S3E5: In the Room with Michelle Zatlyn of Cloudflare

Welcome to The Room Podcast. My name is Madison McIlwain and I'm a partner for seed stage investments at The5VC.

And I'm Claudia Laurie, a co-founder of Pryve. We're a founder and funder who are in the room where it happens. If you're a first-time founder or an emerging venture capitalist, we're glad you found us. We share inspiring, authentic, and insightful stories from founders, funders, and operators who have been in the room and provide tactical feedback on their early aha moments and learnings along the way. Before we dive into this week's episode, we have a short message from our partners.

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On today's episode of The Room Podcast, Claudia and I sit down with Michelle Zatlin, co-founder and COO of Cloudflare. If you haven't heard of Cloudflare, they're silently keeping millions of businesses and by association consumers safe online through their cybersecurity infrastructure, stopping over 70 billion attacks a day. Cloudflare found Michelle through some serendipitous late night chats with her Harvard Business School classmate Matthew Prince. Having been a chemistry major in undergrad, Michelle's drive to help make the world a better place almost brought her to medicine, but after falling in love with business, she decided to pursue other means of making an impact. After Cloudflare IPO'd in 2019, Michelle became one of the few women to ever both found a company and take it public. Today, Cloudflare is valued at over $24 billion as the world increasingly realizes the importance of keeping our internet safe. Michelle kindly sat down with us and shared her personal journey of starting this category-defining company. In today's episode, we explore insights and themes such as diversity of thought in co-founding teams, the power of changing your own framing of a problem, and only needing to get a few things right to make a big difference. Let's open the door.

Thank you so much, Michelle, for coming on The Room today. We're so excited to have you.

Thanks so much for having me. I'm thrilled to be here and I, I can't wait to spend the next little bit of time with you.

Before we dive into the founding story of Cloudflare and everything that you're up to today, we would love to rewind a little bit and get to know you before Cloudflare. You studied chemistry history and business at McGill University in Canada. Tell us how your early interests and education started to shape your path into tech.

That's such a good question. I'm a big believer that life is a collection of experiences, and so collecting a lot of them along the way is an asset, not a liability. And I kind of look back over the last 20 years of my career, and you can see how this windy path has, has built up to be something I'm really proud of, and it's been incredibly rewarding. I did study science, and if I go back to why I loved science in undergrad, chemistry is one of these, the one of these subjects where, where it helped explain. There was always an answer why some chemical reaction was happening, and I, I love that. And one of the things I've realized in technology that I get a lot of satisfaction is, is there's almost always an answer too.

When did entrepreneurship and becoming a founder fall into the equation?

Different times. So I grew up in a small city and my mom signed me up for an afterschool program called Junior Achievement. My dad was a small business owner. He owns a law firm. I, my couple jobs out of college ended up at an early-stage startup that I saw and all brought all these memories back. When did I know I wanted to be a founder? Actually, I didn't. I didn't wake up one morning being, I had to start my own company. That was not me. There are a lot of people who have that revelation, and I think that's amazing. But I was not one of those people. I just happened to end up being the founder of a company. And it really, how it happened was I was on a school trip to Silicon Valley. I'd been meeting all these other early-stage entrepreneurs, late-stage entrepreneurs, investors, and it just in many ways demystified what being an entrepreneur was or what founder was. And I kept meeting these people and being like, wow, they're not that different than me. They're smart, they're passionate. I'm smart, I'm passionate. They were they had a lot of grit and perseverance, they were really resourceful, they had ideas. And I, I just remember it was on the school trip and I said to a classmate, wow, if that person could be an entrepreneur or a founder, so could I. And, and my friend on the trip happened to say, of course you could be. And, and we ended up going to find an idea and, and, and it became Cloudflare. But I didn't wake up one morning knowing I was an entrepreneur. I was just open to a lot of different things. I wanted to be part of a grow— growing team that mattered. And I happened by accident to start a company.

I feel that a lot of the guests on the podcast had two components that you chatted about. One, going to business school and being able to start to explore a lot of ideas that weren't necessarily top of mind to them before business school. And then also identifying with other entrepreneurs and seeing other people that you identify with as an inspiration to say, hey, I can do this as well. Was going to business school a no-brainer for you? Tell us about sort of the decision to go.

