two real personal characteristics that I look for.

The market for talent has probably never been more competitive. So any thoughts on, you know, how do you really compete in this market?

The Bay Area is a really challenging market, depending on what you're looking for. I Mean, there's many companies who want to hire every person. I think for us it's really about a lesson. I learned again from Lou Cerny when I was at New Relic. He has a saying about loving your Mondays and I love that. He's like, you know what, On Sunday night most people are like, ah, crap, I gotta go to work. But if you're at the right place, you're going to bed on Sunday night and it's kind of like before Christmas or something, you're excited to go to bed because you're excited about what's going to happen the next day. So I think it's important that you find people who get excited about what you have to offer, the products you're bringing to the market, how you're doing it, your strategy, and most importantly, the connection of the people. I think making sure that you have a personal connection, that people feel really part of that team and they're excited about the mission is to me, the most important way to differentiate.

That's great. Switching gears a bit, the founder of Delphix, Jed, he wrote a book titled Disrupt or Die. Can you talk a little bit more about what this means and how you're seeing this play in the market today?

It's actually a pretty simple concept and the concept is essentially you're going to get disrupted. It's just a matter of whether you do it yourself or you let somebody else do it to you. No one wants to be Amazoned, but everyone should be paranoid about that and they should be pretty aggressively trying to disrupt themselves. I talk to a lot of C level and high execs in a lot of the big companies around the world and I would say that there isn't one of them that doesn't have a transformation strategy. Some are a lot more aggressive than others, but all of them care about things like business agility and they want to have data driven businesses and they want to drive speed to the market. But I think at this point in time, a really, really critical component is really transforming yourself.

And what keys do you see just in terms of driving successful transformation? I know Delphix has been involved with helping a number of large companies transform.

I think when you're talking about these type of transformations, it really is critical that the drive starts from the top. When I think of a company like JPMC and I think about how rapidly they're trying to transform the business and how seriously they take it, it's something that's driven from Jamie Dimon down through the whole organization. He supports it he believes it and he's driving it. And so I think that's really critical. One of my favorite stories in this regard is really Tyson Foods, Tom Hayes, the CEO there, and Tyson Foods is in Fayetteville, Arkansas. So it's not necessarily the hotbed of technology and talent. But Tom made the commitment to bring in some people who he thought could evolve and change that environment and really turn it from a food company to a technology company. And so he brings in a gentleman like Scott Spradley, who is the former CIO of hp. And, and Scott brings really a wealth of knowledge, but also pushing the leading edge of technology. And so the commingling of those two types of people is really exciting because it's hard to think of a company who has divisions called the raw meats division and the poultry division as a technology company. But they're using technology in really meaningful ways. They're leveraging the cloud, they're pushing automation like crazy. Robotics is a big part of it. And the whole goal is connecting to driving really a better product for the consumer more rapidly and at a lower price, and so driving up quality and using automation and technology to do all that. So it's really been interesting to see that being driven from the CEO on down and having the courage to bring in the right people to really facilitate.

That change continuing from there. Just when you look at large enterprises today, right, what do you feel is the biggest untapped opportunity for them just, just with data and with analytics? Clearly there's a lot of change happening with AI, ML, the cloud. But where do you see just the biggest opportunity around data?

Well, we are a data company, so my view is very data centric. But there's a reason for that. We've had a lot of success with a lot of big companies, and the reality is we live in a software economy today. And the faster you can move new offerings and new services into the marketplace, the better. People want to be more agile, they're being more competitive through what they offer. And so we're helping people drive that and release Software up to 100 times faster through Delphix. And so this is a big part of what they're doing. The second thing I see is really through AI and ML, they really want to serve their customers better. So they're evaluating data, they want to make decisions based on that data, based on what they can learn from their customers and re inject that into the product that they're delivering. And, and so that requires really a lot of speed to get the data into the hands of the right people so they can evaluate that, make decisions. But then you again have to change the product that you're pushing into the market, which takes you back to the first thing. You got to release faster and release more frequently into the market. And then I'd say the last area is really everything around being more agile and fast. And that's where things like cloud, pushing things into the cloud, having environments that you can get stood up faster, all of those types of things, automation, DevOps are all things that are pushing agility. And those are the three biggest opportunities. I would say data plays a central role in all three of those opportunities. And that's really for what Delphix does, is we're supporting all those opportunities by allowing data to flow freely, quickly and securely to the people who need it to drive innovation.

