Cloudflare's Michelle Zatlyn | Cyber Stewards

Hi, everyone. Welcome to Grey Matter, the podcast from Greylock, where we share stories from company builders and business leaders. I'm Heather Mack, head of editorial at Greylock Today. Greylock talent partner Holly Rose Faith speaks with Michelle Satlin, who is co founder, president and COO of Cloudflare, the company, which provides infrastructure and security to websites all over the world, handles 20% of Internet traffic, and prevents some 70 billion cyber attacks every day. In this interview, Michelle and Holly Rose discuss the current Internet infrastructure landscape, talk about the ways the company is constantly adapting to the global environment, and discuss the importance of maintaining trust as the backbone of the Internet. This interview is part of Greylock's Iconversations series. You can find a transcript of this interview on our website greylock.com blog, and you can subscribe to all Gray matter episodes on SoundCloud, sports, Spotify, YouTube, or wherever you get your podcasts.

Hi, everyone, and welcome to Greylock's Eye Conversations. I'm Holly Rose Faith and I lead executive talent for Greylock Today. I'm thrilled to welcome Cloudflare co founder, president and COO Michelle Zatlin. I've had the pleasure of working with Michelle at my prior firm as they were an early investor in the company. As many of you know, Cloudflare was founded on a mission to provide a safer, faster and more secure Internet. The company, which actually began as a class project with Michelle's fellow Harvard classmates Matthew Prince and Lee Halloway, has more than delivered on that goal. Cloudflare has mitigated some of the largest distributed denial of service of the past decade, and today blocks some 70 million cyber attacks per day. Michelle is also on the board of Atlassian and is on the cybersecurity team at Aspen Institute. Michelle, thank you so much for joining us today.

Thanks so much for having me. I'm so honored to be here. I used to come to conversations like this. I still do, and I learn so much from them every single time. And so I hope I can be helpful to some of your portfolio companies today. So it's great to see you. Thanks so much for having me and for all those warm, kind words.

Well, let's dive in. So you have a very interesting background as a tech startup founder, beginning with the fact that you didn't even initially plan to go into technology as a career. Now you are running a company that is essentially the backbone of the Internet. Before we get into your personal history, let's talk about the significance of Cloudflare for a few moments. In this era of rapid advancement in Internet technology, Where does Cloudflare fit into everything?

Yeah, that's a big question. We could spend a lot of time talking about that, but I've gotten better answers this question over the years. So I make a joke about that because there's a lot of founders who might be working on big ideas, and sometimes it's hard to concisely consolidate, articulate what you're doing. And so I guess I make a joke because I've come a long way. So at the end of the day, we make anything connected to the Internet, and when I mean anything, I really mean anything, connect to the Internet faster, safer, and more reliable. So we do cybersecurity performance reliability for anything connected online. And it's interesting, when I first started cloudflare, we're about 11 years old as a company. It didn't quite start with that sort of pitch. It was a little bit of, hey, we're helping democratize tools previously resolved for the giants. We're going to supercharge your website. Oh, hey, I'm building a cybersecurity performance reliability company. And I'd sometimes go to dinner parties, which we haven't been doing very much recently. But when, when we used to get together and people kind of look the other way. They're like, that's so, so boring. But 11 years in, we have over 27 million Internet properties using our service, which is a lot. It's about 20% of the web connects to the Internet through cloud flare. That's a huge responsibility, a huge privilege. Big responsibility. Every day we stop, as you said, over 70 billion with a b cyber attacks coming to our customers. Applications, workloads, websites. I mean, that's just a astonishing number. And it gets stopped because of technology. Our teams of amazing engineers and product managers and what they've built, we help make everything faster around the world. Everyone, all the, all the legitimate users trying to go to our customer sites, faster, safer, and more reliable, and we add reliability in. And it turns out now that we've kind of gained the scale and people understand better what some of these things mean, all of a sudden, people don't run away from me at dinner parties anymore. They're like, that's cool. Tell me more. How do you do it? And I didn't realize there were so many cyber attacks online. Why are people doing it? Who throw them? Why is it so hard? Why sometimes I go to some places online, it's so fast, and others it's really slow. And you know, why is some. Why sometimes I can't get to where I'm going the reliability side. And so it's been really amazing to help build this backbone of the Internet, the infrastructure of the roads, the bridges that kind of make everything work. And you kind of take bridges and roads for granted in cities, but when they don't work, it's really frustrating. I feel like we do that in the, in the digital space and just, you know, know the last thing I'll say here, and I'm happy to go in any direction you want, is just 11 years ago when we started to build Cloudflare, it wasn't obvious exactly what we saw. We saw it, we, we saw the rise of cloud computing. So we were business school students, we started to work on Cloudflare and aws. At the time the dialogue there was a lot of headlines in, in media saying, is AWS a fad or not? Like a lot of people said real organizations will never use AWS's for their workloads. Well, you turned out how wrong that ended up being. And so we saw Store Compute going to the cloud, we saw applications, we saw companies like Salesforce, even Workday growing really quickly ahead of us. We kind of said, well, if storage and compute are going to the cloud and applications going to the cloud, the networking side, again, all the things that make the roads and the bridges also have to go to the cloud. And that's what Cloudflare has built. We've built a globally distributed network that's a cloud based service that makes anything faster, safer and more reliable. That used to be done by hardware, boxes and software. So there you go.

I'd love to kind of learn a little bit more about your background. So you and your co founders, Matthew Prince and Lee Holloway, you started Cloudflare in 2010. And since then it's been instrumental in ushering us through what is arguably one of the most transformative periods of Internet history. Let's back up a little bit and hear how you decided to get into technology in the first place.

