Building a Second Unicorn: A Deep Dive with Harness and AppDynamics Founder Jyoti Bansal

But it's really my privilege to introduce to all of you someone who needs no introduction, which is Jyoti Bansal. He's had an incredible journey in enterprise software, being the founder of not one, but three amazing enterprise software companies. AppDynamics, which I'm sure all of you have heard of, and is a category leader in application performance monitoring. Harness, which is a new emerging disruptor in the CI CD space, and Traceable, which is a new challenger company in application and API security. There's a good reason why we teasingly call him the Elon Musk of enterprise software. Last but not the least, he's also the co founder of Unusual Ventures, where I'm super honored to be a partner and, and get to collaborate with Jyoti. So I'm really, really excited to be here together and hopefully we'll be able to have a conversation that's very helpful to everybody in this audience. We'll be going through some questions, but then we'll also have time for Q and A. And I'm going to keep a track. I'm going to talk who asks the best question or can make Jyoti laugh. That can be our bar. All right, so with that, this was kind of the biggest question I asked Jyoti the first time that I met him, which is if you go back to 2017, AppDynamics was acquired by Cisco. Jyoti finally has free time and a young family, and it's a billionaire. Amazing, amazing success. Jyoti, what motivated you to think about starting another company and being a founder again?

Yeah, it's a, you know, it's a.

It'S, it's a good question. And, you know, when AppDynamics was acquired in 2017 and was a big acquisition, everything. It's the first instinct I had which made sense was that I should. Now I don't need any more money. I have more money than I could ever spend in my life. You know, I've achieved good amount of success. You know, it's. So I should retire and enjoy what I do, right?

So, and so I went on a.

Retirement for about, you know, six to eight months.

And we, you know, we had a.

List of things on our checklist of we wanted to do, like in a safari in Africa, we wanted to go and trek in Bhutan, we wanted to see Machu Picchu, see fjords in Norway and all. Like, this was a list of things.

That, like, you know, when I was.

Running App Dynamics, I could never get to because I didn't have time to do any of that, right?

So we went and do event to.

Do all of those, but in about six to seven months we were done. You know, it's like, I will, you know, my wife and I and what.

What now it's, I can't be doing this all my life.

Like, and I started to look at like, you know, like what, you know.

At some point in life you think.

Of, you know, if you don't have to worry about money, you don't have to worry about your career, success, whatever it is, right? You should be doing what you enjoy. So I looked at, okay, what do I enjoy? And I realized that I really enjoyed the journey of building a startup. So, you know, I'm at the core of it. I'm a product guy. I love building great products. But then, you know, you can't build just great products. You have to combine them with building great teams and then that builds a great business. Right.

I enjoyed that, you know, the hustle.

Of it, the competitive element of it, the building the team, the competing in the market, all sort of things that come with the startup. And I was, okay, that's what I enjoyed. Why shouldn't I do it again? Like, you know, who cares what the outcome or anything could be? But that's what I enjoyed. I will do it again.

The second part is a problem itself.

Like what Harness does and what Traceable does. Right? Because that's also important. Like, I didn't seek out to. I want to start a second company. So now let me go and hunt for problem ideas or, you know, ideas. These were problems I was very passionate and excited about even when I was at AppDynamics. So like the, what Harness does about like, you know, I always thought it was kind of horrible that they're only.

Like there were 10 companies in the.

World who are very good in software delivery where like, you know, cicd software delivery, they're shipping code very fast. And these are like your Googles and Facebooks and Amazons and Netflix. And they had this massive advantage over everyone else in the world was all struggling with DevOps, CI CD software delivery.

And said someone gotta solve that.

Like, so I wanted to solve that even before, you know, AppDynamics was acquired by Cisco.

So to me, that was a problem.

That was exciting as well. So it was. That same applies to Pilotus from Nitrasible. You know, the, you know, how we should think about securing every line of code in the world and we all look at like, you know, all the, the world runs on code, so the code has to be now has to be secure.

That's also a problem I wanted to.

Actually solve and I was passionate about even when I was at App Dynamics, you know, three, four years ago now. So these are, it's, it's the combination of like, this is what I enjoy to do, I would want to do it. Retirement is not really that fun after a while and, and these are problems that excites me to solve. And that's the genesis of it. Same thing applies to Unusual ventures as well. Unusual also stemmed from a problem I wanted to really solve, which is like, how do we rethink early stage investing and how do we make it more really useful for founders when we do that? And I experienced that and I wanted to solve it. So it's like if you want to solve a problem that becomes, you know, why not do it?

Right, Right, right. It's, you know, the authenticity that you can't stop thinking about the problem. Like you're not starting something just to start something. It's because you, you know, can't stop thinking about this even while you are in Machu Picchu.

Right.

