The Secrets to Going Big, Going Multi-Product and Going Public | Amplitude CEO Spenser Skates

So today what I'm going to be talking about is the secrets to going big, going multi product and going public. You know, there's a lot that we've learned on the journey along the way that I want to share with all of you. But like any successful founder will tell you, I've been doing this for 12 years now. The success does not happen overnight. It really is the accumulation of tons of little advantages that occur over many years. So I really want to break down the decisions that your company faces into four critical stages. The first is the foundation building years. This is all about getting the first two to four years of the business right, setting up the right foundation for you, your co founders, the board team. That's incredibly important. That's what you build off of as you grow. That's what a bad foundation can really wreck you as a company. A lot of companies will get founded with some critical flaw there. So I want to start off there's. Then I want to talk about the growth period for organizations where they need to put all of their focus into building an amazing product. Your product will always be your largest growth lever. You also need to really decide what you are and what you aren't. I see a lot of companies not thinking this through and kind of getting it wrong and either trying to build too much or maybe building too narrow. Then it goes to once you get past 100 million in ARR, which I'm sure a lot of folks in the audience here are very interested in building their company too. I want to talk a bunch about what's beyond that and having to make the transition from being a single product company to a multi product company. It's a hard transition and so many companies get that wrong. And so I want to outline a bunch of the lessons that we had as part of that transition. And then lastly to close us out, I want to talk a little bit about going public. I think there's a lot of great options to do this. We've seen a lot of innovations in the public listing space in the last few years. So excited to share my learnings from that process for you with all of you. And then what's important to keep in mind is that this is not the end of the journey. One of both the blessings and the curses of the technology industry is no matter where you're at and how large you get, there's always the expectation and question of how do you get build this thing to be even bigger. And so the journey doesn't end there. So I'm going to walk you through today's talk. A few of the key decisions we made at Amplitude and what I learned along the way. I hope that experience can help you all as business leaders build amazing, lasting, enduring companies. I absolutely love. As you know, SaaS in my opinion is the best business model of all time. We build infrastructure, we sell that. It generates this wonderful predictable revenue stream. And so I hope I can help you along that journey too. So as we're talking, feel free to put stuff. There's be a few moments where I'll ask you to put stuff in the chat, so feel free to do that and then we'll get to the Q and A at the end. That's always my favorite part of the talk and so I'd love to hear what's on everyone's minds. All right, so let's get started with the first stage. Building the company foundation. Founding a company is very, very difficult. Lots of stuff that can go wrong, lots of challenges that each company faces. Unique. But I did want to talk about some of the things that you can do to get the foundation right. So the first thing that I want to call out is that it really is about, I said it's a multi year journey to get the foundation right. And the foundation is not set in a single year or a few different months. You can't build a solid foundation for what you're doing in that short amount of time. Back before we actually started Amplitude, before we actually decided to, me and my co founders decided to build a company, we actually wanted to know, hey, what's our likelihood of success? You know, what are the things that, you know, how likely is it we're going to be able to build something and what are the things that go into that that will determine if we're successful or not? So we actually looked at a batch of Y Com. We did an analysis of Y Combinator companies that were two years old, so that were in a batch two years before us. And one of the really interesting things that popped out to me from that was that there was what I call a rule of thirds where one third of companies would just pack up and die. The website's not functioning, products not working on, co founders have moved on to something else. And so out of a third of companies that started two years later, a third of them would be out of business. One third of companies would actually go on to have future success. So maybe they'd raise a round of funding, maybe they get acquired, maybe they build up into a sustainable revenue team. What was really interesting though was the Middle third, the middle third was still going. They still had a product functioning website, a team that was committed, but maybe they hadn't figured out success yet. Maybe they had pivoted their company, maybe they were still working on trying to find product market fit. Maybe they still had some challenges to get through. And what was really interesting looking at that analysis was that what it told me was that, hey, if all you do is just stick at it and you avoid being in that bottom third, you can kind of continue onwards and then eventually build up to success over time. But the most important thing was just, you know, if you survive for long enough, you'll eventually find some sort of success. And so that really told me that, you know, hey, when we start Amplitude, we need to at least stick at it for a minimum of two years. Probably a good deal longer than that, but a minimum of two years. And if all we do is just not quit in that time, we're already ahead of a good number of other teams. And so that mindset, that was something I shared with my co founders and that mindset was incredibly important to the early days. So just quick story there. Before we started Amplitude, we tried a different company called Sonalite. It was a early version of Siri. It was a voice recognition app. Frankly, the technology was a little too early. Voices and interface, even today, still a question if it'll be successful and usable interface for people to interact with computers. But what was interesting? So we built that company. But what was interesting was that during the building of Sonalite, there were all these questions we had about the user journey, where people found success, where people were stuck, what were the critical events someone would have to do in order to convert to a long term engaged user. And what was interesting was nothing off the shelf at the time was able to do that. So, you know, most companies really had no idea how their customers were using the product. And so, you know, there was, and there wasn't any third party tooling that would allow you to easily understand that. And so we ended up deciding, hey, you know, we really need to build a platform that, you know, we need to build this in house ourselves. You know, like a lot of early stage companies, we had the hubris of saying, hey, we're going to go ahead and build our roll our own analytics. And what was interesting was that when we had showed what we had done to a lot of other companies in space, they're like, wow, amazing. I want this for my own, you know, my own product. I want to understand where my users are getting stuck. I want to understand where they're having trouble. I want to understand what my best users have in common. I want to understand what it is I can do from a product standpoint to grow my company. And so we ended up. So after about a year of working on Sonalite, because we had made that commitment to at least build a company for two years, we said, okay, we're going to stick this out no matter what. We're going to go and try, you know, there's something interesting here in the product analytics space. Let's go ahead and try to go after it. And it was no question that we would have done that. And I think that was a really key inflection point. And because a lot of founders, you know, if you look at the founding story of any early stage startup, so many businesses get to this point 6, 9, 12 months in, where honestly, rationally, they probably should quit, all the indicators are against them. They're not getting the traction they're looking for. There's challenges, but the ones that end up being successful for whatever reason, whether rational or irrational or their own belief in themselves, they don't end up quitting and they end up going on to build