Spenser Skates’ Journey from MIT to Building the Category-Defining Digital Analytics Company

Hey Spenser, very nice to have you here. I want to ask you, how did it start, the desire in you to become an entrepreneur? Where can you trace it back?

Yeah, happy to talk about that. Um, so we started Sonolight in 2011 and then Amplitude in 2012, but really the idea for building a company came in the years before that. I was at MIT in the class of 2010, and I was trying to figure out what to do with my life, and I was lucky enough to have the opportunity to do lots of different things. I could have got into I could have gone into consulting. I could have gone into big tech companies. And, um, you know, it really caused me to reflect on what is it, you know, I want to do. You know, I, I have this great opportunity to contribute to the world in a way through my career, um, and I'm lucky enough to be in the position where I get to, to choose it. And I had actually done this programming competition at MIT named Battlecode., which is MIT's largest programming competition. You know, they have, uh, thousands of contestants and hundreds of different teams that all compete to create an artificial intelligence for a video game. And then they pit, uh, these AIs against each other. And one of the really interesting things was that a lot of people who had come out of that program had gone on to start their own companies. So, so Drew and Arash, the, the founders of Dropbox, had come out of that. Uh, Aaron Iba, the Etherpad founder, came out of that. There was, there was a whole bunch of other, you know, Corey Lee, the Benchling founder, came out of that competition. And we saw that and we're like, huh, like maybe this is, you know, maybe this is something I could, I could spend my career doing. And I started to study startups. I read a lot of Paul Graham's writings. I looked at the paths of, of different successful companies. And one of the things that was really clear was that if you were capable of building a successful company, it was just an incredible way to impact the world. One of the other stories that, that really made a deep impression on me at the time was this one by this guy named Norman Borlaug. So he was an agriculture expert in the 1950s, and one of the things that he did was he brought modern farming techniques to the developing world. So he went to Mexico, and at the time, Mexico was an importer of food from the United States because they didn't have enough food food to feed their growing population. And it was this whole crisis about, you know, how are we gonna feed people? And what he did was he developed a strain of wheat there that was short, that was high yield, was disease resistant. And over the course of a few years, Mexico quadrupled its wheat production and came from a food importer to a food exporter. A few years after that, he went to India and did the same thing. He went to Pakistan to do the same thing. And then he went to Africa after that. And then if you kind of look at it, the sum total of this guy's work, he ended up feeding the entire world and taking the food equation off the table for us as a society. And, you know, as a result of it, he got the Nobel Peace Prize in 1970. But if you really think about what he did, he totally solved all the crisis around food and food problems. For us as a human society. Now we actually don't worry about having enough food to feed our population. Now we worry about other things like energy and climate change. And it's largely because of the work and impact that this guy made on the food production in, in developing nations. And so to me, as an impressionable young 21-year-old, that was incredibly inspiring. And I was like, wow, like, this guy totally changed the game with technology. And if I can have a tiny fraction of the impact that this guy had on human society, I'm going to be really happy with what I did with my life. And so I looked at it, what do I know how to do? Where do I know how to make an impact? And what I knew how to do is build software. And so how can I make an impact on people's lives through doing that? And it was clear that building your own company was the biggest and highest leverage way. I wanted to know whether I was capable of starting a company. And so I studied companies intensely and I tried to figure out, is this something I'm capable of doing and starting? And One of the things that was clear was that if you were willing to stick out building a company for long enough, you could go on to have great success. And so most companies would go through this period, maybe a year or two years in, where all things looked hopeless and by all rights they should have quit. I know you guys went through something similar at UiPath, but for whatever reason, the entrepreneurs decided to stick it out and ended up going on to find great success. And I'm like, hey, you know, that's something I can sign up for. You know, I'm willing to do this for many years with no feedback and no traction and no success. And, you know, based on the data points that I know about, if you're willing to do that, you generally go on to find something worthwhile to build. So let me go ahead and give it a shot. And so ended up convincing one of my friends from MIT, Curtis, to join me. He wanted to work at Google for a year first, but after that year he left. Then we added my other co-founder, Jeffrey, a little bit after that. And that was the start of Amplitude.

Spenser, it's amazing how much I can relate to your story. When I was really young, like 13, I read an amazing book of an American writer called Jack London. The book is called Martin Eden, and he talked about his transformation from like a poor sailor into a writer. And that book made me want to become a writer because writers influenced so much the world. They describe the world to other people, and it can change us and make us understand us and the world. And then Paul Graham was my virtual mentor. He doesn't know me, but he's the guy that also transformed my life through his writings and make me understand how to build the startup. What are the values of a company? And one of his sayings is, ideas don't matter. You start with something and then you iterate, you pivot. And I'm sure you've started your first company, it was not as successful as Amplitude. So I understand a bit, what are your lessons starting with something that evolved into completely something else.

