Jyoti Bansal and The AppDynamics Story: From Idea to $3.7B

All right, let's give it up for Jody. That's pretty cool. All right, thanks for coming. This is great. Wow. So Internet time. So when did this. It seems like months ago. When did this deal get announced?

On, I think on 16th.

16Th. All right.

A few weeks now.

A few weeks now.

So fast. Hard to track.

Yeah. Well, congratulations. So how does it. Well, I want to talk about other things. Just one thing on the acquisition, but because it is crazy. How does it feel? It's not like AppDynamics is a brand new company. Right. The company's doing hundreds of millions in revenue. But does it. How does it feel?

It's been kind of a crazy ride because it's been, you know, we were on deep in the IPO path.

As deep as you can get.

Like two days before the ipo, everything was tracking really well, and there was excitement. This was the first tech IPO of the year and all that. And suddenly we took this deal and everything moved so fast. That was kind of the roller coaster part of it. But as a founder, there is always a bittersweet part of kind of selling your company.

It's a little bittersweet.

It's like you have been doing it for eight, nine years and now you sell it. So there is that part as well.

Yeah. So there is a little bittersweet even now. Yeah, a little bittersweet. So let's go back. I want to talk about a couple things early in time. I want to go back first. I want to. Let's go back to the magic moment, and then I want to go back to how you got the company off the ground for fun. But AppDynamics and actually give folks. Sorry, I should step back. I'm a fan. But give folks 90 seconds on what the company does, because I should have started there.

Okay.

Yeah.

What AppDynamics does is builds application monitoring and intelligence. Everyone has apps. You all are probably building some kind of app, a website or a mobile app or some kind of software. And AppDynamics makes sure that if something goes wrong, you can troubleshoot and figure out what's wrong and optimize your apps.

So everyone. So apm. So you were at Wiley before that, and was Wiley your first big role?

I was at Wiley as an engineer at APM Engineer.

All right, so your life's been in apm, right? And so what was the white space that you saw? Why did you go for it?

I saw two white spaces. One was more of a technology white space. APM was there. People are building, monitoring for apps, but the apps were going through this kind of a big transformation of just becoming more distributed. Like when you do a click, does it go to two or three servers or does it go to 20, 30 different servers? And that was the transformation that was very obvious that's gonna happen with cloud and DevOps and microservices and all that stuff. So to me, that was the technology white space. I knew that we would need a next generation of apm. There was also a business model white space. This was 2008. Right.

So, yeah, perfect time to do a startup. Right? I mean everyone was just throwing money all around. It was the easiest time. Right?

Yeah, but if you look at like every enterprise software category, then just going through that change on consumerization of enterprise software, like you know, CRM going from Siebel to Salesforce and HRM going from PeopleSoft to Workday, but the enterprise infrastructure like monitoring and logging and you know, security, they were just starting to go through that. So I also saw the white space that we can do a business model disruption. We can bring that consumerization into this for this kind of infrastructure software, make it easy, simple, you know, make it. And take simplicity as a competitive advantage.

Got it. So you saw that, but it took a few iterations to get it right. Right. What did you get wrong in the beginning?

So, you know, you start with, I saw the white space, I knew the market was large and I had a hypothesis on the solution, how I would solve it. There were two things wrong in my hypothesis there. One, the first assumption that was wrong was I thought like, if you want to build the next generation of apm, you have to build like a closed loop system where as a developer you tell us that I want one second response time. When someone does a checkout from shopping cart and the system takes care of it automatically, you don't have to do anything like scale up, scale down and you know, provisioning of capacity and all those things. Yeah, it turned out that we were too early for that. The world wasn't ready for that. It's like people wanted just monitoring and data to begin with because going into advanced closed loop was much farther ahead. So that was the first pivot we do. If you look at now the serverless movement and what, you know, Amazon AWS Lambda and all is about that closed loop system that I was trying to do. Yeah, so that was the first pivot for us. The second one was about more about really where do you store the data. So at that time it's like if you would start a company and you were Doing anything on premise, you would look stupid. Like everyone would be, why are you doing anything on premise? Yeah, so that was our assumption as well. We were like, everything was SaaS, everything was in the cloud and we're trying to go and talk to these large enterprises. And what we learned was that for business applications like accounting and finance and hr, they were starting to get comfortable putting data in the cloud. But for infrastructure software where it's like monitoring and databases and logging and security and they were not yet. And about 80% of the market wasn't willing to do, you know, especially in enterprise, to put the data into.