And I think, you know, so many of us don't appreciate that enough when, when you're thinking about like, what really motivates you, I guess. Here's a really important question. Did any of it get easier the second time around? One really hopes that some things got a lot easier. What would you say when you started working on Harness? What felt easy this time?

I think some things do get easier. I think the most important is fundraising and dealing with the Nestors. You know, when, When I started AppDynamics, this was when I was, I was sort of an engineer turned first time entrepreneur, first time CEO. I never even managed a single person in my life before that.

You know, I was in my late.

20S and I had this idea for, you know, what to do in App.

Dynamics and raising capital was quite hard.

For me as the, you know, at that time. And this, you know, I pitched about 20 VCs, you know, rejected me before I got any funding for Abdanics. The harness.

Doing it the second time was exactly.

The opposite of it. Like, you know, VCs didn't even know what we were doing because, you know, we were in stealth. And there were at least 20 people who were willing to give us like offers and term sheets and VCs. Just knocking and you know, I bootstrapped the company initially. We didn't even need any capital. But there was still like, you know, the fundraising part of it was so, you know, so different. It Was kind of almost funny to watch.

Like, you know, and you know, I.

Live in San Francisco. When I was doing App Dynamics fundraising, you know, almost all VCs used to be in Sandhill Road, Menlo park. And every day I would used to drive down and meet VCs and fish to partnerships and all, you know, for Harness, like the firm event with, you know, the entire partnership came to our small wework office in San Francisco to kind of pitch to us and you know, take the money. So it's like that dynamic changes.

The second part that also becomes much.

Easier that kind of goes into that the second time you get a bit of luxury to work with the investors and board members that, you know, you know, you know are the right kind of partners. And that completely changes how you work with your investors and board.

Now to me, one of the, you.

Know, I would say things from Appdynamics was that we had, I spent a lot of time managing our board and investors. Like maybe about 20 to 30% of my time would go in there. We had all sort of investors who needed just a lot of management doing it. Second time and Harness, it's much easier. I spend maybe 1 to 2% of my time managing investors and the board.

A part of it is also like.

It'S just a bit of a psychology in the investor world. Like when I was first time CEO, people were like his first time CEO and people would doubt and cushion all the things all the time.

You know, you have an exit and.

The next day, you know, you start a company, you're a second time CEO now. And just psychologically now everyone thinks you're an expert on everything because now you're a second time CEO. So even though you are really the same person, but just like, you know, so that, that does make things a bit easier on that front, I would say.

Yeah, that's the, you know, the fundraising.

Becomes easier, managing the board gets easier.

I think the other thing that does get easier is you know what to.

Expect you, you know, you can see around the corners better because you know, it's, you have gone through the journey like, you know, when you like I could see six months ahead, a year ahead based on the prior experience of building it. The first time at AppDynamics and AppDynamics everything was new. Like I didn't know what will happen a year later, what will happen two years later. And you.

Things don't exactly happen the same way.

At Harness now, but still there's a lot of similarity, right?

So you know, you know, like once.

You've gonna hit, you know, your hundred customers. These are kind of the challenges that will start to happen, you know, you know, like, you know, once you start getting like, you know, expand your sales force internationally, these are the challenges that will start to happen. So you could be prepared for those, you know, you know, also know, like, you know, these are the things that will happen when, like, you know, when you go from one product to second product, these are the things you have to do on the, how you structure your engineering. These are the things you need to do when you, like, you know, structure your sales organization, how do you launch a product?

Some of the things that, like, you know, I didn't know what, that, you.

Know, what to expect first time, second time, I know much better what to expect. So that makes it much easier to plan around and execute on one of these things.

Right. Well, what was an example of something that was a surprise for you when you were first building app dynamic, like where you were like, oh, shit, I didn't see this coming at all. Or maybe, you know, I had vaguely heard about it but didn't realize that it would be so such a big deal and, you know, wish I knew this six months ago.

Yeah, like, you know, when I was.

First doing Appdynamics, almost everything was a surprise to me because I didn't know anything.

Like, you know, even, like simple things.

Like, okay, how do you even interview a sales rep? I have no idea, like, you know, what to ask, you know, a sales rep in an interview question. And like, you know, how do you, you know, so those kind of things were all you learned through it, right? You know, so those almost everything was.

A surprise at Harness, like, you know, I do think, like some things, you know, you know, you know, like these skills you have learned, like, you know, you know, like, you know, some of these things are not as surprises. When I was building appdynamics, to me, like, you know, how to handle sales was definitely. I never thought it would be that hard or that complicated. Figure it out, what to do, you know, you know, scaling the teams and how do you, like, you know, build the right culture? You know, I was, you know, I never thought of that, like, you know, at AppDynamics until we kind of starting to have to deal with it.

Right?

You know, that. But at Harness, I know, like, you know, you know, you have to be much more productive about building the right culture very early on, you know, you know, you. So those kind of things, you are not surprised anymore. Like, I know these I have to do because that's otherwise you can't really grow.

