Michelle Zatlyn of Cloudflare on Building a Better Internet (EP.176)

My name is Michelle Zatlin. I'm the co founder, president and chief operating officer of a company called Cloudflare. I am panicked about that. The loudest voices seem to get heard the most. Foreign.

Hey, Howie, what is happening today? Not too much. We are going to. I know this is crazy because this is a podcast, but we're going to talk about the Internet today.

Really?

Yeah. Because podcasts wouldn't exist without the Internet. Knut, you and I would just be talking to each other and no one would appreciate the banter. That's right. And now we have the Internet and no one appreciates the banter. So it's kind of the same status quo for us. But if we are going to talk about the Internet, this is the right time and the right moment to talk about the Internet with this person, Michelle Zatlin, who is Canadian, thank God, because we just trust Canadians more. I'm Canadian too. We have that in common. And Michelle, about 11 years ago started this company, Cloudflare. I've had her co founder, really difficult person, Matthew Prince. She'll talk about that. Remember Matthew? He's on the show that just won't let me breathe. I have to be very careful with Matthew. Michelle's just the Ying to his yang. And so 11 years ago, maybe a little more, they started Cloudflare. Now I think it's like 50 billion. Near an all time high. I have been a happy shareholder, so I'm going to explain my biases up front. I've been following the company forever at some friends and family IPO shares that I purchased and I've been holding them, not all of them, but been holding them the whole way up and talking about it. I should have just put my whole damn family fortune in it. The stock is up. It's almost a 10 bagger. Eight bagger. Wow. Yeah. In three years, two years that they've been public. We'll talk a little bit about that. But that's not why I want to talk about. I want to talk about how the Internet works and how Cloudflare helps the Internet work. I think by the time we aired this podcast, it'll be ad nauseam that Facebook recently had one of its biggest outages. And Cloudflare, which has a really incredible blog about the Internet and about security and about how things work on the Internet, has a great blog and a great explanation. So having Michelle here, timely to talk about that and where the company is headed and how all this stuff works and then obviously, most importantly, how the hell do you grow faster during COVID and do all this hiring that they've been doing from a closet or from wherever you are in your house as the company grows faster than ever during COVID Does that seem like enough to talk about? I think that sounds great. I don't think there's enough about me in there, though. So will you work that in? Will you interrupt so we can talk about that? Yeah, we'll check that in later, Howard. Don't worry about it. All right, let me get comfortable. I'm going to take off my shoes. Well, thank you. Turn on the fan, please. Let us bring in. Oh, you know what? I was going to say first. First. And she's going to explain cloudfirst, so I don't butcher it because I'm not a technical person, and Cloudflare is a very technical company. Michelle and Matthew do a great job of speaking in Internet English, but let me just read through their mission so she doesn't have to read through the gobbledygook. And this is in their yearly letter. They write this great yearly letter. Cloudflare's mission is to help build a better Internet. We always capitalize the I in the Internet, in spite of what the AP Style Guide has said since 2016 because it's proper now. We believe there is and only should be one. And we have an enduring respect for what a miracle it is that it exists. Right around the same time that the AP started to say that you needn't capitalize the I on the Internet anymore, something seemed to change. The world shifted from seeing the Internet in what it enabled as an irreproachable good to a source of great danger. We've watched the same thing since 2016. It's often felt like a connection to the Internet only brings cyber attacks, toxic social media, threats to democracy, increasing polarization, and declining disdainful discourse. We have real challenges ahead, as some of the technologies that ride on top of the Internet have broken down traditional gatekeepers without sufficient concern for addressing the harms they previously protected against. But at the same time, the Internet itself remains a miracle. And that is true. And I like to say that those things that don't kill the Internet, like Facebook being down the other day or Trump or wherever, politics make it stronger. And so I also want to remind me, Knut, to bring up crypto and the Internet what crypto's effect is on the Internet. Sounds good. All right. Can we dial it? Maybe she dropped off because she got bored, but let's see if she's still there.

Sounds good. Hi there. I'm here.

Hi, Michelle. Hey. You've got Knut. We've got a bunch of countries. Got America, Norway, Canada. Got a lot of stuff going on in this little podcast. So where are you today?

I'm in San Francisco today at my house, working away and excited to connect with you. And Knut, where are you, Howie?

I'm in Phoenix. We were talking about the Internet. I was reading a bit of your last yearly letter, and I shared it on my blog the other day because I've had the pleasure of knowing you guys since the beginning. You hit me up on Twitter or I hit the world up on Twitter trying to go to see a movie at Sundance. And you and Matthew responded to that tweet, invited me into line. You didn't invite me to invest, but you said, harry, come bud, in front of us in line. And we've been friends ever since. That's about right.

That is. Actually, I kind of forgot about that story until you said it. And I have a big. I know you can't see me, but I have a big smile on my face because we did. We reached out to you on Twitter and we met up in Sundance. I mean, way before you would want to invest in Cloudflare, Howard. It was really early days, and we have been friends ever since.

So how'd you meet Matthew?

Oh, that's a great story, too. Matthew and I met at business school. So we were doing our MBAs at Harvard Business School. I'm Canadian. I had moved down to the US to go to business school at hbs. And the one thing that I don't think people understand about Harvard Business School is actually a huge school. There's about 900 students every year that do their MBA there. And so this big class, and they take the 900 of us, and they break us up into what they call small sections. So 90 kids or students per section. And so it's all by. You know, someone designed some. Some. Some wizard in the back end designs the sections. And Matthew and I were in the same section. We were Section D. And it turns out when you go through a year of 90 other students. Junior, during your first year of doing your MBA at Harvard, you really bond as a group to this day. I graduated about 12 years ago. Some of my closest friends are people I met during that. That time. And then the second year, you kind of intermingle more with the other 820 students across campus. But we met at business school. We were in the same class, by happenstance, and that's where we first met.

And were you married when you went to school or when did you get with Jamie?

Yeah, so I am married today, but I wasn't married when I went to do my mba. We were dating. Jamie and I were dating. We were one year into our relationship. I was living in Toronto. I met him in Toronto and we were very happy. And I said, hey, I'm applying to Harvard Business School. And super lucky that he supported me in that. And then I got in, I said, I'm going to move to Boston. And I really wanted him to come with me, but it's actually really hard as a foreigner to come live in the US unless you fit in very specific buckets. And he wanted to work. I mean it's easy to live here, but it's hard to work here. And he was building his career. And so we did long distance, which for those listeners, knowing how long distance works with MBA programs or any school, I think that's a huge testament. It was not easy, but we did it.

And did he do time in New Zealand with zero or no?

Yeah. So at some point he worked for Xero for many years. He actually lived in San Francisco. So this is many years later he moved down to San Francisco from Canada. He joined Xero to help build up their US presence. So he was based here while I was building Cloudflare. It was crazy times. We were both running these very, very high growth companies. I think back to the studio apartment we used to live in and then we upgraded to a two bedroom when we had our first child. But he lived here. He went to New Zealand a lot, but he lived here.

Is New Zealand as nice as they say? Did you like it?