This is one of those things that's so controversial in Silicon Valley or in the world of tech that, that, so let me preface by saying, I don't think you have to go to business school because again, life is a collection of experiences. There are so many ways to be successful and you just look and there are a lot of ways to be, have successful paths. But for me it was something I really wanted to do. And if you, if I think back to why, again, I had studied science, found myself working in business and I loved it, but I kind of missed some of the foundation because I had a really narrow foundation, academic foundation in the background of business. I think it was for me, I thought going to pursue an MBA would help me see the options and just, I didn't even know what I, I didn't even know what questions to ask because I didn't even know what existed. So for me it was an opportunity to go see and then of course to meet really great people. And so those are the reasons why I wanted to do it and I loved it. It changed my life. And I had grown up in Canada, I'd been living in Canada the whole time. I come from a pretty small city. And the fact that I ended up going to Harvard Business School in Boston was my first time coming to the US. Such an international school, such a global school. It totally opened my mind. What I thought was high standards, talk about my standards got reset 10 times higher of what was, I thought that was good enough. No, my expectation of good enough totally got defined. All these sorts of things. As somebody who's really curious and open, I loved meeting all these people who had been really successful in all these different areas and some that I didn't wanna ever do. But I just learned a lot from them by, by getting to call them classmates for 2 years. And I guess the way I would end it is it was such a luxury to be able to go back to pursue my master's in business after working for 5 or 6 years. It was a huge luxury because I had more data points. I knew what I liked, what I maybe less than I originally started. I think it's an amazing option if you can do it. And if you're not interested in, you shouldn't do it. You don't have to. But I think for people who say Quaker MBA is a waste of time, I'm like, well, maybe for you, but that's The world is a big place and there's lots of different types of people and people come from different backgrounds and reasons for wanting to pursue that.

[Speaker:MADISON McILWAIN] What you're touching on is this network and this incredible community that you were able to build, first of all, in the States, which you did not have coming from Canada, and then secondly, amongst a cohort of thinkers and people who had big visions for the future. And spoiler alert, you met your co-founders at HBS, and we've had many guests come on who have met their co-founders through business school or through their undergrad experience. What was it like to meet Matthew Prince and Lee Holloway, who were the co-founders of what became Cloudflare?

Yeah, well, it changed my life. So that, there you go, Madison McIlwain. That's, it's, you know, it's Matthew and it's Lee and, and it's me, but it's also a lot of, I graduated from business school about 12 years ago now. And, and some of the closest people I know are both from undergrad, but also from business school. And it just, they, and they've all gone on to do really incredible things. And you've worked together and you inspire each other in different ways, or they become friends in different ways. It's made my life more rich. Because of that experience. And it's pretty cool. 12 years later, I can say that. But meeting Matthew, so Matthew and I, we, we were in the same, it's called section class. And he, this is an example of somebody who's incredibly intelligent, had done really interesting things. We had such different backgrounds, but you just were there and you're open. And he always had all these ideas. I always tell entrepreneurs looking for an idea, you should really find a way to go have a glass of wine with Matthew Prince because he's got lots of ideas and he just generates ideas. And I think now that I say that, we all have those people in our life who generate ideas. That doesn't mean every idea is good, but it's the ideation is a skill. And some people really have that. And, and I, I do think it's something you get better at, but he was just always having ideas. He's incredibly intelligent and he has a law degree and he's technical and he was at business school. I mean, the triple threat of, of a tech CEO. And we just, Matthew was always a big idea person and I was bantering with him about the ideas. I actually thought that was fun. That was what we did for fun after school at business school. There's the people playing beer pong and people watching sports, and Matthew and I were at the bar brain bantering about these ideas he had. And I had— I literally enjoyed it. It was a fun thing. And, and we, we started to work on this idea of how can we help anybody with an internet property, whether you're a small business, a developer, a nonprofit, to a large organization, have a faster, more secure, more reliable experience online. And that's basically what turned into Cloudflare. And if you go read our original business plan, it's what we do today. We do a lot more today and we start to work on it as a school project. Really, I did it to enter the business plan competition because I wanted to meet other investors and get to know the professors better. I didn't actually think it was going to become a company one day, but every month I was like, wow, there's something here. There's a big problem. We came up with a really interesting solution. And Matthew Lee and I were working on it together and we were just so different. If there was a Venn diagram, we covered a lot of surface area. We just had very different skill sets, very different perspectives, but we had this shared vision of maybe what could happen and we had a shared respect for each other. And we ended up moving out to California to make Cloudflare, to give it a go. And I just— that diversity of our founding team, which at first was hard because you just approach everything differently. The things that Lee cared about as the technical architect or that Matthew thought about that I cared about. Were sometimes very different and because we just had different approaches. I really cared about how are we going to explain this to customers and they were really excited about the technology solution. But over time, as we kept making progress and working together, I just remember 9 months in, 12 months in, being like, wow, a lot of the things that were hard about us being different up front became huge sources of strength over time. We covered more surface area, we get more done, and then the outcome was, huh, we had a lot of bases covered and we were— things were coming along. And I think it would've been different if if we, we had more overlap. And so I guess that's the story. We are very different. We just— Matthew was the idea person. I love to banter. Lee was the technical architect that, that built all of it. And turns out you need all three of those things to sometimes make a company happen.

