CSS Speaker Series 005: Sameer Dholakia/SendGrid + Ajay Agarwal/Bain Capital Ventures

I think this is the fifth event we've done here, plus one in New York. And I think what I've learned is the secret sauce to them is when the speakers know each other well. And I think these guys know each other pretty well. So Sameer and Ajay were kind enough to both speak at the saster annual in 2016. And it was a pretty popular session and Ajay was super popular this year. But what I didn't realize until recently, I guess Ajay was your boss, right? First boss when you were both 14 out of college. Right?

Yes.

And so. And then at least indirectly, you decide to work for Ajay again. Right. So that's pretty fun. So I'm pretty sure everyone in the room knows SendGrid. How many of you guys have actually deployed Sendgrid or used it? Any folks in the room? All right, good.

Okay.

So it'll be a fun mix.

Yeah.

So Ajay played some role as an investor. When did you invest? Series G. Series A. Series B. Which series? Series C. Series 7.

Which letter?

Yeah, C and D. Okay, so we'll learn a little bit about what it's like to write a 22 million dollar check in. But more interestingly, it's fun to hear the real stories.

Right.

And did you recruit Samir into Sendgrid or. No coincidence. Did you invest before he joined?

Actually, the other way. I recruited in him to. I told him he was going to have to listen to me talk about zinger all the time over beers. Anyways. Yes.

You know my part. I get told my partners, hey, Samirs, you know, wants to meet every night. So yes, put some money behind.

So invest in great people, you know.

Right.

I mean, it's hard to lose.

Right.

All right, so that's fun. I just wanted to give that. Maybe they were going to give that intro in the bio, but let's put our hands up and let's hear what they have to say about their decades.

Deal.

Hi everyone. Thanks, Jason. Thanks as always for allowing us to be here. It's a great event. Great to see so many folks tonight and hopefully, you know, we're just going to try and keep this fun and entertaining since, you know, Samir and I have known each other I think for almost 20 years now. Long time. 22. 22 years. Very quickly. I'm a partner with Bain Capital Ventures. You know, we're a multi stage firm, primarily early stage, very active in SaaS. In addition to SendGrid, Optimizely, Gainsight, Bloomreach, Clary, DocuSign, SurveyMonkey, LinkedIn, just to give you a sense of some of the companies that we've invested with, you've probably heard of Bain Capital, Private Equity, Bain Consulting. Bain Capital Private Equity is a sister division that owns hundreds and hundreds of large companies around the world. And certainly we in ventures take advantage of that to make introductions across a whole variety of verticals on behalf of our young companies. And then most of us in our Ventures group have been former operators. We came from the startup world. I myself came from Trilogy, where Samir and I know each other. So that's a quick intro on Bain. Samir.

Yeah, the quick intro on Sendgrid. It was great to see so many hands go up on usage of what we do. The problem our founders set out to solve. Three founders got going eight years ago now. They had built software applications and websites and every time they did, they had to have the ability to communicate with the user of that application in an automated way. No human involvements. When you hit the I forgot my password button, that button had to have code that sat behind it that would send an email that allowed the person to reset it. If I hit the purchase button, a receipt had to get triggered and sent to the user. And as developers, they found that they were having to spend weeks and months trying to go set up email infrastructure and configure IP addresses and learn about SMTP protocols and security protocols like dkim and dmar. It was just a whole world that they did not want to learn about. They wanted to get back to building their app. They're like, we're going to solve this problem for developers. We'll build it as a cloud service, offer it out API exposed, and go see if there are any other developers out there that suffer from the same problem. To that the specific thing they were getting after turned out, here we are eight years later, over a million plus developers have signed up on the Sendgrid platform. Over the eight years, we have over 50,000 paying customers. We did just cross over the 100 million ARR recurring revenue mark a couple months ago, which we fired up about, which was super exciting. And we've just been able to. We've just had the great fortune of building a great business. So that's the quick up commercial on Sendgrid, what we do.

Awesome, thanks. Well, I want to get to Send Grid, but I do want to start at the beginning, which is your first job out of college. You can avoid any stories about me, but I want to hear more about those early days. Like, you know, tell us more about trilogy. You were 21 I think right out of Stanford, you know, not technical. And you joined this crazy software company down in Austin, Texas. So tell us about those early days. What was your first job, what were you doing, what were some things you learned? And we'll take it from there.

That sounds great. This is going to be fun trip down memory lane. You know, when coming right out of school I had studied economics and organizational behavior, assumed I'd go into like management consulting or the like. Found this very unique and special company called Trilogy that was in Austin, Texas of all places when I was up in school here in the heart of Silicon Valley. And every person I met there I just loved. They were crazy smart, they were fun people, great culture, fits, values. And so I ended up joining as one of a handful in our class of, we called it TU95, Trilogy University 1995, which was a great program that was led by the founder, CEO of the company. And he spent three months over the summer ingesting this cohort, a group of 50 kids straight out of college, across universities and business schools and on a 50 person company. So it was this huge bet the company investment that he was making. And that group was extraordinary. I think we probably had what, I don't know, a handful, six or seven of us that were non technical. Most of them were CS superstars out of MIT or Carnegie Mellon or Rice or Stanford, etc. And I remember being in week one going, oh my God, what mistake did I just make? And they're talking in a language I do not understand. I knew nothing about software, running a software business, I had no idea. And I said, so Joe, what exactly.

Am I supposed to do?