I was at business school. I was doing my MBA at Harvard Business School. So I'm, I'm Canadian. I grew up in Canada. I'm proudly Canadian. I grew up in a province called Saskatchewan, which is kind of the prairie province of Canada. So maybe some of the middle of America equivalents. And there was not a lot of technology influences in my life. Where I grew up, I had a great, I could come from a really close family and in my family, my parents were very much, you have to study hard, you have to get good grades, and you can do anything you want in Your life. But you can't go to university in the province. You have to leave the province. You have to go see more of the world. You can always come back. You gotta have to go see more of the world. And so I was lucky. My parents aren't tech entrepreneurs. I was talking to a woman this morning where both her parents were computer scientists. Like, that's just not. My family has a farming background. My dad's a lawyer, my mom was a teacher. Anyhow, long story short, I ended up going to college outside of the province. I went to Miguel in Montreal. And what I tell this story because like, basically my eyes got opened to a lot more of how big the world was. All of a sudden I went from a small city in a very underpopulated province to a much bigger platform within Canada. And all of a sudden there's all these kids from Toronto, Montreal there. And they were really smart, by the way. And I was like, whoa. All of a sudden my good enough wasn't good enough. So I had to stand up straighter. And I was competitive. I was used to being top of my class. I wanted to, to keep that. And I just kind of realized, wow, the world's a lot bigger, it's a lot more competitive. And I kind of got a taste of what else is there. So I got really hungry wanting to learn how else can I make an impact? Where else can I you just kind of go on this learning journey. Anyway, it brought me ended up doing my MBA at Harvard Business School. And that was a whole nother eye opening of I thought I had kind of seen the top in Canada. And then I came to the us Much bigger country, much more competitive, very global program. And I just realized, my God, the world is a much bigger place than I realize and I really want to make a dent in it. And so I was at business school, I was pursuing and I was really looking what do I want to do after? I want to do something impactful. And Harvard Business School is in Boston. So we were in Boston and it was the first year the professors led a trip to Silicon Valley and I signed up for it. And so we came to the Valley in January of 2009 with a professor, a couple professors, and they introduced us. We met venture capitalists like you, Holly, and your partners. And we met early stage entrepreneurs. We met late stage Entrepreneurs back in January 09. Like I remember, Mark Pincus was the big deal. He was a Harvard grad. Meeting him, it was like a big deal. So I was out here and it was really opened My eyes. You'd read about the Silicon Valley, but here I was spending a week here and it was Wednesday. We are down in Plug and Play in Sunnyvale. Some folks listening might know that you maybe even co. Maybe you started your company there. And, and it was three early stage founders who'd been going through their ideas. And again, here I was, a student doing my mba and I saw these entrepreneurs up close and personal. And I walked out of the room and I said to another classmate on the trip, if that person could start a company, so could I. And I, I don't mean it in a mean way. I meant it in a. It kind of demystified, like, that person's not smarter than me or better than me. Like I could do this and was really empowering. And to what was the best answer ever? Matthew Prince. It was happened to be. Matthew Prince was like, of course you could, Michelle. And we literally in the hallway there started to exchange an idea. And this is how the conversation went. Matthew and I knew each other from class for a year and a half. And he's like, of course you could, Michelle. Of course you could start a company. He's like, and I know there is something there with Project Honeypot. And I said, matthew, you always talk about Project Honeypot. What is it? He's like, it's a community based project I started. It's been around for six years and we help track web spammers online. I was like, how do you do that? Well, small business owners sign up, they put honeypots on their website and we track bad behavior. And I said, okay, what do the website owners get? He's like, karma points. I'm like, karma points. We're tracking the bad guys. I was like, okay, so karma points. Okay, what do you do with the data? Well, the data comes back to Project Honeypot. We go work with law enforcement agencies to take the bad offenders down. And I said, doesn't that take a long time? He's like, yes, years. And I was like, Matthew, I just. Why does anyone. And by the way, 80,000 small businesses had signed up for this thing. And I said, why does anyone sign up for Project Honeypot? I just couldn't understand. I did not have a big background in this. I didn't really understand the problem set at this point. He got annoyed at me. He kind of put his hands up, Michelle, one day we want to use the security data to create a service that actually stops these things. And that was the. Aha. That is what turns like, that was the light bulb going out. Of the hallway and the rest is kind of history. Where we started to work on this idea, it turned out that anything going online needs some cybersecurity protection, needs some sort of global, Needs some sort of reliability. You need to build the infrastructure. And we were just three really smart, passionate people saying, I think we can do this. And that's how I kind of took a very windy career path to get to where I am. But like, the, what you can accomplish with a group of smart people, the impact you can have in the world, it has all the ingredients of what I wanted on this huge global scale. And it's so rewarding and I feel really lucky to get to do what I do.

Yeah. Well, it's an awesome, an awesome story. Let's kind of go a little bit further. So when you launch Cloudflare, there was a lot of different offerings and things to be excited about, but this was also during that time of period, what we might know as like kind of the Great Recession. And there are a lot of unknowns and a lot, just about a lot of different things. What was the initial reception like of Cloudflare? One question and then kind of following on that, is, how did you attract investors and customers?

