From Sequoia VC to Startup Stardom with BigPanda’s Assaf Resnick

I've just released a book from grassroots to greatness 13 rules to help you build iconic brands with community led growth. We cover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike to Saster to Gainsight to give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomena. Check it out at from grassroots to greatness dot com. The digital copy is on for 99 cents.

It's about generating product market fit and that's a really good thing for the founders to be doing by themselves because there's so much iteration. But then it's hey, okay, we've got product market fit. Now it's time to start putting together a go to market machine. And so those initial hires, your first marketing hire, your first sales hire, your first customer success hire so critical. And then you get to a certain point of scale where it's hey, we need to be more thoughtful about our culture. We need to be more thoughtful about performance management. We need to be more thoughtful about a recruiting machine. And so that head of people that is Chro, incredibly essential. Hire those executives that you can bring that can help you develop new muscles.

You don't need all of those in.

Day one, but you certainly need those along the way. And then you also have to be thoughtful about the executive that gets you from 5 to 20, various different skill set from the executive that's going to get you from 50 to 500. And the CHRO that you need when you're a hundred people is very different from when you need when you're 300 or 500 people. And part of the job of a CEO to make sure you have the right leaders at the right time. That's a very hard thing and takes a lot of constant introspection. I need some traction. You need some traction. Let's get some traction.

Hey, what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host, Lloyd Lobo. We're a community of over 100,000 people just like yourself on a mission to help you get the methods, the money and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana and many more. Hey, Traction fam. Our guest today is a tech trailblazer who's gone from rocking the venture capital scene at Sequoia for six years to spearheading Big Panda, a game changing AI ops platform. He steered the company to snag an eye popping 337 million in funding. And he's got heavyweights like PayPal and Kaiser Permanente and Blizzard on speed dial. Beyond the boardroom, he spills the beans on scaling, funding, acrobatics and the art of scoring. A list customers. Welcome to Traction Asaf. How you doing?

Good. Thanks for having me. It's a pleasure.

I am super excited about your journey, going from an investor to an entrepreneur. All the learnings. Because in the last couple years, investors are starting to get a bad rap. Hey, especially with everything that's happened, right? A lot of money went into startups that were overvalued, the valuation fell, and the advice went from grow at all costs to now grow profitably. But you've bridged this gap. You've gone from being the investor to being an entrepreneur. So let's start there. How or why did you decide to make the leap from being an investor? Because being an investor at Sequoia especially, I'm sure, is great money. Why go on this deep end?

It's not about the money, it's about the growth mentality, the challenge. I'd say for me, in my high school, in my 20s, I was never hungry, always a smart kid. In my 20s, I did well, but I never really applied myself. And then I got a job at Sequoia and it was a turning point in my career because I had the privilege of working with these amazing entrepreneurs who had vision, who had courage, had hunger. And I saw some succeed wildly, some did not, but all of them came and gave it a hundred percent. And I said to myself, I like what they're doing and I want to give that a shot. And I don't think these people are terribly smarter than I am. They're just a hell of a lot more courageous and a hell of a lot hungrier than I am. And that's what really made the shift for me of I want to be in the action. I want to be turning an idea into, into a reality and putting a dent in the universe. So it wasn't about the money, it was about the challenge and growth.

I talked to so many entrepreneurs, successful ones, unsuccessful ones, and that is a common trait. It's not the money, it's the impact. It's what can I change? They're either frustrated by the status quo, want to prove the naysayers wrong, or there's something that's just this burning desire. Now, having the desire to build a company is one thing, but having an idea that you're passionate about that you want to focus on over everything else for the next 5, 10, 15 years is different. How did you find that?