No, that's great. And maybe you could just touch a little bit more on cloud. Right, cloud. Most large enterprises today have historically been primarily on prem and today are in various levels of move towards the cloud. And some people would describe this as hybrid combination of being on prem and on cloud. And so in a world like that, where your apps are primarily sitting on prem but some set of them are on the cloud today, and over time, more and more apps are likely to move to the cloud. So in that type of an environment, what role can Delphix play? Or how do you see delphix fitting in?

Yeah, it's a good question. And in reality, from a number of companies perspective, there's way more companies that have never been anything but cloud than people who are taking the journey. But for the largest companies in the world, this is a journey that for most of them is probably 10 years or longer. People are at different points through their journey. Some industries move faster than others. Retail industries tend to move a lot faster from my experience, than things like financial services. But every one of them has a cloud strategy and they're all moving there. So the way we look at the cloud and our cloud strategy is really in two different buckets. The first bucket is how do we utilize the cloud to deliver a better service to our customers. And so that's where you'll see us releasing our product as a SaaS version of that product. And that will be coming later this year. And in that it'll allow us to iterate faster and release faster. All the benefits that you get in a SaaS environment. Then the second bucket really is more in how do we support customers who are themselves taking advantage of cloud and take the attributes and the benefits that Delphix provides and allow them to use that in the cloud. And we're aggressively doing that with all the major cloud vendors today. One quick example, maybe there's a major retailer that is really going through this journey as well. And, and this is a retailer that's really tight with their consumers. They're really driving everything digital first direct to consumer. These are efforts that are primary for them and giving them the ability to really put new products in the market like every day and just the agility of that. So a lot of that is being done in the cloud, but it's also being done in a heavy rapid release cycle. And then there's things like their SAP environment and they're like, you know what, we want to put that in the cloud too. And migrating something like an SAP environment for a major retailer into the cloud is a massive, massive project. And this is one of the things that Delphix will be helping that client to accomplish.

Just about a year ago the company had a major relaunch as a dynamic data platform. What's the new positioning for the company today?

Looking forward, As I think you are aware, this was a major pivot for us as a company. First of all, I have to say what we do is very unique and very valuable. So essentially what we do is we're trying to get data to go freely, securely and throughout the organization to the people who need to use it. And we call these data consumers. This could be software developers or software engineers, could be testers, could be AI analysts, could be business analysts who are running reports. But really the whole thought is to propagate data wherever it's needed. This is really accomplished by the self service delivery of personal and virtual data environments. Virtual is really key because it allows you to do really unlimited copies without physical constraints. And we deliver these personal data environments with a lot of controls that the people I just mentioned are going to use and allow them to self serve and be self sufficient. We call those data environments data pods. Last August we released a fully integrated platform that delivers these data pods to those consumers of data. I think the cool thing about the launch was we realized that the market was really converging to a space where we really already had a really strong position. So you have the intersection of data that's exploding, it's growing, it's doubling every year. They say it's going to grow by 25x over 10 years. You have this massive need for security because there's all kinds of breaches that happen all the time. And so it would be irresponsible to spread data everywhere without a strong security strategy. And they have this need for speed and everything's converging into the bullseye where we think we are.

So you touched on security, which is very topical today. How does a large enterprise straddle between getting the productivity and the benefits from free access to data, but yet make sure security is front and center in terms of the protection that they're looking for as well?

Yeah, it's complicated. This is obviously a primary topic for everybody. And the reality is breaches can happen in a lot of different ways. And a lot of times it's something simple that's missed. You know, it could be a known process that really wasn't followed. You know, something as simple as a poor patching discipline or something like that, and you didn't have the patch in place to protect you. The reality is that there's not one solution and one product that solves this problem. It's a combination of a lot of things. The area that we're most primarily focused on is the fact that data lives in a lot of different places and it's growing in size and complexity. And I don't think people really realize how much of that data is out there, especially in non production environments. So for most people that I talk to, at least 2/3 of their data is in non production environments. I actually think the ratio of non production to production data should be way higher than that because I think they're limiting their ability to innovate by limiting the amount of data that's out there. And I think there will be demands to make that much higher in the future. So that represents a huge exposure if not handled properly. But that's why a part of our platform is a masking technology that provides intelligent anonymization for that data. So it still can be in a very valuable and usable form. But if it's captured or taken by a nefarious person, either inside your company or outside, it's of no value to that person. So that's kind of our approach to that part of the problem. But it's a multifaceted problem that requires, I think, a lot of different pieces.

