Samsara’s Rise to Vertical SaaS Leader and $1B+ ARR with Samsara's CEO and Co-Founder

I know this is a basic question, but just to ground the world, is there any downturn.

In the world of it? I don't know because I don't sell into it and operate exactly right.

Yeah. Is there any downturn?

No, it's very consistent because if you think about who these folks are, it's the folks picking up your trash, delivering food to the grocery store, running the electric utility. These are essential services. So they're just constant, right? They're just running nonstop.

Hey everybody at Saster, we have a treat this week. I get a chance to talk to One of my SaaS and cloud heroes, Sajid Biswas, who founded Samsara. Two time founder over 20 years. I want to dig into, but we've been talking on Saster, folks, I would say a lot of folks in the public markets know Samsara. People have been chatting about it. It's one of the high flyers which I want to get into. Growing 36% at 1.26 billion in AR. But we've been chatted about on SAS or before it IPO'd as just a great vertical SaaS leader. And it has, there's a lot of things I want to talk about, but it has disrupted, I think in some ways a space that was mid sized, which is now huge. Right. Would that be accurate to say? Yeah, yeah. And so those. So many interesting things here. But before we go, your customers, we're going to dig into it. Your customers are in operations, fleets, trucks, just. I know this is a basic question, but just to ground the world, is there any downturn.

In the world of it? I don't know because I don't sell into it. Exactly.

Right, yeah. Is there any downturn?

No, it's very consistent because if you think about who these folks are, it's the folks picking up your trash, delivering food to the grocery store, running the electric utility. These are essential services. So they're just constant, right? They're just running nonstop.

Yeah. So roughly, just because it's just. I know you're. Luckily you don't have to talk with all the IT Debbie Downers outside of AI, but you're, you are a market leader, which we'll dig into. But roughly your growth in part is tied to the health of the end consumer economy. Right. Which in the US is pretty good, right? It's, it's overall, it's pretty good, right?

Yeah. And it's just the size and scale, the infrastructure that runs the planet. So you got the end consumers, you got businesses, you also just have this world of infrastructure which like I was saying, it's utilities, it's the roads, it's all of this other stuff that's behind the scenes.

Yeah.

That is going through this digitization process that it went through 10, 20, 30 years ago.

Yeah. And it, I hate this metaphor, but it's also helpful to ground things in the beginning, that digitization of the real world, of transportation, of fleets, like what inning are we in in terms of like how archaic are some of the business processes you upgrade?

It's interesting because I, I spent a lot of time out in the field with customers. I was at a customer last week. I literally saw an IBM AS 400 green screen system that they're still using to type in orders. Meanwhile I pivoted like 20ft and there's a warehouse robotic system that's like state of the art. So it's happening, it's happening as we speak. And what's interesting is some of these companies, they're 100, 150 years old. So they are transforming. It just takes longer than you'd expect because it's not like they're starting with a clean sheet of paper.

Yeah. And SAMSAR is not that expensive, I don't think. But some of these folks maybe even have five or ten year sales cycles to fully create this business process change in that sort of mainframe plus robotic mix environment.

Yes. And what a fascinating environment to be in. So like sometimes you have to go figure out how are we going to make this API call to an IBM mainframe server and then turn it around and dispatch it to some autonomous vehicle they're experimenting with. Yeah.

A lot of that is, it's still crazy. We have to build that stuff sometimes. Just build it however best we can. Yeah. Yeah. It is interesting how much we still compete with spreadsheets and Windows 31 in the real world. Right outside of this little hurricane of like hypertech of the Bay Area.

World's a big place.

So I want to talk, I want to talk about all of that, but before we get there, just a couple minutes on something that I think about a lot. I don't want to talk too much about the very early days, but maybe just two things. Before Samsara, you had what back then seemed a stunning exit back in the old days when everything was smaller. Right. You sold a networking company to Cisco called Meraki for one point something billion. I wrote it up and one of the first Saster Post in like 2012, I couldn't believe it. Like it was such a, it was like four years to A billion or something like that. Right. Crazy. Two questions. One, for real, why did you guys do it again? And two, how do you really context switch to a totally different domain? Like how do you. It's fun to talk about over French toast and stuff like that, but for real, it's not that. It's not that easy, is it?

Yeah. So maybe just a little historical context. Meraki was the first start. My co founder John had been working together for a long time. We met as grad students at MIT over 20 years ago. And basically Meraki was us taking our networking research from grad school, putting it in a box, making it into a product that could go have impact in the world. So really fun project that turned into a company basically. And we had never sold a thing in our lives. So it was trial by fire. We had to figure out like there was like literally what's a po? Like there were really basic questions that we had to figure out. And eventually we did figure out what a PO was and we got many more of them and that's what led to the exit. And then we spent time at Cisco, basically getting it to. To run in the Cisco machine and get to scale. So Meraki now powers millions of networks around the world. You go to a Starbucks, you go to most big venues. Meraki access points. It's really cool.