You know what, I've never been. I was so busy running clockwear, I never went. But he loved it. Actually after college or university he actually lived in Australia for a year with a bunch of his buddies and had spent a bunch of time in New Zealand traveling around as a tourist. So then when he got this job, he always loved going because it is a gorgeous country as many of the listeners know who have spent time there. If you like the outdoors, it's just, it's a beautiful spot. And so he has a very fond place in his heart because of this time. He went kind of post university college with his friends, living in Australia and traveling around New Zealand. I didn't know him then, but he talks about that experience all the time. And so it's just kind of a reminder for all of us that life is a collection of experiences. Collecting a lot of them is usually ends up Being a good, good strategy.

Listen, you guys are a power couple in so many different ways. Jamie, I know he didn't want my money. He travels to his own voice, and he definitely is a freedom chaser. He understands the privilege. So now let's talk about the company I gave the mission. But if someone pulls you over in the street because you always. It's not like saying Google, right? But yet, you know, at a $50 billion company, you know, you're one of a hundred companies at these type of valuations. Tell me what Cloudflare is.

You know, I'll be happy to do that, but I just. When you're just asking your question, I wanted to add in the word yet. When you stop someone on the street and you say, Cloudflare is not like Google yet. And I hope that's what we. And so let me tell you what Cloudflare does. So our mission is to help build a better Internet. And we can talk about what that is, but what does that mean? So Cloudflare is a service that makes anything connecting online faster, safer, and more reliable. So what do I mean by that? If you are a student trying to put up a project online, a nonprofit that has like a website, or you are a global 2000 business trying to build your next service for customers, and it needs to connect to the Internet, anything that connected to the Internet needs to be faster. Anything connected to the Internet needs to have a layer of cybersecurity protection, and anything connected to the Internet needs to be more reliable. And Cloudflare offers that to all of those types of customers. So whether you are a student, an entrepreneur trying to build the next big thing, and if so, you should take Howard's money to a global 2000 or even a government. Everybody is putting things online these days. And everything that goes online needs to be fast, globally, needs to be protected from cyber attacks, because there's a lot of those, unfortunately. But good news is there's a service like ours that stops it and needs to be more reliable. And we offer that so we make the Internet faster, safer, and more reliable. And it turns out when I used to go to parties and tell people that, they kind of rolled their eyes and they kind of are like, hey, that's boring. I don't want to know about it. But now today, I think as Internet and connectivity has become such a bigger part of everyone's life, and we kind of think take it for granted less, especially during COVID all of us are doing a lot more online. People are like, oh, that's interesting. Tell me more. It's been an amazing experience the last 11 years building Cloudflare, and I love to say that we make the Internet faster, safer and more reliable for a lot of people.

And you do stock Twitter. It's a happy customer. I'm sure a lot of my portfolios are happy customers. What prevents Howie Town, my company, from doing this? Who was the company that inspired? So it's like an Akamai or a Google. How do you wedge yourself into saying that, forgetting saying it? Because we could all just say, go AAA Internet security in the phone book and say, we make the web faster. So I'm trying to understand the wedge in at the time and where we are today. And what was the inspiration for this?

Yes. Yeah, this is a good question. And if you like, my mom was a history teacher, so I'm going to give a quick history lesson to the audience. And so if you go to the. So how do we even come up with this idea and how do we do it? Is, I think the how is super interesting. But also how do we come up with the idea and then how do we actually. What's the technology we built to actually execute on it? Both those are, I think, good lessons. So the first was, you know, 15 years ago, before Cloudflare was even created, before Matthew and I had even known each other. If you were a big company. So if you ran a big bank, JP Morgan, any big bank, just take any big bank, whatever country you live in. They cared a lot about cybersecurity and they had big teams working on it. And they got cybersecurity through hardware boxes, and that's kind of like what they did. And they also cared about being fast for their online customers, and it was through different providers. And you kind of think, why was that even the case? And if you go back. My history lesson begins, if you go back to the beginning of the Internet, when the inventors in the Internet, if you go back to the initial protocol papers, security was at the bottom. And it said security to be completed at a later date. And so security was never by design into the Internet. And neither was global performance, and neither was reliability.

Good point.

And neither was privacy. And so what's happened is. And it's because when they originally designed the Internet, they thought they were connecting academic institutions so they could share research back and forth. And it was just. And it's become this. In our founder's letter we just wrote a few days ago, we talked about the Internet being a miracle. It has turned out to be a miracle. Think about how it's enabled so many of us, so much business, the communication, commerce, connecting, bringing people, the education, rise of education, information around the world, it's enabled all these things, but the people who created it didn't know that it's become a much bigger force in all of our lives than we knew. And so this security to be completed a later date, which was meant from what it was originally designed for, made a lot of sense. But now that we it's become such a big part of business and people's daily lives, it turns out that cybersecurity is really important because it wasn't designed by default. It's getting put in after the fact. And same with performance and same with reliability and same with privacy, really, which is one of the big topics you hear a lot about today. And I think that the best way to describe Cloudflare, where we kind of had this aha was can we help make Internet faster, safer and more reliable for everyone? And when we started, when Matthew and I met, there was solutions. If you were a big company, if you were J.P. morgan, you had fine cybersecurity solutions, but for the rest of the world, they had nothing. So like for your blog there'd be nothing. Or for your small business there was nothing. Because everything costs a lot of money. And so the aha Matthew and I had really early on in Lee, who was the third co founder, Matthew Lee and I was could we create a service that made the Internet faster, safer, more reliable for everyone, whether you're a small business or developer? All the way up to the Global 2000, we had a professor at HBS called Clay Christiansen. He's a very famous strategy thinker. He wrote a book called the Innovator's Dilemma. He's since passed away, which is really sad, but he leaves a huge impact on the world. And if you've not read his book, I highly recommend that you go read the Innovator's Dilemma. The whole point of strategy, and this is great if you're an entrepreneur or an investor trying to evaluate opportunities and whether these things are sustainable, was Matthew and I both took his class at HBS and we were just eager MBA students. And the premise of the class was it's called disruption. Can you disrupt an industry? Again, we saw that if you were big companies, you're buying these big hardware boxes to get cybersecurity, but it was only accessible if you had a lot of money and a lot of technical talent. We said, can we democratize that? Can we open that up? Our premise Was if you want the Internet really to be safer, you have to give it access. You have to give this service, you have to make it accessible to everyone. You have to make it security accessible to everyone. You got to make performance accessible for everyone. Because if not, you're going to have a huge bifurcation where only the biggest companies win. And I like an intranet where you can go do lots of things on it, and the small businesses and the cool fashion designer can rise up and they don't have to buy everything at, I don't know, enter the big box store there. And I think that that was kind of our initial thread that we pulled on. And fast forward. Today we have over 27 million Internet properties that use our service. And some of those are developers and small businesses and nonprofits. And then 19% of the Fortune 1000 are also using Cloudflare. And it turns out it's this very universal need where doesn't matter how big or small your project is, everybody needs some sort of digital armor. You need, like that digital bouncer protecting you from all the threats online. And you need a personal trainer to be fast and spiffy. And that's kind of what Cloudflare is. We're like the Internet's digital bouncer meets personal trainer for any size business.

