SF Conference 2013 CASE STUDY: Michelle Zatlyn - Scaling a Company To A Billion Views A Day

I should talk. When I wrote my first book, AOL.com, i was on the Charlie Rose show and I saw it the other day. Unfortunately, it's on Google. It's still there. And I have shoulder pads going on. I forgot about them. Anyway, the next speaker, we're going to talk about a case study in scaling a company from founding to the next billion. It's a really important topic because scaling, scaling is what's important. Fran was just talking about. It stays small. It stays small, and so it's really important to get it to the next levels and it's a very difficult thing for many, many, many startups. Michelle Zatlen is the co founder and head of user experience at Cloudflare. And she grew up in Canada, earned a degree in chemistry and applies the scientific method to building businesses. I'd love to know what that means. Prior to Cloudflare, she worked at Google and Toshiba, launched two successful startups, and got her MBA from Harvard Business School. She has a degree, Bachelor of Science in Chemistry with a minor in Management from McGill University, and again has the MBA from Harvard and was awarded the Dubliner Prize for entrepreneurship. So she's a true slacker. So without further ado, let's bring her on. Rebecca, is this it?

Yeah. This one. Okay, great. Hi, good morning. Thanks, Kara, for that great introduction and it's a real pleasure to be here. So my name is Michelle Zatlen and I'm the co founder and head of User experience of Cloudflare. And today I'm here to tell you a little bit about our story. We started the company three years ago and we've grown really quickly and I want to share a little bit of some of the things I've learned along the way. So I just want to start by saying, what is Cloudflare? Well, our value proposition is really simple. For any website, we will make it load twice as fast for its visitors. We'll protect any web property from a range of online web attacks. We'll make sure you're always online, no matter how much media attention you get or whatever, surge in traffic, and it only takes 5 minutes to sign up. Pretty good. Pretty compelling value proposition, right? Or the reason why we all come to work are our team believes that we're building a better Internet. So how do we do that? We have this global distributed network literally all over the world, and every month we do 100 billion page views through that network. That's over 3 billion page views a day. This is what that looks like for the last 27 months that we've been in the market, this is what our growth rate has looked at. We've grown about 22%. Thank you. 22% month over month, consecutively. And it's not slowing down. That's more traffic than all of these really popular websites combined. Again, tiny startup in San Francisco that's doing this. In 2012 alone, we saved almost 900 lives that people otherwise would have waited for a website to load because they were using Cloudflare. Just like almost 900 lives. That's just the magnitude of how many people are using our network. We have over 500,000 customers, and we sign up 2,000 more customers every single day. And these are websites you've heard of. You guys have gone to our network? Basically, web properties like StumbleUpon and Imgur. There's E commerce websites, there's a lot of financial websites using us. There's pop culture, educational properties, charities, hobbies, other types of hobbies, national governments, local governments. I mean, it's pretty amazing how global of a reach Cloudflare is achieved. Today. About 90% of people in this room have probably had a better Internet experience because of Cloudflare. Today we do 3% of all Internet's traffic passes through our network. And by the end of this year, we're going to be at 10%. So this is how fast we've been growing. So how do we do this? I wish I could say that there was some ingredient list and I could just give it to you and you can just go do it. But the reality is, there's no silver bullet. It's a combination of a lot of different things. But I do think that there are four essential criteria that in your own businesses or in your own careers that you should ask yourself. So the first is, are you going after a big market? Our market is any website, web app, or web property. When we started, that seemed crazy, but it's a huge giant market. So ask yourself, is what you're working on going to impact 100 million people? And the reason why that's important is no matter how big or small the idea is, it's the exact same amount of work. And so you want to go after something that impacts a lot of people. A big idea is easier than a small idea. So that's the first thing. Are you going to impact 100 million people? The second thing is the right team. Now, this might seem really obvious, but everything I just described we did with less than 40 people. It's a really small team. So quality matters more over quantity. So the people you're hiring, do they have expertise in what you need them to be doing, not training them, but can they help you get to where you're going faster? Are they passionate about your vision? Every single person at Cloudflare believes in building a better web. And we won't hire anybody unless they do. You don't need managers when you're early stage. You need people who are going to actually do the work. So will they actually create and contribute and get things done, not just oversee and implement process. And finally, you're going to work really, really hard. So whoever you hire, they need to be able to be willing to work really, really hard because they're in love with what they're doing. The number three is execution. So the average product cycle at a big company is 14 months. If your startup has any chance of succeeding, you have to move faster. And so you have to be executing things faster than whatever the incumbent is doing. And you always have to remember that are you pushing the ball forward? And finally, I think this one's not talked about enough is ease of use. This is the new killer feature. The average time designed for Cloudflare is 4 minutes and 48 seconds. We time it regularly. Our nearest competitor takes two weeks. Two weeks. This is what's fueled our growth. And so in your own businesses, ask yourself, how do you lower the friction or lower the barrier for people using your service? And if you get that right, it's magic. So if I was sitting in your seats right now, such lucky souls, and thinking about what I was doing next or working on my next idea, here are five things that I would do again, because I think that they worked really well. So