He's like, you're going to be the company's first product manager. Like, what's that do? What does a product manager do? He's like, ah, you'll figure it out, you'll figure it out. And so that's when I first got to work with Ajay. Was Ajay was responsible for figuring out how you took the company that was at the time a one hit wonder. Had one product solution and Ajay was responsible as the leader of a bunch of us kids for figuring out how we were going to go build out a whole suite of products. And myself and two other guys got paired up as a little Skunk works team to build the company's second product. And it was absolutely a blast. The most fun I've had and probably behind Sendgrid, I think the most fun I've ever had in my career. The learning curve was like this. I Had no idea what I was doing. I also had no idea the incredible amount of success that we had with that product and how atypical it was. We built a 20, 30 million dollars business in three years and we just didn't know what we didn't know as we were going through it. Some of the lessons learned, I remember this is 1995. So in the day we had these giant very heavy laptop computers going out on our field sales calls and we could never convince the mainline Trilogy sales organization which of course was at the time 10 guys, probably 10 people that would never sell the second product because they always wanted to go sell the first product. That was the thing that made all the money. Why would I ever go sell the second thing? And so two of us out of the three skunkworks team, basically I became the sales guy and the technical leader on it became the pre sales sales engineer and we went and had to go sell the first set of deals ourselves. And that was great learning. What's it like? Go get in front of the customer, be as a product manager, know your product inside and out, understand it deeply, be able to get in front of the customer and answer any question they've got. Build your own demos if you had to. Which we had to do a few times. But it was great. We took the first deal at remember PH Glatfelter? It says paper company in rural Pennsylvania smelled like ass when you got there. I mean it was awful. But we sold that first deal for a whopping $115,000 perpetual license. And then the next deal we did was with Arrowquip. I remember these all Arrowquip because they were hard fought wins. When it's like you see all the guys and gals in here doing startups like I remember they were hard fought wins. 200k deal with Aeroquip aerospace parts manufacturer. Then we got BMC software in Houston for 400k and then we went to Nashville or no, Memphis and we got Thomas and Betts, an electronics component distributor for the first seven figure deal that was a million bucks. And then we got Allegiance healthcare up for 2 million. By the time we got to Whirlpool around 5 million. The rest of the sales org went hey, what are they doing over there? But it was a great lesson learned in a lot of ways about a knowing your product, deeply understanding it, understanding the value of it, how you drive value up in the conversations with customers and how you get them to how you extract more of that value for your company was great. Lessons learned, how hard it is to do enterprise selling. That was hard.

Yes, Sameer. I mean, and we're going to contrast this when we get to Sendgrid here in a second. But talk a little bit about the model. I mean, the one story that was legendary Trilogy was Samir was probably 22 at this point and was running the pricing product. And he calls me up, which one.

Is he going to tell?

Yeah, exactly. He calls me up and he says, I met this customer today and I want to put it in the forecast for the quarter now. The quarter, by the way, was 14 days away. And I said, you know, NFW, there's no chance this a seven figure deal in 14 days. And lo and behold, 14 days later, Samir walks in with a fax into my office for a million dollars in 14 days and fax. Yeah, exactly. Just to date itself. It wasn't docusign, unfortunately. I wish it was docusigned. We wouldn't be, you know, in those days we had to go fly at Christmas to someone's house to get them signed. Now it's all docusigned, which is great. But that's when Samir became a legend, you know, inside the company. But just talk about that model, like what was good about it, what was bad about it, you know, what are the pros and cons of that? Of the Trilogy sales model?

Yeah, I mean Trilogy Sales model was, it was, it was very, it was a consultative sell. Right. So you deeply, you understood the company's business, what their levers were and then you figured out how the thing you had, the problem it was solving, how much was it going to be worth to them. And as a result, you really were going to monetize as much of that as humanly possible. And as you go through that exercise, one, I think it just drives a deep customer orientation because you're there face to face. You cannot show up and not know your customers deeply and intimately. The extraction of value in that model versus my current model, which we'll talk about later, is, I mean, literally, I don't know how many is that? Three, four orders of magnitude different from what we're doing at Sendgrid now. So you could extract a lot of value. So there's lots of good things about it. And the touch was fun and it was just fun.

I don't know.

For any folks in here that do get to engage with customers on a regular basis and sell, I think it's one of the most fun things that I've ever been able to do. The downsides are they're immensely unpredictable, those sales cycles. You know, that one happened to work out because they had this incredible pain point. And I knew they had a compelling event. They had to have it done and shipped by this date. And we convinced them that if they didn't sign the contract by that date, there was no way we were going to get them deployed in time. And so, you know, it's just so unpredictable and it's very expensive. I think about the team that we had on the ground to sell that deal, and in those 14 days, shit, that was a very expensive sales team.

Made money on that.

We did.

We did.

We did well. And by the way, and that would be one of the other upsides of that model, is if you can extract a lot of money out of it, you can make it a massively profitable business, which Trilogy was for a long, long time and remains today.

That's great. And one last thing on Trilogy, and this is relevant now, in your role as CEO of SendGrid, what you know, Trilogy is known for its culture and strong culture. What are the lessons learned that you took out of that experience? Again, at 21 joining this company? All I think the average age, probably even when we got to 2,000 people, was 25, maybe, or 26. What are some of the things you took from that culture? You don't have to mention things you didn't take from the Trilogy culture, which I'm sure there's a long list as well. But what are things you took from that culture?

No, I think Trilogy was world class on a number of fronts that have been immensely important to me throughout the rest of my career. And I've tried to help bring at Sendgrid as well. And by the way, one of the things that was already in place at Sendgrid, the first really was around the culture and how important it was to the founder, CEO and the leadership team that we were going to have a very distinct culture. And one could argue with whether or not there were, you know, whether you loved all aspects of the culture. But that actually was the lesson for me. And I would offer up to any of you that are building your businesses, building a culture that has edge, that is unique and is explicitly not for everyone. If your culture, if you define your culture and you're like, oh, everybody would want to work in a place like that. Go back to the drawing board. There has to be some edge to it in a place where, like, I'll tell you, at Sendgrid, I know some absurdly talented software professionals who would absolutely hate working at Sendgrid it would be their seventh hell. Like, we are so over the top. Collaborative humility is built into the DNA of the company. There are just aspects of the way we run and operate that would be antithetical to so many great people that I personally love. So it doesn't mean that you're trying to weed out people that you don't like, wouldn't want to have. It's just there's a large and massive talent pool out there in the world. Be very deliberate and conscious in your choices about how you define your culture and make it have some edge to it. And Trilogy certainly had that had a lot of edge in its culture. And it was not for everybody. And everybody would joke about it being cult like. Like, literally. The joke was it was cult like. It was cult like. And by the way, I hope I aspire for people to be like that. Send grid culture. It's sort of cult like. And we start to. We're starting to get there. We're starting to get there. And I love that. I love that. Where the people are so maniacal about the culture. They talk about the culture all the time. It's manifested in umpteen different ways. It's not just a set of things written up on a poster on a wall somewhere. I think Trilogy did an immense job with it. And Sendgrid has as well, been very grateful for that. The other thing the Trilogy was distinctive at and world class at was recruiting and hiring. And the talent bar was so extraordinarily high. And it was just this mindset of every single. And again, for all of you building companies, please take this one to heart. Every single seat, every single hire you make is critical. It is mission critical. And you can't get those wrong. And if you get somebody in there that's okay, you should be replacing that person with somebody who is distinctive. Because the differential between distinctive and okay is not linear. It's like 5x10x to average. And Trilogy was maniacal about that. And I think that worldview has always shaped the way I think about it.