So you started thinking you could do Fortune 500 in SaaS, but you had to actually go on prem to work with those systems.

And we are one of the few companies like normally people go from on premise to SaaS as a vendor. We are actually one of the very few companies who went from SaaS to on prem to go after the market.

And did those iterations, did they extend the timeline it took you to get it off the ground?

It did. So to get the product market fit, it took us about 15 months before we shipped the V1. The thing is, if you're going after an existing APM was an existing market. If you're going after an existing market, your V1 has to be, at least on some dimension, significantly superior than incumbents.

Something has to be 10x better. Right? One little piece.

If you're going after a brand new market, you can still start small because it's better than nothing. So you go after. In our case, it was an existing market, there were strong incumbents, so I didn't have an option. However long it took, I couldn't go out in the market unless something was 10x better.

Yeah. So, and then let's follow up on that. I want to. You've written a lot about yourself as a 20 something engineer that learned all this stuff, which I want to come back to. But so you get the product. How did you sort of learn about sales and customer success and like what were your learnings there? How did you figure out how to sell into the enterprise?

It's, you know, and I've written a blog about this on. I consider building a startup as like series of milestones.

Right.

It's like you get funding, that's your first milestone. You get the product market fit to a reasonable shape, that's the second milestone. Then you figure out how to sell, that's your third milestone. You figure out how to scale sales and then you scale customer success. All those kind of things.

Right.

So when we were, you know, to me it was clear that the enterprise spending is about 20, about 80% of the market. So there were numbers from Gartner and everyone that in our space, 80% of the market share is large enterprise and 20% is SMB.

Yeah.

So to me it's like if I have to win one, it's better to win the 80% of the market share instead of the 20%. So I knew we have to go after a large enterprise. And now it's like, how do you go and sell into large enterprise?

Yeah.

So as a first time, not like.

You'D sold yourself into large enterprise. Right.

So as a first time entrepreneur, you go. And the way I've learned is you go and study different companies. Right. So I started study how do you go and sell. Right. So it's really, if you think of there are two, the whole spectrum is one end is a traditional enterprise software selling, which is that you have like these field salespeople and they're doing this 12 to 18 month sales cycles and you know, products that are hard to use but they take like longer, longer deployments and trials and all that. And you do like a million dollar, half a million dollar kind of deal. The other extreme is the very, you know, where you have the product is freemium and very simple to use and people do free trials themselves self service. You have inside sales at the most. And you go after SMB with that.

Yep. Right.

So initially I was like, okay, I have to pick one of those. And if I'd go enterprise, I have to pick this extreme. And then I, when I started looking at companies that, who were trying to disrupt that thinking, I saw some interesting companies who were trying to merge the best of the two. And at that time Splunk was one of the companies that I really thought was doing a really good job. We ended up building that kind of model which is kind of the best of the two. We're still going after large enterprise, but we had a freemium product. People can download our product and in five minutes could get up and going. It was kind of a land and expand where we are inside sales who will sell for like 10k, 20k, 30k and gets people started in like 30 day sales cycles. And then we had very strong field sales also. Who will take those deals and expand into larger half a million a million dollar deals, which you can't do without strong enterprise selling.

You can't.

So if you merge the two, you can still go after large enterprise, but in a very Very different way than the traditional model. And what I also did was I ended up hiring the head of sales from Splunk to come.

And sometimes that doesn't work, but it.

Worked well for us.

It did work. Chasing the number one at the logo actually worked. Right. Was it hard to recruit him?

Not that hard, because he was in the process of getting out of there, so the timing worked out in some way.