So fast forward. Today we're 2500 people, we're publicly traded, we're on the New York Stock Exchange. We did over 600 million in revenue last year, growing 50%. So that's kind of where we are today. But when you start, you only hear about the failures. By the way, like, it's mostly all the data is like, most companies fail, they don't succeed. And so we have always been a very big, ambitious team and an idea which is so amazing. But when you start, your question was like, what was the reception like? It depends who I talk to. There are some people who love their eyes lit up that we were so big and ambitious and they were like, I want to be a part of it. But for every one of those conversations, I had nine conversations of like, I don't get what you're talking about. Who, like, are you an expert in this or are any of you an expert? Doesn't this already exist? Why you're going to get crushed. And here are all the reasons won't work. And I just kind of share that story because there's a lot of founders listening or even early team members of early stage companies and the conviction you have to have to lean into an idea. It's not like it's obvious. If it was obvious, everyone would be doing it. It's it's, it's really. Of course, some people you talk to, it's obvious too, and they get really excited and that's the thrill. Then like, oh my God, you get it, let's do this together. Come work with us, come partner with us. But there was a lot of people who wrote us off as, this is never going to work. This is crazy, you're for sure going to fail. And I think that it doesn't feel good, but I almost think that's a sign of, onto something really big, that not everyone agrees with it. If everyone agrees with it, it's probably, you can understand all the dimensions a little bit. Almost too clever by half is maybe what I'm trying to say. So that's, that was the original. But for us, we kind of got the first employees through our networks. There was somebody who was doing their PhD at University of Santa Cruz and his advisor left and he was doing a PhD in analytics. And turns out if you're going to power a big portion of the Internet, data is a big deal. You need analytics, you need someone who can handle all that. And so his advisor had just been recruited away to Google and being a PhD student without an advisor is not a good place to be. And so we use that to say, come, come put your what you're studying to use. And he said, okay, I'll go see where this leads. I mean, that was the first person we recruited. The second person was a French systems engineer, C level programmer. Because again, when you're going to build a global network that does all these things you do, you need to write a lot of low level code. And we found this person on LinkedIn and he was employed as a web developer at another cybersecurity company. And we finally said, you seem like you're in the wrong job. And he was, he's like, I'm only a web developer because of my visa status. It was the only way I could get a visa. I'm a French engineer, I wanted to stay here. And so when we told him, hey, you can write C level code and we're trying to help make anything connect to the Internet faster, safer, more reliable, he's like, oh my God, I'd love to be a part of that. And that was kind of what those people were so excited to lean in and join the team and build and come to work every day to do this. Don't get me wrong, I've talked to a lot of people who said, I don't understand what you're doing or come talk to Me, when you have $100 million in revenue, which took many years, by the way, but that, that's a little bit of what you're, what we experienced early on. And I don't know, again, I think that that's really a sign of you're on something really big when not every single person gets it, but there's some people who did get it. And then just on the investor front, which is obviously always top of mind for founders, I guess my point of view is the following or things that I've learned over the years is that there's kind of two ways to raise money early on. You either raise on traction or you raise on a story. And Cloudflare was very much in the latter camp. We did not have revenue very early. Revenue took a long time, and so we really had to raise money on a story. So the idea that we had this big, audacious goal, we kept making progress, we showed progress, but it wasn't money. The progress was monetary. It was other progress. And that was the way that we were able to end up raising some inertial money and then over time, more money. And again, eventually the revenue came, but that was not what drove investors early on. And having met many investors in my career at this point, I think you want to pick ones that align with what you're trying to do and being honest about it. And I think that we were really lucky doing that at Cloudflare.

Yeah. So you have investors, you have a couple of employees, you have, you know, starting content, kind of build out, the start of the, the company. How did you think about then attracting some of those earlier employees? Right. Like you think about and, and specifically maybe something to kind of build upon is, you know, are there any learnings you took away from that early stage company, building around certain milestones or just tidbits that you think would be helpful to share?

Yeah, for sure. Well, let me start by saying you asked 10 smart people this question. You will get 10 different answers. So there's lots of ways to be successful in life. So let me just start with that. There's lots of ways to build a successful company. I think that, like my point of view on this will be literally different than some other very successful entrepreneur's point of view because again, I think that there's multiple ways to do things. But for us, and we felt like this very early on, that at the end of the day, you have nothing without a great team. Like, so we really took getting great people to join our team incredibly seriously. And by that, I Meant like it was Matthew's, part of Matthew Lee's and mine's job. We spent a lot of time involved in the recruiting early on. And as I kind of reflect back, I think part of it was because we did not have a track record. And so I think you have to, for the audience listening, you have to be honest with yourself. Do you have a track record? We were post MBA students who showed up in the Silicon Valley with very weak networks here. That was like the promise of Silicon Valley, right? Come here. You