Yeah. And I'd add one more thing on the Trilogy piece is the training both on the company and the culture was. I mean, Samir touched on it. Every hire that we brought into the company, you know, and we were primarily hiring from college, would start, you know, in the summer or fall, and they would not be allowed into the business until January 1st. And so they literally spent from August until December sequestered in a separate building. Joe, our founder, would come to all of us, you know, in the business and take our best people to run Trilogy University. Because he said, look, people are the number one thing in the company, and I'm going to take the best people in your business to go there. And in that time, he'd have teams work on things that would disrupt Trilogy. He would come up with all the ways that Trilogy could lose or get disrupted or killed, and he'd have startup teams work on that stuff within Trilogy University. And every year, one or two of those would get spun out as separate companies. And then the amazing thing was, over the course of six months, you learn so much about each employee, and they learn so much about the business. So then the process of deciding where each person goes into the business was really. I mean, unlike any other company I've been with, normally you recruit and you've already decided, hey, I'm recruiting this person to come into my business unit, into this role. And for us, it was a blank sheet. We didn't know until the end of TU where certain individuals would go. And so when you think about it, just the amazing cost that we undertook of six months of hundreds, you know, at our peak, the Trilogy university class is 300 people. So 300 people who are arguably not productive in the business for six months, along with our best leaders in the company, into you. So that I think, you know, Joe took it to the extreme, but I think the focus on training, onboarding, culture building for the new class, that was.

A competitive advantage, absolutely extraordinary. And the other thing on the hiring front, just another key lesson learned from our Trilogy days that I think is super important for all of you. As you build businesses, as you start to scale rapidly, one of the things that can kill you in a heartbeat is if you're not really super focused on who is doing your recruiting, who is allowed to do your recruiting. The mental mindset at Trilogy was hiring and recruiting is a privilege. It is not an obligation. And at most places, most companies, recruiting is like, oh, that's one more thing on my plate. I got my day job, I gotta go do five interviews this week, et cetera, et cetera. And that my. It's this obligation. It's this thing I gotta go do on the side. A Trilogy was. It was a badge of honor if you were chosen and allowed to be put in front of the candidates because it was an explicit understanding. We put our best and brightest in front of the candidates because that's who we want to attract. And it was a mental mindset that is totally different than in most places. And if you get out over your skis. And you hire too fast without being crazy, over the top, explicit about who you're. You know, we call it the hoodies. We at Sendgrid, we have our blue hoodies. And who we're giving the next hoodie to is the most important decision we make every week. And if you're not crazy focused on who you're handing them out to, boy, you could destroy your business and or your culture within 12 to 18 months.

So, Sameer, you left Trilogy, I think, at this point, where you were 25, 26, and Samir took over one of our companies, a young company that at the time was going a little bit sideways. And Samir took it on as CEO and did a great job, ended up selling it to Citrix. And at Citrix, Mark Templeton, the CEO there, took you under his wing and became a mentor here. You went from this crazy culture to Trilogy, young startup, running your own startup, even smaller. And now at this large public company. Tell us about that experience and again, your own leadership development. What did you take out of the Citrix world?

You know, a lot of what I left my. I was at Citrix four years, got the great privilege and opportunity to serve as a general manager there over one of their software units. And the thing that I took away most was just learning about scale and scale. Like we, you know, at Trilogy, we ended up, you know, a few hundred million. This was a few billion. And let me tell you, there's a big difference when you add one more zero to that. Everything about it was so different. Every process, the way you'd have to manage and lead people when you're at that scale was just remarkably different. For me, having my eyes open to how you lead through ideas that then lead through people that then lead through teams like the Cascading. I mean, it's just a whole different ballgame that I hadn't fully appreciated up until that point in time. And then the other bit was just again, back to seeing a wildly different culture. So Mark Templeton is one of the most extraordinary business leaders I've ever gotten to work with. He built this company, Citrix, joined when I think it was 50, 70 million as a CMO and took over as a CEO when it was at 100 million and grew it through 3 billion in revenue. The number of human beings I know that can scale through those different points in a business's life cycle is very, very, very short. But he was also on the personality side, which, of course, defined the culture of Citrix. He was a deeply humble man. He was just very, very grounded, very down to earth, had accomplished extraordinary things and you would never know it. And that permeated and he was very customer centric and had a, a demeanor to him that was about servant leadership. And it's a concept that I've taken to Sendgrid. I've loved working under him. And the basic notion was it is not the CEO on a typical org chart down cascading, it's CEO at the bottom of an inverted pyramid. And your job is, and the executive team's job is to support all the people in the business that are actually doing the hard work of the business. And Mark was always very explicit about that, understanding that our job was to serve, to have rudder in the water and steer right. The decisions we had to make were what markets to be in, what products should we have, which ones should we sunset steering big decisions. But then the rest of it was how do we get obstacles out of the way of the people doing the real work so they can go do their best work? And that I've tried to bring to Sendgrid. I talk a lot about that servant leadership. We train our leaders on it, we measure them against it, we promote against it. And that concept I think employees appreciate. I look at Mike, I'm like, I don't know, Mike, do you think? I think they appreciate when their CEO says, dude, I understand that. I'm not taking the phone call from a pissed off customer about X, Y and Z. I don't have a quota to hit. I don't have a deadline to make to ship this project. I don't do the hard work of the company. I don't. And I know that. And they do. And so our job is to serve them because they're doing the hard stuff. And I think that mentality that I certainly picked up from Mark. Mark had one canonical example that always is in my mind when I think of Mark and that humility and that servant leadership. Serving customers. We had our annual conference. You know, thousands of people show up and we have our customer advisory board, it's you know, the top CIOs of the Fortune 50. And lunch break comes and he literally would stand at the front of the buffet line and hold out and hold out plates to our customers. And he wanted to send that signal metaphorically and literally. I and we are here to serve you. And believe me, our customers heard it, they felt it, and every employee that saw it internalized. We are here to serve our customers. And I tell you, I believe that Citrix was as successful as it was for 20 years because the customers wanted Citrix to win. When you have a great culture and the people and the customer centricity is that deep and that real, your customers want you to win. They want to find a way to get the next deal done for you.

Awesome, Great, great story. Well, let's move on to Sendgrid. And I thought a good place to start with Sendgrid is, you know, Samir, you joined the CEO two and a half years ago roughly. And Isaac and team, the founders had built this amazing business model and you know, perhaps the polar opposite of the Trilogy business model where you're selling, you know, million dollar deals in 14 days. Describe, maybe start for the audience, describe the SendGrid business model. How does it work? What's the machine and flywheel the founders had built before you got there?