And what were a couple things he did that inflected the curve when you made the right hire.

He was my first head of sales. So we were at zero revenue then I had, like, $70,000.

You took them out of Splunk, doing hundreds of millions in revenue to join a zero revenue. You're a magician. How exactly do you. How do you do that?

So, you know, Splunk wasn't as big at that time.

Okay, but 80 million.

But yeah, they were.

I mean, it was an iconic company even then, wasn't it?

It took some selling.

It took some selling.

It took some selling, but it was. You know, I really admired the model.

He did sell your first. Now, okay, then this is like, contrary to some best practices. Did he close your first customers or did you.

So I had six paying customers in Enterprise before I started.

So you knew how to do it.

So I closed the first six myself.

And you said, he can do seven to 700.

And I hired him and said, hey, look, talk to these customers. See how happy they are and how we can, you know, the first six customers. It's much easier to hire ahead of sales once you have some paying customers. Otherwise, any good sales guy would, like, would not come at that point.

No one good will come. Yeah, but still, getting him that early from Splunk is a pretty good move. Right? And did you raise your venture capital? You raised a round at that point, right?

Yes.

All right, so you had the capital.

I had the capital.

How much did you raise at first?

First round was five and a half million dollars.

Five and a half million dollars. And you said you had to pitch, like, 140 VCs or something like that.

I think you did that.

I said I had to pitch 150 VCs once. How was it the first time?

It wasn't that bad, but I had to pitch 20 VCs.

20 VCs.

I had to pitch 20 VCs. And, you know, it's. You learn through that process. Like, you know, are you. Is your pitch wrong? Is your. Is your idea wrong? Is your. Like, you know, or you have. You need more validation in the market or you Know you have to prove that you can build the technology or whatnot. Right. So it's yes, it was hard and it was 2008 also, so it wasn't like the best market crazy time.

Right. And so. And what's the as then? A 20 something engineer doing your first company. What was. Since it's found, since it's money day, what did you learn? What was the magic for fundraising? When did you get better at it? What was the hack?

I think as an engineer, I like to put some kind of a rational framework around things. What is the magic behind fundraising? What you just asked. To me, it really occurred that there's only three things I need to answer. One is if I'm raising money from the big VCs, which I wanted to raise a Series A, I need to convince them that this could be a billion dollar company. And it took me some time to learn that because I would, you know, you would think like, you know, if you have a company that's doing good business, doesn't necessarily have to be a billion dollar, but the VCs don't want to invest in another.

It's not intuitive at first for them.

It'S like go big or go home. That's how the model works. So once that clicked to me that you know, the if I need to get money from VCs, I need to convince them that this could be a billion dollar business.

Yeah. The second, did you believe it before then that it would be a billion dollar business or was it part of your pitch?

I did believe in it, but I didn't, you know, I didn't make a case for that.

Got it.

Because I didn't think that I would need to make a case for that then. And it's like, you know, you're a 20 something year old engineer, you go and pitch to VC that this is going to be a billion dollar business. You are hesitant in the beginning, right? But I was hesitant, yeah. And I was like, no, I need to make the case first because that's what they're looking for and the case has to be reasonable case, not just something you make up. The second thing is that you have to show as much validation as you can. VCs are always hesitant on unless when they say you're not ready, show me more traction or something. They just want validation from the market, market customers, experts, someone. And the third thing I learned is that I need to show why me? If you convince the VC it's a billion dollars spent opportunity, you have shown the market validation VCs still would ask you, like, why should I invest?

What was your social proof?

What's your social proof? What's your social proof? Do you have a technology advantage over someone? Do you have an expertise advantage over someone? And that's, you know, so I also have to learn how to talk about that and how to create that proof in some way.

Right? Yeah. So let's go back a little bit in time because you've written about the H1B process and we've talked, we've threaded a lot of these immigration topics today. And what did you write? It took you seven years to become a founder because of it. So share that for folks that are only half familiar with the process.