Makes sense. All right, so to recap a little bit, you said that you know things that got easier. Fundraising, you can get VCs to pitch you on why you should accept your term sheet and offer. Sounds great. Everyone should just skip to being a second time founder and just skip the first time managing your board. Making sure you work with people that you trust and understand and don't need managing and knowing what to expect. I think those are really solid challenges that if they're easier, feels like as a founder, your life is in a much better place. But what about core company strategy? For example, you brought up that when you're a second time founder, people don't question your decisions as much because you have done this before. Like, even if you are the same person, you're thinking like the same way about your company strategy, people kind of trust you that, you know, it is that part easier or you know, like what is it that is equally hard?

I guess, you know, what is equally.

Hard is executing, you know, executing on.

A few things like, you know, and finding product market fit. For example, like, you know, when I was doing Appdynamics, you know, initially I had assumptions on this is how our product should be, this is how the, what the market need be.

And turned out that half of those assumptions are wrong. And we had to do multiple pivots.

In the first 18 months of AppDynamics, right? Then you have to iterate and pivot and find the right product market fit. And most startups have to go through that.

So when I at Harness, I thought like, you know, I'm doing it second time. I don't, maybe I'll get all my.

Assumptions right the first time. But that's really not the case. The finding that product market fit is still the same iterative process. Like, you know, we had to pivot at Harness as well. We have to do like, you know, some of the assumptions were wrong and you have to pivot and correct course and, you know, iterate through it and go through almost exactly the same same journey that we went at Appdynamics, right? So it's just like how do we hone into the right product market fit?

And it was equally hard.

It's a hard problem to solve.

It was a hard problem to solve.

At AppDynamics, it was a hard problem to solve at Harness. And you know, that that was one second is the, I would say equally hard is recruiting. And that was a little bit of a surprise to me actually because I thought like at AppDynamics, you know, we spend a lot of time recruiting, and I strongly believe that to build a great company, you have to hire a lot of good people. And kind of as founders, you have to spend a lot of time personally trying to recruit. Right.

So in AppDynamics, we hire a lot.

Of really great people. And, you know, a lot of those people, like, became like, you know, people who started as engineers become VPs and people started as sales reps and sales directors. They became like, you know, head of sales and all like, you know, people grew with the company for those, you know, five years, eight years, 10 years.

So I thought initially, like, you know.

I could just go and bring all those people who I knew who like, really stars and kind of grew with AppDynamics and I don't need to spend time on recruiting.

But that turned out that's not the.

Case because, you know, most of those people, you know, it's great that they've been now, you know, significantly, you know, grown in their careers and where they are in their journeys and work.

So for them to come into a.

Very early startup, you know, many times doesn't make sense.

Like, you know, how would.

Why would you come to a very early startup? You know, it's. It's just. It doesn't. It's not the right fit. So I. So, you know, it took me some.

Time to realize that I need to.

Actually go through the same cycle again that find these really talented upcomers, you know, very similar to what we did on Abdynamics, and kind of groom them and have them grow with the company and then they become the next generation of those rock stars. You know, the way we had the abdominal, I couldn't just bring all of.

The same people and, you know, I.

Have to go through the same journey again. So that was, you know, I think it's equally hard in the sense that you have to. I had to put equal amount of effort, you know, in that we did an app Dynamics at Harness as well.

Right, right. How do you. I'm curious. I'll interrupt you a little bit because, you know, how do you think about identifying that, like, next, you know, rising star. Right. Like, if you can't just, like, maybe, you know, your old team wants to spend more time in Mach, you then you did. Now you need to like, find like, they're not that. That person. But 10 years ago, do you have, like, you know, because I know you have such cool frameworks for all decision making. Like, how do you think about, like, yes, this person is like a founder level hire and I'm catching, you know, her or him.

I think the framework that I like.

To use is like, you know, someone.

Who is, you know, first of all, high intellect.

You know, they have to be. High intellect is important. Second is they are very curious. They're curious and they want to learn and they are fast learners and they're curious about learning more and more. And third, they're ambitious that they want to do that. Like they have the desire to, you know, you know, to grow. The desire to, you know, do bigger things. Like, you know, if you, if you.

Want to have like, you know, a person who, let's say you're hiring as.

A sales rep, that they are like.

You know, they are high intellect, you.

Know, they are, they are, they are.

Curious and fast learner, but they're ambitious.

That they want to become a VP of sales at some point.

You know, so now, you know, like.

You know, they have all the right, right ingredients at least. Right. So, you know, could they be coached and mentored and kind of they could get there over time?

You know, they can.

So that's how I would identify things. But it also goes through a process after that. Like, not everyone makes it. Like, you can't not, you know, it's.

Like if you hire five of those.