Completely by happenstance, we actually started a company called Big Panda that was in a very different direction. I knew I wanted to start a company. I had an idea together with my technology co founder in the advertising technology space, how do you take lots and lots of data in social media and turn that into shopping and tent? This was 10 years ago when things were new and we started down that path and actually took seed funding from Sequoia Capital down that path. And after a year we realized, hey, advertising technology is not where we want to be. But while we were down that path for a year, we had a problem that we had to solve for ourselves. That was the inception of what Big Panda is today. And the problem was when you're doing advertising technology, you have to do web scale infrastructure. Hundreds of millions of people are surfing the Internet concurrently. They want things to work really quickly. So we had to build high performance infrastructure. We did it with the modern cloud native stack. So lots of cloud, lots of SaaS, lots of open source. And when we had issues with performance and latency, took us forever to find and fix which of these 17 different silos of our stack was there a problem. So we had to hack together some software for ourselves to be able to find and fix problems faster. And we kind of fell in love with that problem. We said, hey, here's a problem we were solving for ourselves and we're moving to the cloud using cloud native environments just like everyone else is. Maybe everyone else has this problem. And so the inception of the idea really came out of scratching our own itch or solving our own problem. This wasn't hey, we sat in the laboratory whiteboarding ideas, this was hey, here's a problem we have, we solved it for ourselves and then we say, let's go solve that for everyone else.

That's how some of the greatest companies start, right? Because building a company is part data and part love or passion. And if you just go alongside data, it's hard to understand the emotion behind the problem because you're not facing it, you're not experiencing it. And a lot of what we buy, what humans buy, and until we live in a world where humans are buying from humans, emotion will be a huge part of it. So I like that story. Now, were there any learnings that you experienced as an investor funding many, many companies over the years? You were at Sequoia that you brought to the journey of building a startup and I know it's not the same being an investor and then doing a startup. But you must have had some key crucial learnings. I like the Mike Tyson quote also which says that everyone has a plan until they're punched in the face. So. But maybe you had some learnings from your experience working alongside fund companies.

There's a million learnings and it's go on a random tangent. We all grow up saying we're never going to be like our parents, we're going to be just like our parents. We're going to be nothing like our parents. And then we have kids and then you turn out. That's when all this knowledge and all this like pattern recognition that you got from your parents comes up and you end up once you have three kids, just like your parents. I'd say same thing here. There's a lot of things I learned as a venture capitalist, seeing the cycles of other people. All those learnings didn't come out in the first year of the company. Those learnings continue to come out. So some of the ones in the early years, until you find product market fit, make sure you're really smart about your burn, make sure you're doing things in a very lean way and make sure you're focused on. It's not about sales and growth at the first chapter. It's around finding that product market fit. That's an art. Everything else is a science. And so that's a big one. Definitely seeing enough cycles to know those first few handful of employees. That's a very important decision because those people will define the culture of your company for the rest of time. So you have to be really, really thoughtful about who are those first five to seven people because they're going to bring their friends and those are people are going to bring your friends. And before you know it, you're a hundred people. You've got a culture, you've got an operating rhythm and a lot of it was set from that beginning trajectory.

How big is big panda today?

Today we're about 300 people. Wow.

And when did you start the company?

About 11 years ago.

Wow. So that's a long journey. I asked that because you've mentioned people a couple times as you were starting out. From the early days to now scale, who are the key hires you made along the way that were pivotal to this journey?

There's so many. There's so many. And it depends on where you are. We started off with a very tech heavy group of individuals because we were building the initial platform and me and my co founder were the folks to sell the first three, $4 million worth of product. Because at that point, the journey to $3 million is not about generating revenue, it's about generating product market fit. And that's a really good thing for the founders to be doing by themselves because there's so much iteration. But then it's hey, okay, we've got product market fit, now it's time to start putting together a go to market machine. And so those initial hires, your first marketing hire, your first sales hire, your first customer success hire, so critical. And then you get to a certain point of scale where it's hey, we need to be more thoughtful about our culture, needs to be more thoughtful about performance management, we need to be more thoughtful about a recruiting machine. And so that head of people that is chro incredibly essential. Hire those executives that you can bring that can help you develop new muscles.

You don't need all of those in.