It does. And what you're saying is what we like to call the people who are in the room with you when everything was getting started, and you had the, the magical marriage of these skill sets that came together under an idea, which you alluded to, was helping to solve security online at a very different time when security and kind of keeping your website secure, your data secure, was much less hot of a topic. I feel like it's all we kind of talk about today is data privacy and things and concerns, but it wasn't at the time. And I don't think we can really talk about the full extent of what Cloudflare became without touching on Project Honeypot. Can you share with our listeners a little bit about what that project was and then how that really left into what is the underlying thesis of Cloudflare today?

So if I zoom out and I, and sometimes people say, how did you come up with this idea? And I think that there are sometimes, and I read all the startup advice and scaling the company advice. I'm a founder, so I read all these things. And I do think that there's a notion that you should start a company about something you know a lot about. And I think that for some people that works really well. And again, back to there's lots of ways to be successful. I hope people listening realize there's lots of ways to be successful. And so for some people that really works. If you have a deep expertise in an area, that could, can be a good path to starting a company. It sometimes can also be a liability. And I know that that's hard to rectify, but it's true. And so for us, Matthew and Lee had started something called Project Honeypot. It's a community-based project. It was something they were really proud of. Matthew always spoke about it. And that was the inspiration for where we got this the original aha that we kept pulling on that originally led to Cloudflare. And what I kept asking during one of our bantering sessions was, okay, what is Project Honeypot? And it was a community-based project that helped track web spammers online. And this is, you know, again, years ago in the mid-2000s. And I said, who signed up for this? And it was a lot of small businesses, 80,000 small businesses, webmasters around the world. And I was like, what do they do? They installed the honeypot on their site. And it tracked bad behavior. And again, this is back in the 2000s, and I was like, okay, and what do you do with the bad behavior data? It all went back to Praj Chanipat, and Praj Chanipat would work with law enforcement agencies to go try and take the offenders down. And I was like, doesn't that take a long time? And Madison was like, yeah, it does take a long time, years. And I couldn't understand why anyone signed up for this thing. Why would a small business who's already so busy, or an IT administrator who's always so busy, participate in this? They got karma points. I just could not understand. And it was through our bantering, Matthew, which was our ideation, you know, phase of the validation phase. He's like, Michelle, one day, could we use the security data to help provide the service that actually stops the bad behavior online? And that was the light bulb that went off, I guess, of, huh, could we? And that was, we said, could we? And we started to look, is there a problem here? What would be the technical solution? Is there a good business? That was how it came about. And so back to my point of you don't have to be an— you sometimes should be an expert in this thing you start your company. And I definitely— there's lots of examples, but you don't always have to be. And for us, I was really drawn to this idea of if we were successful as Cloudflare, I would be really proud to be part of it. Because the idea of— back to my original wanting to help people— if we could help small businesses, developers, IT administrators, big companies be more safe online, I would be proud to be a part of that. That seemed a good thing, even if at that moment I wasn't an expert. I think I've become a lot of an expert now. And what's interesting is I reflect, and we're many years in, early on when we started Cloudflare, there were other people who tried to compete with us, or they, or there were other companies. And it's interesting, it was almost because we came from outside the industry, we checked all, we, we rethought, I guess is the right way. I'm gonna use Adam Grant's Rethink. He has a new book about think again. And he says, at some point you have to rethink your assumptions. Because we had a fresh set of eyes and we approached the problem in a very different way because we didn't have a lot of preconceived notions, we were able to rethink a lot of assumptions of how this would work in this new paradigm. And I think because of that, we made better business decisions. This is an example of where sometimes having industry experience is certainly an asset and other times it's a liability. And I think you just want to, um, check yourself and make sure you're always rethinking assumptions and on the right side of that.