So a lot of engineers from all over the world, engineers, scientists, come to us on H1B visa. An H1B visa allows you to work here for a company, but it's kind of crazy that it doesn't allow you to quit your job and start a company. And so I was here on H1. I wanted to start a company. I wanted to be an entrepreneur. That's something I wanted to do. But you just can't do it, which doesn't make any sense. And the process of getting a green card could be anywhere from five years to 10 years, which is also equally ridiculous. Imagine someone coming from a top school in India and they come and do a master's in MIT here, and now they have an idea to start a company and they're not allowed to do it for five years, seven years, ten years. That's wrong. So I've talked about how that needs reform. That's a screwed up system. It needs to reform.

So would you have left Wiley a lot earlier if you could have or what's the process?

Yeah, I would have left Wiley many years earlier and got it. And went after start doing this.

Got it. So how long, so how long were you trying to, to be a founder? How long were you going through that process?

You know, so I've been working in similar kind of areas and I had a lot of like many times you have like this aha moments on, hey, there's a big white space here, there's a big opportunity here. And I wanted to go after those opportunities and I just couldn't because of the visa status right now.

I should know this. I've been through the H1B with a lot of my team. But remind me, so it's seven years and how do you, how do you get to then found app dynamics? Remind me what's what changes. I should know this.

So you get a green card. Once you get a green card, you can do that.

Okay. Of course. Yeah, yeah. Got it. Yeah. It's seven years to become a founder.

To get a green card. You know, that's, that's why the. I do think the strength of Silicon Valley is that it allows people from all over the world to come here and you work with some of the best people in the world in building companies and building great products and all of these part.

Right.

It doesn't make sense to make it harder because that is the competitive advantage that Silicon Valley has. So that's why I talk about that we need to reform some of these arcane kind of rules around this stuff.

Yeah. What do you think over the last, better part of the decade, what is the competitive advantage of Silicon Valley today? Is it notwithstanding this, this horrible immigration drama, is it stronger than before? Is it weakened? What do you think? What do you see?

I, I think it has, it remains very strong. You know, it's. The good thing is like, you know, the startup activity and the across the world has accelerated and I see it almost everywhere in the world. I see in Europe, I see in Asia, everywhere. And even in US outside of Silicon Valley, there's so many startup hubs that are starting to emerge.

Yep.

But that doesn't mean that Silicon Valley has kind of gone down on the startup activity. So I do think the startup activities increase everywhere. The Silicon Valley advantage of like, you know, the venture capital ecosystem is very strong. The talent and immigration that is still very strong. That, you know, you have good talent coming here and then you also have the experience and expertise and mentorship from. Mentorship from other people. That's very strong framework. But also culturally, Silicon Valley has the. It's okay to start a company and fail at it and no one looks down on you. And that kind of the cultural aspect is very, very key. Like everyone wants to try it at least.

Yeah. So let's go. I want to dig into. Because we've got a lot of folks here, the 20 something engineer. If you go back to your 20 something engineer self, any advice you'd give yourself to do better next time? Not that this was a pretty good outcome. What's your advice for next time? What are the things that you'd advise folks here to do better? To advise yourself for a 20 something.

Engineer, the way I was. I think the advice I give to any founders who are in that stage is that you have to actively work on developing yourself. And I look at, you have to develop yourself on four dimensions One is the technology savvy. If you're doing a technology startup or you're in the world of tech, you have to be very technology savvy and you have to be good at it. Second is the business savvy that you're not building technology or product for the sake of it. The end goal is to build a successful business around it. If you want to be a successful founder. So you have to kind of learn the business savviness. The third is people savviness. Building a company, running a company, being a CEO is all about people hiring, inspiring, managing, leading, all of that. So you have to be very savvy at that. The fourth thing I tell every technology founder is the sales savviness. The job of a CEO and the founder is selling all the time. You're selling to your employees to hire them. You're selling to your investors to raise money. You're selling to your customers. You're selling all the time. I was at a point where my wife would joke about someone could wake me up at three in the night and I would do my sales pitch like that. So you have to become good at selling and be very comfortable. You know, selling sometimes sounds like a strange word, but you could call it inspiring. How would you inspire someone to join you as an investor, as an employee, as a customer on something? So you have to become very savvy about sales. So that's the advice I give to every founder, that you have to consciously work on developing yourself personally on all those four dimensions. The technology dimension is very natural, but the other things are, you know, you have to work on it.