The brand name's still there. I see it. Is it still there today? Is it still.

Well, it's Cisco Meraki, but it's still.

They kept it. Yeah. That's nice. Yeah.

And what was incredible about that is it showed us what it meant to have impact. Right. Like, we believed WI fi was going to be a big deal. When we started doing networking research on in the early 2000s, it was really cool to be part of the process of bringing it out to the world and having that impact. So that's what got us excited. We realized at some point Cisco wasn't for us. It was a very big company. We hadn't built it and we were being asked to go work on other parts of it that weren't related to Meraki. So we said, okay, we've done our thing, we've gotten to scale. It's going to keep scaling, which it has. Let's go do something else or take a break. And at that point, that was it. We didn't have a plan beyond that. There wasn't like, let's go do this other company. We've been waiting to do it. We were actually tired. Like we hadn't taken a vacation ever. So both of us took some time off. Both of us had just had kids. So like young kids phase of life. And that's when we started tinkering again. That's what got us back into just building stuff. And as engineers we just like building things, we like being useful and totally became fascinated by the world of operations and infrastructure because you're just curious, like it's the world behind the curtain. And at the time I think I was interested in understanding like where do all the emissions in the world come from. I was just like asking kind of big curiosity questions and kept coming back to whoa, this is fascinating. Like I'd never thought about how the roadways get built. We never thought about how food gets delivered. So anyway became fascinated by the market and the customer. And while we were tinkering we were basically building little sensor systems because we knew how to make hardware, we knew how to cloud connect things and lots of interesting technology had happened in the 10 years that we'd been involved or 10ish years that we were involved with Meraki. The cellular was everywhere. We saw the beginning of GPU compute even 10 years ago. Like you could see the inference capabilities kicking in. We just saw like what you could do with mobile apps. Like everything was new to us. It was really fun. So that's what got us into it. But to your point, we had never spent time in operations, didn't know anything about the market and so it was actually good to go back to beginner's mind. I think if we went back to it it would have been tempting to just dust off the playbooks and run them over again which rarely works 10 years later. So I think it was really good.

That we switched markets and did you find. How did you get just in the early days just that acquire brand new domain expert was just go hanging out with fleets. Did you. Was there a key hire you made to the team like a COO or VP of ops or something? Was there anything special? Just good old fashioned founder learning.

Just get out there. And it was at the beginning it was show and tell. Like we basically built the simplest cloud connected sensor we could imagine which is temperature sensor. We took it into two industries which is food and beverage and then pharma and biotech thinking that hey they have like temperature sensitive assets that might spoil if something happens. And we said hey this is, let's see if we can go do something useful with this. Those initial beta testers were the ones who actually brought us into the fleet. They said this is cool. Our big fridges don't Actually break very much. What does break is the cold chain. Like when we try to move something from site to site, we have a customer. They were delivering this cowgirl creamery. Since you're here in the Bay Area, Right. Like they make fancy cheeses. They would lose like $10,000 of cheese when they deliver to Whole Foods because someone would leave the doors open and all the heat would come in.

Got it.

That's a real problem. So that was the process was just go spend time with operations folks. They were very generous with their time. They let us into their loading docks and warehouses. They let us be interns or shadow them for a day or two. And immediately we, we just saw, okay, they're doing everything on pen and paper. They're making phone calls to figure out where people are. If they have GPS tracking. It was like a breadcrumb that dropped every 15 minutes or 30 minutes. It was super antiquated. And immediately we saw, okay, that's where we can go be useful. That's how we have impact.

Got it, Got it. So you honed it out quickly after the. After they pointed you to the cowgirl tracks and everything and you were off to the races from there.

Yeah. And it wasn't just cowgirl. Like it was a couple of different folks across different industries. And you say, okay, this is like a industry wide problem. And then we started like pulling on the string. We're like, so how many commercial vehicles are there? 30 something million in the US even more. Like there's 12 million in Mexico. There's even more in Europe. Like 60 million said, okay, that's pretty big. What are they using today? Old stuff, 20 year old technology. And are they happy with it? Definitely not. Did we know anyone else working on it? No. So there were a lot of kind of raw ingredients there and that's how we just got back into it.

Yeah. And so you, your co founder is John.

John Bickett.

Yeah. But there were. And I think there might have even been a couple other folks on your senior team that were from Meraki. Right. What have you learned? I've tried this experiment, watched it. I find sometimes it works. Sometimes the band doesn't want to get together. Sometimes they want to be CEO next time or they're on their own journey, what have you. When does it work to get the band back together and when does it maybe not work?