something successful. So that would be my biggest advice to all of you. For those of you who are in the first year or two of the journey, just sticking around and sticking out for long enough, enough you'll be able to outlast others and be able to find something successful. So that was a kind of really big lesson from the early days. All right, so once you get past that commitment, what's next? Well, you got to build the right team. So that really starts with your co founders. So, you know, I think just to tell you a little bit about our founding team, first co founder, myself, obviously first co founder was one of my classmates from college, Curtis Liu. And so we had met at MIT and we had competed in programming competitions together and become close friends. And I really knew I wanted to work with him as a co founder. And so he was interesting was, I remember I asked like 20 different people to start a company with me. But luckily he was, you know, he was the one who had said yes. We said, hey, I want to work at Google for a year first before coming over to build a company with you. And I'm like, man, if he goes to Google, he's never coming out of it. That just is like a giant black hole for founders with dreams, but that folks that have never come out of. To his credit, after a year he actually did leave and Join us. The other co founder was Jeffrey Wang, who was even more exceptional programmer than the both of us. And what was interesting is he actually the process to get him was a multi month process to really convince him to come on board. I remember at one point he had sent me this list of 20 very thorough, very thoughtful questions around why we thought the market was ripe, why we thought we had a winning product, why we thought we had an advantage. We met up back and forth over the course of many months after that he's like, these guys are smart, they're cool, they're working on something interesting. Um, and he, he ended up joining. And so that was a, that was a huge, that was a, you know, huge win for us. Um, and the, the lesson there is it, it really took, you know, one year to get Curtis and then we had to fail with Sonalite and start up Amplitude and then do, you know, whole other product process to get Jeffrey. But that has been so worth it. You know, I look now a decade later back on it. Um, you know, and those, you know, our relationship is kind of the bedrock of our success at Amplitude. What's interesting to see is so many early stage companies have issues between co founders where they're not committed, where they don't have the same vision, where they have friction between the co founders. And so really investing the time and getting the right people on board at the early stage, totally worth it. So that's kind of the very early founding team. The other really interesting inflection point for us as a company was hiring executives. And this is one of the most challenging things in kind of any company's history. To build out your executive team, you have to hire people who are more experienced than you, who are in some ways smarter than you and more talented than you. And it really challenges and tests you as a leader because it's like, okay, well you know, that's their role. What is my role as founder, CEO? I'm supposed to be the one that has all the answers. And so that's kind of a huge challenge in it yourself. One of the general rules of thumb there is that in general you'll expect half of them to work out and half of them to not work out. And so you have to be willing to kind of take that plunge and take that bet and bet on folks who are stronger than you. And really that's kind of your job as the CEO is you're going to be used to getting, trying to play roles, but you want to find people who in all of those are Better than you as a leader. And that's a hard thing to do. One of the last things I want to call out is you'll have to delegate a lot more. I mean, that kind of goes without saying. You know, the surface area of companies and organizations and customers and products and everything else gets big, and you have to really be deliberate about what you're cutting back on. So one example, you know, it's kind of a very small one, but I think it's illustrative is that I actually have never been involved in our search for new offices. We've moved through many offices over the years at Amplitude, and we've signed contracts with a new office space and a new lease without actually ever seeing me seeing the place so many times. I remember in one process, they're like, really? The CEO doesn't want me to see this space. I'm like, no, the team's got it. They're smarter than me. They're going to drive it. I got better things to do and building out the org in that team. And so I didn't care as much. I knew that our team would come to good decisions there. On the flip side, there is stuff I have been very religious about about the years. We have a weekly all hands, you know, every single week since we started the company. And that's been a really core foundation to keep us all in touch and all have the same narrative and same understanding at we scale. That's gotten a lot of resistance over the years. People are like, oh, so much work to do a whole company presentation every. Do we have to do it every week, Spencer? But I think it's incredibly important. You know, one of the things it's been one of the things that has kept a good foundation of communication as we've scaled about what's important, what we're working on, and giving us all a shared narrative as we build a company through hyper growth. All right, so the last thing I wanted to call out here in terms of building the foundation is building a great board. One of the best comparisons I've ever heard about a board is that a board is basically an executive member that you can't fire. So you have to get it right. It's like, even though if an executive doesn't work out, you can part ways with them and move on and find someone else who's a better fit for you, you can't do that. You're stuck with the board member. And so one of the mistakes I see founders making is that they will rush into fundraising processes, chase High valuations, high terms, you know, really exciting offers, but not really spend a lot of time about thinking who is the board member that they're adding to the business. And so I encourage folks who are going through that process to really spend, be really thoughtful. When you're at you doing your Series A or Series B or adding investors to the board that are permanent, really think through who you're adding there. There's really three key things that I look for as a CEO in my board. The first is, are they going to have deep empathy with you as a founder? Not to say they always agree with you, or that they always defer to you, or that you always be right, but will they have an understanding of the difficulty of the founder journey? And a lot of investors don't have that. Second, are they going to work hard for you? Are they going to put in the time to help train you and coach you and help you learn? Very, very common to have board members who are checked out, who only think about you right in the parking lot right before they come into the board meeting, and when you ask them for help and when you're not doing well, they're nowhere to be found. And then the last is, are they very conscious of what they know and they don't know? Many, many investors very overconfident about what they know. I think the best, though, have always been very humble about that. We've never, for example, giving detailed product feedback about Amplitude. Probably not where a board can add leverage, but one of the places that they can is how do you build out a great organization? And so board members that really understand that. And so we've been very lucky to build a board with some amazing investors. At Amplitude, our Series A investor was Eric Vishria from Benchmark. He's been on our board for over seven and a half years. Right now we probably would be one tenth of the size today if it weren't for him. He's helped us hire hundreds of people. He's given me advice during critical inflection points at the company. When I had to step into a sales leadership role, he went out and did some homework and talked to a bunch of sales leaders and helped me provide me a quick guide to, to how to drive sales. And so just lots and lots of things where he's been, I still talk to him weekly. And so huge amount of leverage I've gotten as a CEO. Whereas if you're in the space where, hey, you have a investor who can't add value, or you're an investor even Worse you're afraid of that, becomes much, much more challenging to run the company. So that's the last bit of the foundation. All right, one last, just anecdotal story that I love sharing from the early