That's really powerful advice. And for entrepreneurs and for funders everywhere, it's a good gut check on the biases and the perspectives you're bringing to the table on potential opportunities and then opportunities to unpack and change the way things are done. And I don't think anyone knew there could be a different way to fight cybercrime online until you all came along. But I realize we haven't actually shared with our listeners What does Cloudflare do if someone is listening and doesn't use your product or is familiar with your product?

Thank you. Well, we would love for you to be a customer. So what, what does Cloudflare do? So our mission is to help build a better internet. So if you are an internet property, a website, an application workload, a blog, we help make sure it's fast, safe, and reliable online. So Cloudflare does global performance, cybersecurity, and reliability for anything connected online. And our customers are businesses, small, big businesses, nonprofits, developers, entrepreneurs, We have over 4 million customers using our service and we help make the internet faster, safer, and more reliable every second of the day. And just to give you, the audience, some sense of the scale, we help stop over 70 billion cyber attacks daily. And so this idea of back to wanting to help the world, 70 billion cyber attacks get stopped by our technology every day. And so that means those small businesses and big companies are freed up to focus on other products and services to help their customers and don't have to worry about attackers trying to take them down. And so that's the power of technology and how you can help build products that really help the world.

We have a customer on the call, actually.

Absolutely. And I think now we're in a world where everything's online. Your whole entire business is online. Your revenue stream is a single app. Security and reliability is really a single point of failure for that business in many ways. And so very, very appreciative, and I I speak to a lot of entrepreneurs out there, that your product exists and is accessible to small and large businesses.

Oh, well, thank you so much for being a customer. That makes me so happy. I love meeting customers. I love making— meeting happy customers. And to other listeners, we'd love to help you. One of them, I remember early on, someone said, oh, like, Cloudflare is like a, a bouncer, a digital bouncer for anything connected online, or a personal trainer. And I, I actually kind of like that analogy.

I like that.

Madison, you said security is a little bit more cool now, but it hasn't been that cool historically. But everybody understands what a bouncer— you keep unwanted, unsavory characters out. And then personal trainer, keeping these websites and applications and workloads just looking their best, the best experience for customers and online users. And what I'm proud of, and again, we're 12 years into this journey, is our product really works and does help a lot of businesses. And And I love that. We get so much satisfaction about that. That's why our team comes to work every day. So we have lots of happy customers.

Well, thanks for helping keeping the club safe online. I know we're all excited to be going back into clubs soon, hopefully, as the world reopens. But take us back to 2010 when you had this project, you graduated from business school, and you recognize there's a business here, but you're launching that product really more to create revenue, to create a business, not just to help people more as like a nonprofit, right? Like, what was that transition? What was that aha moment that said, okay, we know there's a business here and we're going to build it?