Selling as inspiring is a good hack to think about how to get comfortable with selling. Right. It can be a tough transition for some. So one topic I've learned. So I founded a couple companies that grew quickly, but never anything close to app dynamics. And what I've learned is from companies I've been involved with, actually, the faster you grow, the more things break and the less the rules work. So what did you learn trying to manage this hyper growth? So you got the guy from Splunk, that helps, but how do you just manage growing that quickly? What was your revenue ramp? It's all in some S1 published, but it was pretty nuts, right?

Yeah, it's pretty fast. We grew from about, say 40 employees to 700 employees in four, four and a half years. Our revenue grew from or our sales bookings grew from $2 million to about close to about $300 million of annual bookings in that period. Like in five year period.

Yeah, it's almost mathematically impossible. Well, you got to do sales, you got to close the deal, you got to go get on a plane, you got to talk to people. People. It's at the edge of physics here. Right? It's at the edge.

So I think the thing I've learned about hypergrowth is that you want to get the right balance of how much detail you want to manage. If you get the organization into too much detail and planning, you just can't keep up with it. If you don't get into any detail of planning, then everything will go in different directions and everything will crash. And the key is to find the right balance. What at Appdynamics I found that worked for us was we call the concept of Guide Rails that we have to. And we would say like, okay, what are the minimum number of questions that everyone in the company should know the answer to so that they are aligned and going in the same direction.

Yeah.

And it turned out to be that it's not too many. It's like only about 10 or 12 questions at any point. And many times this will be like, who is the ideal user of our product? Is the Persona? Is it, is it a developer? Is it a DevOps engineer, is it a operations engineer, say for our kind of product? Because if our engineers are building product for a Persona 1 and our sales is trying to sell to Persona 2.

Things break or people don't do that enough. The 10 to 12 points.

Yeah, but if you look at like, so what we used to do was every quarter I'll do like a off site of our management team. So just me and my direct reports, we'll get into a room for about four or five hours. We'll say, okay, this is the list of questions we need to align ourselves on. And we will fight, we'll debate, we'll argue. We won't get out of the room until we get alignment on these. But once we get out of this room, we have answers written like very short answers to these questions 10 or 12. And after that you do whatever, you figure out the details after that. And so you don't have to micromanage it, but those things every three months we align. And that worked very well for me.

And how did you distribute that to the company so that everyone knew the 10?

We'll talk about it in the all hands meetings.

No tests or quizzes or anything like that.

You repeat things many times, but no test. Yeah, maybe that's.

You got them. As engineering gets further and further away from the end customers. That is a challenge. Right? How do you. You've got to keep them connected to the end customers and any learnings there. Just when you brought it up, I always struggle with that. I made all my engineers do customer support. That was my hack. Right. You had to do it once a month.

I totally agree with you. I used to call it like, you have to break the walls between. Between engineers and customers. And the thing we would do is like, we would do this. We'll encourage our customers to. Our engineers to visit customers. So we had a rotation kind of model that every quarter we'll do like these field trips, you go and visit our customer. You know, we are sitting in San Francisco, in Silicon Valley here, and most of our customers are like these large enterprises in Wall street and insurance companies or like a retailer somewhere. And our engineers have never seen how they do things and how they've done it so many times. It's like. And what we found is like doing a phone call is not enough. You want to have them like at least once a year or maybe once in a lifetime, go and visit them and spend like a few hours and see how they look and how they operate and how their day looks like. It makes them so much aligned. So we would do those trips and they would work out well.

And even if you scale, would you have every engineer do that or was it optional or mandatory? I like the mandatory.

Initially it used to be mandatory, but then as the organization grew, we made it a bit more optional.