Day one, but you certainly need those along the way. And then you also have to be thoughtful about the executive that gets you from 5 to 20. Various different skill set from the executive that's going to get you from 50 to 500. And the CHRO that you need when you're 100 people is very different from when you need when you're 300 or 500 people. And part of the job of a CEO to make sure you have the right leaders at the right time. That's a very hard thing and takes a lot of constant introspection.

I've experienced that myself. So I wanted to ask, what were those key inflection points? I guess the first one is product market fit. You pivoted to the AIOps platform. At what point did you know you had product market fit?

It took us a while. We launched the product in 2015 and the first, I'd say 18 months was not great. The market, it didn't take off like wildfire. I know now we were in the right place at the wrong time. And so we come to customers and a lot of our value proposition, we come to large enterprises who are moving to the cloud. They're modernizing their approach to it. They're doing cloud, they're doing microservices, they're doing open source, they're doing cicd. All these new ways of we call cloud native. That lets companies be way more agile in the product development. And we saw that coming. But in 2015, when we came to enterprises and sold our platform, what we heard was, hey, we know cloud is coming, we're experimenting with cloud, but we haven't moved Our mission critical assets there, we haven't really embraced cloud and cloud native. And so the problem that you're solving for us is a future problem. And only in 2017 did you see that kind of tipping point in the overall market where enterprise adoption of cloud moved from I'm experimenting with cloud to no, I'm really taking cloud seriously. I'm really putting a lot of our mission critical assets. And so in 2017 was when some big companies came and said, hey, we've got this problem, we want to partner with you. And that's when the market really took off. Those first few years were hard because you don't know. Those 18 months, two years, you don't know, hey, is this a timing issue and the market's just not there or do I have the wrong product or am I just failing? And so you have to have a CEO, a lot of conviction and very thick skin to be able to go through those periods before you have product market fit. It's quite a roller coaster.

How long did it take you, given considering the pivot and everything else, to.

Get to product market fit? After we pivoted and said, hey, we want to do AIOps, it probably took us, I'd say a year of core development of the platform, then we launched it, then probably another 18 months. It was a good two and a half year journey to product market fit. And you know, that's tough emotionally, like you, you gotta be tough.

It is. Some of us have been there and, and understand the emotional roller coaster it is. But I love what you said. You and your co founder sold the first 3 or 4 million and that is very commendable. In the last week I've talked to three founder friends who've burned through tens of millions of dollars building tech and now are on the brink of having to potentially shut down because they don't have any customers. It's easier to build product in 2023, it's harder to get customers. How did you make that leap? Did you always have the ability to sell?

No, I never saw myself. You know, I'm a reasonably communicative guy. You just do it. You do it because you have no choice. You do it cause you have no choice. So you just got to hustle those first few million. Today we have a sales machine, we've got marketing, we've got a very well built out pipeline and it's got stages. But back then we just had hustle. So I would meet with anyone I could, investors, executives at large companies, friends, family, and was just hustling for introductions for people in CIOs and people in operations and engineering and you gotta kiss a lot of frogs to find your friends.

You started with the enterprise, that's a big leap too, isn't it? Like it's hard to sell enterprise. You haven't sold, you never saw yourself as a salesperson and now all of a sudden you're on the deep end selling to a long sales cycle enterprise that would have been emotionally challenging in and of itself.

Well, that was part of the journey to product the market fit. When we started selling it first we didn't know are we selling to enterprises or are we selling to the mid market or are we selling to Silicon Valley startups? We didn't know. And like I said, In 2017 the market really started waking up. And when I, when we exited 2017 and started looking at our customers and saying, okay, well we have a lot of different kinds of customers. We have customers that are paying us big checks, we have customers that are paying us very small checks.

What are the exchange, what is the biggest check and what is the smallest check?