People, you think, okay, these are high potential.

Not all five are going to get there.

Like, you know, so. But so it almost also goes through a sort of a meritocracy process after that.

Like, you know, the best people get promoted to the next level and the.

Next level and the next level. So you go through that cycle, you know, so, you know, we, we did that very well at Appdynamics and I.

You know, I initially thought I can.

Short circuit that at Harness, you know, you know, it's actually a great cycle because it allows so many people to grow with the company and you know, so that's the. You have to do that again.

Right, right. And you, you know, talked about how you had to learn a lot about sales with Appdynamic. So how did, how did that go with Harness? And traceable, like any, any shortcuts to hiring good salespeople and, and hitting your quota every year or every quarter, you know.

Well, there are two parts of sales. You know, in the initial years there's a lot of hustle and there is.

Always a bit of hustle goes in sales.

But the initial years is there's much more hustle than you would imagine. Right. And actually I initially thought when like doing it Second time that we don't need to hustle as much.

You know, like when, when it was.

Like the early days of Appdynamics, like every deal doesn't matter. It was like thousand dollars, two thousand, five thousand dollars, like, you know, whatever it takes, you know, will, you know, if I have to be involved, I will be on the front line trying to close the deal, win the deal, everything, right?

But as the company got matured, at.

Appdynamics, you have a sales machine, like, you know, you have entire machine that, you know, you actually don't want it to be hustle oriented. You want it to be more systematic because the hustle doesn't scale at some point, right? So, you know, so I got very used to that machine, right. You know, so when I started Harness initially I thought, okay, we, you know, we probably don't need the hustle because machine is great.

Like, you know, but you realize in.

The first couple of years the machine doesn't really work. You got to still hustle a lot.

And you know, and that part, you know, you can't really avoid it.

Like, you know, so I at Harness, like in security, the same kind of things I, you know, we had to go through as well. Like, you know, if it's a, doesn't.

Matter if it's like, you know, to.

Find, to win, how small a customer is, you know, how small a deal is, you have to do everything to win. You have to, you know, prospect, you know, your way in, you have to like, you know, beat competitors. All of that sales hustle you still require like, you know, you really can't like, and whatever it takes to help your sales teams and your sales reps to like just get one small competitive advantage to win. It becomes really, really important in the, in the first couple of years, right? So that, that still remains the same I think when it comes to like, you know, if you want a repeatable sales, sales motion where like, you know, you never miss a quarter, that happens only when you build a repeatable sales machine, right?

And every startup has to kind of evolve into that.

Like, you know, you start with the hustle oriented sales to like, you know.

A little bit of hustle and a little bit of machine to like almost.

Complete machine oriented model at some point, right? Where like, you know, everything is predictable, repeatable, all of that. And you go through that, that, that, that, that cycle. You know, I have a little bit.

Of an advantage doing it the second.

Time now at Harness and you know, and traceable that, you know, like that is coming like you Know that, that we have to go towards it. At App Dynamics, I didn't know it initially. I was like, you know, hey, this hustle thing is working so well.

Why do we even need to think.

About building a machine until I start running into problems with it. Right. So like, you know, we can start building done like building up very kind of sales machine a bit earlier than most startups we do.

Right? Yeah. And you know, unusual. Like we definitely find that just building the sales machine and getting the senior sales leader hire. Right. Is just so challenging for founders, especially doing it the first time. And that's built so much support for them, like where we can like help them pick that right person. And I remember, I think this was like maybe 2018. I remember reading this amazing article that you had published about what you learned from AppDynamics about hiring sales leaders. Especially at that pivot point of like going from having a sales leader who manages to deal to having a sales leader who manages to sales capacity and like running a machine that's capacity based and the leader who thinks about capacity as opposed to a leader who thinks about individual deals. And you know, it really felt like very, very good hard won wisdom that you can. And the funny thing is you can't really hire the capacity leader early. Right. Because that's not the person you need early. Like you actually do need the person who can get in there to close individual deals. So yeah, I think that was like just an amazing way to synthesize what you probably learned over years of hiring. Adapt the. And very useful for founders.

Yeah, I think it's, you know, some of the things that you have to do in the very early stage, like you know, getting from that idea to the first, the first million dollars of revenue. Those things, you know, I think it's, it doesn't matter how much experience you have, they remain equally hard and you just have to do them like you know, manage the sales fields and yeah. Recruit the initial team and you know, go and get the right messaging and you know, as you know, Sandhya at Unusual, that's a key part of our focus on how do we help founders in a very systematic way. Just help. Not just giving them advice, but can we just go in the trenches and be the extended salesforce and be the extended recruiting force and be the extended marketing arm to do that. That's really hard to do. I think at some point when you start hiring the right, you know, that you can attract the right leaders, you know, in your company as VPs, things get easier. Like you know, so that's, that's always the. But the initial challenges and you know, you have to go through, there's no.