Yeah, an extraordinary go to market model and sort of the magic. One of the magical elements of Sendgrid is how different that go to market model is. And by the way, I'll talk a little bit about how I believe there's sort of an emerging class of companies and SaaS companies in particular that are going to demonstrate how incredibly powerful that model can be. We're not the only ones doing it, there are a handful of others. But by solving what I call product buyer fit as opposed to product market fit, they got a solution that solved a particular pain point for a given Persona who could put their credit card down and buy it. And so here we are, SendGrid. Of those 51,000 paying customers we have, we probably signed up on a direct basis, maybe 500 of them at most, over eight years. Which means to say that 99% of those customers that came in came in self service untouched, never talked to a SendGrid employee. They would show up on this, they would find us on the site. And whether they came to our site because they talked to a community evangelist that was at a hackathon, they talked to a developer friend who had solved the problem using SendGrid themselves. They did a Google search and came to us. But it was this revenue, it was a revenue marketing led model. So it's a marketing led model as opposed to a sales LED model and it's literally e Commerce for SaaS if I were to simplify it. And so you contrast those models like Trilogy was crazy high end enterprise selling seven figure minimum deals, oftentimes eight. Citrix built a multi billion dollar business on a channel model. Totally different. It was about the bars for the first 15 years of that company's life and then you have SendGrid. That's as a self service model, fundamentally it's an e commerce self service model. These are radically different ways to go to market. And what I would say is and you see way more of these companies, way more companies than I do for the room in the audience I would just argue from what I have seen in my 20 something years now, technology companies don't fail because they didn't build the right solution, they weren't solving a real problem or this code sucked. That's rarely the reason. The reason is they can never figure out the go to market model. They can never figure out the business model is going to go efficiently acquire and serve customers. That's where I think at least most of the companies I've seen fail.

And you know, I think, you know, I want to spend a minute just on this topic for a second because I do think go to market is a big decision for you know, all the companies in this room. For most young startups and you know, the sendgrid model's very attractive. We're going to talk about more of that here in a second. But you know, is it for everyone? I mean are there certain characteristics of types of problems, types of companies where the SendGrid model you think makes sense or there may be others where the trilogy, you know, high end outbound model makes sense?

Yeah. And as in all things, I would argue pick the model that works for the business that you are building. There is no one right answer. It's about executing the model to the best of your ability that best matches your business. I will tell you the things that are the redeeming attributes of the SendGrid self, what I would describe as self service SaaS and it's extraordinary and I love it and it'll be hard for me to ever go back to a different one but it doesn't work in all places. It works in our case because we have focused on actually in our case now, two Personas. It started with the developer and has now extended to the marketer. So we did the API based infrastructure to send your email. Now we've added a marketing application so you could send promotional email newsletters and offers and the like from the same system, from the same platform. But in both cases the developer and the marketer happen to be in a world where a there's massive volume of them is a giant horizontal, where there are literally millions of people that do this thing and are actively looking for solutions where they are comfortable self serving. Right. So if you were saying hey dude, I sell a security solution for big banks. Yeah, that's not gonna work. All right, this model ain't gonna, it's not gonna work for you. But it just depends on your model in our case because it's Persona driven and they are coming. A great litmus test. Go look at the volume of keyword search for the things that you are solving and if the answer is this, yeah, it's probably gonna require a heavier footprint. If it's, if it's large and people are coming, you can go and build a great self service business there.

And so maybe another way to say that, Samir, is it feels like in certain categories where there's a known need, a known problem, you know, as you said, the keyword search, because I contrast one of our other companies gainsight. It's not like, you know, people are searching for customer success software. You know, they may have been searching for customer success or so forth, but it wasn't a known need. No one sort of, it wasn't defined in the minds of, of the buyer. But you know, things like CRM or help desk or email, email marketing, transactional email, these are known problems that people are trying to solve. Unfortunately, the ways that exist to solve them aren't great. And a company like SendGrid comes along with a better way. But you can leverage the fact that there isn't a market education that has.

To be done, which is an immense, you know, immense benefit and assist for us that, you know, take email marketing, it's a $5 billion TAM. It's been around for 20 years. There are a hundred competitors. You know, as our chief product officer likes to say, you know, it's Wednesday and somebody's buying email marketing. Like there's always somebody out there buying it. It's a high velocity. We launched this product 18 months ago and we've got thousands upon thousands of customers already signed up on it. I mean it's extraordinary. Just it's because it's $5 billion TAM, right? And it's defined, it's known. Every marketer on the planet has email marketing in their as a line item in their budget, right. You don't have to create that. It's already there and they're just picking which tool they're going to use. So.

And Samir, you mentioned the community managers and you know, I think one of the strengths of Sendgrid, certainly when we invested in 2014, it was clear is this amazing groundswell of support from the developer community. And so how did that happen? Like did it just happen I assume there are things that the founders did in those early years to build and cultivate that like any both strategy or tactics that you can share on that front.

Yeah, I mean, I think the founders and the early management team. Mike is here, One of our VPs has been with us at the company for five years now. Five years. Did an extraordinary job of again being crazy focused on that Persona and figured out all the ways in the world that we were going to go wrap SendGridLove around him. So, you know those SendGrid T shirts Mike is wearing? One of them now. We hand out 10,000 of them a year via this army of community evangelists that show up at hackathons. They go to every accelerator on the plant, they go work with incubators, they go to VCs and say, let us tell you about how your portfolio.

Have they been to Castro Co selling before? Come on, where are those community managers?

Sure.

Yeah, exactly.

If they haven't yet, they haven't yet. So, you know, I think it's things like that, it's knowing like where does your Persona show up? And in our case, they just got very clear on these are the places that those developers go. And we're going to be all over the place and we're going to go create a brand. And I think the company just did an incredible job executing to that.

That's great. And so $100 million run rate, cross that mark. Congrats. Awesome. But the other thing which I think is equally extraordinary is the fact that you have P which is profit. And as a SaaS investor, it's unusual for me to be on a board that generates profits. How did you as CEO, how did your management team think about that decision? Because certainly you have access to capital. We'd give you more. Lots of people give you more to go spend. And so how did you guys come to this decision of hey, we want to be profitable?

Yeah, you know, I think, you know, I'd say it evolved. You know, it evolved as we first got start when I first arrived, you know, our company was. We were probably about a 40 million in revenue or so two and a half years ago, but we were burning 13 and a half. We were negative 30% margin again for a SaaS company. Not all that atypical to be burning.

That's light.