At StockTwits, we started out as like, oh, we'll build a community. Look at Twitter, for example. We're a mini version and we have our little house rules that last for about three seconds without people trying to break them. And so me, who doesn't know what a coder. And in 2007, when we're building this thing, I'm like, we'll just put our rules up and people will obey. And obviously they don't. But that's just the actual people on the line forgetting about the bots and the attacks. And I didn't even know that something like this existed in how small a world it is and how many times I've had a call, you were. Or Matthew, obviously I'm not supposed to call you, but I know you, so I get to call Matthew and go, matthew, fix this. What's going on? Is it the Russians? Is it the whole. And so a quick question. That there's 27 million Internet properties. Cloudflare is just a directional bet on the Internet because 27. It's not that 27 million. The pie is growing, correct?

Yes. Yeah, yes, the pie is growing.

And so crypto is good for the Internet, like Chris Dixon said. Well, you know, the way I and this helped me think it through. Around. Crypto is like, you know, people always talk about, you know, what's going to disrupt who and who's going to disrupt what. But in the end, the pie is growing. Like, the crypto doesn't disrupt Google. There'll be thousands of companies that eventually will have to do customer acquisition on Google. Not everything. Decentralization has its cost too. And crypto must therefore be fantastic for cloudflare.

No, it's so funny, when you said the word crypto, I was like, which one? Because there's.

I'm just saying I don't know what.

I'm supposed to call it.

Like, just crypto to me is like the Internet at this point. It's just a thing.

It is, it is. Well, there's a. There's a bunch of cryptography experts who, who make sure things go over secure connections online, which is like the HTTPs locks in our browsers, and that field is called cryptography. And I would say that the cryptographists, the folks who study cryptography, and there's a lot of experts, we employ a lot of them, there's a lot of people around the Internet. We should be all very thankful for them to help make everything more secure. Fundamentally, down to the core, are a little bit irked that the cryptocurrency has been able to take the shortened word to crypto. But yes, yeah, yeah, it's there. It's a side inside Internet joke that I feel like every time I hear that word, I'm like, which one are you talking about?

Which what I mean. And crypto to me just means, again, maybe I don't know what I'm talking about, but decentralization, let's call it the whole redoing of everything, or whatever we're going to call what cryptocurrencies or blockchains are. Sounds to me like 27 million Internet properties is tiny.

Oh, it's so. I mean, there's so much. I mean, that's. Yes, there's so much more to go about. 70% of the web situation uses Cloudflare service just to give you a sense of. And so that's amazing. But there's also, you know, that's why we show up every single day to help another set of customers. And, you know, it's interesting just on this point is like some things that I don't think are so obvious, and maybe I can just please use two examples to help highlight the customer. So we're both a big company and a small company, depending on how you look at it, right? Like, it depends on which lens. If you compare us to an early stage startup, obviously we're a huge success story. We have, you know, we have all these customers, we're public, we have real revenue, we have a market cap. It's a lot of employees around the world. But then if you compare us to some of these trillion dollars, like some of these other very large companies, we're still small, so it's, it's interesting which lens you use on. But so our company, Clefter. So on behalf of all these 27 million Internet properties every day, Howard, how many cyber attacks do you think we protect our customers from? How much like the technology we've built. How many cyber attacks? If you add up all the ones trying to attack stock twits and all the other companies that use CloudFL. How many attacks do you think we stop on a daily basis?

I don't know, 10,000?

Okay, awesome. 80 billion.

That was my next guess. Knuth said low Knut had his thumb down. I was going to say 75 billion. 80 billion.

It's a crazy number.

Is that machines or is that actual bad? That's not 80 billion. It's a little bit of everything.

It can be machines. I mean, most of that's machines. It's not all people. It's a lot of machines, but it's somebody's behind those machines directing them. And they're like little robots online, looking for back doors and vulnerabilities and scraping and some of them, like, there's lots of reasons. Who's behind it is a whole other conversation. But it's just, if you just think about that, you're like, that's a huge number. And back to, that's why all of these. Anything going online. It's your refrigerator, it's your car connecting online, it's your, your blog, it's a website, it's whatever you're doing online needs some sort of, again, digital bouncer just to stop these 80 billion, like these security bots that are going around trying to find vulnerab. And the good news is our technology solves it. Like, we just kind of put it in front and everyone behind us is protected. Which is kind of one of those points that's not obvious. You're like, wow, I had no idea that there are so many vulnerabilities online.

Now, is there a Cloudflare shopping cart for the small business? Because you just said it yourself, you have the big business, which is 19% of Fortune 2000 or 1000. I forget what you Said and then there's stock twits and then there's maybe even you say a media company with three writers. I go to Cloudfurt. Is there a shopping cart that says do you want the wet market version or the lab version? You know what I mean? Like is there a shopping cart that says this is what you need? How do you know what you need is my question.

Yeah, I know. Well this is the point where we tried to make it really simple early on when we said we want to make it accessible. So we kind of have a, we have a free service. So literally anybody with anything should just sign up for the free service. It's a no brainer. And then we have a $20 a month service. So it's. If you have a, it's a small business owner, photography sites, that's media company, three writers, where you're just getting hobbyists, self employed, you know, some sort of self employed business. Like that's like really great. You get extra security, extra performance, extra reliability. We have a 200amonth plan. So you get. And that's different. That's you know, it's a ten time step up.

So.

And then it's a lot more.

So if I'm. Is there a part of Cloudflare then that goes to call on Shopify station. You know, you can have the institutional grade version that every store that comes onto Shopify is got. Is there upsell there? How does the product sold? Is it sold or is it purchased?

It's both purchased and then sometimes sold. And I love that you Shopify. They're another Canadian, huge success story. What an amazing company.

Now out of Canadian companies, but go ahead. Nortel would be my next one. Lulu.

I know. Well Lulu, I think there's a lot of people working hard to create the next step. But yes, I'm point taken. And you know Shopify is a customer. Exactly. Because they have all these merchants around the world.

So when you sign up for Shopify, is there a badge that says Cloudflare protected or is that something you negotiate? I just as a salesman myself, I'm wondering like, you know, I'm trying to find a job on the side.

Yeah.

Could I work for Cloudflare? No. But is that how it works?

So there's sometimes companies sign up and offer it to all of their, all of their platform I would say. So they decide to adopt it and everyone on the platform gets access to it. And there are other companies who say okay, we're going to distribute Cloudflare to all of our end customers and it is powered by Cloudflare and click here to add it. And so we've seen both sort of distribution channels, and it depends, in Shopify's case, they've made the decision, this is table stakes to offer to our merchants. And so it's just integrated into their infrastructure by default. So any Shopify merchant gets access to it, and that's great. Like, it's just, it's Shopify and Cloudflare work together, they get access, the merchants all benefit, and it's all behind the scenes. There are other examples where, you know, if you're a WordPress user, Cloudflare is something you could add on in addition to WordPress, for example.

But WordPress has become such a nightmare for me. I have to know how to use the Internet, you know, and that's why there's obviously competition to WordPress. They were at one point like you were 19% of web pages. And so now you'll face the same type of problems as you, you know, as you get bigger, how to service all those customers. Sounds like you guys have really thought it through beautifully. I guess to interrupt my next question would be how do you know it's working? Like for the Sinek on the Internet, which is about 85% of Internet users, how do you know Cloudflare is working?