days is charge more. Charge more than you than you think you're worth. So the transition from a free to a paid product is one of the most important points in a company and one that you want to do as quickly as possible. It can feel. You can get very, very nervous about doing that and actually charging folks for what it is you do. But incredibly important. A lot of folks at Saster have given much better advice on me than this. I'll defer to them. But I remember we spent about a year building Amplitude without charging anyone for the product, and we were kind of wandering in the desert just begging anyone to use the product. I remember the very first time I actually convinced someone to pay us money for what we were doing. We had gone to this small gaming company. I still remember the guy Brett. It was me and one of our early employees. We went to make a pitch for what we were doing. We kind of went through the whole demo process. We got to the end of the demo, and he asked this question I had never heard before, which is, how much does it cost? And I'm like, holy smokes. I thought about how much I want to charge for. And so I remember the great advice of always charge more than you think than you're worth. And so I was thinking something like $50 a month, maybe 100 if I'm really ambitious. So I'm like, people always say you have to charge way more than you think you're worth. So let me just throw out the biggest number that I can think of. So I thought I was like, okay, let me go to $1,000 a month. That's a crazy number. And so I said, It's $1,000 a month, and tried to deliver that with as much confidence as I could. And his first reaction was like, wow, that's incredibly cheap. And I'm like, holy smokes. Someone wants to pay me $1,000 a month for my software. It was an incredible moment where it's like it validated everything I wanted about building a business for the first time. And so from there, we were off to the races. Started closing more deals, growing and scaling the company, driving revenue, and then the rest is history. And so my adv to this group is, start asking for money early on from your customers. You might scare them off, but it's much better to have one person that will pay you $1,000 a month than 100 or even 1,000 customers that aren't paying you anything. So just one of those great stories from the early days. All right, so that's all about the foundation. Very important to get that right, get yourself in the right mindset of this being a long term journey. Get the right team, get the right board. The second thing I wanted to go into is like, okay, great, now that you've gotten the right foundation, how do you go about building a great product? And I want to be clear, it's not like we did all that stuff and then we did all the organizational stuff and that these are kind of. You do all this stuff in parallel. This is something I'm really excited to talk about because it's my background. So it's very near and dear to my heart. And this is the core of what will bring you from $0 to 100 million in arrow and the kind of, you know, building a real business around what it is you do. So let's go ahead and get into it. So the most important thing to remember when scaling your product is to know what you are and what you're not. And this is something I see companies constantly struggle with in the early days. Cause they're so desperate for anyone to get on their product that it's really hard. You know, where are the edges of what it is I do? You can always build the next feature or build the the next thing. So I want to actually just pose a quiz. So feel free to put your answers in the zoom chat just on your thoughts on this. So several years back when we were smaller, there was a big competitor in our space and they had put together this pitch deck for the next funding round. And they had talked about how they'd done a great job selling to product leaders. They were like, oh yeah, we won the product space. We've done a great job selling to that buyer. What we're going to do next is go build data tools for the sales industry and the finance industry next. And when I saw that, I was like, huh, that's really interesting. You know, is that a path we should go too? But as it turns out, huge, huge strategic mistake on the part of this company. So if folks want to put in the chat, what was the strategic mistake that that company made there in going from a data tool for product teams to a data tool for sales and finance and other teams? Does anyone have any guesses as to what the strategic mistake is that they made as a business? All right, didn't talk to enough customers. Lack of focus. Good answers, good answers here. So I think the too many products, these are all getting at the right thing. So what the core issue that they had. There we go. Anoop, you got the answer. Who are you selling to? Changes. Yeah, the core issue is they had decided to go out of selling to their core Persona and they had done it way before 100 million ARR and it ended up being hugely, hugely distracting for the company. They never actually got traction. They lost the lead in the product space to us. And so it was a huge lesson that from my standpoint that if you don't you need between 0 and 100 million ARR, you've got to focus on a single buyer and a single use case for that buyer and trying to go into multiple buyers or trying to go and create new product market fit out of your core thing. Very, very dangerous. Markets are so big and SaaS these days that you absolutely can build 100 million in ARR business on a single buyer. And so even today when you think about you look at the salesforces, they've done a phenomenal job selling to the sales buyer. Adobe's done a phenomenal job with marketing. Workday's done a great job with HR. ServiceNow's done a great job with it. They've never lost that core of what makes them great and who their core buyer Persona are, even at the billions or tens of billions in revenue. And so to do that early on really doesn't make any mistake. And so you're building an organization that's operationalizing around a single customer and a single buyer. And so that was a huge lesson for us, like, hey, don't do that. Stay really focused, do the best job for the product buyer that you can. And then once you get to 100, you know, you can start talking about more things after that. But just focus on one product. We had tried. So the second thing I want to share is that this cake here in the early days of Amplitude was we had tried actually a number of products outside of core analytics for Amplitude. And we had tried crash reporting, we had tried building a BI tool, we had tried being a third party data white label product and it was all incredibly distracting from what we were best at, which is the analytics side. And so when we finally decided to shut down those products and wind those down on the day we actually deprecated those products, we had a giant celebration where we had a bunch of cake where we said, hey, we're not going to have to do crash reporting. Anymore as a company, we're just going to focus on analytics and analytics only and do that for the product buyer. And so that really allowed us to focus in, be the best there and scale. We're also welcomed some new hires, Alicia and Nirmal at that point, so we're celebrating that too. But huge, huge deal for us to be really clear about what we were and what we were. Okay. The second thing I did want to talk about in product is one of the most common transitions for a SaaS company is the shift from selling to startups to selling to the enterprise. And the biggest mistake I see companies makes here is that they think, oh, let me hire an enterprise sales team. And they'll go, and they'll go drive, you know, and they'll, they'll build this and they'll be successful. But in fact, hiring an enterprise sales team is almost the easiest thing that you can do. It's really the transformation that you have to bring the rest of the company through that's actually quite challenging and difficult. It's a whole company transformation. So the part I want to focus in here, you know, a lot needs to change. Your marketing, your customer success motion needs to change how you do, legal needs to change how you security. But I want to focus in on the product part. What was interesting is the core value was the same. You know, they wanted to understand insights about their users across the customer journey. But the needs and how they did that ended up looking quite different. They were very. So one of the most common things we ran into was issues around collaboration. They wanted to share charts and understandings across their teams because a lot of these, you have customers that Amplitude customers, enterprise, that will have hundreds or in some cases 1000 