Yeah, that's light. And so, you know, and it really didn't cause anybody to bat an eyelash from our trilogy training. This guy that we worked with, Joe Leamont and I, you know, one of the many lessons that I took away from our years of trilogy. One of them was around profitability. And he had a great tagline that was simply profitability is a choice. It is a decision, not an outcome. And what he meant by that was you can build your model however you're making that conscious choice and you can decide whether what your expense profile is. And by the way, you can always spend more as the year goes along and your numbers are beating your conservative estimates. But if you build your plan to the aggressive, well then you over hire now you got to let people, I mean, and by the way, if anybody in here has ever had to let somebody go, that is the absolute worst feeling on the planet and should be because it was our fault that that happened.

Right?

We allowed that situation to occur. And so anyways, that profitability mindset was drilled into us so early in our careers. I remember and I showed up at Sendgrid at first and I thought I was being crazy at the time. And I remember when we first talked about it, I was like, well it's 13 and a half. I'm like, let's take out at least 25 or 30. Let's do. Let me, let me get it down to like 10 million. And Ajay said, I get it to single digit. Just mentally. You remember this conversation? I remember vividly I was walking through the airport and you said, just get it to single digit. And it will mentally, even if you get it to 99999, it'll mentally be different for you and it'll change the way you think about it. I'm like, that's a great idea. We ended up taking the burn rate from 13 and a half to 3 in one year. But it evolved like as we started to get into it, you started to see all the different. Once you start looking for you like okay, let's try to get this thing down. And there's travel stuff and there was some vendor renegotiations, there's headcount. I'm like, how many people do we still hired? In the year that we slashed that burn rate, we still hired 50 some odd people. It wasn't like we were starving the company by any stretch. It just meant we were going to get your expense growth in control relative to your revenue growth. Not very complicated or sophisticated insight. I wish I had, but it was literally that basic. It was just a, we're going to spend a little bit less than we are growing. And by doing that we took the. And once you get on that, once you see the trajectory and every month would Go by, It's like, holy shit, we're going to be break even here. We could do that by early next year. And then it starts to be a galvanizing force across the whole company. And you start to highlight the examples. And one of our founders and one of Mike and my close friends, Isaac, we said, isaac, there's this piece of code over here in the system. It's crazy inefficient, man. Can you rewrite that thing? He's like, dude, I'm all over it. Comes back. Literally saved us half a million dollars a year by refactoring the code on this one piece. Because when you're in Gogo, like, everything's ramping crazy fast. You don't worry about optimizing anything. You're just trying to hold onto the tail of a tiger and not have things fall over. So he goes and optimizes it and literally saves us half a million bucks a year. And all of a sudden, the other end, you start celebrating that. Of course, other engineers, like, hey, where else can we go find some dollars? And you create a culture of, hey, we're going to go. We're going to make this thing. Unlike Most software companies, SaaS, companies around, we're going to go be unique. We're going to be both high growth and profitable. And this was right around the time, I think, when we started to really attach to that rule of 40 construct. And that was a really powerful and helpful kind of regulator for us.

Do you want to describe that for the audience?

Yeah. So Rule of 40, simply put, was take your growth rate as a percentage year over year. Take some profitability metric, whether it's free cash flow or EBITDA percentage, et cetera. Add those two numbers together and they should add up to something on the order of 40%. So if you're growing at 20% year over year, you better be 20% profitable. If you're growing at 60% a year, maybe you could burn up to 20, but it's just sort of guiding. You're investing for outsized growth returns. And it's just a good kind of barometer for us. And so we, when I joined, as I said, we were negative 30% margin. We were growing in the low 40s. So we were at a rule of 40 of 13. And we took that from 13 to the high teens to the low 20s to the mid 20s to the high 20s to the low 30s. We ended last year right around on a run rate. I think on a trailing basis. We were at about 33, 4, 35 and this year we'll be well north of 40. We have 43, 45 and we are pushing, we're coming up with our 2018 plans on. Screw this Rule of 40 shit, let's go for Rule of 50 because we think we can keep driving leverage in the business.

And one thing you didn't mention, which certainly is tied back to the model and how attractive the model is, can you share what percentage of revenue spent on sales? Because you know this, this is different than a lot of, certainly a lot of, you know, my other portfolio companies.

Yeah, I mean it's an extraordinary model. So you know, all of you, it's helpful to benchmark and you want to think about. You take your, take your revenue line, percentage it out and go, how much do I spend on GNA as a percent of revenue? How much on R and D is a percent of revenue? How much on sales and marketing as a percent of revenue? The typical SaaS company spends about between 50 and 75%, sometimes more than that in sales and marketing. And the notion is hey, I'm going to get a three year lifetime value.

I think you say 150%.

In some cases and sendgrids is 25, 25 is literally half of what is probably median. And that is what allows us is that incredibly efficient go to market model. And it's interesting, when I first joined our spend in sales and marketing by the way was about 15%. So we've actually spent way more in sales and marketing which has allowed us to take what was a decelerating growth rate, flatten it and then actually re, accelerate it. So we're actually spending almost two times as much in sales and marketing and it's still 25%. It's immensely efficient model and it's because it's the self service model but that.

Incredible leverage. One last question before we open up to the audience for questions. So one of the other initiatives that you've put some real energy behind is this push towards your marketing campaigns product. And so you have this amazing engine, you know, it's going gangbusters. You've accelerated the growth, you've driven profitability. But you also have made the decision to take a set of resources and dollars and put it behind, as you call it, second act. Talk about that. And you know, how was that a hard decision and what did you know, what were the implications for the company when you've got such a phenomenal engine working so well?