Well, yeah, it's so interesting. So it's one thing to identify this problem and then it's like, how do we solve it? And then how do we know that we're solving it? I think those are really important pieces. And so we could geek out on this all day long, but it's actually kind of a really cool, cool aha. That we had. And what was happening when Matthew and Lee and I started cloudflare and you know, we didn't really know. You don't really know when you're in a trend. But in retrospect, this is what was happening. The rise of the cloud became this opportunity. And so it was this world where big companies were buying hardware boxes to solve this problem. But cloud computing was becoming really big. And I remember this is back in 2008, 2009, and you know, you're reading a lot about AWS said about like, oh, big companies will never really use that. Well, that turned out to be incorrect. I mean, the business same with Azure, same with Google Cloud. So this was the time this was our environment, we were reading about it. And the other aha. Was we want to help small businesses. And a lot of times back then the small businesses were using a couple like hosting With a company like GoDaddy, they weren't using AWS, they were using GoDaddy.

That was my next question. So GoDaddy should have had this stuff. GoDaddy wasn't a tech company. They were more like, I know, Bob here in Phoenix. It was a marketing company. Genius hack, right?

And it was one of these things where we were like, well, if we want small businesses using GoDaddy and big companies using Cloudflare, you literally can't. Because we were like, okay, we have this idea. How do we end up with a cloud service? We deliver all this through large.

Right.

If you invent this in two, if you guys are in business school in 2006, this idea never even happened because the cloud's not there.

Exactly. And there was also some other things, like the rise of the iPhone. Bandwidth was coming online because all of this content was going online was driving the price of bandwidth. The iPhone, like, some of the cpu, like, it just some things were happening that made it almost the perfect time to start a service like cloudflare. And we happened to take advantage of that. And so we started to build. What we said is, hey, we're going to build a global network. So Cloudflare, we are in 250 cities around the world. So we're very close to where people and those bots that are trying to do bad things are connecting online. And because we're very close, we're at the edge. We're very close to where, you know, you're in Phoenix, Cloudflare as a point of presence in Phoenix, I'm in San Francisco. We have a point of presence in San Jose. If you're in France, we have a point of presence in Paris and Lyon. We have, like, point of presence in Marseille, many places across France. And the point is, we're in 250 cities around the world. And at each of those points, we say, when you connect, if you're a malicious visitor, we say, oh, wow, we've seen you try and do bad things before. We're going to stop you locally. So you never get past the cloud floor point of presence in that city. And if it's a good. If it's a legitimate visitor, you're on vacation in Italy. And it's like, great. Well, we know, Howard, do you have a good reputation online? We want to make your experience better. We want to be that personal trainer. We want to speed it up and make it reliable.

Oh, I would love to be pushing some knobs at cloudflare. I can make some lives miserable, so why not Coronado. It seems like an important place. Why can't we have an edge office there? I'm happy to stay.

We will talk about it. Let's figure out a way to do it. But that's the diagnosis.

I have golf, Jamie, maybe, maybe Jamie and I could part time that thing.

Well, and we keep saying, how do we go closer and closer? And so we actually just announced, how do we go into office buildings? Like, it's like, you know, so within a city, how do you even go into more places? And the point is, is as everything becomes more digitally enabled and again back to a toaster and an off, you know, like your toaster at your house or your fridge. The closer you can do these things, the better the experience. And so we're, we're really rethinking what it all means and building it. And so what's interesting about kind of like how we've done this is we build real. We are a very technical company. We build infrastructure for the Internet, we move a lot of bits around the Internet and it's amazing, but it's very technical, low level. And what we've done has been very differentiated. Like how we're solving this problem is different than how people solved the problem before us. And that was again, something we kind of came up with as we built as entrepreneurs. And it's become really the differentiation to our technology and we think a sustainable one and we are very proud of what we've done and we think we're well positioned to help all of our customers and future customers to kind of evolve in this very fast innovation world of the Internet. Like it's changing much more quickly. Even I work at it every day and I'm just like, it feels like there's another shift going on. Things are going faster and just more things are connecting. More ideas, more, more, more. Like the number of companies starting and building and scaling, all these sorts of things going so much faster. You gotta be future proofed against that. And this is back to you said it's like Cloudflare's kind of a bet on the Internet. Anything connected needs to be faster, safer, more reliable. It's gotta happen the network layer. You gotta be really close to where all these devices and people are connecting. We think we are the furthest along in that.

Love that. So if you're future proofing. So again, looking for a job for myself, if I'm head of future proofing, I come into me and say, michelle, what happens if something better than the cloud comes along? What's the warning sign? Or is it just you just. There's no switch overnight? Like, just like, you know, the cloud came along there and it was the iPhone and it was a bunch of things and the App Store. How do you future proof against something beyond the Internet?

Yeah, it's so interesting. And so this is where. Okay, so let me make two points. The first is, so the Internet is a network of networks, and then there's the Web. And those are not the same things. And I just want to make that point for the audience. The web is part of the Internet. It's like an application that runs on top of it. So that's point one. The web has evolved a lot. We started with Web 1.0. I remember when it first came out, it was basically information sharing. I could go and click on links to get information. Information like AOL doll up. What happened in web kind of 2.0, which is someone else's terminology, not mine, was the rise of social, mobile and cloud. And it made the web way more interactive. And it. Because it's beautiful. We have all these voices online and things you can do. And you think about all of the awesome products have been created. And I still think it's early days for all of that. And there's so much, so many more things left ahead of us. And so what's happening right now is, and we talked about it briefly earlier, but it's something that maybe some of the audience is following is web 3.3.0. And it's almost like the next wave. People are already starting to talk about what's next after web 2.0. But web 3.0 is based on the Internet, and it's not something new. It's the subsection that keeps evolving. And at the core of it, and there's so much great writing about it. It's still early. It's going to change 25 different times. But if that's something you're interested in, you should continue to read about it because it feels like it's gaining steam. But the premise is the following. All right, the web is about 25 years old. We know a lot more today than we did 25 years ago. There's so many amazing things that are happening. There's some things that aren't so amazing. You know, there's lots of problems with the Web 2.0 too, by the way. Like, there's bowling online information, like disinformation. Like, there's just lots of things that are also bad. But at the crux of how I would describe it is the following. The People who created the Internet of the Web, what they really one of the principal foundations to all of this was that it's decentralized and how there's been some centralization on the Web 2.0. These big companies that have been created and they, including yourself, including yourselves, the browser companies, and they all work together, which is why the experience is better for all of us. But there's a group saying, hey, we have to reach the full potential of this idea. We want to make it more decentralized. We don't want to have these targets for cybersecurity attacks. And so they're trying to figure out, and cryptocurrency is part of that. Blockchain is part of that. There's all of these new ideas of how to evolve the next kind of the next chapter of what the Web means in our everyday life. And it's very early. It's very early what that means and what problems does it actually solve. But there's a lot of people working on it. And it's hard to predict the future. It's so hard to predict the future. It's very hard to predict the future in technology. But there's a bunch of people who are trying to show, hey, if we do it this way, here's how much better something will be, or how much cheaper it'll be. And better might be faster or might be less friction or something else, maybe data. But that is kind of the core of what's going on. And there's been a lot of things like the data privacy around the current generation. There have been some really bad actors where they've kind of mistreated people's personal information. And. And there's a group of people saying that we can do better than that. We make it so the data belongs to yourself, your personal information belongs to yourself, and create services and companies around that. And so it's a whole new lens. But it's very early days. It's kind of like the very, very early.