Yeah, it's important to build a business. I mean, I mean, nonprofits are great too, but those are different than, than building a company. And I think it's amazing to build, invent new technology. I love that. Amazing. You want to invent new technology and have a great business. That is really the sweet spot. And so you never really know. We were at business school and, and we were making really good progress. You never really know until you ship a product. So we're really big— we've really ascribed to get things done, do things. I'm a big believer in doing things. And so we, we started to put together a beta, a pilot, and we had we actually had users and customers telling us what they love, what they hated. Sometimes you learn more from the people who hate it than the, the people who love it, but it's all part of the journey. And there's so many great stories online about founders about the early, early days. And, and that was great. And at first, you know, our business model was we have a free service, we have a $20 a month service, 'cause we really wanted to make this accessible to small businesses, entrepreneurs. We had to hit the right price point. And then we also have a $200 a month plan. And now we also have organization organizations paying us millions of dollars a year. So really, we service today a broad set of people, but early on we weren't sure, what is there a good business here? And I think that we thought there was, and you can build a business plan, you can crunch all the numbers, but I think a lot of times business plans evolve and you only really know once you start to do. And so we kind of start to realize, at first it was very much based on the vision of what was possible. It's almost a possibility of what was possible upfront. We were That was how we pursued Cloudflare. And it was after the first couple years that I remember, like, we had a hypothesis there was a good business, but we weren't sure. That took a couple years. And then at some point, I just remember we were budget planning for, you know, we were, we were getting, we were putting our budget together. And I, I remember sitting in the room and looking to one of my colleagues and being like, we really do have a good business. And it was a year, it was several years later. As a, for the listeners, especially if you're early stage entrepreneurs, I think there are some entrepreneurs who have really strong financial metrics up front, and that's great. Those are great businesses, customers funded, that, that's a great spot to be. But not all companies look that. And I say that because we were a company that didn't look that. We sure, we had some revenue early on, but $20 a month, revenue doesn't grow very fast. $20 a month, it just, it grows a lot faster at higher numbers. And that took us some time to get to.

The early days, you had an idea that had early market validation that people wanted the service. And then you had people who were willing to pay. You might not have hit scale until a couple years later, but before you even maybe had some of those first customers, or maybe right after the launch of that beta, who was the first check into Cloudflare?

Who said, "Yes, I believe in the vision of cybersecurity and how you're going to solve it online." [Speaker:MADISON McILWAIN] Those people that say yes, the people who really believe you up front, you just want to hug. Sometimes when you're an early-stage founder, you tell people your idea and they're like, I don't get it, or that's a bad idea. And you're just, what's wrong with me? And so you really hug— you— I feel every entrepreneur remembers those people who say, I think this is a really interesting idea. And so this is a cool story. So Matthew and I graduated from business school, we packed our things in a U-Haul, and him and his mother drove the U-Haul from Boston to San Francisco, which is a far drive. That is like a multi-day drive. So him and his mom, you know, packed, drove the U-Haul from Boston to San Francisco. I, I flew to see my boyfriend in Vancouver, we drove down. Okay, so we meet in San and here we are showing up to give Cloudflare a go and we're making progress. And really, we originally, the first people who said yes were two sets of people. The first was a classmate of ours. So she was Bulgarian. Her childhood friend who was a venture capitalist, and she really liked Matthew and I, she's like, "Wow, they're smart. They have an interesting idea." Back to this network at business school, really smart, passionate people. She knew nothing about what we did, but she said, "Wow, I believe in Matthew and Michelle. I know them for the last two years." They have a startup, it's making, or they have the startup idea, it's making some progress. You should meet my friend who is an investor out in Silicon Valley who does cybersecurity investing. And we literally met her Bulgarian childhood friend, Dafina Chonteva, for lemonade, a coffee in Menlo Park outdoors in the summer of 2009. And it was amazing because Dafina knew a lot about cybersecurity and she didn't try to, we didn't have to spend any time convincing there was a problem here. She understood that there was an opportunity. She was really interested in the technology and how we were going to solve the problem. And she loved the more we told about, well, we have this data from Project Honeypot and we're going to use it to build a service that actually stops it. And that was amazing for us and her because we were back to bantering, back to Matthew and I bantering when we first started. We are now bantering with this potential investor. And she said, you have to come meet our partner. And her partner was Ray Rothrock, and he had done 15 cybersecurity investments. He's an incredibly well-respected cybersecurity investor. So he again understood the problem. And we met him, and when someone understands the problem, for them, it was, I bet on this team that they can actually solve the problem. And, and he was, well, I'm happy to give you a little bit of money to go see if you can do this. If you can, it'll be a big company. And they very quickly got it. So that's, that was one people who said yes. So it was again, a classmate who introduced us to one person. It's a reminder early for early stage founders is one conversation can really change the course of your business early on. So that, that's one. And then the other one was, Matthew had done a couple other— he's back to the idea, print press. He's a serial entrepreneur. He'd done many other things before. And one of his prior partners was a venture capitalist at a firm in Utah called Pelion. And he just said, "Hey, we've known each other a long time. Will you just give us the opportunity?" And so we met his partner, Carl Ledbetter, and Carl had been at AT&T and Novell, and he was fantastic when we met him. We had dinner in the summer of '09 in San Francisco, and he was also very clean and said, "We're interested." And so we were able to raise money from BenRock and Pelion together, and they had a long history investing together. So that— those were the first two people who said yes, and it makes a huge difference. Now, I've glossed over all the people who said no, so don't— I'm making it sound so easy, but you just need one to say yes. Now you have another feather in your cap, and you get to go to the next, the next, you know, you keep the momentum, moving the ball down the court.