users on amplitude. And the question is, how do you help them organize all that work? And so we ended up building a huge amount around collaboration, shared dashboards, this thing that we call notebooks, which allows people to kind of tell stories and share that. And that was a huge deal. And I remember one of our earliest enterprise customers, we asked them, hey, what's the most exciting feature to you about amplitude? And we thought, you know, it was going to be some advanced analysis or segmentation or retention or slicing and dicing chart, but they said shared links. And that blew my mind. Shared links is the most valuable thing to you. Whoa. And so that told us, hey, we got to refocus. If we really want to go out to the enterprise, we got to refocus what we're doing our product around a bunch of these use cases and needs and there was a whole bunch more. Security was a huge concern of a lot of these companies. Data governance was also a huge concern. How do you actually manage the data taxonomy for a large, you know, for a very complex set of data that's going out to a lot of different end users? We also actually changed what our product North Star was as a company. As a result, we were previously focused on just monthly active users on Amplitude. But we had found two things. One, that our most successful enterprise users, customers used us weekly. And then two, that the best indicator of forward revenue and stickiness was whether they shared insights with other people. So we came up with this metric called weekly learning users and that became our product North Star. And that was a huge part of helping us successfully transition to the enterprise. Anyway, huge success, ended up getting to 100 million in ARR. This is back in 2020 on the back of us making this transition to the enterprise. Okay, so that is product. Okay, so let me go ahead and move to the third stage. I'm going to try to speed through this so we can get. So we had some really good questions. I want to make sure to get to some of these before we run out of time. So let's go ahead and talk about part three, going to multi product. So this is a very, very. This is the most common failure mode for companies that are post 100 million in ARR but is essential because it is almost impossible to get to a billion dollars in ARR off of a single product. Almost no company in SaaS does that. Every single company you look at sales, any of the names I mentioned for, they've all done that by going multi product. And so the question is how do you do this? Because so many SaaS companies, they really do fail at this execution. You have to basically capture lightning in a bottle a second time and find product market fit all over again. And a lot of the assumptions that you built your organization, your company with have to be re looked at and revisited. And we actually failed that at the first time that we did this as well. So the first thing just to call out the hardness of the problem, you got to find product market fit all over again. And so I think the place where companies really fail here is that they try to go into a totally different buyer or use case. So similar to some of the mistakes I talked about early on, that's not actually related to their core product. And I remember we initially said a few years back at Amplitude, hey maybe we should look at a product for marketing teams and marketing to get into marketing because that's a huge. Another TAM beyond product. Turns out, huge mistake for us because that did not allow us to use any of the initial successes selling to our initial buyers in the product analytics because we were just looking for new distribution. And so it's like, okay, that actually is not going to help you. You know, they're not interested in using a product that you haven't even built, that doesn't even exist, or it's really, really early on. Instead, what we should have focused on and did end up focusing on is something that's very complimentary to what you do. So you actually, you want to go back and talk to your existing customer base and ask, what is it they find valuable? And so this actually led us to our first two new products, experiment and recommend, which we launched last year. So teams had been asking us, hey, when are you going to do AB testing and experimentation? They had wanted that, and they wanted to see that out of us for a very long time. And we didn't want to get into it because we're like, oh, this doesn't really help us expand our tam. But in fact, it was actually the exact way to expand our tam because we had already built this great relationship with our thousand customers and done a great job of delivering on analytics. And so all of those customers were primed and ready to hear from us about, you know, more pieces of value we could sell to them. So again, you know, focus on the same buyer, focus on the same buyer, the same customer, and see what additional needs and use cases that they have that build off of what you already do. And so, you know, huge, huge lesson for us. And something I'd say to the audience is like, look at what, look at what else your customers are using. Look at what they're getting. Value, you know, ask them, you know, what they want out of what they want out of you, and then you'll find your way to new things. And so, early days for these two new products, but some great traction so far out of our customer base of 1600 customers, we have over 100 new products already in just six months. See a lot of potential here. And this is giving us both the confidence that we know we'll get to a billion ARR by continuing to invest behind these products as well as continuing to invest into new ones that we'll be coming out with over the next few years. And so again, want to stay focused on that exact same buyer. All right, so next challenge, so you can build a product, but actually just deploying it out to your go to market teams, that's a whole nother challenge. And so you can't just once you get to scale and once you get to a huge organization, you can't just say okay, let me turn it on for everyone at once. So this was actually a mistake that we made last year where we said we expect, we did this big company launch around our experimentation, but we just expected our sellers just to go sell it right away. It actually takes a lot of work to educate your go to market organization. They've been trained and they understand how to sell what you're already doing. In our case, product analytics. And to sell something totally new is very unique. You have to relearn the landscape, the markets, the needs, the use cases, all of that stuff. And that needs to happen to everyone from your SDRs to your AES, your solutions architects, your CSMs to demand gen leaders. Our big learning here was to we should have tranched it out over time. We should have started with a much smaller group of sellers who were focused on our experiment and recommend products and then from some initial success done more work to enable and create centers of excellence around those areas with our sales engineers, with our CSMs, with other folks on our team. So not everyone at your company is going to be able to do everything. And that's okay. You know, this is once you start getting past a hundred million, you start to add a lot more complexity your company. You'll add more GEOs, you know, more segments of your business, SMB versus enterprise, more products. And that's okay. You know, not everyone needs, needs to know everything. Last thing I want to say here is that you know, you, I think one of the mistakes is, is and this goes with the kind of tranching out how you go to market is don't, you know, a lot of, a lot of companies think, oh hey, we'll keep it all secret and make this big launch, huge mistake. You want to be testing this product with your customers from the early days, from the alpha, you know, to doing betas with your customer, to making it generally available, to really scaling it out of your sales team. And so one of the secrets here is that you want to launch your product actually multiple times. Everyone thinks, oh, you just launch it once and you're done. Like no, you want to always be relaunching your product. You're launching them to a new segment of your customers or a new group of your company and you can kind of build up that momentum for a launch and getting people excited about what's new and you can do that multiple times and it's really. It's something that, you know, can be very effective. All right, let me go ahead and we're behind, so let me go ahead and close out with the last thing going public. Huge milestone. I'm sure a lot of folks here really think about and dream about this, but. So I wanted to call out both the mindset around this as well as the, you know, some mechanics around