Well now it's very different. Now it's typical enterprise deal can be in the hundreds of thousands or in the millions of dollars in terms of ARR. But back in the day we also had customers paying us 5, $10,000 in ARR because we didn't know what end of the spectrum we were selling to. We were just going fishing. And then at the end of 2017 we said, hey, we have a handful of customers paying us hundreds of thousands of dollars and a handful of customers are paying us 5, $10,000. I like the customers that have paying us a lot more money and have a lot more pain. And then you start thinking, okay, well what do those customers have in common? And what they had in common was they were large enterprises that had the pain of very large scale, drowning in data, drowning in fragmentation, and we were bringing them a ton of value. And so towards the end of 2017 we said, hey, we like this cohort of customers, let's go double down on that. And that was part of the journey of product market fit. Because when you're selling to an enterprise, it's not just enough to have the core engine that does the innovation that people need. It has to be have an enterprise level car around the engine. And it's got to have scale, it's got to have security, it's got to have all sorts of things that an enterprise needs from a mission critical platform. And so it took us a while to build that Again, to build that around our core innovation. And enterprise also needs a very specific go to market motion. It needs sellers that know how to sell to an enterprise. It needs marketing that know how to market. And so part of the path to product market fit is not just does my core innovation solve a problem, but can I build a car around that engine that an enterprise wants? Can I build a company around that offering that services an enterprise market that didn't come from day one, that came from the path to product market fit certainly.

I mean that informed your messaging, your ideal customer profile and your go to market motion. What does that go to market motion look like from two guys selling and trying to figure it out? How has it evolved today?

It hasn't changed dramatically, I'd say since in the last few years. Once we said, hey, enterprise is the market, then you want to bring the initial enterprise machine. So you want to bring enterprise sellers, enterprise sales leaders that can build that enterprise marketing. At a certain point you need enterprise level post sales and you want to be able to at a small scale, when your revenue is still small, make sure you're building that assembly line on a really solid foundation and it's got repeatability and it's got efficiency and it's got scalability. And then as the years go by, you add an ad. Obviously it's much more complex. The whole go to market machine, customer support machine, it's much more complex at $200 million than it is at $10 million. You go from playing checkers to playing three dimensional chess. But at the end of the day, it's still focused on servicing the enterprise market.

Now going from product market fit or beyond product market fit to today. What were some other key inflection points in your growth that stand out?

It's a few, so not necessarily around technical sales or developing the product. A big one for me is culture. Funny enough, values. We got to a certain point when I started the company. I was pretty skeptical about the concept of values. I had always thought of values as some corporate bs, bunch of words that people put on a poster and everyone else takes cynically. And we got to a certain point when we were like, I don't know, 100, 150 people, where, you know, our performance as a company was not as good as I wanted it to be. And when we started digging, I kind of realized, hey, we're at a scale where I can't interview anyone, everyone anymore, and I can't make sure that we're hiring people that really fit our culture because it's Amorphous and you have multiple offices and people hiring their friends. And we had too many people that just weren't a good fit. And so our VP of HR said to me, hey SaaS, I think it's time we get more serious around our values and really write down what kind of people do we want to hire? How do we expect our people to act with each other and with customers. And so we went on kind of a long journey on that and came at values from a perspective of hey, values is not a recipe about how to be a good human being. Values is a recipe for what kind of behavior do we want our team members to exhibit to maximize the chances that we will succeed. When you're in a startup, so many decisions you have to make every day and there's imperfect information and timelines and if you get your values right, hopefully they can. When an employee is at an or anyone's at a fork in the road and the decisions are unclear which way to go, our values can get you towards the right decision. Most of the time they don't guarantee success, but they maximize the chances of success. And so we built our values, spent a lot of time thinking about what are the values that we want our team to exhibit, took it very seriously. And it's amazing. Once we started getting serious about values and started bringing it into the kind of people we hire, the kind of people we promote, the kind of people we let go of, our business just got better. Our growth rates got better, our customer retention got better, our R and D velocity got better. And so that was one of the real kind of hard milestones. I know it sounds soft, but it was actually a real difference maker in our performances business.