Shortcut to it makes sense. All right, so to quickly recap some of the things that, you know, you said, unfortunately, continue to stay hard finding product market fit, recruiting really, really good rising star talent because the team from your first run might not be the right fit to join you on day zero again. And the sales hustle can never stop hustling. Really need to be super, super hands on deck in the early phase of building your company, which resonates a lot. And so we've talked a little bit about what got easier, what got hard. What about surprises? Like what was some, what would, what would you say was, you know, maybe like month two of harness, what was for you? Like, oh, I was really not expecting this. What just happened.

Yeah, you know, there are always some surprises.

Like, you know, I think most of the surprises to me were more at a personal level.

Like, I think the number one is like, you know, when I was last.

At Appdynamics, you know, we are about 1,000 plus employees. You have, you know, a few hundred million dollars of revenue and you start operating at a much higher level. Like, you know, you're not into the day to day details. You are much more at a strategic level. Right. So, you know, you're operating at that 100ft, 2,000ft kind of level. And when you start a company like the Harness, the first few, you know, you know, say the first few months.

You have to go down to that.

You know, 1ft level and you know, and start operating at that again. Right. And that's a little bit of a, you know, I kind of knew that that's what you have to do, but still it was a surprise to me. Like, you know, that, that adapt adapting to it and adjusting to it. You know, it takes, it takes some time.

Like you have to deal with like.

Really small things on like, you know, do you have, you know, the, you're hiring an engineer, you know, to start tomorrow and do we have the, you know, a desk for them?

Right.

You know, it's. And something like that, you will have to like operate like, you know, because there is really no one else. You have to take care of things and you know, kind of the job that happens in early stage, you know, where as founder you wear every hat, you do everything that, whatever needs to be taken. Like, you know, you have to be the plumber for that day, you know, because office is flooding, you got to still do it, right? And that's, that's still a bit of an adjustment that was a little bit of a surprise to me that, you know, you got to operate down at the, at the, you know, at the one foot level.

I would say the second surprise is.

Also a bit of a sort of a personal adjustment, which is the realization that there is really no shortcut. Like, you know, if you have to go through a journey, like, you know, like the startup journey, like in the B2B kind of space, like, you know, you start, you start with an idea. It takes like, you know, somewhere in the 12 to 18 months to find your initial product market fit, you know, your initial set of customers. And then you start building a sales team. And then you go and, you know, you go to a million dollars of ARR and 10 million dollars of ARR and 25 million dollars of ARR and 50 million and 100 million. But those are all. You have to just go through it and you'll.

There will be challenges and, you know.

Hiccups and, you know, big obstacles. Sometimes through all of those. Right. There is no shortcut. And you know, mentally, you, you know, I had to prepare myself. I had to ask myself actually, especially in the first six months a year, you know, that am I pushing the org to go too fast because I.

Wanted to get like, you know, because I was running a much bigger company before.

Right. So almost like you think of, you want to get there as soon as we can, but there are, there is no shortcut to get there. You have to go through the journey and you know, even if we go.

There very fast and Harness, I would.

Say is on track to be among the fastest companies to reach many of those kind of revenue milestones in the SaaS kind of world. But still you can't go any faster. Right. So you, you know, so I had to like stop myself on like, I can't keep pushing my team to go any faster. It's like there's. We can't. This is no shortcut. You have to go through all of the grind. Right. And that's like, you know, it was a bit of a surprise that I need to go through that kind of a personal mental adjustment around.

That makes sense. And do you, do you remember there like, were there like feel mistakes that you had made adapt dynamics that you're like, yes, definitely not doing that again. I'm going to do things differently here. That worked out well with Harness.

Yeah.

You know, other than the whole investor management thing, not.

Well, investor management, I would think is probably the biggest one like, and it was a, you know, it could become a drag otherwise. Like, so, you know, definitely that's a mistake I wanted to avoid. Like, you know, how we have the right pick the right investors and how we manage them. So I'm pretty happy with that.

But I think if you look back.

At most companies, like, if I look back at dynamics, you know, successful outcome, everything, the mistakes mostly come down to two categories. You know, either you make some kind of strategy mistakes of like, you know, you didn't go into a use case or a product area or some adjacent market or something fast enough and you let some competitors go there faster, or you kind of didn't change or pivot, you know, some product strategy somewhere soon enough or something, right? That's like the more of the, you know, and a lot of them fall into the product strategy, go to market strategy kind of you made some wrong decisions or you didn't correct your decision fast enough. The second category of mistakes almost, almost come into people, right? You know, that you didn't hire the right person or you kind of like, you know, didn't change a person soon enough, or you kind of like, you know, so it's. When I look back at Appdynamics, like, you know, the mistakes come down into two buckets. Like, you know, it's the. So, you know, at Harness, obviously, like, you know, I try to avoid those mistakes. You know, you still cannot get everything 100% right. Like, you know, it's just impossible. Like, you know, but it's, but we.