can be anybody and show up here and have a chance to build something big. But you're competing with Facebooks and the Googles who have a network or even all the Greylock. All of you have a network. Like, you call somebody, they answer your call. I call someone back 11 years ago, they're like, who are you? Like, you know, never heard of you before. And so I think early on we didn't have as much of a track record. I think if I started another company today, it'd be different. Like, I have a track record, I have a network, it would be different today. But back then we didn't. And so for the founders listening who don't have a big network or track record, I think one of the strategies we ended up employing that worked really hard is we were really well, excuse me, was that we were involved. And so what I mean by is like we reached out to people, we, we got on the phone with them, we did the phone screens. And I will tell you, it sets you apart than if you're talking to a recruiter at another startup. Like, it's just if you're a candidate, an engineer, and you're talking to the founder of one company who's so passionate about what you do. And most founders are really passionate about what they're doing, otherwise they have such conviction and passion, they wouldn't be doing it versus a recruiter at another startup. It just, it gives you a different sort of dynamic that again, you have to have the right job, has to align, but it keeps you in the conversation. So now you can try and tilt the risk reward in your favor. So that's one thing we were very involved. Fast Forward today again, 2500 people at Cloudflare, Matthew and I still each spend 20% of our time recruiting. 20% of our time, that's two hours a day or a day a week. So much time. And all of our hiring managers spend a lot of time. Like at first it was us, but then what we ended up doing, pivoting just like how this evolved over time was of course we have a recruiting team. They're amazing, but they partner with the hiring managers to get great people to join cloudflare. But it's the hiring manager that's responsible for hiring their team. They run the process, they partner with the recruiter, but it's someone's coming to work for you and your team, you have to be involved. And it's interesting. We have, over time we've had a lot of senior executives join our team and that's not how most companies run. They're recruiting. Most companies just don't. They outsource it to external recruiters or recruiting teams. And I've had several senior executives tell me over time I was not a believer of this model, but now I am because the retention ends up being a lot higher. People join, there's a lot more alignment and fit and they stay a lot longer. And so it's been, I think, a good thing. So that's one thing that we did that I think maybe will resonate with the audience or two things, I guess, depending on how you count it. The other point I'll just bring up and again this was we were back to our. No one knew us. I think that early on it's how do you get awareness about what you're doing? You think I'm going to hire a PR firm and they're going to do some marketing for you or some pr. But like the journalists want to write stories about early stage companies because most don't stick around. So it's hard. There's niches and there's things to do. And so it was like, how do you build an audience and awareness without spending a lot of marketing dollars? Because we did not have a lot of money early on. And one of the things that worked really well for us that I'm going to share with the audience that has ended up helping with this talent people side is we started to write a lot, we built an audience and what I mean by that is we literally wrote a corporate blog and if you go to cloudflare.com backslash blog today, it's a very well read blog. It's in fact gets more views than like a lot of media properties. It's. And we don't advertise on it. But the point is, is we start to blog about technical problems we were having. And by technical problems I literally, we had engineers saying here's the code, code that I'm using and people would like in the comments help us decipher the problem. With the code, like, it would be really, like, kind of buried. Yeah, we wouldn't do that now, but back then you can. When you're a startup, you can do these things. You can have a personality. And it turned out that there are developers around the world, there's engineers around the world that were reading about this and. And we started to build and then they love to read our technical blog and then they would apply to work at Cloudflare. And so all of a sudden, when someone's applying to work for your startup or your company, it changes the dynamics versus you reaching out to them. It's just. It's a different thing. They've expressed interest. And so then it's about lining up the fit and make sure expectations are right versus trying to convince someone to even learn about your company to come and learn about the role. And so we, for a long time, not. Not anymore, but for a long time, 50% of the people we hired applied through our website to work at Cloudflare, and that's how we ended up hiring them. And I remember when I have shared that with other founders, they're like, I don't even read our resumes that come through our website because that's never good quality. And I think that can become, again, a strategy you can use to help go find the right people. Because the world is a big place. If you put out good content, people can help find you. Now, on the flip side, we were lucky. Matthew, my business partner, is a great writer. Our employee number 20 at Cloudflare ended up being our CTO. He's a very good technical writer. We had some very early teammates who were very good writers. And then it's attracted more great writers. I've met some companies who are like, I want to replicate the Cloudflare blog and they give it to their marketing team. And I'm like, our blog is not run by our marketing team. And they're like, what do you mean? Like, our blog is actually run by. They're like, that doesn't make any sense. The engineers surely aren't writing it. I'm like, they kind of are. We have editors and we help. But like, it is by the team for the team. It is. And so I think you kind of have to know who you are, I guess, if you're going to take that strategy. I think it worked for us because it was really core to who some of the skill sets we had. So those are just some things that come to mind.