Yeah, it's a team that we love working with. And so a bunch of us either knew each other from Rocky or even from before that. We were just personal friends. So that chemistry has to be there. That sort of mutual respect and everyone wanting to do something a little different. So Kieran, who I think has presented its aster a couple times. He's great. A couple of times. He's running product now. He used to run marketing for us at Meraki and he used to be an engineer before that. So it was just, hey, let me go see if I can figure out how to do product in R and D. There's always a new challenge. And then Ben, who runs our hardware team, he did hardware at Meraki, but it was different kind of hardware. Right. So he was like, hey, this is fun. So there needs to be enough of a challenge that each person is engaged and has enough to do. And then there needs to be mutual respect so people enjoy working with each other. Otherwise it's not going to work.

You've got four members of your senior team who are all multiple times together, right?

Yeah, that's the name Samsara. It's the cycle of reincarnation, rebirth. We thought it fit, but actually I.

Did not know that because the team being re. Re reborn.

Yeah, but actually a lot of our early sales leaders, even our early reps, a lot of engineers like people. We, we all liked working together, so that's what got folks interested. They didn't know anything about operations either, but we were like, let's go figure it out.

Yeah, you really can pull the reps and the individual contributors together. If the managers are like super excited, they want to. If they're the best, they want to follow them.

Yeah.

What's funny, I'm. I'm trying to help through some founder conflict of a couple folks coming up on a hundred million today that are incredibly talented, work together for a decade out on eggshells with each other. Any tricks for keeping you? I'm sure it's great, but there must have been a few tough, tense moments or. Not everyone grows at the same rate, even if they get to the same place. Any. Just any good learnings or tactics to keep the four of you together for so long to deal with the frictions?

I think it's always just being super real with each other. Like we've been friends now 15, 20 years across these companies and we've been through a lot. I think we each know our strengths and weaknesses, like with each other and so we can be very open about. Hey, I think you're missing this. Or it's actually just all being honest and being open about. Okay, we're all figuring this out together. It's not like any of Us have done this at this scale, like we are figuring it out as a team. And I think once that humility is there, it actually is. Is much more possible to have a real conversation. I think when egos are at play, that's when you tend to see those like crazy conflicts and you just step back. Like we're all just trying to solve a problem here.

It is ego. Right. We like to. You need a little bit of it or you can't do this stuff. You need something. Maybe he goes the wrong term, but you need a certain amount of self confidence. Right. Because otherwise imposter syndrome can overwhelm you. But it can be tough. Right?

Yeah. And that. And we've been at this long enough that you try a lot of things and those are the two way doors. Like it didn't work back up, try something else. And as long as everyone's okay with that, like totally made a mistake on that. Like I often say that was the wrong call. Like we just messed up, my bad. But if you own it, it's way easier to figure it out together. If you don't own it and people are like too afraid to tell you. That's where I think those conflicts start to brew.

Yeah, for sure. Or even just finger when things are tough, even just you, you've just. What you said, you've got to step up and take ownership. Number one. Right. Because everyone's to blame. Right. For every shortcoming, everyone's to blame that.

And as founders and really as the CEO, it is all technically your fault. Like you're the one who's responsible for it. So let's go figure out a fix it. I found that helped. And then I think the other piece is you have to actually be spending time together. Like if you're all working in different corners and not working together on things, that trust starts to erode. So we still all collaborate and work on whether it's customer deals or products, we're always working together on things.

Yeah. Do you guys hang out on the weekends?

We do. And probably talk on the phone every other night at this point.

That's a good. That's, that's my view of a great co founder is it's someone you'd like to talk to at the end of each day or every other day. Right. When you enjoy catching up. It's a good time.

Yeah. And, and on the co founder relationship, especially as a company morphs as it goes from seed stage to a hundred million and beyond, there are very few people who you can be totally honest and Open with because other people may have agendas or they're insecure. You've all been in it together. And anyway, it's great to have buddies.

All right, one more question on management, then I want to dig in on Samsara business model. But you've got so much energy. It's been 20 years with the team. How do you keep it, keep the energy going and how have, how do you. I find that every five years you've got to reboot your strategy. And I don't know how long you have to reboot yourself, but it might be at least once a decade you have to reboot yourself too. So what have you learned about these this 20 year, the Samsara 20 years with these teams in this journey, how do you keep the energy up and reboot yourself?

Yeah, it's. You gotta install the software updates every once in a while, otherwise you become that IBM mainframe. So what I found is it is actually about challenge. If you think about what it's like to build up experience, imagine you went back to like fourth grade. Like, you probably do everything in fourth grade, like, super easy. I've got a nine, 10 year old, so I think about that a lot. But it's challenging when you're in that moment because you've never learned multiplication or whatever it is. Once you accomplish it, though, you know how to do it. So it's important to always be challenged. And I feel like as a, as tech founders, there's always a new challenge, there's like a new market you're trying to enter a new product, you're trying to build new integration, new partnership, whatever. And you have to have enough challenge for it to be interesting. And that's where the energy for me comes from is it's a puzzle. Like, you want to solve it. Like, you almost start obsessing over it. Of like, I know there's a path here and once you unlock it, you get this dopamine hit of, wow, that was amazing. Let's go do it again. Let's see if we can 10x it. That's what keeps it interesting. Like the numbers rack themselves up in the background, but really it's about solving challenges and puzzles and doing it in a way that's useful for customers.