I've just released a book, from grassroots to greatness. 13 rules to help you build iconic brands with community led growth. We cover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike Disaster to Gainsight to give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomenon. Check it out at from grassroots to greatness dot com. The digital copy is on for 99 cents. I recently wrote a book From Grassroots to Greatness. It became a Wall street journal bestseller. But 13 rules to build iconic brands with the power of people and community. But in doing my research I talked to hundreds of people, thousands of people actually, and looked at hundreds of companies. Normal key things was that great companies are built on great alignment around values, your purpose. And it's not what you write on the wall, but how you behave is what matters. And if you're hiring and firing and promotions are not according to your values, and people just think what you write on the wall is lip service. I like what you said there. It truly resonates and it separates the most successful companies from the ones that are not or that don't endure. But it's really hard to think about these things rightfully. Like you said, right? When you are poor and you're trying to survive, you can't think about values. You don't oftentimes, but that is what scales eventually. Are there some tactical tips you can suggest in terms of defining your values and then making sure people act according to them? Maybe one or two things that you did to make sure people embody them when you're not in the room, because that's what's important is how do people behave when you're not in the room.

You got to choose the right values that starts there. You don't want the values to be some aspirational thing that you think people should do. You want it to be a real expression of where your team really is and how they really act. And what are the things that are unique to your company. That's the easy part. And the hard part is how do you make them real? And you make them real by a number of things. You make them real. It starts with the person in a mirror. And if you're living the values, if you're talking about the values, and if you're talking about tough decisions and you say to them, okay, well, turn to our values. Well, how do our values inform the decisions we're making? And if you're talking about that, especially in closed rooms with your own executives, as opposed to you check the values at the door that makes them real. So if you as a CEO and the founder, and if your executives are really living it, that goes a long way. Then you want to celebrate your values. You want to celebrate when people reinforce those values. You want to put them into. When you're doing performance reviews, when you're doing hiring, you want to make sure your values are part of those processes. And so just like everything else, if you are studying a foreign language and you speak it all the time, you're going to get better at it. You don't speak. If you only speak it once every two years, you're going to get really rusty. And so if you imbue your values into your day to day, you're going to live them. If you whip them out and talk about them at your corporate kickoff once a year. Then they're going to be lip service and they're going to be a source of cynicism as you've been on this journey.

11 years is a long time. That's how long I even built my company. But what was the lowest point or maybe a very tough decision you made that didn't pan out as you expected? And how did you navigate through it?

I mean, there have been plenty of low points, plenty of near death experiences for me. I remember I was talking, we released our product in team right before we released our product. Large company in our ecosystem offered to buy our company. I would have made a lot of money. We had no sales at the time and I had two young kids and another one on the way. And my wife said, hey man, go sell this company. It was a life changing amount of money and help me raise the kids. And we just, Simeon, a co founder, decided not to because we really believe in the potential of this company to do something amazing in the market. And so we walked away and we were feeling very macho about ourselves that we walked away. We were brave. We're gonna go change the world and let's go release this offering. It's gonna be amazing. And we did. And then crickets for two years. It was a lot of times when I'm thinking to myself, what was I thinking? What is it? The pit of despair? A year into launching the market in the product, in crickets. And I'm thinking like, why didn't I sell this company? What was I thinking? But you just gotta keep going. You gotta believe in the vision.

I hope you don't regret it now.

I don't regret it in the least bit. If I look at the growth that I've had as an executive, as an entrepreneur versus where I could have sold the company eight years ago, I'm a different person. And all of it was earned the hard way. None of it came easy. Nothing about where we at, not one quarter of it came with a cakewalk. Every single part of it was a marathon where you're pushing harder and harder. But I've grown so much and had the privilege to work with amazing executives that I've learned from, amazing customers that I've learned from. And I'm just a different person than I was eight years ago. And it's not about money. Don't start this. Don't do this for money. Like you can earn great money going to work at Google or Facebook and it's much safer and less binary you.