Yeah. And it's almost like for founders and other. And even Others just even executives, if they think about how, like, what's a unique strategy you could implement right into your own organization, as I see that as like a, like a very interesting takeaway. So putting the team in place in Cloudflare allowed you guys to really achieve considerable traction relatively early. And the company has continually expanded throughout its existence. Existence. Walk us through some of the major milestones that you are most proud of.

You know, one thing you said was traction early. So I just want to say a part of that and then I'll go through the milestones because this is something that I try and share. Insights that maybe you don't always hear because again, I'm sure folks that are listening listen to others too. And I feel like there's some common advice you hear over and over again. And there's some things that I'm like, why didn't anyone ever tell me this? Because as soon as I learned it, I was like, I wish someone had told me this. This is one of the things that I'd love to. You used the word traction early on. It's true, we did have traction early on, but it wasn't revenue traction. And I make that point in an important way because what I think is interesting as founders or leaders at early companies is you get to pick the metrics that you measure traction on. And it doesn't necessarily have to be revenue. Of course, revenue is the best one, but if you don't have it, pick other metrics that move quickly because that's one way to help demonstrate traction. Of course, you have to have to be legitimate to your business. And so early on, when we were setting up Cloudflare, we had a slide that opened every single board meeting and was the exact same five metrics that we got to pick. And those metrics we picked on ones that would change quickly because we wanted to demonstrate traction. And I think that you have a lot of decision on how to frame your business. And the ones early on were examples of how many customers are using Cloudflare. But customers move slowly, right? It's linear. One customer to one customer to one customer. And so that's on a very fast moving metric. Usually sometimes it is if you're like club host. But the other metric that we ended up using was the number of page views that were touching our network because again, we were showing that we were trying to make things faster, safer and more reliable. And so customers, you go one by one. But customers come with different amounts of traffic to the web applications or websites that they had. And that metric Grew really quickly because it was like if one customer had a call, it a website with 100 visitors, and then another customer showed up and their app got a hundred thousand pieces of traffic, all of a sudden that metric looked like it was growing. And it was an appropriate metric for us because we had to make sure we could serve that traffic. And that was really critical. And so. And we had three others. But that's an example of no one told us to pick that metric. We picked it to help demonstrate the progress we were making and the traction because we knew revenue was going to be a lagging indicator in our business. And so I share that because I think for four years we use the same set of metrics, and at some point we started to have real legitimate revenue. And then revenue became one of them. It was actually revenue per employee because we wanted to show how the leverage in our business, but, like, that was just something I wanted to share. So on the. On the traction side, because I think that's might be helpful to some folks. So some of my favorite moments, I mean, there's so many. I mean, there's no better feeling of shipping a product that customers love, like solving and talking to a customer and then being like, I love your service. Like, you literally have saved our bacon. Or, you know, I'm meeting people in person. Like, sometimes people have hugged us, saying, like, I literally sleep better at night knowing you're in front of, like, in front of my infrastructure. It's moments like that than, like, what we do matter. Kind of. Back to, why did I start this? I wanted to do something that mattered. I wanted to make a dent in the universe. Like, I love that. And it's. It's not me. It's never me. It's the collection of people at Cloudflare who get up every single day to build these things and to work really hard. That put our best foot forward. I always played sports. I love being on a team. I love the team aspect. And I think as a leader in a growing tech company, you can have those same sort of aspects at work. And I love that, by the way, I've had a lot of jobs where that's not the case. So it's not. That's not a given. But you can create that sort of environment. And I think that those are some of my favorite moments. When we took our company public, I was so proud. How many people start companies and take them public? Very few at the time. We were the 210th tech company to go public of the New York stock exchange in 10 years. And I remember going to meet all these public market investors. You're trying to get them to become shareholders in your company. By the way, if you raise money once, you're going to raise money many times I've at this point raised over 1.5. What is it? Billion dollars? That's a lot of money. Like, I've raised a lot of money between private and public shareholders. So if you don't like fundraising, you just learn to get good at it, because it doesn't go away. It's not going to go away. So you might as well just learn the skill now. You'll save yourself a lot of headaches. But I just remember sitting in one of the public market investors offices in New York. This is before the pandemic. We did this stuff in person. It was interesting. You kind of think of, I mean, I really like our venture capitalists. They're always rooting for our success. Always kind of thought of public market investors as a bit, we don't care about what you're doing. I just want shareholder returns. That's kind of what my model of them was. And so we're meeting these investors in New York, and they literally. The managing director looked at Matthew and I, and he said to us, looked us, like, straight in the eye. So it'd be, like, staring me. And they're very intense people. They're like. And he was just like, you two should be very proud of what you've built, because most founders never get to the seat. And I was kind of like, left. And I, you know, you're there. You're serious. I'm taking this really seriously. And I was like, you know what? I really was nice of him to say that. Like, I kind of was like, I am proud. And so when we went public, we had 150 people at our team come to New York. There were current team members, we had former team members, we had our board, we had our families. Because it turns out it takes a village to build a company, both at the company and outside of the company. And then we had celebrations in different cities. And I just remember looking out at the sea of people on the floor of the New York Stock Exchange. And I was just like, this was such a proud moment for all 1100 people. And I kind of had this moment of we would not be here without every single person showing up and caring and putting their best foot forward every day. Like, whether you were on the administrative staff or customer support, every single person did something that allowed us to get this coin. And that just was Like a really amazing moment to celebrate as a leader. Like, I just was like, it was definitely one of those proud moments where I was like, wow. And then when the world needs you most, cloud for it turns out the Internet often plays a role. And so in the last two years, you think of COVID as a public health pandemic, which it was. We all went through that. But when you couldn't see people in person, everyone shifted to online. They all used online to connect now to do things. So what has been less reported is basically overnight the traffic online doubled. And when you were a service like Cloudflare providing the infrastructure, it doubling in two week period was insane. And so it wasn't just us, it was all the cloud companies. I kind of look back and think how many network administrators, IT engineers held the Internet together when the world kind of needed it most. And sometimes I think like, if Covid had happened 10 years ago, it would have been way rougher because we wouldn't have been able to stay connected in other ways. And not that it was easy, but I feel like people could connect to loved ones through video conferencing and what. And 10 years ago I really don't think it would have happened. And so that was something where it was just a moment where I'm like, I kept reading the news and being like, the world is a terrible place and like your, your friends are getting sick, your family's getting sick, it's so hard. You're taking care of your kids. It was like a very stressful time. But I would go to work. I almost escaped reality by going to work because the stuff we were doing mattered so much for people. And like that is a really good feeling if you can create that. Or for me it was a really good feeling. And then I can keep going on the vaccine distribution. All the sites distributing the vaccine they knocked over, turns out infrastructure can help. So we had something protecting all of them. And I mean we literally have videos of people whose jobs are to get vaccine distribution being like, thank you for saving lives. And I don't know, it makes you weather the bad days because there's of course bad days. I'm talking about all the good stuff. But it is a lot of proud moments over the course of my 11 year career at Cloudflare.