the details. So first thing let me talk about is just timing. Well, so firstly, actually, let me. Before I get into that, let me talk about philosophy of going public. You don't. It's not an end state, you know, cliche, everyone says it, but it's. It's just a tool to help you grow the business more. If you aren't thinking about what are the years look like, go after you. After you go public and you're thinking of the end state, you will stumble and lose your way. And that has happened to so many SaaS companies in the history, you know, in history where, you know, they've really stalled out their growth. They've had a lot of their organization and team churn. So really make sure you think through why are you going public and it being an accelerant for the future of your business, not an end stage, especially in this market environment. I mean, we were up at $84 at one point. Now I think yesterday we hit a low of 15 or something. And so absolutely wild swings in the public market. And if we had said, hey, that's the end state, this is the thing to celebrate. We would have been hosed, our teams would have been hosed. It would have been a really bad place for Amplitude as a company to be. All right, so let me talk about. Okay, so with that out of the way, let me go ahead and talk about when's the right time in my opinion. I think actually once you reach 100 million in ARR with good momentum, that's actually a really great time to bring your company to the public markets. Historically, if you go back 10, 20 years, companies would go public on much, much less in revenue. They'd be in the tens of millions in revenue and go public. With the advent of a lot more money in the private markets, that timing has really gotten pushed out. And so you see companies like Stripe, who frankly, really should be a public company at this point, who are just very, very late stage. I think there's a few reasons to do this. One is it gives you a lot more tools in order to be aggressive about. In order to Be aggressive about different moves you want to make as a company. So acquisition being the most common, but just having a liquid currency for your stock gives you a lot of leverage to be able to go acquire and do different transactions you might not be able to do. And that can be a huge lever for growth. I think a second is there's obviously all the press. It's less of the press itself. It's more that, you know, hey, if we're the as amplitude we actually wanted to go out earlier because if we're the only company in the product space that is in the public markets, that says a lot to the rest of the ecosystem, whether other customers, partners, you know, press analysts, you know, you know, all of you about, you know who the leader is. And so being, you know, one of the first ones to do that can be huge. The last thing is, you know, it really does raise the bar on you in terms of execution from you and your team. And that's frankly a good thing. Great companies will rise to that moment. Bad companies will blame public markets for their lack of success. And by the time you get to 100 million ARR, you really should be doing that. You really should be building the operational rigor and the muscle around predictability and forecasting within your business. And so for these reasons, for a bunch of these reasons, I'm very much for taking the companies public I think earlier than maybe has happened in the last few years once you're really past that 100 million in ARR milestone because the advantages. Second thing I want to do, I'm a huge advocate for direct listings. If you guys have heard of any of my other talk tracks. The short of it is direct listings have a number of systematic advantages over traditional public offerings. I got some question about how do we convince our board to do it. I think there's a few different things. One is that it's market based pricing for your stock versus stock that is advised by your bankers and ends up artificially deflating your price and basically nowhere else in the financial world. I heard one public market investor call IPOs the largest arbitrage opportunity in all of finance. And it's like as a CEO I have a fiduciary duty to not undersell my stock. And so a huge recommendation on my part for you to take your company public if and when the right time is through a direct listing. And there's been a number of companies who have done it. Second, I want to call out underrated reasons allocation in a public offering, your stock is kind of hand allocated by the bank saying, oh, you get this, you get this. And it's whoever has the best relationships and pays them the most fees. Whereas a direct listing, it's whoever has the most belief as represented by their willingness to bid for the stock. And that in my mind is a frankly much better way to, to allocate. I want shareholders who are incentivized and motivated by amplitude and what we're doing versus their relationship with the bank. And the last is dilution. There's a bunch of effects in traditional public offerings that the banks want to squeeze in every last potential shareholder. And so they end up trying to get you to add more and raise more money than you need, which, again, not what you want to do, especially at a lower price. So go through direct listing. I've written a ton about this. Check out my founder's letter or I've talked a lot about it with the press. Last thing is, you got to prepare your team for market volatility. So thank goodness we had done this, otherwise we'd be in a world for hurt for now. So actually, a few months before we went public, I actually created a fake stock chart to represent amplitudes as a public company and say, I would walk the company through this every few weeks and say, hey, pretend we're already public. And pretend the stock does this and the stock does this. How do you feel? And the important message was that whether we're up or whether we're down, that is not what is important. What's important is are we executing on the things in our control? We cannot let your emotions be driven by factors outside of your control. You have to be let them driven by what's in your control and your success, which ultimately comes down to are you building a great product? Are you selling that to customers? And if you do that, the stock will take care of itself in the long term. And so I walk them through this exercise where I, you know, pretended I went through all these ups and I didn't even know, you know, there's going to be this volatility. I wish I had, but there were all these ups and downs as a company before we went out. And I remember getting these questions. It's like, oh, are you sure we want to talk about it potentially going down? I'm like, hell yeah. Like, we want to talk about it potentially going down. It's like, they're like, well, that might scare people. And I'm like, well, that's what being a public company is. If they can't take it when we're doing it in practice, how are they going to take it in real life? And so thank goodness we had done that. And that messaging was really, really, really, really clear throughout the team. And that's something I'd been beating on the drum for the six months in the lead up to the public markets. And so very, very important moment of leadership. I've seen CEOs have done the exact opposite. That will celebrate when they're, one, they won't even have that conversation with their team, and then two, they will celebrate when their stock goes up and it's like, okay, hey, a lot of that, frankly, doesn't even have to do with you. That's changes in the macro or changes in speculation on you versus anything you've delivered. And so they end up getting a lot of morale and a lot of issues when it goes down. All right with that. Again, public company is just the start of the journey. So we are in the start of our next journey as a company to go take over the world of a product. And so hopefully everyone understands that it doesn't end when you're here, it's continued. It's both the curse and the blessing. Everyone's expecting more out of you all the time, so. But all these lessons that hopefully, that I just went through, hopefully you understand, you know, still apply all the same thing, you know, you're still building a business for the long term and wanting to build that with the right foundation. Wanting to. Yeah, so wanting to build that with the right foundation, wanting to stay focused on the core of what makes you win and be successful as a product, being able to, you know, expand that to multiple products, you know, and then setting yourself using, Using, being public as a stepping stone for the next stage. All right, so sorry, I ap. I'm way over time, so hopefully that was helpful to folks here. Let's go ahead and jump into Q and A. So, Amelia, for us. Go for it.