And you still does. We, just before we started, we were talking about how you're just out in the field with customers, tractors and all that. Does that still give you energy? Does being out with customers, does it give you an energy boost doing that?

Oh, yeah, it's super fascinating. I, I Learned something on every single trip. And like I said, these are not parts of the world you get to see. Like how many distribution warehouses do you get to see robots running around in? Right. Super cool stuff going on there. I saw we were talking about tractors before we started. Autonomous tractors that are controlled by an app.

Right.

Like that is pretty futuristic. So anyway, each of these trips is really fun.

Yeah. I almost feel like it's. If you don't, at least in business stuff, B2B, if you don't gain energy meeting with customers, maybe you should find another CEO. Like it's not, it's not a cr. It's just a sign, right. It's one. It just, it should just fill you with energy when you go out and fascination when you have that factory visit. Right?

Yeah. And the fun part is I see more problems that we can solve every time I get to set on site. Because you're like, oh, wow, I hadn't even thought about that. Would it help if we had an app that did this or can we build you an integration that does that? It feels like you're being useful. So there's something deeply fulfilling about that, at least for me.

And you still get at your scale at 1.26 billion more when we do the next quarter. How many of your ideas do you get out in the field, just help other folks. How many times you come back a year or quarter with an idea that actually goes into production?

Oh, pretty often. And a lot of these are features. Right. They're enhancements or tweaks, but they might be like, wow. And every once in a while you come back with something where you're like, whoa, this could be really big. And that's actually like everything we offer on the platform we came up with organically through these customer conversations. We can talk about being multi product, but it's really just solving multiple problems for the customer that if you like boil it down.

So let's talk about a couple things that I think just are really interesting about the business. And I may be misdescribing it. I'm just, I'm just an observer. But probably an unfair way to describe Simsar in the early days. Is next generation fleet management not completely fair, but your customers are in transportation. It's an old category. You've got folks like Qualcomm and Verizon charging a lot of money for very limited capability on creaky old networks. I don't know what it was, but it was probably a couple hundred million dollar market. Right? $500 million market pre samsara for all of the vendors. Sure, for all of them. Right, yeah. What changed? Even you said there's 100 million vehicles in north and South America. Right. But if you only got 10% penetration, your product was creaky and expensive. It's hard to get to 1.26 billion growing 30 some odd percent. So the market, this is what we all hope for as founders is that between our innovation and market changes. Because sometimes it's got to be both. Right. It's got to change because you've unlocked a market that's got to be 10, 10 or maybe 50 times bigger than what it was before.

Yeah. So what we didn't create were the need for commercial vehicles. Those were there already and had been getting built up over a hundred years. What you would find is if you stopped commercial trucks on the road and just looked what they had on board. Most of them, at least when we started, didn't have a ton of technology. They weren't connected to the cloud. So if you wanted to know where your telecom field technician was, you were making phone calls. Right. The industry that did invest in it was long haul trucking. So you mentioned Qualcomm. Most people don't know this, but Qualcomm's original business was tracking trucks like it was the Omni track system. This is what got them, you know, building the predecessor to cdma. You can nerd out on this stuff. It's really fascinating. They took the company.

Yeah, yeah.

In 91, if you like, led them to it. Tracking was their product at the time of. They went on to do amazing things with chipsets and cell phones and stuff. But anyway, the interesting thing is it's an old market. Right. So tracking trucks have been around 20, 30 years. It had been kind of niche. And what we found was that outside of transportation, people had invested in it. So that's why it was so small. It felt inevitable though, right? If you're delivering food, if you were doing field service, if you're even doing construction, you would want to know where your people are.

Right.

So that was the. It felt obvious to us, but the dots hadn't been connected and the products were a little clunky, like they had been acquired by private equity. The R and D teams had gotten hollowed out, been frozen in time, in other words. And so if you wanted to take the Qualcomm Omnitrack platform and stick it in your field service suite, it wasn't practical. You'd be dealing with a bunch of wires. It was very expensive. It just wasn't worth the effort and that's why people hadn't done it. Meanwhile, in the consumer world, Door dash was happening in Uber and Lyft and like all this real time tracking. So you knew it could be done and it was like, okay, how do we bridge that gap?

Yeah, I hadn't really thought about that. But you already saw the example that it exploded in consumer. Right. From Uber and Durdash. Why can't that be in fleets in the business side, why can't everyone have that identical functionality? Why not exactly part of the unlock.