Yeah, and just so many different aspects like you guys have been able to touch and kind of go through. There was something you said in answering that question related to employees and how important every employee in the company is to Cloudflare. And right now we're kind of in this, what people are calling, like, the great resignation. Right? People are looking for new roles. There's a lot of movement happening in the market. We're not seeing that as much at Cloudflare. You guys. You guys have a very low attrition rate compared to other companies in the ecosystem. Why do you think that is? And what are some of the attributes, when you think about working for Cloudflare that make people want to stay there?

Well, you're being very gracious, Holly. I mean, just don't get me wrong. We're not immune.

Everyone's. But you guys aren't. I don't think you're being as impacted as. As other people where I sit, at least. Like, I see movement of certain companies right now where I'm like, wow, that company is losing a lot of people. I never have seen that with Cloudflare. But I'm just curious, like, what is it about the cloud for culture, things that you do that make people want to stay and do. You don't have to share all the secret sauce because then people start adopting that. But I'm. I think it's helpful insight for others.

Yeah, of course. No, again, this is back to. I want to make this helpful to your audience. Okay. This is for the founders listening, or maybe leaders listening, because I don't think it's just founders that have to learn this lesson. I remember early on at Cloudflare, like, somebody telling me they were leaving, and I was mad, mad. I was like, what? You're leaving? We're not done yet. You can't leave. Like, sorry, excuse me. No, we're gonna get. We're, like, working our butts off. Like, what are you. Meaning you're leaving? And it was a surprise, and I was just very upset, and I was kind of mean to the person about it. I kind of gave them a hard time. Like, I. Some version of what I said, maybe a little bit. I was just like, how can you be going. Anyhow, I tell that story. Embarrassing story, because again, it was me definitely not at my best when that I. One of the hard lessons I've had to learn as a founder of Cloudflare is the people you start the journey with are not the people you end the journey with. And sometimes it's. They choose to leave the journey sooner than you'd like. Sometimes you need to tell people it's time for you to get off this journey. And both are very hard, by the way. And I think that I'm still not perfected to this day. But what I've since adopted. And I like it a lot better as a leader. Leader. So I'm just sharing it because again. And you read stories, I don't know Michael Bloomberg, but you read stories about when someone left Bloomberg, like he'd hold a grudge forever. So I'm not the only person to have this reaction of, what do you mean you're leaving? Like, I'm going to excel you for my life. Like, again, I don't believe that I. I've now kind of said, hey, thank you so much for everything you've done here. We wouldn't be the company without you being here. I'm wishing you all the best in this next chapter. If I can ever be helpful, let me know. And some people take me up on it, others don't. And sometimes it's happy they're leaving, sometimes it's sad they're leaving, and sometimes we've made a mistake. Sometimes they, they're just fed up. And I'm like, I wish you'd told me. Like, I, you know what? Not. It goes not. But I think that that lesson of people you start with not going to end with was a hard lesson for me to learn as a founder because I was just so loving what we did that I just, I'd like to share that because I just think how you join companies, how you leave companies matters a lot as a candidate and also matters as a leader. How people join companies and leave companies. I think it works both. It's a dynamic in both direct directions. You learn a lot about each in. In both directions. So our attrition is about 12% annually, which is low for a tech company. If you, you know, there's some other external metrics that show it's, you know, 14, 15, 16. So we were always kind of on the low end. Annual attrition. And I think part of it was success. Like, success helps, like strong momentum, big opportunity. There was, you know, this was leading up to going to public and then we were public. And so there's liquidity and real wealth creation. All those things help. Like those, those are all parts of it. I think our mission is to help build a better Internet. I mean, there's a lot of jobs in the world. If someone's working at Cloudflare, they are getting recruited to go work anywhere. They literally could work at any single company in the world if they work at Cloudflare. Like, I strongly believe that, but they, like, believe in what we're doing. And because we spend so much time recruiting up front or aligning Expectations like that's when we're at our best. So now during COVID that 12% ticked up to 16% on average. Some teams are higher, but like that's it. And I too have heard from many other tech peers where it's like they are seeing 25 or 30% annual attrition. That's a lot of your team leaving. Right? The great resignation is true. And I think that, I mean, I have no secret sauce except for we're deliberate in the recruiting process so that there's a strong alignment. Again, hiring managers are aligning so it's very clear why someone's getting hired, who they're going to work with, that and like, again, I think the why people leave companies is often their manager. But if the manager is very involved in hiring people, you kind of de risk that now there's lots of movement inside a growth company. So it's. That doesn't. That's not a foolproof, but that's. So that's that I think that we want people to feel like they belong to Cloudflare, like we care about that. We want people to feel like, I can do great work here and my work matters. And so the other thing that we have a lot of process around or focus on internally is what are we accomplishing as a team and what are you doing as a team? And so I'll give you an example. Up until very recently, I can't do it right now because I. We kind of outgrew it. But for a long time I would recruit someone, they'd be like, well, what, what often comes up in recruiting is who makes decisions and how do I know what needs to get done? Like, that's kind of, I think that a lot of people get lots and high ambitious people want to feel useful. You want to feel like you're set up to do good work and you can move the needle. And so at Cloudflare we are very set up to making sure people feel like they are moving the needle or can make an impact in what they're doing. So if you're a product manager, what products are you building? Are you shipping? How many customers are using it? If you're in the customer support team, how many tickets, how many customers are you helping? What are we doing to make our processes better? And we like are very, very focused on doing things and getting things done. So starting something middle and shipping it. We for years ship, ship, ship, get things done, start, middle, end. I mean, I have Rolling Thunder. We had so many different leadership terms and I used to be able to pull up a spreadsheet on a quarterly basis. Early on, it was every three weeks and I went to every six weeks. And then we went to quarterly with the 200 most important things going on at the company who owned it, a link to a JIRA wiki page. And every week, whether it was green, yellow or red, is it on track, is it delayed or at risk for getting done? So we had this very strong muscle of what are we doing and are we getting things done? And I think that helped with people going to stakes. They were like, I'm doing things here and my work matters and it gets celebrated. And in that spreadsheet, it wasn't my name next to it, and it wasn't even our, like, head of marketing's name. I remember I'd like, executives always want to put their names. I'm like, I don't want your name next to it. Who on your team is owning this? And the idea was, it's not the executive owning it. Who on your team owns it? Who do they have to go work with? And it was this muscle. And I think that, that it feels good to be useful, productive, contributing in this growth. And I think that has been hugely helpful to why people stay at Cloudflare because they feel like my work matters. And it helps weather some of those down days where you're like, everything sucks, but like, my stuff, what I'm doing here actually matters. And when you have 20% of the web touching your service, you can really make an impact at scale. And we're still relatively small team, so again, we're not immune to it. But I think some things like that. The last thing I will say on this, because I think it's the last point that it's stressful. And one thing I saw from, especially from a lot of executives, we were talking about this a lot last year and now it's everywhere. But Matthew, like, my business partner at our, like all hands, we kind of quarterly kickoffs, talking about what we're going to do, and then we measure ourselves at the end of the quarter in the summer last year, in his opening remarks, he said, we are going to lose some of our people. Like, he basically kind of said what everyone was thinking and reading. And our executive team, when we always do practice runs, they were like, you cannot say that, Matthew. You can't. You have to convince people why this is such a great place to be, that you have to build up the opportunity. Matthew's like, that's bs. Everyone's reading about their great resignation we are not immune. I'm gonna name it. And he's like, some of you are gonna leave and that's gonna be sad. And I don't, like, I hope you don't. I hope you stay, but some of you will. And that's sad. So he kind of just named it he. We did that twice. And I think that just kind of let some of the era. And that was not what the leaders wanted. The leaders wanted Matthew to talk about why everyone should stay. And he was kind of like, some of you are going to leave and we'll be okay is basically what like. And I thought that was interesting. And then the second thing I'll just say around one of the things was, okay, what are we going to get everyone to stay? And again, of course you want your team to stay, but our strategy was a little bit, now's the time to be the company to come to. And so how do we go get great people at other companies that you thought would never leave their job to come be part of what we're doing here. And we almost used it as a don't play defense and keep everyone. It was more how do we play offense and think about be the company that people are coming to. And we talked to the management meeting. A lot of people were like, that's a stupid strategy. They didn't, they weren't on board with it. But it started with one executive and kind of the executive I never would have guessed and said, people who I never thought in a million years are returning my phone call and they are interested in joining my team. And it just took one brave person at that leadership team to say that. And then the next week someone else had a story like that and the next. And then pretty soon the people said this is a crazy strategy. Looked like dinosaurs. It's like, maybe you're the problem. And everyone got very on board with where the company that people are coming to. And so I tell them because it wasn't like, it's much easier when everyone lines up. But there was disagreement of what the right strategy was. And those are just some things that might resonate with the group. Yeah, yeah.