Yeah, Lots to unpack here. Great presentation. You got a shout out from Matthew on that. Good move prepping your team for the ipo. Lots of. Lots of good questions here. I'll dig into the first one. We'll try to get through as many as we can so you guys can continue to chat in. First and foremost, Amplitude's new customers were still growing an incredible 51% at the time of your IPO. That's higher than most folks who rely on their existing base to grow at scale. What are your learnings here?

I mean, I don't know that I'd say anything different from what I just went through. I think it was. It has to be a consistent focus on being the best and within your space and then winning one deal at a time. I would say one of the hardest challenges for us as a company has been that we have a significant SMB and commercial business and we have also a significant enterprise business that makes up the majority of our revenue. And so being able to do both simultaneously can be challenging. And it's kind of one of the, you know, even today, one of the biggest things that we want to make sure because it's like a lot of times there'll be strategic efforts to focus on the enterprise, but it's like, you know, you ignore the S and P or commercial business. But now we just, we've been, you know, kind of reinvigorated and focused on doing some changes to commercial business to help us drive that. And so I think you have to be able to do that, frankly, if you're going to get to a billion ARR and beyond, if you're stalling out, if you really just only count on existing customer growth. And it can be very easy and very tempting. A lot of them know you. It's kind of the easiest sale you can make is to your existing customers. So one of the things we did actually that our CRO, Matt Heinz did last year, which I thought was very. Or two years ago, sorry, which was very prescient and I think incredibly important this. We separated land and expand teams. So we had a group of sellers that were just focused on the land side and a group of sellers that were just focused on the expand side. And that was really huge for driving it. I think one of the mistakes we had made was that it was very easy for account executives to just harvest the existing business and not really spend a lot of energy focused on driving new lands. And so really separating out different parts of the organization were focused on each was. Was a. Was a key part of that.