Yeah. And what happened when they came back from those meetings, was it somewhat transformational?

Yes, because they. I would also call it, like sometimes we had a concept called, we call innovation by embarrassment. Like if you go in front of a customer and you are kind of embarrassed about some feature in your product or something, you will come back and in a day or two, you will just build it. You'll figure out a solution around that. Right.

So did you make them pitched. Do you make them do part of a presentation or what did you force them to do in those meetings?

So they will go in those meetings and ask customer, hey, how do you use our product? What do you like about it, what you don't like about it and have a conversation there and then the customers will open up and ask questions about this. And I don't like this. And why do you don't do this this way. And with good engineers, if they couldn't explain, yes, you're right, it doesn't make sense. We should have done it this way. Then they will Come back to office and they will fix.

So related to that, when as you're at different phases of your scaling, how much time do you spend actually with customers?

I spend a lot of time with customers. So the way I manage my time as CEO was that I had this rule of 1/3, 1/3, 1/3rd, 1/3 time I'll spend on the product with the engineers and on the product because I was a product oriented CEO and that was my strength. And if I wasn't spending time with product, that wasn't right. 1/3 time I'll spend with customers, visiting customers and so spending time with customers. And 1/3 time I would call operating the business, which is, you know, VCs and board and managing the executives and hiring and things like that. Right. So that was my rule of thumb, like 1/3, 1/3, 1/3 over any week or month or.

And what did you, did you literally plan it out or is that at a gut level?

It was more at a, like a gut level, gut level.

Right.

One third one. You know, it's not that every day you can do 1/3, 1/3 or even at every week you can do 1/3 one. Sometimes you're doing a fundraising and you may be doing 100% of your time on the third category for a week or two. Right. And things like that.

Most of us, I find when I talk to founders, they don't spend enough time with customers or they may spend time in sales, but then they don't spend enough time after the deal closed with customers. So related to customers, just because you've written about it and you have the passion. So it sounds like you have a passion around NPS and measuring customer happiness. So what are the secrets there to customer happiness or what have you learned around that?

I think what we learned at AppDynamics as the secret is that customer, how do you define if the customer is happy? And the way we ended up defining is if the customer has gotten the value that they thought they're paying for, if they had gotten the value that they thought they are paying for, they will be happy, most likely and recommend to you. So how do we become systematic about it?

Yeah.

So in most, when you're selling into large enterprise, almost all the time you, before the sale, you create some kind of ROI model or some kind of a business case that, you know, if you buy, if you spend $100,000 with us, you're going to get $300,000 worth of, you know, return of your money in three years, something like that. Right. But rarely any company Goes back after the sale and proves that they delivered that roi. So we, we adopted a process which is. Which was kind of unique at that time that we would go after the sale, like three months after the sale and six months out of the sale, and we'll sit with the buyer and say, okay, this was the ROI that we built together before the sale. Let's see how we're doing on it. And let's. And we will, you know, and we'll. We'll fill out the spreadsheet.

You deliver what you claimed you're gonna deliver to the customer.

And if we delivered what we claimed, customers were happy.

Yeah.

And. But at the. Sometimes you can't deliver what you claim. Things happen. Like, you know, from. It could be our fault, it could be customer's fault.

Yeah.

And then we would say, okay, let's. If we didn't deliver what we. Or we are not tracking towards delivering that, let's build a plan together and go and make it a joint goal to get there. And, you know, customers always liked it that we were holding ourselves accountable to delivering the value we promised. So to me, that's been the secret of how do you get high NPS scores if some way you can ensure that you delivered what you promised customers will be.

So you go back at month three and month six and have an honest assessment of did we meet, did we deliver what? Right. And when you went back and some of those customers were angry because the sales guy said something that wasn't true or the product didn't work when you went there, did you ever lose them when you actually went there? Because I find you don't lose too many if you actually get out there and go through this, no matter how angry they are.

Exactly right. If you go and talk to them and say, hey, let's see if we did deliver the value or not. And say you said, we will give this value and we haven't got it. And we'll say, okay, let's see. Can we remediate it? Can we fix it?