Try, you know, I look at like.

Can we reduce the mistakes and can we reduce the time to correct mistakes, right? So it's really comes down to those two things, right? So like, you know, we are just, you know, you know, little bit more conscious about, you know, keep studying where the market is evolving so that we are not, like, there are a few things we missed out, like, you know, when being, let's say, you know, how fast everything moved to mobile apps, for example, right? So the mobile apm, we were at least a year behind in market at AppDynamics because we were, you know, you know, we were just not paying attention enough to it, right? And then we had to catch up and like build a good mobile apm, you know, for mobile apps a year later.

At Harness, we try to avoid those.

Mistakes by like, you know, having much more dedicated focus on what are the things where the market is going. Are we constantly listening from our customers and are we constantly also listening to like, what are the other trends going so we can Avoid some of those kind of mistakes, people the same thing. Like, you know, it allows us to, you know, do slightly better. But you know, in reality it's impossible to not make mistakes. Like, you know, you have to move really slow. You know, if you're startups, you're moving fast and you know, sometimes you just have to decide and keep going. Right. And you correct from later if something was wrong.

So I only look at like, you.

Know, we can reduce the rate of mistakes, then we'll be fine, right?

Yeah. I think one thing that really stood out to me in what you said is this idea of like when you're heads down building your company, sometimes you forget to look at what's happening outside the building. You're so focused on like what's going on inside the building in your little world that you don't even realize that there is a bigger opportunity or like a market share shift happening outside that world that you would actually be perfectly positioned for. So it's important to make sure there are people who can nudge you when they see that happening and people who can make sure that you don't miss it. So really, really good advice. Well, so you said that Harness is growing really fast. You guys recently got valued at $1.7 billion, officially becoming a unicorn. How does it feel? Is there, you know, is the sense of achievement the same for you and the team? How does it feel the second time around?

It's a good question.

I think when AppDynamics achieved the billion dollar unicorn mark, this was 2014, 15, around that time, so six, seven years.

Ago, it felt like being a unicorn.

Was like sort of the pinnacle of success for a B2B kind of startup, you know, and so we have achieved a big part of our journey. When we became unicorn, that's what it feels like, you know, that we have achieved a big, we have done big part of our journey. Now the seven years later, the world has shifted in very good ways as in the sense that the opportunity and the market need for like, you know, products in the Developer Tools DevOps ecosystem to like, you know, most of the business applications. SaaS has become much bigger. So the addressable market is significantly bigger than what it used to be. So getting to say 100 million ARR and you become a unicorn, that was a big deal.

Now I think the market opportunities are bigger. So at Harness, when we hit a.

Billion dollar valuation as a unicorn, it feels like the journey is just starting. So it still doesn't feel like we have accomplished a big part of our journey. Which was kind of a bit different at the time of Ad Dynamics. So that is a difference. There's a. Obviously to our team, to everyone's credit, it is still very hard to build a billion dollar unicorn company.

But I think at unicorn these days.

Compared to seven years ago, you have so much more potential to do.

And so that's a little bit of.

In some sense it's a great part that there's a lot more opportunity.

The bad part is it comes with that, that expectation.

Like you know what I call it, like you know, the Decacorn is the new unicorn now.

Like you know, right. Billion dollar was a special part.

And now it's like, you know, you know you gotta be $10 billion to be really special over the company these days.

Yeah, like getting that top percentile given you know, think the market has accelerated so much and it's growth. Yeah. It's funny, I think one of the things that drives a lot of us as founders and folks in the software industry is we always want to be at the top of the game. And this is the new top of the game. So it's a great question to ask yourself which is what level are you operating at and what is it that you are going to celebrate? Well, so shifting focus a little bit, I wanted to talk a little bit more about Harness and one thing that actually stood out to me is that if I think about these two companies there are a lot of fundamental differences in how they are positioned. Like AppDynamics was an early entrant in the application performance monitoring space and, and you guys built an amazing enterprise top down sales engine. I still hear people who talk about that five minute demo that you could walk into the company and do. And I remember telling someone oh yeah, which product marketer came up with this? And they would say yeah, his name was Jyoti Bansal, so kudos to that. But then Harness feels like it's in a different environment. Like you're disrupting a very big existence existing category as opposed to like being the early like category define or you're a disruptor and the go to market motion might also be different. So we'd love to hear more about that. Like how would you contrast like the positioning and go to market strategy for these two?

Yeah, you know the one similarity is that you know both AppDynamics and harness are in the broader developer tools DevOps ecosystem kind of space. Right.

But the big difference is as you.