It's civilization. We had the big bang. It's a fresh big bang. It'll be in a hundred years. People say, was the Internet round or flat? That's where we're going. That's how big the Internet is. And the Web, or wherever we're going to call it, is just a reincarnation of civilization in a digital way. And so I don't know what to call it. But yes, Web 1.0, which was like a quotron for me. It was like stock prices and I guess weather and web 2.0, which really got me hooked. And it's so funny because I didn't know you, but I made early bets on identity. We were in Phoenix back then. It wasn't the cloud. So you, my thought was better just insure yourself because you're going to get screwed, you're going to get hacked. So that was Lifelock. And you know, because that just made sense to me as a non technical person, it's like you're fucked. If you go on the Internet, someone's going to take your social, you know, it's inevitable. So you might as well insure yourself. Being at the center of the Internet as you guys are. How do you guys split up as co founders? Was it when the three of you, was it 33? 33, 33 from the beginning or was it different? Can you share a little bit about that?

Sure, I will. It was different actually. It was not a third, a third, a third. From the beginning we had different backgrounds, we brought different things to the founding team. Matthew owned more and Lee and I owned less and that's what we agreed to.

So you call yourself co founders. How do you split up President COO and how did you fit into these roles? Is it like how do you break up the day between the two of you? Let's say as CEO and president coo?

Just like the web, Howard, it's evolved. It's evolved. But I say that because you know, I know you have a huge entrepreneur following and I, you know, for the founders listening out there, these things aren't set in stone. They're much more like, they're more like built in sand. And I kind of wish I had internalized that early on. So that's why I'm telling all the founders, listening that you know, what you pick on day one can evolve over time as things change because there's going to be lots, you know, as your company grows and you go through the different chapters and evolutions, the company needs different sorts of things. So today how it is and I feel like the luckiest person I love my job is I run all the go to market functions. So what does that mean? It means anything where how we work with our customers in a push or pull way, sometimes our customers come to us, love that and sometimes we go to them and I love that too. And so sales and solutions engineering and customer success and customer support and marketing, like all of the communications, all of that, all those functions are brought up into me and as well as our people team. So how do we get great people to come work for Cloudflare. Howard, you've said a couple times you want to work for us. I'll just say this very clearly. We are open for hiring. We'd love to talk to anybody. We are hiring across all of our teams. We are growing. We have about 2,000 people around the world. If you're interested in coming to help make the Internet better, we'd love to definitely talk to you. We are open for hiring across all teams. And then once those great people come join Cloudflare, how do you do the best work of your life? How do we have a company that we're proud of, how we're doing the work? And so that reports all up into me, Matthew, who's an incredible.

I like him. I don't like him as much as you, but I put up with him. I tolerate his weird hours of texts and calls.

He's a very special person.

Most of you tell me he's in Staad or something, but I enjoy it because he means it in the meanest and nicest way at the same time, which is just a charm that he has.

Exactly. All of the technical leadership brought up into Matthew and finance and legal, and so all of the technical leadership, again, we run a really technical company and so that all reports up to Matthew. And so that's how we are currently running the business. But again, I think that the point I want to make is it's not set in stone. These things evolve.

But what a perfect fit. I mean, I know both of you. Not well enough to really know, but I know both of you from business. Watching you guys interact, and in business, your brains are just so big, but they're so different. Yours is a go to like, the way you're talking to me is so go to market. I would go to war with the way you're explaining the business where with Matthew, he's so good at like, I know he's a lawyer by education. He's so good at policy and understanding and being a diplomat at so many levels. Even when he's not being a diplomat, he's being a diplomat. Diplomat. Not an easy company that you guys have built in such a short time. So, I mean, hats off because I think you're doing a great job helping me understand it. And I trudged up my nephew Jeremy there as an intern, and what he had, first of all, he's a smart kid. That's why I brought him. But what he had to go through to get hired as an intern was military grade. He could do any job after it wasn't like, like at Stockton's where you were CEO for the day if you showed up. There's a little bit of a regiment Canute at Cloudflare. So on a go forward basis, is there a worry if you're 19% of the fortune, is there a pushback to say we can't let CloudFlare be over 30% of Fortune 2000? Is there pushback from. How do you deal with that? When does the penetration become scary?

I so this is one of the things where as you understand more about the Internet and the web and again I think it's part of everyone's life so we all have to become better, have better digital literacy. Like it's not going away and so kind of this pack. So like it's just changing it. It's like if you don't know a lot about it, start to learn now because in a year you'll be more of an expert. And so your question is a good one and I think that I really believe and whether we like it or not, this is what's going to happen is anything connecting to the Internet is going to have to go to a service through a service like Cloudflare.

Got it.

And we won't be the only company that provides that, but there will not be very many because what we do is hard and it takes real Capex costs. Like there's really. We spend a lot of money on capex to be in those 250 cities and soon to be all the office buildings and moving traffic around the Internet is not easy, but that's where all the value comes. That's why it's not easy. That's why businesses get so many value out of it. It's like, wow, this makes everything faster, safer, more reliable. But I can't get somewhere else. And so I think that there's going to be a couple large players like we saw on the cloud computing side. And that's why I think who runs these companies matters a lot. I think Matthew and I take this very seriously. We deliver a ton of value to our customers and play an important role in the Internet and we take that seriously. I think a lot of other of the companies who are very large also take that seriously and I think that's good and important because even if that makes you uncomfortable, a part of me feels like it's inevitable because it's just there's so much value, it's just so hard if you don't. You are exposed to attacks and being small just is not an option. Scale really matters because you got to be everywhere. And to be everywhere, you need money and to be able to justify the money, you need customers, and it becomes this flywheel. You have the customers, it makes everything better, and then you build better products and it just becomes this flywheel. And so we're just heads down, making sure that we deliver a ton of value to our customers in a way that we're really proud of. And when you think about Cloudflare's values, we have three. We're transparent, we're curious, and we're principled. And we picked those very deliberately.

I love them. And I was expecting that type of great answer, which is detailed and on point. And I agree with you. People ask me, it's all Internet companies. I'm like, but the Internet is just starting. Why do I want to own copper and energy and fashion? I get how they're all connected to the Internet, but at the same time, I want to get as close to the Internet as possible. So for someone that knows as much about the Internet, you don't need to make money investing, but do you invest on the side?

Yes. Yeah, I do. Definitely.

What interests you? What is your interest? Like, if you can invest in three things, like, if, you know, money be damned, you have a YOLO fund, you have a slush fund. Jamie doesn't know about it. I promise not to tell him. He won't listen. What gets you excited? How do you get Michelle's attention?