And that was part of the unlock. But to your point earlier around, you do want this kind of market tailwind behind you. Like the market has been growing for us at a pretty hefty rate. And the reason is because everyone is a consumer. They're all seeing this modern technology in their hands, in their mobile phone and so on. And they're asking the question of how do I get this from my fleet of 5,000 vehicles? This seems obvious. How do I make it happen? Then they end up engaging with someone like us.

Yeah, they, they ask. And it's also great marketing too. Right. If you can leverage it. Right. This is what we should. We can deliver this to your fleet. Right. We can deliver what the doordash and it was an Uber Eats and I'll have. We can do this for your fleet in a week.

Yeah.

It's a bill of maybe didn't exist. Right, right.

But do it in a way that it's going to work for your enterprise and be set up with the right hierarchy and structure and security. That's the enterprise side of things. Right?

Yeah.

The interesting thing for us was actually that was the entry point. But then our biggest product now is a driver safety coaching product that uses cameras and AI to basically help break risk, prevent risky things from happening on the road. That was not in the cards when we started the company and so that was customer feedback loop happening. That's not something that you see Uber and Doordash and Lyft do because it's much more of an enterprise use case.

Yeah, let's talk. I should know more about than I don't. But I get it. The whole driver coaching process, monitor it using I health safety, whether they've been on the road for too long, they're all that stuff can be done. That and managing a fleet, their status. Right. Same buyer, different buyer, same budgets. Different budgets, same sales teams. Same budget. Yeah, same budget.

Yeah, yeah, exactly. It's operations budget. So if you think about. You're the VP of operations, the CEO, you're running this big operation, you're trying to just make sure your field operations are efficient and safe.

Yep.

And. And then you've got a bunch of budget tied up with that. It tends to actually be a very high opex industry. So if you think about what it costs, it's not a high margin from a profitability perspective, but what it costs to operate a food delivery fleet. A huge amount of the operating costs are your trucks and your fuel and your people and the insurance. And so if we can go help with that, the same buyer cares and so our same sales rep can talk to you about it.

Yeah. Because it's always, it's always interesting if you can sell to the same buyer, it's easier get them on the phone if they love you, if your MPS is high challenges, sometimes you don't unlock as much budget as if you found someone else in the organization who has different budget.

Right.

But maybe the non obvious thing here is the ops budget so large you were able to just tap into more of it. Was. Is that, is that the answer?

Yeah, that's right. So in these industries it's hard to come up with a general number, but the vast majority of the operating cost is in the ops budget. Like it's cogs. Right. If you think about it a P and L perspective.

Yeah.

And so for them, like anything they can do to reduce their accident costs, reduce their. Met A Customer last week, $45 million of fuel spend a year. That's a really big gas bill. And we cut it down by almost $2 million as a byproduct of another program they're running with us. And so that's the kind of thing that makes them really want to do more with us. This is super valuable. Tons of roi. Let's do more. Like what else can we digitize?

And I probably should know this too, but now that your brand is pretty dominant, you can challenge me. You can say it's not dominant. Our TAM's 8 trillion, but I would suspect it's dominant in your niche market. Do you sell, can you sell telematics and safety and your other products, can you sell them all up front? Is it gradual? How is. What's. What have you learned about how's that motion changed over time?

It's both. So most of our customers today use multiple products, so they adopt two, actually three or more in the enterprise. So that's gotten to be really strong. Many of them are under contract with the legacy provider and they'll say I Need to roll off that telematics contract. But let's put in the safety coaching and when I'm done with that contract, I'll just bring it all on to Samsara. Got it. So there is a benefit there. We can land with a number of different products, but ultimately customers are adopting the platform and the scale. It's not just brand. Right. There's actually a lot of data that we see in the system that nobody else has a scale of data. We have our ability to support customers at scale, help them with these programs, help them figure out how do you coach drivers. These are all things that get better the bigger you are because we, we see more. Right. We see so many of these very large companies do this. That's an interesting flywheel effect as well.

If you're, let's say you've got that customer, they're on a, they're on a dated platform, they're going to switch over to you for telematics in two years. But they're excited. They buy safety today. What do you get by combining the data from driver safety and from telematics? What do you get more out of two data sets or combined data set that you don't get from the standalone? Like how do you combine those data?

Yeah, so safety is a great example. An accident happens, you want to know why it happened, where it happened, all that kind of stuff. If you have the telematics as well, you can see was their foot on the accelerator or the brake, how fast were they going, were they on a route, are they on shift for eight hours? So there's a lot of context there that's related to the telematics side of things.

It seems you're a good salesperson even though you didn't know what a PO was. That seems like a no brainer. If I bought in, if I, it almost seems like safety is almost more important because telematics is an understood space I've already bought into in safety. Of course I want them integrated. There would have to be a dramatically better reason to use another vendor. Right. Because the integration is so powerful. Because accidents are what percent of fleets have an accident? 2% a year, 3% a year.

It's way higher than that.