And Cloudflare definitely had some momentum from first check all the way to ringing the bell to open markets. I think you're probably one of the first entrepreneurs on this podcast who have founded a company and brought it all the way to IPO, which is really any founder's dream. Could you tell us what that was like? What did you learn along the way during the IPO process?

I loved it. It's been amazing. And so it's interesting. I hope— I think lots of founders want that. Some people don't. And back to a little bit more balance of there's lots of ways to be successful in life. I think for some people that sounds like a terrible outcome. But for me, it's been an amazing experience for our team. It's been an amazing experience for the company. It's been a very positive experience. And so I guess I'm here to say that it can be fun and it can be very positive. And there are other ways to build the company too. But it's been incredible. I think that when we started our company, did I think it was going to go public? Probably not. What— the way I started our company thinking, wow, this is either going to be a very big company or not exist as a company. We didn't really make sense as a medium-sized company because again, we were building these cybersecurity, reliability, global performance services that made sense if a lot of people used us. And that's how we can stop $70 billion of cyberattacks every day because we crowdsource all the threat data across lots of different customer types. And it It only works if we have lots of different customer types. And so, we were showing up here in our U-Haul. I didn't know that to think one day we'd have 4 million customers, 17% of the Fortune 1000. I just, you know, I mean, I hope that would be the case, but you don't, I don't think you really know. And so, that was what we said, we got to go prove this out. We got to go make progress against this. So, fast forward to today, it turns out we have been able to deliver a lot of value. We do have a lot of customers. We have a lot of revenue and we have a big responsibility to our customers. And I actually think Being public has made us a better company. We have better process, better systems. So there's more accountability around what we're doing as a business. It's a more public, more equal playing field. I think that's a good thing, especially because we want to build a longstanding company. We want to be around for a long time. And so that just becomes a natural path at some point to become a public company. And I've heard other people ahead of me say something similar. And when I was 5 years into Cloudflare, I said, okay, sure, they're just saying that. But now I understand how it works. Being a public company, there is It does make you a better company because the— it's just, there's more scrutiny, there's more dotting your i's, crossing your t's. You do things in a better— and, and I, I do think we are better run today because of it.

I think one thing that myself as a founder, and I think a lot of other founders struggle with, is this ambiguity and these very long timeframes, and you're sort of overcoming a bunch of different challenges to continue to progress the company. Could you tell us about a moment in Cloudflare's journey where everything didn't necessarily feel up and to the right?