You know, number one, as you, as you outlined is the, at Appdynamics, you know we were really defining that market, you know, you know Appdynamics and a few companies of what application performance monitoring APM market would be so still very early and being defined and harness. You know, people are doing CI CD today, people are doing DevOps today. So and so we are going and going to the market and creating something that is like significantly disruptive and much better way of doing it. The interesting thing is like you know the, our competition about 90% of the time is people building it themselves, right. So we are, you know, so it's because they were not really good products to do this. So most of the time people are doing it like you know, using some solutions and then kind of doing it on top of it themselves, putting a lot of work and effort. So we have to design our product like you know, the bar becomes much higher when you are going into a new market.

You know, even your V1 bar doesn't.

Have to be that high because you know something is better than nothing. But when you're going in an existing market where most people have a way to solve the problem already in some ways like either from grown or commercial or whatever it is, right, Your bar for your V1 is that you have to be at least 5x10x better than the existing approaches. So that becomes your first major difference compared to you know, when you just look at the product strategy and what the product market fit would be because it's a much different bar just as a starting bargain.

The second thing is the go to market model.

It is significantly different in Appdynamics versus Harmness for two reasons. One is I think over the last seven, eight years, especially in the developer tools kind of space, much more power and influence have shifted to the practitioner, to the developer level. Like in Appdynamics we were very well known as a very, you know, really, really world class top down enterprise sales motion. Right. But so what we would do there is we would go to the, you know, the senior level Execs, you know, VPs and C levels and we'll make the case on, you know, we had a process called, you know, business value assessment. Like you know, what is the, how do you do things today?

You know, what could be the new.

Way of doing things with Appdynamics and what is the business value you get? And we'll convince them and they will do a trial and proof of concept and then you to go and sell to them.

That doesn't work anymore because if you.

Just go to go to the someone who's a decision maker and Unless you have got buy in and already ground up adoption from developers and the practitioners, no decision maker wants to give a tool or a product to their teams to go and use it like you know, everyone. So it because they, they're all scared like would they get adapt adoption, would it work or not? Right? So you almost have to create this new go to market model, you know that you know what I call the, you know sometimes we call it the pincer strategy or like you know the, you know, you know sometimes you call it the sandwich model that you go from the bottom and you go from the top, that you have to go from the bottom to the practitioner themselves so that there's a very easy premium trial experience, open source kind of models that you can go to them and these people are using your product and happy and you know, and you still have to build sort of the decision maker down the top down sales motion so that you can monetize it and still create the business value framework. And but, but, but, but you already have a lot of the risk removed around adoption because your users and developers are already using it. So it's, it's definitely a different kind of go to market strategy than what we did at App Dynamics. You know it's and to do that we also look at like, you know, we have to make sure that we are not focused completely on large enterprise, that we have a very healthy mix of SMB mid market and large enterprise. So we are. The SMB bin market keeps you honest in terms of like, you know, how easy and simple your product would be. Like, you know, how fast of a sales process you can do. Can you go to the developers and practitioners themselves. So at honest we do it differently that you know, we look at like, you know, 40% of our business comes from SMB mid market and 60% comes from large enterprise. You know, at AppDynamics it was 95% coming from large enterprise and you know, very small part will come from SMB mid market. So we deliberately change the go to market strategy so we can kind of address how the buying patterns today in the world of developer tools and DevOps are.

That makes a lot of sense given those differences. Like what were some of the implications in terms of like when you were hiring the team, did you look for a different type of profile for your product team, for your sales team, maybe marketing? Like what were the implications on hiring given that the market dynamics and the go to market strategy was a little different?

I think it's a good question. Hiring becomes, you have to hire the right people who have that mindset. At Harness, we don't want to hire people who only knew or cared about top down enterprise sales. We also wanted to bring a healthy mix of people who understood the bottom up community driven sales and marketing as well. And then you try to bring a healthy mix of that same thing from a product design perspective, right. You know, and from a product design you, you know, you want to make sure that you have people who understand the like the product LED motion and you know, you can design the product, you know, around that. In addition to like, you know, people who understand like you know, what do large enterprises need to succeed, right. So we look at like, you know, and sometimes you may not find the same person who understands both like you know, but you have to hire the people who at least have the, you know, so you can come, you can complete the set of experiences in your team, right.

Actually take a question from our audience which is very, very apt right now. Just you know, how do you, what are like the signals or signs that tell you okay, you are ready to go from hustling for every deal to like having to build sales machinery? Like what is that tipping point? What do you look for? And you say okay, we are ready, ready to get started on the machine?

Well I think the biggest is like where you are in terms of your revenue is I think Getting to the first million of revenue I would say is about 80% hustle and maybe 20% machine and process in there. Getting from let's say a million to $10 million of revenue will be about maybe 60% hustle and 40% machine. When you start getting from 10 million to $25 million of ARR. Let's say then it starts to shift. Like you know, it starts shifting from like you know, it's 70% machine and 30% hustle. And when you start getting from like 25 million plus it becomes 90% machine, right?