So it's interesting. So we, Jamie and I kind of have a philosophy of, like, we like to invest in things that we understand that we like and we're lucky. We both work in tech, we're here, we see a lot of things. So it's, wow, we really, like, love the service. Like, that is something that we like to invest in and we've done very well investing in companies where that it meets that criteria. And those are, you know, public companies, growth companies. And it's kind of like the usual suspects. And it's just kind of be like, I'm. It just. It's hard to imagine a world where, you know, before it was like, we're not going to spend more money on. On Amazon or more or more with Apple, like, and again, those are huge companies, but it's just like, they're just so part of everyone's life and whatnot. And some of the earlier ones, like Atlassian, I'm also on their board now. But what a run. I know an amazing company and, you know, I use that every day at work. And it's just in it, it's like the, the ERP of making our development process work. And if every company is becoming a software company, it's just like you gotta have a way for developers to connect with the rest of the business. And it's like the glue and you just, you need something. And so it's. Anyway, so these are some where, where Slack, where it's these companies that we were using that we were investors in, in the public market and, and peloton, huge peloton fan anyhow, sorts of things. I bought the dip and that worked out well. Anyway, that's that then then early, which is all the entrepreneurs and the founders and we try and I think there it's different because lots of times early on things evolve. It's so early. I'm part of a great fund called the Operators Collective. And Mal and Yen put this together and basically you hear about this all the time. There's not enough women on cap tables, by the way. There's not enough women in the public markets either. When we went public, most of the investors, most of the people who are really the portfolio manager were men. And I was just like, man, where are the women by the way? But anyhow, that aside, so Mallon, amazing operator, she kind of got tired and so she got a group of all these women operators, actually a lot of us and people of color to kind of do follow ons with other VC firms on a portfolio. So she raised her first fund, I'm an LP in that. And there's, you know, she's about to raise the second fund and it's going really, really well. And I love being part of that because I think this idea of having more women on cap tables, more people of color on cap tables, more people participating in the economic upside of all of this amazing innovation is really important. You want all tides to rise and it can't just be some group of people. And so that's been really. The OPCO has been really great. So anyway, proud to be part of that.

Will you introduce me? I mean we're breaking news. We're doing an emerging manager fund. So we're always looking for emerging managers.

Okay, perfect. I'd love to introduce you.

Yeah, introduce us. So you're busy. The company is relentlessly doing this Covid just to end this, because you grew much faster during COVID than before. So running a growth company during COVID Matthew came on early in Covid and was hiring like crazy. But now we're 19 months in it, through it, whatever we're going to call it, Living with it for the rest of our lives. The world has changed and I've met you both, obviously, so I know how you lead and how you think. How has that changed? You know, how do you do all this thing through Covid? How did, how did it work? What was the, what was the big change?

Well, we, it was a huge change for us as many businesses where we were definitely a company that came into the office every single day. Like we were an office first company. It was just, you know, I was going there every single day. I mean, we. And we had 17 offices around the world, so there was a lot to pick from. But we were in the office every day and we were pretty dogmatic about that, I would guess. And then overnight we all weren't in the office, we were all at home. And again, I think that's for a lot of businesses that, that rings true. It was just like, wow, we were all together and all of a sudden we weren't. And you know, there's like the IT systems, how you access information, your vpn, all those sorts of things that you have to get right. But what was interesting is it basically put a stress test on all of our systems and, you know, a lot of those things got better really quickly because we had to like out of necessity, like keeping the business going. Because at the same time, what was happening at Cloudflare, which is super interesting business, was again, if you think about what Cloudflare does, we help make Internet traffic faster, safer, more reliable. What happened when everyone stopped going to the office? They were at home online every single day. So Internet traffic basically doubled overnight in every single country around the world. In two week period, Internet traffic doubled. And those, a lot of that traffic was going on to a provider like ours. It was chaotic. Like, talk about chaos. And in the best possible way. But at the same time, this incredible pride from our team of like, we have to help help our customers. Our customers were or customers who onboarded really quickly. It's like, oh my God, like we're falling over. We need that. Back to my silly analogy of a digital balancer. Like, we're getting attacked because not only did traffic go up, like attacks went up. And so everyone needed something. And so we were so busy, our traffic doubled. Imagine something doubling overnight. It's just a lot. We were already working at huge scale. That's just like really big scale. You're personally going through all these things. We're all at home. So it was a hard time. But I would say that what was amazing to see as a Leader. And these are the stories you don't really get told in business. And I wish more of these stories got told because I think more people would choose to join tech and business because it's a great profession is around just this immense pride of. All right, step one is I gotta take care of myself. Step two, I gotta care of my family at home. And of course that's really important. We're all going through this public health crisis, but step three is I got to show up and help our customers keep the Internet together because if not, it may fall over. And like, that would be a problem. And it's kind of like our customers need us more than ever. And turns out, like, people love to be productive. Humans really want to be part of something and have an impact, to be productive. And just like our team just rose to the occasion and not only took the products we already had and help extend them, but we created new products to help with new set of problems that we saw because of what happened. And like an example is the vaccine distribution. So if you thought about early on in the vaccine distributions, I don't know if anyone remembered the headline where there was scarce supply. And so these communities or cities would do vaccine distributions and people would go to sign up, there'd be a huge rush. People like, I want it, I want it, I want it. And you think about a huge rush. It's a hard thing to scale for these small community healthcare sites. They fell over, they kept falling over. And it's actually one of our. The wife of somebody that works at Cloudflare and her name's Kate, said to her husband, I thought, cleverhole, make the Internet better. Can't you do something here? And he brought it to work. And we're like, we can. And we couldn't put that. We don't do shots in the arm, we don't do that. But we can make a waiting room so that when people are going to sign up for the vaccine distribution, it doesn't fall over. And that's important for trust online. You got to believe in that. And everyone has their fair shot to get access to the vaccine. So we have something called Project Fair Shot. We call it that a fair shot. And it was. We don't make very. We don't make money doing this. But man, our team came together, people worked all hours of the day to help onboard these provinces, states, countries, communities, because again, it depends on where you are talking in the world to onboard onto Project Fair Shot so that they could give their customers in these regions around the World from Latvia to Santa Barbara, like a fair shot at getting access to the vaccine. And again today that's not such a problem. Lots of people have access to the vaccine, but back then there was just these huge demand and, and it was a hard technical problem that we thought we could help play a role. And just seeing people step up and do that and be so proud of the work and our team and customers being so happy. And again, we weren't making very much money from it. But that's the story that you're like, that's how we make the Internet better. And to see that. And so it was hard, but it's also made us better as a business. I think what's really interesting as we emerge in a post Covid world, what does the future work look like? I know that's a huge topic and it's not going back to how it was, which I think is good. We've learned that there are better ways and I'm really excited for the next two or three years because I think we're going to learn a ton. I'm also a bit nervous because I think that there's going to be. I just think there's going to be also some byproduct of things that don't work well. And I think, I hope we don't revert to how it was before. I think we've evolved what work means and I think we need to take this opportunity and push it forward. And that's not just at Cloudflare, I mean, more generally around the world, but that's what I hope. And that we look back three years from now and be like, wow, that was a pinnacle point and look how far we've come. I think that'd be a really great outcome.

One last question. I'd love to have the time to go backwards and what kind of household turns out someone as great as you, but we don't. So I gotta let you go. But Facebook being down, what does it look like inside? This is not just a small website or company. What does it look like? Is there like a trauma room or is there like, how does that ring up to the top at. And what did that even mean? What did that mean to Cloudflare? What is that? What is Facebook, Dan, how do you explain that?

Well, it's so interesting because you're like into DNS and bgp, which are, by the way, things that I'm really into and our team is into because it's the like underlying their underlying technologies that make the Internet work. It Was a big day. It's just like, whoa, what's going on? This was a big kind of moment, learning moment, I would say. And so. And so from the. It's one of those things where I was like, wow, it's pretty cool that, like, DNS that I talk about every day is, like, all of a sudden coming in really handy. A lot of people, a lot of friends ask me, like, what? What's going on? And I could actually explain.