Yeah, I mean there are a lot of dimensions to, you know, when you have a great first product Solution. I think my back to our trilogy days, I think I was shaped by that notion of we don't want to be the one hit wonder. So what's our act two and act three going to be? And so we adopted a three Horizon product strategy and said, okay, well, act one, act one should be the thing that is throwing off cash for us. That's the cash machine that allows us to invest in other things. Act two has got to be a growth engine and a growth engine for now. And then Horizon 3, and this is what Mike and his SendGrid Labs team focus on, are the bets for the future. We're not expecting growth out of them now, but they're going to become our growth engines of Act 2 at some point in the next two or three years. And so when we made the decision to expand, it was a very difficult decision because you think about everything that had made this company successful was a deep and maniacal focus on the developer Persona. And we had a big strategy debate at the company. Were we a developer services company that happened to start with email, or are we an email company that happened to sell by first selling to developers? Right, just. And by the way, we had a lot of heated debate about it. You could argue both sides of that equation. And we built. We actually were headed down the. We're a developer services company that happened to start with email when I arrived. And I think we all got conviction that actually our brand and the platform and the domain, the expertise, the people we have in this company, it really is about. It's an email company today. And once we got clarity on that, you're like, okay, well, we're doing these transactional emails, the automated ones that the app triggers. Well, there's this whole other tank over here, this big giant pile of email. And our customers would talk to us all the time about, hey, I start with you on day zero. I have to plug your API in when I launch the site or the service. At some point in my life cycle, we get successful, we hire a marketer. And now I need an email marketing tool. Can't you guys just have one? Because then I can just put it on the same platform. And if you don't, I gotta go use somebody else. And now I gotta. If I get an unsubscribe request from a customer, I gotta go to SendGrid and I gotta go to fill in the blank, whoever my email marketing provider is. And we were getting a lot of that request from the customers. Once we got ourselves over the hurdle of who we are as A company and you get clarity on your mission and vision, which we did and wrote down and were very specific about what that was. Then it actually got a lot clearer and then it was easy because then you're like, okay, let me get this right. We got this great brand halo around email. There's a TAM that is perfectly adjacent to ours that where we can go do some TAM stacking and it's literally two to three times larger a TAM than the one that we are currently in. And the average price point is somewhere between four and five times more than the thing that we are currently doing. And all the things you would have to go do to be great at that second act are things that you would have to have done in your first one. You'd have to have great relationships with the inbox providers. You'd have to build ascending infrastructure that could send lots of emails. You'd have to, I mean you go through this list, you have to be able to fight spammers and fishers. You have to, you come up with this list, you're like, holy shit, we've done 85% of these things already. Let's just go, let's go tackle that market. And I deeply believe we built the first hundred million dollar franchise around our email infrastructure business. We are going to build another multi hundred million dollar franchise around the marketing category. And then the thing that we get really excited about and that Mike in the Labs team's working on is taking that from a email marketing platform and making it a multi channel marketing platform, a growth platform that works across other channels.

Yeah. So one last thing I want to ask is about email because I think when a lot of people in Silicon Valley, tech folks hear email, they think, okay, that's 1990s, it's dead. It's not chatbots or text or messaging or what have you. You know, my, my kids don't respond to my emails to them and so why email?

Why email? Yeah, you know, it's, it's one of those great things. I believe email will outlive us all, I really do. It's going to be here forever. It is. You know, remember when Google, it's going.

To kill us all before that.

It might do that too. Might do that too. Our inboxes are all overflowing. I know that. Anybody here remember Google Wave? I mean email has tried to be replaced by some other, better medium so many times in history and I'm willing to bet every day and twice on Sunday email is going to be here a long, long time. You know the volume that we send today and the number of people that continue to actively engage, you know, just give you a sense of scale. We send 35 billion emails every month, over a billion emails every day. That's more than two times the volume of Twitter. Just as a relative sense of. Give us relative sense of scale. We touch 1.7 billion unique email recipients every month. So email as a channel is massive and it is the most used by the marketer. It's most used because it's also the most efficient. So the ROI, for every dollar you spend in email marketing, you get $38 back. And every marketer knows there's a reason that there are in 2017, thousands upon thousands of email marketers around the world that do nothing but figure out how to get into your inbox and get a message that you're going to respond to. Think about this. The difference between an email and an online advertisement, it's literally a placement. Both. Imagine them visually. You got an ad on the side of a website and an email in your inbox. There's a picture, there's some words, catchy. There's a link to try to get you to click on it to go back somewhere. The only difference is the placement. One's in an inbox, one's on the side of a website. So I just don't. Marketers are going to continue to try to find ways to get in front of their consumers, and email just remains the most cost effective way of doing that. I don't see that changing. There's a lot of discussion with mobile. Mobile explosion. Well, mobile is going to kill email. And you're like, well, turns out the email client remains one of the top five used apps on mobile. If you look at emails read, we send 35 billion emails a month. We know better than virtually anybody on the planet. 70 plus percent of them are read on a mobile device.

So it's everyone at the Whole Foods checkout is reading their email while they're waiting, right?

That's right. How many people here wake up and first thing in the morning roll over their phone, grab their phone and check their email? How many people bring their email in the places they shouldn't be bringing them?

It's.

It's not going.

Yeah. I think the other thing that's amazing about email is that even though the inboxes are controlled by Google and Apple and a handful of folks, it's totally an open platform. I mean, there's really no outside of spam. There's really no gatekeeper, unlike platforms like Facebook. Or WhatsApp or Snapchat, where you're beholden to those platforms with email. The consumer has gotten used to the fact that hey, this is mine.

I'm in control.

I'm in control.

I don't think a lot of consumers are going to be willing to give that up anytime soon.

That's great. Well, why don't we open it up to questions from the audience.

Sameer, a question about your sales team.

Super capital efficient. But you talked about a lot of developers coming to your website and just signing up. How much of your sales team, like how do you structure it? Kind of like SDRs, AE, do you have any contact with salespeople or is it purely marketing spend, just driving people.

And doing the community? Yeah, I was remiss in sharing some of the specifics. So over 100 million in ARR scale. We have nine quota carrying reps. They are all inside sales. We don't have a single field salesperson and won't. We're sort of Atlassian like in our religion on this topic. We explicitly do not now again know your business. So we explicitly do not sell to the enterprise and don't want to. To be clear, until they are ready to adopt cloud services at scale, there's no point in me wasting time trying to convince JPMorgan Chase that they should be willing to use more public cloud services three years from now, five years from now. It's a pull model, not a push and so at some point they will but so we have a very small inside sales team. 80% of what that team is doing is responding to when somebody pushes the button that says contact sales. So it is a inbound driven model and yeah, we have an SC and they'll help close deals. But it's an inbound model. Now we do, we have, you know, we have a handful of SDRs that are now we are with that 20% of their time are starting to knock on doors of people that we think are good fits in particular vertical industries. They're digital native tech savvy businesses. But that's all SDRs and inside sales only.

Spirit.

It seems like your average customer pays.

You $2,000 a year or about 170 bucks a month.

How important is it to your business?

An annual subscription plan versus a month to month subscription.