So there is almost like a, like.

The scale that comes with it. Like you know that because initially you don't even, you can't make a machine out of something until you don't even know what to what the formula is. So initially you have in that process to find the formula, the 0 to 1 million, you're still finding the product market fit formula. You don't even know how to articulate your product, the value prop of your product or the what the use cases your product solves. You're experimenting and finding. So you can't make a machine out of something that you are constantly experimenting in the one to $10 million of phase, you're also experimenting your sales market strategy. You go to market strategy, I call it like you know, so your 0 to 1 is a product market fit phase and you know, 1 to $10 million is product market sales fit phase. Like and how do you sell it? Like you know, and you're still trying to figure out enterprise SMB, you know, bottom up, top down assembly, all sorts of things you're figuring out, right? So in that one also you want to start building a machine, but not too much because you're still experimenting. But after 10 million you start switching gears to like less. Now you know most of things. To start building machine after 25 million you should because you need to press the gas at that point and kind.

Of grow fast, right?

So you really want to make it much and much more and more repeatable. And, and during all of those phases, if you don't have the right people who can transition from that 90% hustle to 90% machine, then you may have to change people as well during the process.

Awesome. So that was a lot of really, really good advice for our founders. I think a lot of it applicable even to first time founders. But one of the questions that maybe we can wrap up with is thinking back to your first time founder days, like what would be advice that you give them? People who are just starting out on the journey, who are just thinking about starting or have just started building something. What would be your advice to a younger version of yourself?

I think that the number one advice I give to everyone is don't get frustrated. Startups are hard and there is no straight smooth line. Like you know, when people look at like, you know, successful startups and they sometimes think, you know, these guys had it so smooth, like you know, why am I struggling with this or why am I having this thing? And I tell them everyone has their struggles like, you know, I'm now a two times unicorn founder, but I have struggled and you know, all their challenges.

At every step and you just have.

To go through it and don't get frustrated about that. That's the normal part of building a startup. So that's, you know, first time entrepreneur, founder. That's like, you know, don't get frustrated. The second thing advice I would give to folks is like, you know, try to keep things simple. You know, don't over complicate it. Like you know, I call it like, you know, my five point simple formula of building a company and my five point simple formula is starts with like, you know, make sure your Addressable market is large because. Or you're making it larger constantly. Because if you are, if you are operating in a small addressable market, it doesn't matter how hard you work and whatever you do, you're kind of constrained by it. So an addressable market, sometimes people think that they can't control it. I strongly believe that you define your addressable market by expanding the use cases that you can address, etc. Right. So you have to constantly work on making sure your addressable market is getting bigger and bigger and bigger and bigger. So that's one part of the first part of the formula. Second is, my formula would be like, build a good product. If you build the product that is in the top three, you know, ideally top one, top two, top three, like in, in your space, whatever problem you're solving, everything becomes so much easier. So like, if you put a lot of energy and focus in doing that. Third to me is sales, sales, sales. Like, you know, don't ignore sales and don't underestimate sales and build the sales, you know, from the hustle to the sales machine. And like, invest time and energy in learning about sales and getting good at it and working and helping your sales teams execute, etc.

Right.

Founders and entrepreneurs. I was a product founder, entrepreneur. First time I was doing it, I was, you know, initially I wasn't like, you know, why should I care about sales? And that's, you know, but it took me some time to learn it. But that's to me is like an important part of the formula of you as a company. You have to become very good at it. Fourth is customers, customers, customers. Like, just take care of your customers, you know, and not just lip service to it. Like, you know, every customer matters. You know, you do whatever it takes to make your customers happy and successful and you make them happy and successful and find a way to do that. And fifth part of my formula is culture. Like, don't underestimate, you know, the importance of culture. You got to build the right culture. You would have to deliberate about it as a founder. And, you know, you have to make sure you're setting the right tone for the culture. If you screw up the culture, eventually everything will fall apart. So I look at like, you know, my simple things. I only look at these five things. Like, you know, are these five things happening? And you know, when I run harness or I run traceable, like, are we on track on these five things? And if it's just a simple framework and I don't need to worry about much more and then kind of things.

Start to start to happen.

Awesome. Well, thank you so much, everyone for joining us. And thank you so much, Jyoti, for your time. So it's a really amazing session. So many polls of wisdom. Sometimes you make it sound so easy, you know, like five point framework for building a company. But each of those five points are there's so much to thought and learning behind it. And I think that's the fact that you are able to simplify it and articulate it like that for us is super helpful. I know a lot of this content will be available on YouTube and we are all on Twitter if you guys want to ask us more questions. Happy to keep going later. But for now, this will be the end of our session. So thank you everyone for joining us.

Thank you, everyone.

Thank you, everyone.

Bye.