All the time. I have such a hard— So we've been incredibly successful. If you look, if you zoom out over 11 years Cloudflare's existed and the charts are up and to the right, but if you zoom in at any given time, there's aberrations. And even when things are going well, lots of things are going wrong. I remember there was an entrepreneur who was a bit ahead of us and I really respected him and I heard him speak off the record. And from the outside, from all the podcasts he did, from all the articles, and he was a very famous CEO. And I heard him speak off the record. He's like, "We are terrible at everything, except for a couple things that we got really right." And I think that that maybe is the best way to sum it up for whether you're a founder or someone working at a growth company, because at that point, it's not just the founder, it's everyone who works there. It, even when things are really good, there are lots of things that aren't going well. And that used to really drag me down. It really used to weigh me down. I used to really stress about it. I think that I maybe smiled less because of it. And I was a bit of a— it was hard and a little bit depressing and lonely. You think, oh my God, all these things that are going wrong. At some point, and we were not public yet, but I could see us happening to go public at some point. I could see the light. And so we were over $100 million in revenue and whatnot. I decided to changed my perspective. And I just remember I went for coffee with somebody and I said, "But how are you doing?" I was like, "Yeah, I'm grumpy because all these things are going wrong, but I'm changing my perspective. I've decided I'm going to see that as a learning opportunity." And I saw him 6 months later, he's like, "How's it going?" "Actually, it's great. I haven't fought back since." And so it is a bit of a mindset. So now when things go wrong and things still go wrong, I'm always, "What can we learn about this? How do we make a runbook so the next time this happens, We have a set defined play that we know that works. And actually it's so much better. It's so much better ever since I've done that. Every successful company only got a few things right and lots of other things are broken. You don't have to get every single thing right. And that is not a common point of view, but it's— that's the truth. And you just go look at inside of every company and you're like, oh wow, a lot of things are broken, but they got a couple of things right. So focus on the good things and start to fix the things that aren't, because as soon as you start to fix Focus on something that's not working. As soon as you acknowledge something's not working and say, "Okay, now we're going to go fix it," you have a way better chance of succeeding and then making progress against that. And at the end of the day, companies are just groups of people rolling the same direction, making progress against some shared goal. And so acknowledging if something's not working, you're more likely to be able to remediate it and get it to a different place.

Well, the things that Cloudflare got right, or the things that were working, to use your words, They really worked. Today, at the point of recording, you're at $21 billion market cap, I believe, and it's been a successful IPO, and you continue to be what we would call a category-defining company, which is incredible. So first of all, congratulations for all of that, but you really found yourself in a space you helped to create, which is cybersecurity online and the infrastructure behind helping to stop cyberattacks just yesterday I'm reading in The New York Times about what's going on with DarkSide and the ransomware that's happening across the East Coast in America today. It's becoming more and more in the news that we see cybersecurity and breakdowns in infrastructure globally. What's your perspective on the future of cybersecurity?

You know, I'm happy we're talking about cybersecurity more in the news. I actually think that's a positive, and I wish it had happened 20 years ago. I think actually I think society would be a lot stronger if we had started talking about it, because these things have been happening for a long time. The way it's happened is changing and the types, but cybersecurity is a lot— it's been around for a long time, but it used to be pretty of a narrow, relegated to subject matter experts, and it wasn't something you read about in the news. And actually, I think that has caused a disservice. As all of us spend more time online, we are all digital citizenship, just meaning as people spend more time online and they do more things online, and whether it's in their personal life or for work, this becomes a really important piece of it. And there are people trying to do bad things. And so you have to just be aware. It's not something you outsource to somebody and not pay any attention to. It's just part of having an online, more interconnected experience. And so I love that it's in the news more. I wish it wasn't such terrible things, but it, but it's, we all have to take it seriously. I am an optimist. If you haven't— if you haven't realized that from this podcast yet, I'm the half glass full sort of person. And so I do think that cybersecurity is a serious threat to businesses. You got to take it serious and to people, you got to take it serious. But the solutions today are very good and they'll continue to get better. And I say that as someone who offers one of those solutions. And I said this earlier, we help stop 70 billion cyberattacks on behalf of our customers, and that means businesses. Claudia can focus on her product and she can have a little bit of peace of mind of, okay, great, I got some digital armor around what I'm doing and I feel good, let's go. Versus before, that was really hard for a small business or an entrepreneur to do that. They, they couldn't do that. And so it was more exposed. But now there are better solutions, and it's including ours, including Cloudflare, others. And I think that they'll keep getting better and easier to use. And what I see is, as more companies take it seriously, As people get to understand better, oh, that seems— I didn't do a password reset. That's weird that I got an email on my credit card. There's a password reset. I'm going to actually go investigate. Oh wait, someone's trying to steal my, my personal identity. That's bad. Stop it now. As there's more awareness, then we're going to become more secure. All tides rise. And so the severity of these impacts will become much more minimized. I think that there's a good path forward, but people have to take it seriously. People, businesses, small businesses, big businesses. And so there's many businesses that are taking it seriously and there's some that are not, and they will continue to be targets until they are. But as more companies come along and realize, oh, this isn't something that just our security team can deal with, it's something that we got to deal with as a business, it becomes— we will be better as a society. That's why I'm optimistic for the future.