the first is choose partners wisely. So three of us started Cloudflare. Lee, he's a technical genius. Matthew, he is the big vision strategy co founder and I'm the third. Michelle and I get things done. You need all three to make a company work. This is a Venn diagram back from my science days. You want to cover with your co founders as much surface area as possible. You want different people than you again, Lee, Matthew and I, we are such different people. There's no confusion over who's going to work on what, because we have totally radically different skill sets. If you and your co founders are having problems deciding who's going to work on what, then they probably aren't the best co founder. I'm sure they're really wonderful people, but you want people who are different. You want to cover as much surface area as possible, but you do need Some overlap. You need a shared vision, you need shared ambition, and you all have to be working towards the same thing. So the choose partners wisely. That applies to both at work and at home, to life partners. I'm married. I have an amazing husband. He's my biggest champion. I wouldn't be able to have done this without him. And so you want someone at home who is saying, you can do it, you're gonna do it, keep going for it. And it turns out not everyone does that. Second thing is hold team accountable. So this is a snapshot of our team. I want you to focus in on the right hand side there on the. Not on me, on the whiteboard. So I don't know, you can see the sticky notes. Post the post it notes. So for three years, this was our planning process. We would plan in three rankings week increments and every single person on our team, we'd have their name on the whiteboard and what they were going to do that week. Friday at 5 o' clock, we'd have a meeting. 5 o' clock on Friday, everyone was expected to be there. And we'd go person by person. They would stand up, go sticky note by sticky note. Did I get what I was supposed to get done, done. And if I did, I got to bring it down. And if I didn't, it stayed up. And at the end of the three weeks, the goal was as a company to have a white, a clean whiteboard. This is not high tech, but it worked really, really well. We held every single person on our team accountable. And there's nothing more, you feel nothing more than pride than when you're in front of your colleagues saying, I did everything I was supposed to get done this week done. And there's nothing that feels terrible when you feel like you let your team down because you didn't get what you said done. And it helps identify bottlenecks and all these sorts of things. And so I don't care if it's lean method or agile or scrum or kaizen or whatever the method you want to use is just pick something and hold your team accountable. Get your own office early. I mean, co working space is great, but after certain, after three or four people, you need your own office. This is not a frat house. This is not a sorority house. Get your own office. It's going to impact your culture, build a voice. So it doesn't matter if you have a product ready. Start blogging. And you might think, oh my God, why would anyone care what I have to say? Because you're an expert at something and start writing about it. People want to hear about it. And obviously you want to share that on Twitter and Facebook, but there's lots of other places that are looking for content. The Women 2.0 blog is always looking for contributors for people who have high quality content. Hacker news. Great place to submit your blog post to try and get pickup. Even without a product, you can build this voice early and an audience. So once you do have a product or as you gain momentum, you have an audience that is listening to you. So it's really powerful. And unlike the CEO of a public company, you can have a personality. So use it and finally launch an event. I think launching an event like Women 2.0 today or TechCrunch Disruptor Launch makes a lot of sense. Early on in a startup, you need early adopters, you need investors, you need media attention, you need partners. All those people come at these sorts of events to find the next big thing and you're it. And so that's all obvious, but the real reason why launching an event makes a lot of sense is nothing motivates a team like a deadline that you can't change. All right, so here are the four things I would do differently. Some obvious, some less obvious. I think that it's so clear what we're working on at Cloudflare. We communicate it all the time, but it's. I mean, I'm talking about it every single time I have a conversation, what we're doing. And I think, again, we communicate to our team a ton, but it's still not enough. You gotta do it again and again and again and again. And they appreciate it, you appreciate it. And enough is never enough. This is not obvious. Be smart with personal security. When we started, we were literally students. We used my Matthew cell phone. When we registered as a company, we used his home address. Three years later, we're a big target. He ended up on the COVID of Wired magazine in February. He was hacked. His AT&T voicemail got hacked. They hacked into his personal Gmail account and they used that to get into his Cloudflare email address. It was terrible and violating and everything worked out fine. But please don't make our mistake. Take this stuff seriously. Just take it seriously. Early on, you're building a personal brand. Own it. Buy your own domain name. Otherwise someone else will. There is now Michelle Zatlin fan club@michellezatland.com but I assure you, I don't run. Don't let this happen to you. You think again. It feels silly on Day one. But if things really take off, it's too late after the fact. And finally someone told me this and I didn't listen. And so I'm going to share it with you and I hope you guys do listen. Take a lot of photos because I wish I could show you some, but I literally have like three. And it's such a rocket ship that changes over time and you can never go back. And so having photos along the way are really, really valuable. So I just want to close by saying that the really big ideas seem crazy when you start. I mean, when we started Cloudflare, we said we're going to build a better Internet. People laughed at us. Literally. Really smart people said that was crazy, impossible, would never work. But no one knows your business or your vision or your passion as much as you do. So sometimes you just gotta trust yourself and go for it. So good luck. Who has michellezatlin.com I don't know. It's a Tumblr blog. So maybe someone at Tumblr can help me get it back.