What takeaways do you have about the industry that would surprise folks or some key insights just in conversing with folks at very large enterprises around the world.

The most interesting thing for me is that there's never been a time, I don't think, when data has been more valuable and more strategic and there's never been a greater focus on how do we extract that value. Out of that data to use for strategic advantage. The learning for me is that most companies aren't good at it yet, but they're committed to figuring it out. I talked to one particular person whom I won't name, but they had over two petabytes of data that they were saving for analytics purposes. But they didn't know what they were analyzing. So that person had to maintain, secure and store two petabytes of data. They knew there was value there, but they didn't really know how to extract that value. For me, I think the big thing is that people are trying to change the way they run their businesses and become really more data driven in order to do that. I think they really are going through these transformational challenges that are tough for them. It requires technology, but also process and sometimes people and organizational changes. And so I just see on a daily basis this is a hard, hard transformation for people to make.

Any interesting recent customer anecdotes or stories?

Yeah, well, first of all, I would just say I've been really blown away lately by the business savvy of these CIOs. They're not just really great technologists and understanding of the technology. I feel like they know the business they're supporting. And to the extent where, you know, you could have fooled me, they could have been the line of business leader, not the person that's delivering the technology. I'll give you one quick example. I had a meeting recently with a large healthcare company. They have a really complicated business actually. I mean they're trying to deliver services like Medicaid and different other types of services. And so these are big contracts that they have to win at a state level. The RFPs for these are really complicated. It could take hundreds or thousands of people. The answers are thousands of pages. They have really complicated financial models to try and play it out because these are long contracts and they're usually fixed bid. And so the person I was dealing with is looking for ways to drive the margins up. He wants to drive the cost down in terms of what it takes to deliver. If they win the bid with those two things, they feel like they can bid more aggressively, still have the margins they want and win contracts they may not have won otherwise. So you have somebody taking technology and trying to apply that and thankfully they're going to be using Delphix to help deliver that. But I just thought the knowledge of how the business runs on a day to day basis and how they can help that, that was just one example. I'm seeing that all over the country. So I'm really seeing the intersection of business and technology in a more meaningful way than ever before.

So keying off just the intersection of business and technology, most young technology companies, they really struggle when they deal with large customers in terms of the bringing together, if you will, of the technology they provide and linking that to some type of business benefit. Any advice or thoughts on how a newer company should approach large enterprise customers?

I think what you said is the key. You have to articulate and identify the impact to the business, because I think what you'll find, especially in large enterprises, people love technology. And so it's easy to find people to talk to you. It's easy to find people who want to test out what you have to offer. It's easy to find people who think what you have is pretty cool stuff, but getting them to actually pay for it, buy it, and commit to it and put that as a top priority versus all the other competing priorities, which could be hundreds of. I think you have to be really careful not to fall into the trap of finding the wrong person that just sucks up your time and you don't make any money. And so my advice is, if you cannot articulate the business value, and if you can't get the customer to articulate it back to you, either find somebody else in that account or go to a different account and have the courage to walk away.

You know, maybe jumping back to a little bit of a leadership topic. Most of us struggle with the amount of the size of our inboxes, the number of meetings we need to go to every week. And so I think managing one's time and priorities is a challenge for most leaders and entrepreneurs.

Right.

Any advice or thoughts about that?