Kind of moving to another subject. When you say, you know, Cloudflare provides the backbone for 20 of the Internet, I think of the subject of trust. Right. Because on a day to day basis, Cloudflare is largely behind the scenes. And yet by nature of what the company does, you guys have to talk very publicly about decision making or, you know, any challenges the company has been dealing with. How do you and Your co founders, like, figure out, like, how to approach this.

Oh, I love this. And I think this is something that Greylock really believes in. Your entrepreneurs and founders of, like, responsible leadership. And, like, being a leader is a huge privilege. It is a responsibility, and I take that really seriously. And Matthew takes it really seriously. Lee, our third co founder, is incredible. Extremely sick. Unfortunately, it's a tragic story. So he left many years ago, but Matthew and I are still running the business and we've always taken this responsibility seriously. And frankly, I wish more founders would because, like, there sometimes you read about these things and I'm just like, God, like, these are people's livelihoods and customers. And anyhow, so I. So I think it's. It's a big deal. You know, we build infrastructure for the Internet again. We have startups who are our customers. We have governments who are our customers. We have 20% of the Fortune 1000 who are now Cloudflare customers. We have a ton of developers around the world. I mean, again, 27 million Internet properties are users of Cloudflare. And every day lots of new people sign up. So. So that's just kind of give you the sense. And when we started Cloudflare, I think especially, like, in cybersecurity, the way that you built companies with was with a lot of fear, uncertainty and doubt. It was kind of called FUD. In fact, we were launching our company at TechCrunch Disrupt, which was the thing to do back then. I don't think you would do that now, but that was the thing to do when I was starting my company. And again, we were trying to get awareness, and you practice your pitches before you go on stage. And so we actually came to Silicon Valley, and I think it was. I can't remember whose offices. It wasn't Greylock, it was someone else's. But it was a bunch of VCs who were there. The judges who were practicing the. These founders were practicing their pitches and they were giving us feedback. So Matthew and I came in and we practiced our pitch. You get three minutes to pitch, three minutes of Q and A. And literally afterwards, a bunch of the cybersecurity investors, who of course are the ones who got to judge ours because we had that element to it in our pitch, were like, you guys need to have more FUD in your messaging. And Matthew and I were like, but we don't want to self fud. Like, our messaging was, give us five and we'll supercharge your site. And they're like, you got to make people feel the Pain more. And I'm like, but that's kind of gross. Like, it was just a little bit, that situation. So, anyway, so back to, like, principal leadership. I think that we led our company a slightly different way, and we had some assumptions early on. We thought it was important to have a face to the company. And what I meant by that was, like, we were groups of people working on this, and because of what we were doing, we felt we sat in a very privileged place online and that when it works, it provides a ton of value again. 80 billion cyber attacks were stopped every day because the technology we built, it's amazing. You can make things faster and safer. That's all. The good side, the shadow side of that is, are you kind of like a Big Brother watching everything? Like, that's kind of sketchy. And so early on, we thought it was really important to have a face to Cloudflare. So we showed up to things. We had public profiles. We. If you go to our team page today, it is not just the senior leadership team. We have a picture of every single person at Cloudflare on that page. And the point is this is a service made by people for people, for companies, and. And we. And we take responsibility and we hear. So that was something that. I'm just trying to share some of our thinking.

Yeah.

So we had a lot of people working. You're, like, updating that page is annoying. Can I don't. Can we just get rid of it? It's like, we're so big now and we're like, no, keep going. And just these are things that we cared about. And then there was things that happened where bad things would happen. Like, sometimes there would be, like, a security breach or whatnot. And you don't have to talk about these things. And in our space, the common approach was not to talk about it. And we felt like transparency, like, trust, to build trust, you need to be transparent. We believe is important, important. And so we started to be really transparent of why we were building something or when something went wrong, what happened and what we were doing to fix it. And it was interesting. We were very committed to being transparent, both internally with our team. We shared a ton of information. We still do to this day, but also externally, and it's interesting that, again, the world has really changed the last 11 years, but now so many more companies are more transparent. And it was interesting how that was not the case. But we were trying to shape. We're seeing, kind of trying to share why we made a decision, what we're going to do. About it. And that's a big responsibility. But it's been. It was a choice like no one told us. I don't even think it was conventional, but it was a choice that we made. And then you got to stick with it because there's both implications in both ways. And so I tell that story because all of you are founders. And when I started Clever, I didn't really think of myself as a leader. I thought of myself as starting a company and there every day trying to make it happen. But you are a leader and you can choose and your choices can make an impact on how your business is run and the experience your team has and your customers have. And you should really take that seriously. And I think that the world is craving leadership that's authentic and principled. And I think that if that is something you're interested in, lean into it because you will get great people to work for you. They'll stay, they'll come, they'll be like, I like I choose you over other things because of all these things. Investors will back you because of that. And I think that it's a choice and we just took it really seriously and it comes back to trust was really important based on what we did and this was how we helped to what we described. We had to accrue trust on a daily basis. It seems like we've always had it, but literally it's been 10 years being really thoughtful about it and it's a fragile thing. We take it really seriously. Yeah.

Would love just a quick overview of Cloudflare's main areas of focus for the next couple of years. Like what are you excited about and what do you see as kind of new opportunities of challenge?