But many Michelle Zatlin's are there.

No, no, that's me. They have the Michelle Zatlin fan club running it.

Oh, okay, that's good. That works out.

Oh no, it's definitely me. They're running it on my behalf, I guess.

I own all the Kara Swishers. I bought them like in the 90s.

See, smart woman. Yeah, Follow Kara's lead.

I also wrote so it is written. You remember from Moses. Anyway, so it shall be done. Okay, couple questions. I'm serious about getting up right over here. Right here. Why don't you go to the mic right there? It's not far. Two questions. That is all.

So you have an amazing background in terms of education. MBA for some of us in like our mid to late 30s and have a lot of experience in terms of implementation or doing and want to take that to the next level. You know, one of the things that I look at startups, I see a lot of men in suits with MBAs running companies. So what do you recommend? I guess is it worth an investment potential? Potential long term. Looking at that, I mean, that's something that a lot of us I think are thinking about as well, like go the education route to try to get in that way or just try to jump in and do it.

Look, I had a great MBA experience. There's so many people who hate MBAs. It's very controversial subject as almost everything is. I think an MBA means nothing. It's the person behind it. So Just because you have NBA, who cares? It's more what you do with it. Same like if you don't have one, you should, it doesn't matter. I mean, again, I don't know enough about your personal situation, but if you have a lot of great working experience and you see a problem that you care a lot about that you think that you can solve, assemble people on your team that maybe have the skill sets that you don't. So you know, if you, if again, some of the skill sets maybe an MBA brings are some financial and accounting and just general strategy, business acumen. And if you feel like you're missing that, then find a co founder that does have that. And then together you guys will help have a really strong team. And so I think this is where you can leverage the power of co founders who have a different background than you. And again, I don't. I think that if you can do an MBA early in your life and you're excited about doing it, then you should go for it. Don't let someone get in the way of what you think is important. But I don't think it's a necessity to be successful.

What about a computer science degree?

I don't have a computer science degree.

I would suspect it's more important in tech to have that than of course.

I mean, although I doubt you're going to go get your computer science degree. But yeah, of course, if you can, the more technical you can be. I am not. I don't have a computer science degree. Obviously I wish I did. Every single person working in technology says the same thing. Having said that again, it shouldn't stop you. I mean, I run a web infrastructure company. I have learned a ton over the last three years. Every time I hear a word I don't know, I look it up. I read constantly. You can take tons of classes online, so if you're curious. I think being curious is more important than if you don't have the degree. If you're curious, you can overcome a lot. You can get a lot further along the way.

Okay, one more question quickly. Right here. There's one right here.

Elena Moska, Globe llc. Michelle, a couple of years ago you spoke at Silicon Valley forum for foreign born CEOs. And I've been kind of paying attention to what you're doing ever since. And you talked a bit about challenges and advantages for women who grew up in different cultures trying to launch businesses on US soil. So from your perspective, has it been an asset where it allowed you to think more out of the box? And be bolder or has it been an inhibitor having to adjust to all of the cultural differences?

Okay, so if you're a foreign entrepreneur trying to start a company in the US it's really hard. The good news is there's a lot of great people, a lot of great Americans who are trying to fix that with making immigration easier. It's hard to get a visa. It really is, I'm not going to lie. But possible lots of point proof points where it's possible. Get a good immigration lawyer. Second thing, I mean I again, I'm really lucky. I have two awesome co founders who I don't even think they think of me as a woman. They just think of me as their business partner and we've been able to achieve a lot. And so personally for me it's not been a problem. Having said that, I know lots of women where they are constantly have challenges because maybe they are a woman and that's too bad. But not everyone in the Valley is like that. I mean our investors are terrific. I know a lot of them are looking for Michelle's to put into their other companies because they see the value of having diversity on the team. And so again, I think instead of getting hung up on oh, is it getting in my way? Just go do it, just go get it done and keep pushing it forward because there are people out there that will champion for you.

It's a big issue in Silicon Valley is helping people get visas. Although you know, you Canadians are so troublesome.

We have to watch. I have to play by the same rules.

Anyway, thank you very much.

Thank you, Michelle. Thanks.