Well, first of all, it's something that I think you gotta constantly reinvent yourself on because there's so many distractions, especially for a CEO or a founder, an entrepreneur. There's unlimited number of people trying to get a piece of your time. And so I think you have to be really disciplined. First thing I would say is email is pretty evil. I really try to set aside only specific times when I look at email. Thankfully, I have an amazing assistant that can kind of track it. And if there's something that's like, man, you need to get on that right now, she'll bring it to my attention. But other than that, I'm not going to spend any time during the day looking at email. Email is one of those things that's really addictive because it's like, wow, you know, I could take five minutes here and just bang out 10 emails or whatever. I find it to be really distractive. The second thing is you think of the old analogy of if you put the sand in the jar first, you never get the rocks in. As a CEO or an entrepreneur, the rocks are the most important things and you can't do them in five minutes and you can't do them in 30 minute chunks. A lot of times the rocks take, you know, half a day or they might take two days or that might take two hours. So I really try to schedule even ahead of time. I will schedule bulk pieces of time even though I don't necessarily know at the time I put it on my schedule because I have to schedule like a month or two in advance. But I'll have chunks of time that are purpose built for the rocks. And so as those rocks come up and it might have to do with strategy or product strategy or whatever the big topic is, I have then time built into my calendar to do that. You can always free that time up, but it's really hard to carve out four or five hours of time if you didn't plan for it. And so I encourage focus on the rocks and don't get distracted by the sand.

Any thoughts for young entrepreneurs or leaders in terms of things that could be useful to read?

It's funny you ask that. I read a lot in terms of books, I tend to read a lot of nonfiction but also non business. So I like things that are about people or about history. One of my favorite books in the past was a book called Moonwalking with Einstein which is about the world memory championships and how people prepare for that. I thought it was really a fascinating read, but usually when I'm reading I'm trying to actually get my brain to think. Not about work, but in the mornings I like to read in a way that gets my brain ready for work. I really love Harvard Business Review and you know, a lot of the articles sometimes in the magazines might be feel like they're geared toward a 20,000 person company or whatever and it doesn't apply to me. But I love the daily readers that they send out and it'll be simple things. It's something I can read on the Bard, on the way in in 10 minutes and it kind of gets my brain stimulated and that'll usually lead me to something else I read and, and so I try to read about kind of business related things in the morning to get my head going and then at night I try to read nonfiction things to take my mind off of business. I'M always looking for new material as well. Like, what are you reading that's interesting or listening to?

You know, there's one blog in particular I really enjoy reading. You know, every week. It's a site called Farnham Street. F A R N H A M Street. It's kind of a combination of they try to help you master the best of everything. So it's a combination of high performance and psychology, if you will. Similar to you. I've always enjoyed reading Howard Business Review. I've been reading that for many, many years. On the technology business side, I follow Barron's pretty carefully, and they have a tech trader section. And so I look at that and they have snippets on tech companies every week. So it's a great way to kind of build one's knowledge on technology. And I would say the last piece is really, I feel very fortunate because every week I get to talk to many, many very, very smart people around different aspects of company building, whether it's smart engineers or architects or smart marketing folks or smart heads of sales. Very accomplished CEOs like yourself. So, you know, that's a big part of my learning every week.

Excellent.

In terms of closing, what's the one actionable advice you'd suggest to our listeners that they can do right now to move the needle for their company or their team?

I think I heard this somewhere, but it stuck with me. I think it's really important to kind of maintain and create a proper balance between inspiration and paranoia. And so I've been doing this for a lot of years and I've been pretty paranoid for a lot of years. But I think it's a way of kind of keeping yourself on your toes and always trying to anticipate what could happen. And you know, this is the one thing I love about aws. Like, if you engage with aws, whether it's re invent or in the marketplace, what you find is a company that acts like they're in last place or they're at least in second or third. They are running with an urgency like they're behind, and if they don't catch up today, they're going to be dead tomorrow. And of course, the opposite is true. And so I think there's a lesson there for all of us that driving the urgency and continuing to be paranoid and push forward is really important. So I think there's a saying, if it ain't broke, don't fix it. But what I would say is, you got to have the courage to disrupt yourself because there's somebody around the corner always that will.

Thanks so much, Chris, for sharing your lessons today on scaling and just on leveraging data management. Wonderful advice on leadership, being authentic, on being trustworthy, on showing people where to go. I liked your thoughts on recruiting and looking for that childlike curiosity. One of my biggest learnings in just working with a number of successful companies over the years has been it really takes stage appropriate leadership as the company scales and grows. And I think Delphix is very fortunate and lucky to have you there. And it's just wonderful to see you partnering with Jed and the rest of the management team as we continue to scale Delphix from hundreds of customers to thousands of customers.

Thank you.

So thank you again.

Well, you've been a great partner along the way, so I thank you as well. Shane, it's been a lot of fun.

Thanks.