I texted you. I go, well? She goes, oh, this is a good day for us DNS geeks. That's what you're texting me back. But I don't even know what that means. So just in English, what does it really mean?

Yeah, what does it really mean? So I think that, like, at the end of the day, what it means is for all of us. And again, I'm really big on digital literacy. Like, you should, if you don't understand any of this, you don't have to be experts, but don't lean out, lean in. Like, just learn a little bit more. This is not going away. It's only going to become more important. So, like, I just, like, I fundamentally believe that. And so what. What Facebook going offline meant for six hours is it's a reminder that the Internet is very complex and interdependent. It's an interdependent system of millions of systems and protocols working together, which is beautiful. It's beautiful that it's like millions of these systems and protocols working together, and it's super complex. And there's something really elegant about that. And so that's. If there's one thing. But what happened with Facebook was they went offline for six hours, and it was an internal mistake that caused it. And they have a lot of smart people working on it. And for Cloudflare, it really meant very little things. I mean, there were some secondary order effects that happened, but they're not. A Cloudflare customer had nothing to do with us, but we were just like, wow, as technologists who understand how the Internet works, how can we help explain this to the world? And what is. And by the way, okay, based on what we know, what happened to them and what ended up happening is they lost access to what you would call a control plane to go fix the problem. They knew they had a problem very quickly and what their problem was. The best way to explain it is think about, you're mailing a letter, okay, you're going to mail a letter online. You put an address so you know where the letter is. Going so. And then there are a bunch of routes to get from work from Phoenix, Arizona to, let's say you're mailing something to New York City. There's lots of different ways you can get there with the post office, not just one route. The Internet's the same way. You want to go get something from one place to another. There's lots of different routes to get there. What Facebook accidentally did is they erased access to all the routes of how to find themselves so their address still existed, but no one could find it. That's basically what happened. And the way the routes defined it is called bgp and DNS is how you like the location of where they are. They raced all the routes. They raced BGP to go find where they were. And so nobody could find them. So none of us could access anything. Big problem. They knew very quickly what was wrong very quickly. But they couldn't fix it because they basically couldn't get access to what they needed to go fix it. And for a bunch of different reasons. And so they've written some postmortem since a little bit. I think that'd be awesome if it was even more transparent and more detailed. But I think what was interesting to us at Cloudflare was, well, one just what happened. And I think just like from a. From people who love how the Internet works, understanding how could this happen, what happened before we even knew, kind of helping explain it to everybody because it was getting a service that a lot of people use. It's not Even Facebook, it's WhatsApp and Instagram. And people are using this to connect with their families. Like it was what is going on. And they did not communicate a lot. But what was super interesting. And I think that this is something that I encourage everyone's team, if you work at a company to encourage your team to go. It's like, if that happened to us, what could we tighten up now so we are stronger as a business? And so it's almost like how can we learn from Facebook's mistakes to all get better as an industry? Because again, the Internet's complex and it's interdependent systems of millions and millions of systems and protocols working together. It is going to happen again. It's going to happen to somebody or something visible. So how do we make all tides stronger? And I think that that is this constant evolution of learning from others people's mistakes. We all get better is a good takeaway from what happens with Facebook. We should use this to all get better as the Internet.

Yeah, that's great. Is there any chance that it was foul play or is it just a mistake?

It was a mistake. Almost always. What's interesting is because of this, this, the routes, this thing called bgp, which is again, the. The routes to get to where they live. Like, that's really the best analogy I can use. Every time there's a BGP mistake, it's almost. Because it's a mistake, not an attack.

Got it.

It's almost always. And there's a term for people who follow this. It's called fat fingered. Like, it's just. It's a. It's a mistake. And it's kind of like, how can one mistake bring down something like that? And then why did it take so long to restore it? But again, the Internet's complex and interdependent systems and millions and millions of systems and protocols working together. And that's both the beauty of it, but also the frustration part. It's kind of like golf. I know you're a big golfer. There's some relation to golf.

I think it's a relation to trading in trading. They call it fat finger trade, but it's generally somewhat malicious in the sense it's a rogue trader pushing a button to do a trade trade when they don't have the authority to do it. So fat finger might mean a little bit different financially because usually it leads to a bank getting crushed. You don't hear about fat finger trades and go, that guy killed it. He had a great trade with his fat finger. Generally, it's different. So that is fantastic. Well, I've taken up more than the hour, so I'm going to let you go. I can't wait to try and have you back when the stock doubles again. Not that you're promising that I did. No, I didn't do that. So, Michelle, thanks so much. I appreciate you taking the time out from the large company. So glad you guys are doing well and that Jamie's doing well and that Matthew's doing well, and I appreciate all your hard work. We do at stock to a lot of our portfolio companies, so I appreciate it.

Well, this has been really fun, Howard, I love this. Thanks so much for having me. And thanks to all the listeners, and if I can be ever helpful, please reach out.

Thanks, Michelle.

All right, talk to you soon. It's been awesome.

Cheers. Bye. That's a fascinating business. Well, it's fascinating because you're a geek in that. What's fascinating is I wouldn't have when they did their pitch and they won TechCrunch pitch, I wouldn't have gotten it right because you would say, oh, well, Google does this and you wouldn't know you need it. And now you're just like, wait, once you hear the pitch, you're like, oh my God, buy the stock. You know what I mean? Once you get it, it's the Internet. And like she said, the more they do business 250 locations, the harder it is to compete against them. Much like aws. So very interesting company. No fanfare when it went public at around $15 a share a few years ago and to the point where I was a little skeptical that I was a friends and family shareholder wiring money to buy my shares and going, I don't know if they're doing me a favor. And it wasn't a I took risks. But the point is I've learned a lot by owning the stock and following the story. So there you have it. Michelle Zatlin, mom of two. We didn't even get into that and how she was brought up. But the subject of the Internet is fascinating to me. Appreciate you listening in. This is panic with friends. No panic in Michelle. No panic in all my guests. That's the idea here. We all have these moments of panic. We had it in March of 2020. That's disappeared and today everything is about the Internet and growth and crypto. I love talking to entrepreneurs, founders, traders, investors trying to get a few steps ahead of the future and see where the world is headed. If you like this type of investing and interview and discussion, just search my name. Howard Lindson, Apple Spotify. I have a YouTube channel. Subscribe and you'll get an alert when we do the show once a week. Thanks, Knut. Thanks, stocktwits.

Howard Lindsin is the founder and general partner at Social Leverage. All opinions expressed by Howard and podcast guests are solely their own opinions and do not reflect the opinion of social leverage or stock twits. This podcast is for informational purposes only and should not be relied upon for decisions. Guests may maintain positions and securities discussed in this podcast.

Interesting because you're like into DNS and bgp, which are, by the way, things that I'm really into and our team is into because it's the like underlying their underlying technologies that make the Internet work. It was a big day. It's like, whoa, what's going on? This was a big kind of moment, learning moment, I would say. And so. And so from the. It's one of those things where I was like, wow, it's pretty cool that like DNS, that I talk about every day, like, all of a sudden, coming in really handy. A lot of people, a lot of friends asked me, like, what's going on? And I could actually explain.

I texted you. I go. She goes, oh, this is a good day for us DNS geeks. That's what you're texting me back, But I don't even know what that means. So just in English, what does it really mean?