Yeah, it's an extraordinary business. So 51,000 paying customers. It's highly polarized across what we call high volume senders and low volume senders. There's a couple thousand in the high volumes and a long tail 49,000 little ones. So the bigger ones do spend. We do have lots of customers that are spending hundreds of thousands of dollars a year with us, but as you'd imagine, tens of thousands that are paying us on average 1,000, 1,500 bucks in a year. We have 95% of the customers are on MRR monthly credit card bill runs. We have a very tiny percentage of our revenue that we put under ARR multi year contracts. We'll probably do a little bit more of that at the tippy top at the high end of our customer base that are paying us hundreds of Thousands. The first 5% we're like, dude, seriously, we're writing you a check for $800,000. Can't you send us an invoice? And they're like, okay, yes, reasonable, we'll do that, we'll break the model there. And so we are doing that a little bit more for the tippy top, but otherwise it's mrr, it's monthly recurring and we kind of like that. It keeps us on our toes. We got to earn our customers business every month, month in, month out.

Makes sense. Question over here. What scares you?

I mean I look at mailchimp manual.

They sort of did the reverse.

Oh, I don't know. I don't know. A leader in this room that isn't scared and kept up at night on a whole array of things. No matter how great things are going, you know, the old only the paranoid survive. Andy Grove I believe is right. We worry about lots of stuff. You know, one of the ones that keep you top of mind, you know there's frankly the biggest thing that I worry about right now is all the people stuff. I am so excited and so confident in the businesses that we have and the markets that we play in around the email infrastructure developers, email marketing and the marketers. We can go build a multi hundred million dollar businesses in each of those two. And our language internally now is we want to go build a billion dollar revenue company, not a billion dollar valuation company. Like we want this thing to be an iconic built for the ages, built class type business. And we're just fortunate that the two that we're already operating in are great markets with great unit economics. We can go scale them for a long time. The thing that we absolutely could screw up is the people. And by the way, lots of companies screw that up as they are scaling and scaling fast. And when I say how do you screw up the people? You let your culture get away from you. You change the bar on how you're doing, your hiring, how Efficiently. Are you onboarding them? Are they. Are you continuing to build and retain that special culture that allowed you to get to where you are today? I believe it'll be people. Yeah. I really do. It has been today in my two and a half years. I'm sure Mike would agree. Our inability to recruit as many people as we would like of the caliber we would want has absolutely been a regulator. I believe we'd be growing in the 50s or 60s if we could hire more great people.

Do you move them out?

Do we turn geographically?

How do you think about geographically?

Oh, yeah, Physically reload them. So the company is headquartered in Denver, Colorado. So our center of gravity is there. We've got about 300 people there. 70. No, about 50 people are down in Orange county because our founders were from Southern Cal. And then I joined the company. We opened an office here in Silicon Valley down in Redwood City, and there were about 30 or so people there. So to date, we basically said, we will reload great talent from anywhere. This is back to that maniacal focus on great talent from our Trilogy days. We'll bring them wherever. As long as they want to go to one of those three places, we'll reload, absolutely. Your CEO at Trilogy sounds like an extraordinary person.

He was.

Is.

Yeah. I mean, Joe. I mean, he's a brilliant entrepreneur. And, you know, I had the fortune of meeting Joe in college, and his father had run a software company. So Joe's. Joe grew up as a GE family. His father was an executive at ge. He ended up ascending to be the number three executive at ge. He ran GE Information Services. Joe's mentor and godfather was Jack Welch. So as a young person, he's hanging out with Jack Welch. That certainly, I'm sure, didn't hurt.

And then in high school, picked up a few lessons.

Yeah, exactly. Joe's dad left GE and ended up taking over a software company down in Dallas, which ended up turning around and selling for $400 million, which back then, you know, 1988 was a huge number. And Joe would hang out there in high school. And so when I met him in college, he was a junior. I was a sophomore. He said to me, I want to build an enterprise software company. And I said, what the hell is enterprise software? I had no idea what it was. He said, have you heard of SAP? I said, no. Have you heard of bon? I said, no. Have you heard of Oracle applications? I said, no. But he knew all that stuff, you know, even as a college student. And so I think that certainly helped him quite a bit. But he's also wired in a way that, I mean, incredibly brilliant visionary. I mean, a lot of the things you see in Silicon Valley over the last 10 years at places like Google, in terms of how they built the company, the culture, the recruiting, the kitchens, like all that stuff trilogy did 10 years prior, Joe was at the forefront of a lot of the things that have become normal in Silicon Valley. I mean, if you think about the 90s, almost every other enterprise software company that was being built at the time, certainly companies we competed with, were being run by folks in their 40s and 50s. Your trilogy was all 20 year olds, which again now, today is very normal. Now it feels like if your company's not all 20 year olds, you're out of touch or not modern. But it was very innovative. So he was, you know, the Forbes cover story they did on Trilogy was they keep getting younger. It was a picture of the founders of the company who were all 25 years old at the time. And that was unusual, you know, back in that era. So Joe's extraordinary entrepreneur. I've been in the venture business 14 years, probably one of the best I've ever met. And, you know, we both had the good fortune of working there, learning from Joe. And I think the other thing we all got out of Trilogy is the relationships that came out of it. I mean, incredible group of people.

This is a question for both of you. When you look at hiring, do you.

Look at people who have hard skills versus do you look at who the person is and how do you train.

What you bring to the team? Yes. Which is, you know, I would say, and it's different, by the way, by stage of company. And so, you know, I think at centigrade scale now, you start swim lanes get narrower by definition. Like when you're a startup, you're wearing seven different hats, as we did when we were getting things off the ground in Trilogy. And that was part of the fun of it. It was great. As we scaled our roles, all necessarily got a little bit broader in scope, but narrower in what you did. As you get narrower in a swim lane, your depth of expertise in that swim lane has to get deeper. And so as Sendgrid made our transformation, we had a bunch of awesome generalists in the first stage of the company. And as we got bigger, we had to go find people that were not good at seven things but were world class at one thing. And that's just a, you know, that's a stage of company decision. So for where we are now, for any given role, they do have to be deep, hard skills in what the thing is that we're trying to do. And they have to be great culture fits. So the culture value system that underpins our culture at Sendgrid, we call the four Hs Happy, Hungry, Humble and honest. And every candidate is interviewed against those four. And we have turned away tons of awesome hard skilled folks that didn't align to those four H's.

Hi. You talked about your 40 rule 25%.

Yeah, we have a fairly complicated. We've made things a little bit more complicated on this front. You know, lots of people talk about CAC, LTV, payback periods, etc. And because our customers, once you get past a handful of months, they stay on with us virtually forever. Like the churn rates are incredibly low once you get past a certain point and then their organic growth because we have a transaction based pricing model. So the more you send, the more you pay us. It's hard to do a the terminal value on it. So we have a fairly convoluted cac. IRR is what we call it. And it's a turning figuring out a internal return. It's got to be that's north of 150% based on the customer acquisition costs in any given month for a given cohort. All that translates, roughly speaking to it's less than a year is our payback period is how we think about it. It's got to be less than a year. And I would say, you know, the new product line is a little bit more than that. The old product line is way less than that. Awesome.