Yeah. There's a related question here. I think you touched on it a little bit now, but if you can dive in a little more. Did you. You separated your land and expand teams. Did you do that as you went multi product like before in the prep for it? Like when did that happen?

Yeah, so we did it. Sorry, it was. We did it at the start of 2021. So this actually. Yeah, this was. This was actually right before we went multi product as a company. Okay. And so I think the new the lands. I think one, one caveat, one important nuance there is the LANS team just very still focus on Product analytics, you know, that's their mandate. They're not distracted by our new stuff experiment Recommend those are, we're focused more on upsells to the existing customer base. So it like actually that kind of separation of those two teams really helped drive, you know, that focus in a natural way as well.

Got it. Okay. When did you figure out that your 100k customers were going to be your key ICP?

I think we had always had a pretty high ASP. You know, I think we, you know, even in the early days and so as part of the move to enterprise we were, you know, we had grown that number. Analytics, you know, it's a heavy weight. Again, every SaaS company is different. What I'll say about analytics is analytics is a heavyweight implementation. You have to get the buy in of multiple stakeholders in order to do it successfully. So you have to get a product champion who wants to bring you in, has the reasons to do that. You need to get the engineering team to buy into it and also allocate resources to implement a new. And then a lot of times we'll need to get sign off from data science or whoever's responsible for the data tools as well. And so that can be challenging to do as part of that. Just to do that, implement, get that implementation done. $100,000 is kind of the entry point for you to do that in the enterprise. And so I think as we knew we were going to enterprise and bringing up those price points, the sale naturally started, the bulk of the revenue naturally started gravitating towards those hundred million or one hundred thousand plus customers. And then they've been a huge part, they've been the number one thing that has driven amplitude's growth over the last few years.

Yeah, and you shared earlier how you used to underprice. Now you've shared how you got your first kind of 100k and then 100 million customers. What was that like getting your first million dollar deal? Because then now you have so many now it's like natural almost.