Right.

And if you have the conversation of that, we are serious about remediating it. Customers like that, Right. You don't lose them if you are serious about it.

And a niche question, but related to that because it is interesting. So you segment your customers into this inside sales and the field group. Right. How do you force rank priorities? Because there are conflicts. There's sales, there's engineering. Maybe there's not a conflict, but the enterprise piece is bigger. Right. So how do you manage those conflicts, if at all?

Well so the model that we adopted was we were selling into enterprise. We're not selling into SMB unless like some opportunistic. Yeah, but what we were doing was it was, it was. We're doing it by the deal size. So if the deal was less than $75,000, our inside sales will take the lead and run it. The deal was more.

Even if it's IBM.

Even if it's IBM.

Even if it's IBM.

And if it was in some. With some exceptions, like, there will be some like accounts which will be exceptions. Sometimes.

Yeah. Google gets the better treatment.

Yes.

Yeah.

But very few normally will be like, you know, if its deal is less than 75, our inside sales will do it. And if the deal is bigger than that, it's a bigger opportunity than that. Then our field sales will do it.

Got it.

And many times we'll pair them up. There was like a pairing of an inside wrap and a field rep who will do together after territory.

Got it. So one other question on this. So sounds like you knocked it out of the park on your VP of sales. So you're ahead of over 70% of folks here because our unscientific survey is that 70% of your first VPs of sales don't make it six months. When you're hyperscaling, what are some of the hires that you made that were wrong? Like what were some of the. So you made the splunk thing work? Any mistakes that you learned? Did figuring out how to hire a VP of product not work out? Or was marketing a challenge?

Yeah, you know, not all hires go right. Yeah, I would say like about 7 out of 10 or 6 out of 10 is probably the right hit rate. I don't think 10 out of 10 would go right. On hires, on exits, I think it's.

Impossible, but no big one. You learn sometimes.

Sometimes what happens is some people are good at a certain stage, but they're not good at a different stage. Right. So that also happens. It's not that they didn't work out right then, but they.

Well, that's a hyper growth topic. How far. When you're in a hyper growth mode, how far does the executive have to scale? Because it's hard to scale from 1 to 300. So what are your learnings? Like, do they have to scale 18 months or do you hope they scale? Or.

It's an interesting question. The way I always started to look at it, like instead of asking the question like how far someone scales, what does it mean? Or what are the skills required?

Right. Yeah.

So let's say we had known that we are going to the next level. What do they lack? Do they lack ability to inspire a larger number of people? Do they lack the amount of planning or strategic thinking that needed for the larger role? They're not good at hiring or delegating. What are they lacking that would stop them for the next level? And then I would ask, okay, can this be coached? Can they be coached on it? If sometimes you can't coach someone because that's how they are.

Yeah.

So it's. And that's how they have operated or that's their personality for say 20 years. So then you have to like, okay, based on, we need this skill and this skill cannot be coached. So we have to make a change.

Yeah.

Sometimes it's, you know, it could be coached, but you may not be able to afford the time to coach. You are like, we need. If we'll take a year to coach and we can't. We don't have a year, you know, or this person is in such a critical role that we don't have a year. We have to make a change.

Change.

It's a hard question. The hardest question is like when things are going well in hyper growth and you have to bring someone for the next level of skills.

Yeah, it is hard. Did you get any coaching or mentors or folks that helped you scale? Did you find anyone great to help?

It's, you know, unfortunately I couldn't find one. Yeah, I couldn't find like one coach. You know, I wish I had like one mentor or one coach like, like that. So I would go and go and talk to a whole bunch of people. You know, you read and study and you talk to a whole bunch of people. And you know, especially, you know, the way I learned is like it's best to pick a topic.

Yeah.

And see like who can you talk to about this particular topic? Right. So if a topic is like, you know, we are figuring out we are going to expand internationally, how should we think about our international expansion strategy? And then you. I go and we'll talk to like try to find like seven or eight different people. And if you talk to like eight different people who have done that, you start getting like a good idea on.