Because if it's more than 3%, oh my God.

Because imagine you had a thousand trucks in your fleet. It's just like something is happening somewhere, right? Yeah. And this is just like the side effect of scale. So that's by the way, why our customers have safety managers. But to your point, like really these two feel obvious that they should be together. But once you put those two things together, don't you want to also see the trailer or the construction equipment? Don't you want to see these other work? Like, it starts swirling around. You say, wow, there's a lot of value to just getting these onto one platform.

Yeah. And can you. I know I've written this up, but can you help me think what was in your mind in terms of sequencing these products? Obviously, you get. You're meeting with customers, you get excited. If you're in Y Combinator, everyone's telling you not to spread yourself too thin and focus what you're learning on timing. You've got how many core products you have today?

We have multiple products. We've had them for a relatively long time. So I think we started working on the safety products. We must have been somewhere around 2010 to 20 million in ARR.

I see.

Which for us happened really quickly. We went. It's still on the S1, but I think we went 1 17, close to 70. So it was like a very sharp hockey stick. It was really fast. But the customers were actually that fast. Yeah. So the customers were asking us about safety. They were saying, this is an amazing telematics product. Is there a camera that you recommend that you integrate with really well? That didn't exist in the market people were using.

Probably wasn't any great.

There wasn't a good camera. So we built them one and that's how the second product came about. So it's actually more about listening to your customer than it is like product or not.

Like, it wasn't exhaustion. You just. It was just making the suite much. Making the product much better.

Yeah. Just solving more problems for the customer. And again, we run this 8020 filter. Once you start hearing like 80% of customers are interested in something, you should probably do it right. Like it. It really is a good sort of adjacent fit.

So that is interesting. So for your suite, for your products, it wasn't really about layering with your. With deceleration in anything. It was about customer pull. Like, how can I make the sweet period? Just let me build it as fast as I can at a quality level. What the. What 80% of my customers are demanding.

Yeah. And if I step back and I look at the telematics product, which was number one, it's over 500 million in ARR. It's growing north of 30%. We're not out of market at all. Like, we're probably the largest player from a revenue perspective in these areas. But there's still so much market ahead of us. That's not the issue. It's hey, can we just do more for the customer?

Yeah, that is interesting. I don't. Maybe it is. I didn't know if it was broken out, but if you're at 30 something percent for telematics, your initial product, it's. This isn't about. It hasn't. It isn't growing more slowly. Right. We can see others like at HubSpot, which is great, their slowest growing products, marketing, they own the market. Right. It's at a billion in ARR. And it's growing in the teens. Right. But sales is growing 30 something percent. Right. But your core, it is interesting. Your core is growing. Great. It's growing. Your company's growing in the 30s at 1.26 and the core's growing in the 30s.

Yeah.

Right.

And that's what you need to sustain growth at scale. Right. Like you actually need a lot of things growing fast, which is its own challenge. Like how do we keep investing in all these areas while doing new things. There's lots of trade offs and balances, but yeah, there's a lot of growth that's possible here.

All right, one more thing on this because I actually learned a lot. It's so helpful. One of the things you said, you've said is that. And I was just trying to tie this all together, but the majority of your new bookings are from new verticals outside of transportation. So maybe is that accurate?

Yeah, I think that's right about, I think in the last earnings call we talked about 13% of our bookings were in transportation, 87%. The complement was everything else.

It's crazy, right?

Construction, utilities, et cetera.

So are those. And those are. And talk about how that transition happened because it, it's a it. The. I get the 8020 on the product. But going into brand new verticals is not easy. Right. Even if they sound the same like construction, they're not the same.

Absolutely. Yeah. And construction is pretty different than food and beverage. Right. Like many different businesses. So what we discovered was most physical operations companies have fleets of some kind. Right. They might be little delivery vehicles, they might be technicians, but they're people that have to move around. So that's the common element. But these businesses are very different. Construction cares about very different things in field services, which is different than long haul trucking. So what we did at the beginning was say let's go get up on our feet in what we call transportation warehouses. So logistics and trucking and food and beverage, which are actually very similar.

Right.

Like big trucks. Right. Once we got the hang of that, we said, okay, what would it take for this to be really useful for someone? The big field service fleet, H vac repair or elevator technicians or something like that, they don't care about trailers and they don't care about long hauls. Right. Like they're not driving eight hours. But they do care about safety. They care about maintenance. So we, we started saying we can borrow 80% of the platform and bring it over. And that's how we expanded. So it took us probably three to four years to do that systematically. We just went for adjacent vertical after adjacent vertical, and then we covered most of the market. It's very rarely we come across an industry we've never seen before. Now.

Got it. And did you. I know it's a little bit nerdy or tactical, but did you put new GMs in charge of it? Did you create little pods? How did you attack these different verticals?