We have a different point of view than other people leaders on this question. So Cloudflare, we run this global network. We do performance, security and reliability which is by the way you could build a company just doing the security side and you could build a different company just doing performance. You could do just to build a different company building reliability. But we do all three. And then another way to cut or build thing is like okay, we help protect web applications, websites, but by the way we also help protect networking which is like a totally different buyer within an organization. And oh by the way, we also do everything under zero trust. So employees accessing information identity and access management, same platform we're using and then we are helping build the next compute platform under serverless. So we do a lot of things. Sometimes the advice you get is focus on one thing and go really deep And I think that that is a good example, example of how to get good traction and traction matters early on in the business, but you also have to make sure you don't run out of tam because you want to grow for a long time. So our strategy has been sustained growth for a long time. Endured growth for a long time. So for the last five years, we've been growing our revenue 50% annually, which is, there aren't very many companies who have been doing that. It's, it's, that's a rare set of companies that, that we sit with. And a lot of people are excited about cloudwork because it feels like, wow, we're set up, we've laid the seeds to grow for a long time. So when you look at where we're going to invest in the next five years, it kind of comes back to the strategy we're going to continue to invest in, going to get more customers to adopt the services we already have today. We do a lot of things today. We have lots of customers, but we're barely penetrated the market. There's so many other customers to get. Like, I'm sure a lot of people listening today aren't cloudflare customers or again, we have a bunch of the Fortune 1000, but not, not the rest. And so we're going to continue to grow the number of customers using our service, for sure, based on what we currently do today. But then we're investing a ton in our product engineering teams to say, we are not out of ideas. We want to go build the next set of products that we can then go get into the hands of our current customers. So today, 80% of our customers use four or more of our services, which is amazing. But then those new products that our teams are building also help us go get the net new customer. So it's like, get customers, solve their problems, use those insights to build new products that help us go get net new customers and expand relationships with their current customers. If we just do that, we'll grow for a long time. And so that's really what we're very focused on. So it's investing in the product engineering across our global network and getting great people to join to help make this all happen. So that's how we're thinking about it. And I've been in many of your shoes before, where people used to give us a hard time for investing across so many product areas. In fact, we had a management meeting, this was like five years ago, where our chief security officer said, you know, my colleague said, Cloud four is A mile wide, an inch deep. And then his colleagues like, is that a compliment or a slight? And it was kind of like, I think they're not. That meant not to be like, you guys look like crazy people shipping so much product. But it's always been part of our strategy where we wanted to do a lot because we want to have a big tam and grow for a long time and expand the relations with the customers we have and go use it to get new customers. And I think today makes people really excited about what we're doing and puts us in a good strategic position. But like, I, I say that story to founders because sometimes the pressure is just to do one thing and one thing really well. And that is a approach. But this is another approach that might spark some of you.

Yeah, yeah. You've been in a unique spot where you've had to add independent board members and you now are serving on the board of Atlassian. Do you have any Advice for founders, CEOs with regards to how to think about or maybe how to approach that independent board member slot?

Of course. Just like investors pick people wisely for team, for co founders, for life partners, for your investors and board members choose partners wisely. So, yes, for the board, I think you want people who are excited about what you're doing and believe in what you're doing and it can add value. And so some way, if at your gut level, you're like, this person wants me to go left and I'm going right, I probably wouldn't get them on your board because it's just going to cause a lot of friction and you're going have to manage that.

Yeah. Even if someone's telling you like, this is the best board member, you should add them. It's like, trust your gut like you know your company the best.

Exactly. It's easy for me to sit here and give you advice. You're the one who have to. We have to. The ones have to show up every day and run your company. So I think the people matter. You know, I think one of the things that seems so obvious now, there's lots of great content around it, is what kind of skills do you want on your board? So do you want, you know, the operating skills? You want the CEO mentor? So someone who is a CEO at a company ahead of you to mentor, do you want the technical expertise? So if you're a really technical company having some of that technical expertise on the board, one of the ones that we a skill set we need on our board, which is kind of atypical is public policy experience. There's a lot of rules changing around the world, and we operate as a global company. And so we spent a lot of time thinking about public policy. We're very invested in that. And so having someone with a European standpoint is on our board, it's been great. So those are some of the skill sets that it's actually helpful to think about. And when you talk to a good board member, the first thing they ask you is candidates. They say, what are you looking for in a board member? And so you look at more grown up and professional. If you have a good answer, oh, I'm looking for a board member that, that has great operating experience at scale ahead of where we are. And we're currently at this many, many people in this much in revenue. But we're hoping to grow to this. I'm looking for someone to learn from who's been ahead, or I want someone with a Rolodex to the Fortune 500, because that's the segment we're going after next. The really good board members, they have choices. They want to know what are you looking for? And so I think being able to systemically answer that was great.

Yeah. Okay, one more question and then, well, unfortunately, we'll have to wrap up. I feel like I could keep talking to you forever, Michelle. I mean, you have so much knowledge and expertise. But one thing I know that someone asked is, you know, from the election to the pandemic to geopolitical instability, how do major events happening all over the world impact what you guys do at.

Cloudflare On a human level? It's hard. Like, you're all living all of those things. I literally said someone on our team yesterday. I'm like, I'm so grumpy. I'm so tired. It's been two years of chronic stress. So you're kind of in this chronic, you know, flight or fight mode. But we've been in fight mode for two years and all of us have. I mean, all these events have been awful. I think that, again, this is part two. You know, I didn't realize quite this when I started Cloudflare, but it kind of came back to when he's making an impact. The Internet's just becoming more important to our lives, not less important. Technology is becoming more important, important to businesses, not less important. And that's part of this. Like, there's a huge groundswell. Things are changing, growing. And given all the events last two years, it's been amazing to see how much the Internet has played a role in helping solve some of those problems, keeping us together, keeping things going. And again, our business happens to be right in the eye of that. And I heard Satya Nadella speak recently and he said it's the golden age of computer architecture. And I was like, it is, it is the golden age of computer, like the network architecture because it's just, there's just this huge shift from on premise hardware and software to cloud based services. And it's pretty early innings. And there's just a lot more coming online, a lot more how we're connected and these pandemics or crises that we have in the physical world. Turns out we're very connected to the Internet world and it's just kind of like, it's almost like a whole ecosystem. And I think sometimes people think tech is a fad. I'm like, it's not a fad. It's only becoming more important. So all of you that are working in it, you're in the right place. It's good. What you're building today is going to become the really important things ten years from now. And that's a huge responsibility. It's super fun. It's also really hard work and tiring and stressful all mixed up together.

Yeah. Well, Michelle, it's been so, so great having you here with us today. Thank you again, Michelle.

Thanks so much for having me. Thanks everyone.

That concludes this episode of Gray Matter. If you liked what you hear and want to find more interviews on entrepreneurship, Please subscribe at SoundCloud, Spotify, YouTube or wherever you get your podcasts. You can also find all Gray Matter content at our website, greylock.com and you can follow us on Twitter reylockvc. I'm Heather Mack and thanks for listening.

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