Great town.

It's a great town. Yeah.

How did you consolidate that conversation?

Some of it, you know, I would say there's probably 20, 30% of the savings came from just basic locking and tackling stuff. The vast majority, as all of us know in building tech companies comes from headcount. And so it actually it wasn't nearly as complicated as it sounds in some ways because you just said, okay, well if we're going to spend at a growth rate that is lower than our top line growth rate, that necessarily means you can only hire this many people. And that, you know, that was a significant regulator on the spend of the business. I should also mention, you know, we do have the luxury of scale. So you get economies of scale where all of a sudden now, you know, the same number of people or the same amount of infrastructure can just, you know, the volume grows by 50%. You don't need to grow the infrastructure or the engineering team by 50%. You can grow that by 10%. So you got. Our gross margins went from the low 60s when I started to the mid 70s. So it's just a lot of just conscious focus on, like, okay, how do we drive leverage out of this place and that thing? So it was decisions like that.

Jason, how much time do we have?

What do we have? Jason?

Maybe like two more questions. Two more questions. We have the last one.

So three.

Okay, three more questions. How about in the back there? My name is AB and I run an education company. We just raised the PC round and hired our first employee. My question is to sa on culture. I mean, so many things going on. You're selling, you're doing this. What is the right time to really start putting something on?

Yesterday? No. And I say that sincerely in that you get the great privilege of building a company. It's your company, and you get to define it the way you want to. But I would strongly advocate for being very deliberate and intentional from day one, day zero, whatever day you're on, start tomorrow. The sooner the better. Because you defining that will help you in the. It's a giant. It's a giant labor market. You want to attract the people that are going to be the kind of folks you want to work with day in and day out. Because what you are embarking upon is fucking hard. It's going to be. It's hard to build a business. And so you want to be doing it with people that you love, that you. That you fit with, that you're going to have fun doing it with. And you can't. You just can't do that if you're not deliberate about it from the outset.

How about over here?

Two questions to it. So what was the inflection point where.

You thought that, you know, we have to go through this transition of a decision about. It's a female company that has built.

Its first tool for a developer community.

Yeah.

Versus know, a developer services company. The second question, like, you know, it's.

Related.

Which are the two.

You'Ll be.

Invested, you know, series B and D. Right.

C and D. C and D. And.

Did you have a foresight on the.

Company is going to go through this transition?

Yeah. So let me answer that one because it's a quick answer, which is, you know, Sedgrid, great company. We're excited about it. But, you know, the moment Samir took the job, we were writing the check. So plain and simple. I've had the pleasure of knowing Samir for 22 years. I've seen him in action in a whole Range of scenarios. The CEO of one of our companies as a colleague and teammate in the trenches, in the foxhole, and we were fighting, you know, some tough wars over the course of the time of Trilogy. And, and so, you know, in my view, Samir and I said this to my partnership is one of those individuals that. It's a blank check. It's a blank check, Samir. How much? Tell me the maximum I can give you and it's yours. And that's why we invested. Great company, great platform. But to be honest, our first investment in 2014 was the day after, you know, this superstar took the job.

You ever see a brown guy blush? Cut that out, man.

Cut that out. No.

And obviously the converse is true. When you have a mentor that's been with you since you came out of school, you want that advisor. And all the conversation, by the way, that strategic discussion, to answer your question, had that strategic discussion with Ajit about what do you think on these two things? You know, we had a very, you had a very strong point of view on it. We had a lot of discussion and debate about it. And that's what you want in a mentor, in a friend and an advisor. And in our case a board member also is somebody that you can bounce ideas off of and know you're going to get great, sound strategic analytical thinking. So it's a no brainer.

It's really easy.

Both of you.

We've been doing this software for a few years, right. One to ten. How good are the times today?

2017, you probably have a better view on it for across SendGrid's 11. I think they're very good times. I do, I do. All the conversations we've had with investors, private investors, public investors.

Has it ever been better?

Oh, sure. Oh, it has been. I think the dot com days were stupid, so maybe that's worse. But in terms of valuations, yes. Better, but stupidly bad. No. I think it feels now that they're based on at least some economic fundamentals, but they're definitely very favorable. It feels like the markets are being more generous than normal where we want to 10.

Yeah.

I think about multiples.

Yeah.

A holistic view of all this Eco SAS software where we want.

Yeah, I would say we're, we're, we're close to 10. I mean. Yeah, I mean, I think certainly from a founder perspective, you know, number one, there's lots of money, you know, so that's good. And unlike the dot com days, the money's still rational, but there's lots of it. And It's a good valuation, so it's not stupid. I think cloud is here and it's opened up so many new opportunities, you know, verticals, segments of the market that could never be addressed before. I think the cost to get a product out the door has come way down. I think the fact in this day and age you can build a bottoms up model, you know, self service, you know, you don't necessarily have to have the feet on the street, you know, in order to build a software company. I think all of that is positive. The reason I probably don't give it a 10 is I think that also means, you know, lower barriers to entry, you know, for all those reasons. So more money, easier to start a company means more companies and it's more crowded. And you see it in every landscape. You know, the HR tech landscape, the AI landscape, the security landscape, the Martech landscape. Each one of those, I think they have to make smaller and smaller logos because it's literally like 5,000 companies per landscape. And it's crazy and it's only growing. And so I think, you know, the good news is if you get to scale like Sendgrid has, you know, it, you can sort of drive to escape velocity, you can consolidate, you know, et cetera. When you're early, I think the, it's even, you know, the bar is even higher now to make sure you have that distinctive culture that Samir talked about and that distinctive product market fit, really knowing exactly where you're unique and why you're different. I think, you know, there's much, it's a much higher bar, I think, in that regard than it was. SAS is, has some good and bad. I think the good certainly is it is a fundamentally more sound business model to better business model, more sustainable business model. But I will tell you, I do miss the days when at Trilogy we closed a $30 million deal and literally two days later we get a check, are wired for $30 million into our bank account and, you know, versus having that dribble over five years, you know, the cash flow characteristics. Trilogy raised $3 million, never spent it, you know, and is today throwing off 200 million of cash flow a year. That's the benefit of perpetual license. The downside is in 2001 everyone stopped buying software and our bookings went from 300 million to 150 million, you know, in one year. So pros and cons to everything, but overall it's a great, great time. Yeah, 959 5.