I would think of them more as campaigns. So we said, okay, we want to go win and field service, or we want to go in construction. Let's go understand the customer. Let's. We have to build some technology partnerships because they would integrate with different pieces of software. So let's go do that. Let's of course, speak their language. Right. So when we're doing marketing case studies, but we never specialize the sales team and we never specialize the product teams. Except for public sector. Public sector has a different buying cycle.

Right.

And they have like different contracts. So government sales, a little different for us, but it's the same use cases. So we try to sell the same products across the board.

In other words, same sales team. No GMs selling in construction, H vac, food and beverage, and fleets.

Yeah. And so the GMs are more focused on the product. So they. We have a. Someone who manages safety or telematics and compliance, those sorts of things.

Yeah. No, it's interesting. I appreciate it. It's. I'm not saying I don't know that this breaks any rules, but it is slightly different than what most folks try to specialize. They try to break teams up. Specialize. But you have. You haven't had to do that. You've made it all work, keeping it together. A lot of founders would like to not do that. A lot of executives would like to not have to do that.

I am always a fan of. Let's keep it simple. We do. We would run salesforce reports that would cut by industry vertical. So we'd look at what's our win rate look like here? What's the price that clears the market there? Does it need to be different? What feature set? Like so it's important to look vertical by vertical or industry by industry. But like when you totally split off the teams, like how do you set the quota?

Right.

Are those sales reps going to feel successful? It's way better if this sales rep can win a bunch of deals over here and then pick up a couple of deals to say okay, I'm able to open up the construction market. So that's how you broke into in adjacencies.

Sometimes it's hard that. Let's say you want to go into construction. Samsara is such a powerful brand, but you're new to a vertical. There's off. There's always a couple entrenched competitors. Maybe they're 20 years old, maybe it runs on Ms. Dos. But they're there and they know the market, they know the people, they know the market cold. So sometimes that rep that wants the deal can just never talk the market the way that 20 year old vendor can. So sometimes it's harder for them to cross those lines than you might think without that specialization.

Yeah. And we've totally had to learn a second language multiple times. The key though for us has been have a couple of wow features that the market has just never seen. So whether real time tracking or AI in the camera or apps, there would just be things that legacy player was just. It wasn't on the roadmap even and we just demo it live over zoom and the prospect would say okay, you don't really speak my language. I get that you're from this other industry, but I could really use that feature. That sounds great.

I love. That's a great insight though. I call them 10x features but maybe they're really wow features at scale, right? Which is you can just open up the laptop or open up zoom and boom. You just. Any, anyone. You can train anyone on that wow feature. Right. This is what you got to get an expert in. Demo. The wow feature. Get them in and get them in the door where they just have to have it. It just doesn't exist in the incumbent.

And it has to be genuinely useful. There's like eye candy and stuff like that. But are you doing something that really gets the prospect excited? You're solving a real problem for them.

All right, one last addition. 1. Because this is so interesting, can we talk about going to upmarket and not going up market? If I have, if I Have my metrics again, I am a student. But you've talked a lot about going more enterprise, more 100k deals and mathematically it's tough to get to 10 billion an hour probably without more 100k deals. And you go but, but talk about the smallest ones. If I have the numbers more and more enterprise. Tell me about that. But 10 to 100k deals are still 39% of your revenue and the little ones are 8. And I don't know how many of the 8 grow into the 39 and grow into the 40. Sorry, 40 some odd. But how does that all work together and how do you focus? Because you're going up market but also the long tail still wants Samsara.

Yeah.

This is the conundrum. You get in like you want to go up market but the long tail, if they love you. I always worry about leaving the long tail behind.

Yeah. It is hard to be everything to everyone and so serving someone who has you could technically have a fleet of one. It could just be you driving, you probably know where you are. So we're not going to be super useful in that context, but if you have 10,000, we're super useful. So what we decided is we're going to focus on people with complex operations. Now the interesting thing there is you might have 10,000 trucks. We have customers who have 40, 50 vehicles but they're in four different states so they view their operations as complex or they have Hazmat or they have something else going on that makes their operations complex. We are a good product for them because they get a lot of value from all the software, the reports, the APIs, all that stuff. If you have a really simple operation, you probably can get by with a relatively inexpensive like basic product and just go back to doing your business. Right. So we, we can't serve everyone. We focus on the kind of enterprise and the mid market sections. But we'll go down to someone who's an 8K customer. That's okay. But probably you're going to resonate with us if you've got something complicated going on.

I see. That's. That is an interesting line. Complicated you, I don't know the whole market but there's probably really low end mobile apps. You can track one or two people on your phone. It's 20 bucks a month or 30 bucks a month. Right. And.

Yeah, exactly.

And there's no complexity there for the three of us.