I'm feeling a call to action to be more vigilant on my password protection online and also on optimistic because there are people like you in the Cloudflare team who are help fighting crime and attacks online with your incredible innovation. In 2019, when Cloudflare went public, it went public along 241 other companies that year, and we were surprised to learn that you were one of 3 companies that year that had a female co-founder or female-led company according to Business Insider. So first of all, that's truly an inspiration to Claudia and I on what we can do in our careers. But it's also a little bit of a sad number. What advice would you have to young women who are aspiring to follow in your footsteps?

You summed it up well, Madison. It's the glass half full is I'm so proud and I'm also, how can I? That's sad. As you said, there should be way more. So I couldn't agree more. No, there are. I mean, my advice to women earlier in their careers, I hope you listen to this and be like, wow, the revelation I had is if Michelle can do it, so can I. And I just think if you see it, you can believe it. And I am not the only woman to take the company family public, there are others, but there are more men. And so we need more women, we need more underrepresented minorities. And it's amazing. And winning and building valuable companies is great and it pays it forward. And so I think that if you are Claudia with an idea where you're so passionate about it, go for it. Go build a big valuable company and be ambitious and do that and win because we need more examples. And there have been many since me and there'll be many more. And we need even more. And so sometimes I read the headlines and I think, oh my God, no women would ever want to be an entrepreneur or come into tech because you just hear all the negative stories. And those are true, but there's also so many positive stories. And so I just think, help, help change the narrative and let's, let's go change the narrative going forward.

That's definitely an encouraging call to action that resonates with myself. And almost after every one of these podcasts, I just feel much more invigorated to do the rest of the work that I need to for that day. So I hope some of our listeners feel the same. As we come on time, we have a hero question that we ask every guest on the podcast. Who is a woman in your life that has had a profound impact on you and your career?

I'm lucky. I have several that I would say. And so I have two amazing women on our board, Maria Aytel and Katrine Sodar. So they're two women who have been very successful. Maria's been at Nike. She helped— she's been there for 20-some years. She was there during their whole supply chain crisis and retooling all their processes and to overcome that and worked with Phil Knight and she's built their foundation. She's just incredible. Katrine is in Europe and helping bring digital transformation to a lot of organizations there and the government and how you, how policymakers partner with tech. It's, they are both incredible. I feel like I have so many women who who have been so graceful in their career and so successful and who, what they do, they really enjoy it. And I feel that's really contagious. I have two sisters, they both work, they have great careers. And so I just surround— I'm surrounded by a lot of incredible women who have done lots of incredible things. And, and I realize how lucky I am. And I guess if you're early in your life, maybe seek it out.

Thank you so much for sharing that. We are so, you know, excited that you came on the podcast today, and I I'm just incredibly excited to share your story and continue to inspire others by your personal journey and what you've built with Cloudflare. So thank you so much, Michelle, for joining us on The Room today.

Thank you so much for having me. I can't wait to see all the great things that come out of, out of this podcast and your company and your investing portfolio and all the other people who listen to The Room. So good kudos for you for making it happen.

Thank you for listening to this episode of The Room Podcast. If you're new here, please subscribe, follow, write us a review, or DM us on social. We'd love to say hi. We've had some pretty incredible guests over the past 2 seasons, so go check them out. We'll be back next week with an all-new episode, Tuesday, June 8th, 10 AM Eastern, 7 AM Pacific. See you in the room.

All opinions expressed by Claudia Madison and podcast guests are solely their own personal opinions and do not reflect the opinion of The5AC. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.

Support for The Room comes from Silicon Valley Bank.

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