Do it for 100%, you do it for growth, you do it for impact. I like how you said it. Now, through all these challenges, what is your approach to surviving or rather adapting to market changes? Internal challenges, low points. How do you keep calm and navigate? Do you have a personal coach? Do you have. Do you work out? Like, what is your regime to stay in peak performance and not mentally crash?

There's no silver bullet there. So I love to run. And running is definitely very meditative. Like for me, the hard part, it's probably for a lot of entrepreneurs, is when things get really stressful. And they're always very stressful. You can't turn it off. You have a day at work and then you come home and you're hanging out with your kids and you're still can't compartmentalize the stress and the ideas. And so you got to be able to. For me, exercise is a big one. Trying. What I do is I've got a kind of thing on my front door, just a little piece of art that kind of reminds me, hey, when I walk through this front door, try to be present for your wife, try to be present for your kids, try to mentally make that shift. It's really hard. But having that kind of trigger I find really helps. That's another one. I'm also part of this group of other CEOs where we meet once a quarter to talk about what's going on in our companies. And that's also very helpful because being a CEO is a very lonely job. Very lonely job. And if you can kind of have a peer group that you can talk to and share ideas and commiserate on struggles, that's just very mentally and emotionally helpful as well. But it's a hard job. You've been doing it like it's lonely, it's stressful. It's not a cakewalk.

All of the things you said. You know what's funny is I put the business first over everything else. When we sold half the company, I'd never seen money. And then I saw some money. And immediately after that I was hospitalized for Covid pneumonia bilateral. I was on oxygen, almost died. And then life lost its meaning for me because I soon after departed the day to day of the company and then started to think that, hey, I put the company first and this became my identity. And now I barely have a relationship with my family, but I lost the tribe that I thought was mine as well. And I was at Loggerhead. And I think a lot of what you said is what everyone should do have a community that you surround yourself with, of positive people that you can talk through situations with, have triggers that when you go through the door, you're leaving it behind and you're not bringing that home and you're spending quality time with your family and exercise. Those three things actually changed my life. I wish I had advice like that years ago when I was going through this journey.

When you're an entrepreneur, like you said before, so much of your identity is wrapped up in this company that if you're not really intentional about it, like, it can really take over. And that happens to a lot of my friends and it happens to me at times too. You have to kind of check yourself and say, like, I need balance. You're not going to make it without balance.

It's a marathon, not a sprint. If you try to sprint a marathon, you'll burn out or die. I have a second lease in life, so I completely understand now shifting gears to what you've been doing that's cool today, but you've been doing it for a long time. AI and the trends around it, a lot of conversation in the space. What are your predictions? What trends should companies have their eye on to ensure they're not left behind?

I'd say two things. So one is for us, we've been doing AI for a long time, but gen AI in the last 18 months is really in many ways changed the game because it means that you don't need necessarily to have a small army of very expensive data scientists to produce AI. And those data scientists can oftentimes need long lead cycles to come up with new types of AI. And they're oftentimes pretty far removed from your customers and their reality and their customer. They're data scientists. They're not necessarily super empathetic with your customers. And what gen AI has meant is you can bring people that are technical enough to do prompt engineering and technical enough to leverage genai, but that's a much different Persona. So we find that we can be, in our case, we're doing AIOps. Our customers are DevOps and SREs and folks in IT Ops, folks that are technical enough to use Gen AI. And so we found that we can do two things. We can bring people that have much deeper customer empathy and are really knowledgeable about the pain that our customers are going through and then can leverage AI to help solve that pain. So it's not AI for the sake of having AI. AI is just a tool to solve really juicy problems for our customers. And so it lets us bring the people that understand what really are those juicy problems versus people that are really good at AI. That's a really big difference both in the quality of the output of our productization and in the velocity for the company. Take that very seriously. It's not lip service, like really. And try to couple people that have deep customer empathy and.