That's right, yeah. And that's fine. What we discovered though is the resonance was so strong because the bigger the companies get the more kind of complex stuff that's going on and they will often buy the smaller folks and roll them up. So there's this weird force that happens in physical operations. Private equity is quite powerful in terms of providing capital to, to basically get bigger and bigger. So the consolidation effect in tech, it's the other way around. Startups that, that grow get big in operations. These are asset intensive, labor intensive industries. They tend to actually consolidate and, and so anyway it's been a dynamic that's been a little different than what we experienced before.

Got it. That is super interesting. I, I like that complexity line. That's a very, that's a learning for me, a very helpful way to understand it. Right. If it's complex, they have enterprise ish issues. Yeah, maybe not the same as a hundred thousand fleet customer, but enterprise ish naughty issues to solve that you should be able to extract some amount of value for.

Right? Right.

Yeah. All right, last one. I have a lot more but I don't want to keep you forever. We talk, we started this conversation of is there a downturn in Samsara's world? The answer is no. The, the numbers say it, but I needed to hear the CEO say it. Let's talk about real world AI with real world customers that are driving fleets and H vac systems and construction and are busy. I know you've talked a little bit about the role of AI and in looking at data at Sensor, but what's really happening with what's your, what is the AI story at Sensor at a tactical level and do customers care? Are customers out in the field saying to they need more AI, they need more chat bots and chatgpt and their in their field management product. What do you think? What have you learned on AI?

No, I, I think AI is this incredible enabling technology so our customers do not go shopping for AI and GPT4 enabled bots. Like that's just not their world or their language. What they are trying to figure out is how reduce risk on the road. AI is super useful for that because you have all this data, right. You actually know where people are driving, how long they've been on shift, if they run stop signs. Right. There are all these like leading indicators of risk that you're like okay, this is likely to. Or do they speed a lot? That's a great one. If you have all that data you can actually get out in front of the risk and coach the driver. The only way to sift through like gazillions of hours of GPS traces is to have AI, right? The AI finds the insight in the data and then you need to actually have the workflow to take the action. So AI is an important step in that process. You get data, you get insights, and you take action. If you close the loop for the customer, you eliminate the risk or you cut it way down. That creates the value. Right. Then they want to go do more. So now they're saying, great, can you help me coach my drivers on fuel efficiency? AI is great for that. Right. That's how we think about it. So enabling technology that's getting better and better at a cheaper and cheaper price. Right. These models are incredible for what you can get. And Llama is free. Right. Like, it's like, how many times does this happen? So AI is very strategic and very important for that reason, but it has to be in context of value. Right. Otherwise it's disconnected from everything.

But there. There've been a step change in AI, but extracting structured data from these disparate data sets, you've been doing that since day one at some level.

Right.

So has AI led to any magic, any wow moment in the product, or is it mostly in. In the background in terms of constant improvement?

Yeah. The wow moment for us on the safety side, which I mentioned earlier, was around. So we built this dash camera. We ended up putting AI in it. And what the original AI was doing, this is 2018, 2019, was detecting mobile phone use while you're driving.

Oh, that's a good one.

As a consumer, we've all done it. We've checked our message that comes in or whatever. Imagine you're driving your company truck. It's like a big rig or something like that. You're taking a crazy amount of risk and it's a bad habit. So these companies all had policies. Do not use your mobile device while on shift, et cetera. There's no way to enforce them. What this would do is actually just provide a beep, like a coach, like a coaching moment. It would break the habit. Right. So that was our first, like, mainstream use of AI. It was basically a convolutional network, like a image recognition kind of model. And that now seems really basic. Right. Like, now we have a model for drowsiness that looks at your state of how long you've been driving and all kinds of stuff.

Yeah.

But even basic AI had a ton of value there, and that's how we got into it. Cool.

All right, last question. Anything coming out in the next 12 months or so that you're just extra excited about as an Engineer. What do you any, any big feature, any big expansion, what gets you. What is there a wow moment coming out that you're excited about?

Just building off that last one we were talking about, we just rolled out the drowsiness detection. It's such a powerful feature because people get tired on the road. It's daylight saving season here in the US we're going to see that shift happen. We had one customer we piloted with. They said they, they're a very large company and so they had people basically say we were getting drowsy on the road. They would turn on the coaching. They haven't had a single drowsiness incident in a whole week. Right. And they're driving long distances in the middle of West Texas where there's no lights. So that's the kind of thing where you're doing something that's saving lives feels really fulfilling. And as an engineer, you're like, what else can we do now? So that, that's one. If I just had to pick an example.

That's a cool one. All right. So this was so great. Again I big inspiration to everybody for all the success and I actually learned a lot. I learned a lot about keeping the team together, about going multi product, about enterprise that were a little bit non obvious and maybe for what it's worth, more different than other folks and it might look on the outside. So this was super helpful. So really appreciate your all your time. We'll, we'll check back in at, let's see 1, we're at 1.2. What's 1.2 times? We'll check back in around 5 billion.

Sounds good.

All right, thanks for the time.

Okay, thanks, Jason.