What, seven or eight.

Yeah.

Yeah.

So if you talk to like one or two, you still may not know like, you know, what's. Even though they have been successful in their role somewhere.

Yeah.

It may still be a wrong approach.

You always have to push yourself to do more of those meetings. Yeah. On that topic, just because of our audience. Any interesting lessons on that? Going international? Did you do it too early, too late? Did you staff it wrong?

No, I think I would say for most software companies, international expansion these days is easier because of SaaS and online, sometimes it's organic. Online.

You can buy software anywhere, right?

Yeah. And that's the test we had. Like if we are seeing free downloads coming from a country, that means that country has demand for our stuff. So let's go and do after it. The advice I would give though is like, you know, pick the biggest countries and the biggest geographies. You know, it's like if you have to go to Europe, pick the top three uk, Germany and France and start with that. Don't go after like every country in Europe initially until you nail the bigger economy. Same thing in Asia. If you're going in Asia, try to nail the easier and bigger economies and then you expand from there. That's otherwise it takes too much resources.

And it's the same amount of resource no matter what the market is. Right. So good. So I know we kind of blew through time. Any high level thoughts? What kind of advice can you give especially to the 2000 folks from other countries? What's some zen thoughts for us on the journey to 3.7 billion?

I think my advice is simple. You can't plan it all, but you have to do it one step at a time, one milestone at a time. Have the plan at a high level, but then focus on how do we achieve this next major hurdle. That if your hurdle is that you need to go and nail the first set of customers and some vertical or you need to go and expand into this country or you need to raise this capital, you have to find a way to nail that hurdle and you keep doing it.

You get bits and pieces right. Otherwise it can be overwhelming.

It's overwhelming, right? You just go after like one hurdle at a time and you keep building on it.

Well, last question on that. I know we're over, but when did you know Appdynamics was going to make it? When did you feel, what would it feel like at the moment when hypergrowth hit? Did you know it? What was that switch that happened when you knew the company was going to be a big hit?

I think the first 18 months was kind of. It was, it was hard. Like you. We didn't, we didn't know if people are gonna buy our product. You know, we were going through pivots and transformation of what we are gonna be when. So that was hard. But once we got the product out and I could see like customers were happy and excited. So that made to me was a. I knew we could do it. Yeah, I remember like we were about, you know, at that time, billion dollar valuation or unicorn was very rare.

That's why they called them unicorns. Remember, that was the old days.

You have like 150 of them, right?

Yeah.

So in 2010 when we launched the product, I said, hey, we gonna be a billion dollar company. And we were like 12 people in the company. And people were like, what are you talking about? Hey, look, our product. People like our product. We're going to be a billion dollar company. Let's set that as our goal.

Yeah.

And what I also learned is like, you know, sometimes if you set a goal and some kind of path, they do become self fulfilling as well in ways. You know, I'm kind of believer in that because the organization, if the organization starts to believe in it and you have like, you know, smart people in your organization, they start figuring out a way to get there.

They do.

Like, so it's like I remember like in 2000, so in 2010. And so we're going to be a billion dollar value company and with 12 people. With 12 people. And people were like, are you crazy? This doesn't. But then we, but then I repeated so many times and you know, we will, so this is how we will get there. Likely like a billion dollar valuation is about, you know, $150 million of revenue growing fast. Right. So how are we going in for a B2B company? So how we will say, okay, this is how we go to $150 million and people start seeing it. But the best thing was like I didn't need to tell them every detail. Like once people believe that we can go there, they started figuring out they'll say, hey, we have this problem. If we don't solve this now, two years from now, we can't get there and the organization just starts to do it. It's kind of crazy how once the organization believes in that goal, they start to figure out ways to get there.

That's the key. If you set the goal too low, you're going to align to that low goal. Right? That's great. All right, let's all do that. Let's give it up for Jody. This is an amazing story. So thanks everyone. Super cool.

Thanks for doing this.

This is.