Yeah, I mean it's still, I mean we had, you know, we have $29 million customers which is unusual for a company at our stage. You know that's roughly around 200 million. And so I think we've always been focused on continuing to go up market because that tends to be, you know, it's like just the returns to scale there are so much better. You know, you still have, it's a single sales cycle except it's ten times as big. And so I think there's a Natural gravity that pulls you there if you have the ability to do it. Now the hard part is how do you enable the rest of the company to help you drive that sales team will always start to hunt the largest ones up market because per unit energy invested they just always have the most roi. I think the challenge comes in is what are you doing at the rest of the company to support that. So our first million dollar deal was IBM back in 2017. There's actually million and a half credit to the AE who managed to get that at the time. And that's when that really told me as CEO hey we really got reorient a lot of the rest of the company around this. So we went to talk to them, we said hey what are your guys biggest needs? What do you actually like most about amplitude? Why are you buying it? And that's when they said hey I like shared links and like oh collaboration, this is going to be a huge thing for the enterprise. And so that really helped us build out a lot of our tooling around all the enterprise needs in the product front. And that translates to more deals and kind of more momentum there over time. I think the biggest mistake I see a lot of founders get religion in the wrong way over hey I want a free to use product or I want someone where the pricing is transparent on the website. Turns out that's not how enterprises want to buy or I want you know, someone that my something that my mom can use or a small business and it's like you know, it's, it's a understanding that you know that might be like a kind of lofty aspirational thing, you know that you might want to that, that but that's very different from okay, where is it that's going to drive more business for my company and being willing to let go some of those sacred cows like not having transparent pricing which by the way we're looking at changing again for some of our low end folks. But not having because that's not how enterprises want to buy. Having a very high touch sales cycle, having building out implementation services, having a product that's focused around collaboration and has all the administrative controls. And so that's where I see that's really what's helped the sales team will take care of itself. They know how to go hunt and sell deals and they're motivated and compared to incentivized it's like that's almost, you know, I don't want to trivialize it. That's almost the easy this most straightforward part. It's really changing the other parts of your company, both the product as well as the rest of you know, how you support customers that enables you to have success there.

Yeah, that can take a little bit longer sometimes. I'll try and squeeze in two more questions if we can, related to pricing because I know we've chatted about it a lot in questions and then earlier in your presentation, it's been a part of your journey. Can you summarize what you've learned about best practices and pricing for managing overages and utility based pricing?

Yeah, so we've tried to stay away. You want to in general stay away from utility based pricing. There's two schools of thought of this, which is interesting. I was talking to some of the leaders at Confluent and they're actually trying to push more people towards usage based pricing. So it's interesting. Historically we have tried to stay away from utility based pricing in that, hey, you're just not buying more data, more events or, or what have you. It's like it's really about buying the value in amplitude. And the reason for that is because you want alignment from the business about what sort of outcomes you're able to drive for them versus saying okay, hey, let me just, I'm buying X number of seats or X number of things. And so that really does help protect your value and helps drive, you know, align towards more places you can drive value as a customer. Sorry, I feel like I'm talking in the real abstract here, but I think for us, you know, we intentionally try to stay away from it. So we have a platform fee and then we have like data volumes on top of that and then we have additional modules you can buy as well. I think the, you know, I don't have a good. Yeah, I don't have a good answer for that. Other than that you're always trying to look for ways with that best align the customer with the way the customer gets value out of you to your pricing model because you want to be charging a percentage of that value and so the more you can do to that. One switch we're looking at is currently we do data volume based pricing, but we're thinking about potentially going over to MTU pricing for some of our products for monthly track users because that much better aligns to how people think about the value that we generate. So the more places where you can have levers that do that, the better. I would say if you're an IT sale, you're selling engineering, you're selling something like confluent or Snowflake, the utility based pricing makes a lot of sense. Selling engineering. That's how they're used to buying, that's how they're used to scaling. I think for us we're selling a line of business and so you're looking at kind of more of a flat fee model where it's like, okay, we're going to charge based on some value that you get.

Right, last question of the day because I know we're at the top of the hour here. Wanted to get your hot take on recruiting. You chatted earlier on about always hiring people that are better than you. A lot of us are trying to do this as well. Do you have like one top tip for getting those, convincing those people to come on board?

It's hard. I think, you know, I'll say two things. One is that passion is really, really underrated and it's something I see some early stage founders struggle with where if you're just really passionate about what you're doing and the excite like that will translate. People want to work with other people who are excited and you know, and so if I look back at all the best hires I've made, it's like the decision for them really did come back to the fact that they saw I was super excited about what they were doing and you know, they were just wanted to follow if through curiosity, if nothing else. And so, you know, you have to be your top advocate and your top salesperson and kind of all the way through and that's not going to change. You know, I still, you know, I'm in part of every VP hiring process and I'm trying like I, you know, do that to this day. And I spent a lot of time just kind of building those relationships over the years. And so just that, you know, that's what convinced Curtis to join, that's what convinced Jeffrey to join me. You know, really, you know, it's like, you know, there's, there's no secret to other, other than that, than continuing. You're the number one storyteller for yourself and that's never going to, you know, no one else is going to ever do that job for you. And so you have to be out there doing that the most and the best and the greatest and everything else. And honestly that that's going to be the thing that, that drives it. You know, it's a kind of gritty way of looking at it, but it very much matters.

Yeah. Spencer, thank you so much for all the great insights in the presentation today and for answering all of our questions and bringing all this foresight to the Saster community and being very authentic in your story and being open to sharing it with us. So thanks again for joining us at Saster Build. We are very lucky to have you. Great session. For those who want to see it again, we'll be resharing it live. So. And thanks for joining us at Saster Build, Amelia.

Thank you so much, Saster Community. Thank you all. Of course, what you all have built, like, phenomenal. The fact that there's a community around what we do is amazing. So I'm really happy to be part of it and come talk to you today. Thanks, everyone.

Yeah, we're lucky to have you. Thanks, everyone.