Yeah, what does it really mean? So I think that, like, at the end of the day, what it means is for all of us. And again, I'm really big on digital literacy. Like, you should. If you don't understand any of this, you don't have to be experts, but don't lean out, lean in. Like, just learn a little bit more. This is not going away. It's only going to become more important. So, like, I just, like, I fundamentally believe that. And so what. What Facebook going offline meant for six hours is. It's a reminder that the Internet is very complex and interdependent. It's an interdependent system of millions of systems and protocols working together, which is beautiful. It's beautiful that it's like millions of these systems and protocols working together, and it's super complex. And, like, there's something really elegant about that. And so that's the. If there's one thing. But what happened with Facebook was they went offline for six hours, and it was an internal mistake that caused it. And they have a lot of smart people working on it. And for Cloudflare, it really meant very little things. I mean, there were some secondary order effects that happened, but they're not a Cloudflare customer had nothing to do with us, but we were just like, wow, as technologists who understand how the Internet works, how can we help explain this to the world? And what is. And by the way, okay, based on what we know, what happened to them and what ended up happening is they lost access to what you would call a control plane to go fix the problem. They knew they had a problem very quickly and what their problem was. The best way to explain it is think about, you're mailing a letter. Okay? You're going to mail a letter online. You put an address so you know where the letter is going. So. And then there are a bunch of routes to get from work, from Phoenix, Arizona, to, let's say you're mailing something in New York City. There's lots of different ways you can get there with the post office, not just one route. The Internet's the Same way you want to go get something from one place to another. There's lots of different routes to get there. What Facebook accidentally did is they erased access to all the routes of how to find themselves, so their address still existed, but no one could find it. That's basically what happened. And the routes to find it is called bgp and DNS is how you like the location of where they are. They raced all the routes. They raced BGP to go find where they were, and so nobody could find them. So none of us could access anything. Big problem. They knew very quickly what was wrong very quickly, but they couldn't fix it because they basically couldn't get access to what they need to go fix it. And for a bunch of different reasons. And so they've written some postmortem since a little bit. I think that'd be awesome if it was even more transparent and more detailed. But I think what was interesting to us at Cloudflare was, well, one, just what happened. And I think just like from people who love how the Internet works, understanding how could this happen, what happened before we even knew, kind of helping explain it to everybody. Because it was getting a service that a lot of people use. It's not Even Facebook, it's WhatsApp and Instagram. And people are using this to connect with their families, like it was what is going on. And they did not communicate a lot. But what was super interesting. And I think that this is something that I encourage everyone's team. If you work at a company to encourage your team to go, it's like, if that happened to us, what could we tighten up now so we are stronger as a business? And so it's almost like, how can we learn from Facebook's mistakes to all get better as an industry? Because again, the Internet's complex and it's interdependent systems of millions and millions of systems and protocols working together. It is going to happen again. It's going to happen to somebody or something visible. So how do we make all tides stronger? And I think that that is this constant evolution of learning from others people's mistakes. We all get better is a good takeaway from what happens with Facebook. We should use this to all get better as the Internet.

Yeah, it's great. Is there any chance it was foul play or is it just a mistake?

It was a mistake. Almost always. What's interesting is because of the routes, this thing called bgp, which is again, the routes to get to where they live. That's really the best analogy I can use every Time, there's a BGP mistake. It's almost. Because it's a mistake, not an attack. It's almost always. And there's a term for people who follow this. It's called fat fingered. That it's a mistake. And it's kind of like, how can one mistake bring down something like that? And then why did it take so long to restore it? But again, the Internet's complex and interdependent systems and millions and millions of systems and protocols working together. And that's both the beauty of it, but also the frustration part. It's kind of like golf. I know you're a big golfer. There's some relation to golf.

I think it's a relation to trading. In trading, they call it fat finger trade, but it's generally somewhat malicious in the sense it's a rogue trader pushing a button to do a trade when they don't have the authority to do it. So fat finger might mean a little bit different financially because usually it leads to a bank getting crushed. I mean, you don't hear about fat finger trades. They go, oh, that guy killed it. He had a great trade with this fat finger. Generally, it's different. So that is fantastic. Well, I've taken up more than the hour, so I'm going to let you go. I can't wait to try and have you back when the stock doubles again. Not that you're promising that I did. No, I didn't do that. So, Michelle, thanks so much. I appreciate you taking the time out from the large company. So glad you guys are doing well and that Jamie's doing well and that Matthew's doing well, and I appreciate all your hard work. We do at stocktwits, a lot of our portfolio companies, so I appreciate it.

Well, this has been really fun. Howard, I love this. Thanks so much for having me. And thanks to all the listeners, and if I can be ever helpful, please reach out.

Thanks, Michelle.

All right, talk to you soon. It's been awesome.

Cheers. Bye. That's a fascinating business. Well, it's fascinating because you're a geek in that. What's fascinating is I wouldn't have, you know, when they did their pitch and they won TechCrunch pitch, I wouldn't have gotten it right because you would say, oh, well, Google does this and you wouldn't know you need it. And now there's like, wait, once you hear the pitch, you're like, oh, my God, buy the stock. You know what I mean? Once you get it, it's the Internet. And like she said, the more they do business 250 locations, the harder it is to compete against them. Much like aws. So very interesting company. No fanfare when it went public at around $15 a share a few years ago and to the point where I was a little skeptical that I was a friends and family shareholder wiring money to buy my shares and going I don't know if they're doing me a favor and it wasn'. I took risks. But the point is I've learned a lot by owning the stock and following the story. So there you have it. Michelle Zatlin, mom of two we didn't even get into that and how she was brought up. But the subject of the Internet is fascinating to me. Appreciate you listening in. This is Panic with Friends. No panic in Michelle. No panic in all my guests. That's the idea here. We all have these moments of panic. We had it in March of 2020. That's disappeared and today everything's about the Internet and growth and crypto. I love talking to entrepreneurs, founders, traders, investors trying to get a few steps ahead of the future and see where the world is headed. If you like this type of investing and interview and discussion, just search my name. Howard Lindson Apple Spotify have a YouTube channel. Subscribe and you'll get an alert when we do the show once a week. Thanks Knut. Thanks stocktwits.

Howard Lindzen is the founder and General partner at Social Leverage. All opinions expressed by Howard and podcast guests are solely their own opinions and do not reflect the opinion of social leverage or stock twits. This podcast is for informational purposes only and should not be relied upon for decisions. Guests may maintain positions and securities discussed in this podcast Panic.

We had it in March of 2020. That's disappeared and today everything's about the Internet and growth and crypto. I love talking to entrepreneurs, founders, traders, investors trying to get a few steps ahead of the future and see where the world is headed. If you like this type of investing and interview and discussion, just search my name Howard Lindson Apple Spotify YouTube channel subscribe and you'll get an alert when we do the show once a week. Thanks Knut. Thanks stocktwits.

Howard Lindzen is the founder and General partner at Social Media Leverage. All opinions expressed by Howard and podcast guests are solely their own opinions and do not reflect the opinion of social leverage or stock twits. This podcast is for informational purposes only and should not be relied upon for decisions. Guests may maintain positions and securities discussed in this podcast may maintain positions and securities discussed in this podcast.