I'm a huge fan of Paul Graham's as well. It was the exact same thing with me where a lot of his writings form the basis for the mentality of how to build a company. One of the things that we got wrong in the early days of Stormlight was we didn't spend enough time with our customers. We instead spent a lot of time building product because that's that was what we knew how to do and that was what we were comfortable doing. You know, we're two engineers and we know how to solve engineering problems. And so we talked to our customers once in a while, but we really didn't get to understand, um, who they were and what they needed, what they actually valued. Um, and so that was kind of a huge mistake. And so we ended up wandering kind of a year. We launched an app, you know, had some okay traction, had a few hundred thousand downloads, so someone was using it, but wasn't sticky, customers wouldn't keep coming back. And so we realized that we were going to have to build something else and move on. And so when we started Amplitude, one of the rules that we put for ourselves was we were going to go talk to 30 prospective customers before we built anything at all. And that was a huge, huge change in terms of how we approached building the business. It meant that we're much more keyed in on what our customers' problems were, understanding them, understanding what needed to be built from an analytics standpoint. And building for someone real as opposed to building for someone imaginary in our heads that we didn't really understand. You know, we were great engineers, but we didn't have any idea of whether we were solving people's problems. And so that was kind of a big thing when we started Amplitude. Then we launched the company in 2014. I switched over full-time from the building product side to the sales side. I got a sales, uh, coach, uh, that helped us out one day a week and kind of taught me the basics of how to sell, how to qualify, how to ask the right questions, how to focus on customers that have the right problems. And we kind of took off. We grew from zero to a million ARR in 9 months, and then, you know, the whole thing just, just kept growing from there. So the biggest thing by far is that, particularly if you're an engineer, your instinct is going to be to focus on problems you solve, which is how to build a product. But the equally, actually even more valuable in some ways is the understanding of what product you should build by talking with your customers. And so that was a kind of huge lesson, even though Paul Graham talks about it and all these people talk about it, it just building that instinct, you know, took us a while. And I think one of the biggest recommendations I'd have is get, you know, a mentor, get a coach, get, get someone who's built a business before. Because then they're going to give you the feedback and advice on how you spend time doing that, where to spend time, you know, how to keep you on track if you're not doing it. And so that was one of the biggest things by far. You know, once we got to a few million in revenue, then it was all about hiring and building out the team so that we could scale the business and then hiring executives. And that's a whole thing, set of lessons itself. But the first one by far, especially if you're an engineer, is make sure you spend 50% of your team's time talking to customers. Like, look at you, look at your co-founders, look at how you allocate your time. Figure out how to put half of it on talking to your customers, because that's equally important as building a great product.

And I said it before a few times, that was also the biggest transformation in my journey as an entrepreneur, because I'm an engineer myself and I like to create the world that I like to get there, but this one might not be what people want. And you can disconnect. And it was a battle for me with my team of engineers, telling them, guys, these people trust us with their careers. They put in us a lot, and we don't solve their pain because we are some idealists that want to build something that might not be worth it. No, we have to go there. But Spencer, this is like a muscle. If I give you a book of how to play tennis, it doesn't make you a tennis player. You have to go on the tennis court and play it. And then you said also, I think you gave me the hint for the next question. Once you get the product-market fit and you understand the customer, it's about scaling. And scaling, it's about teams. And this is the biggest thing, the most difficult thing in human history. We humans separate from other species because we can work together. We can assemble large teams of people and we can inspire and direct them to fulfill a goal. So what's your lesson in scaling teams and make them, you know, vibe in the same direction?

It's so hard. That one's a really hard one. I'm candidly still learning a lot as a CEO there. One of the biggest lessons is, as an entrepreneur, particularly a first-time entrepreneur, you're not going to be familiar with how to scale an organization. And so there is so much value in bringing in perspective on the outside for how to do that. There's a playbook for all these things, for how do you set up a sales, an organized sales team, for how do you, uh, build a great hiring process for engineers, uh, for how do you set company goals and strategy, for basic things like how do you run your finances. And bringing in that knowledge from the outside versus having to learn it yourself makes the process of getting to good 10 times faster. And so for building an organization, you can hire executives that do that. Now, this is where the kind of magic comes in, which is it's really, really hard to do that well. Almost inevitably, as a founder, you're going to get your first executive hire wrong. Now, the mistake a lot of founders make is that when they do that, they're like, all right, well, I know how to do it better. I'll swear off of them. But there's actually tremendous value in learning from experience. It's just about how to find it and get it right. And so the kind of hard tension that exists for me to this day is how do I know when my instinct is right on how to build a great organization? And how do I know when I don't have the knowledge and I need to listen to someone that I've brought in from the outside? That tension, like, I still struggle with that today. That's a really, really hard thing to understand. And, you know, there's going to be times where you kind of get that wrong on kind of either side. You may listen to someone from the outside too much, or you may be too stubborn in how you do things. Like, let me give you a really, really simple example. So many entrepreneurs that go into B2B want their pricing to be transparent, self-serve on a website so everyone can, can look at it and buy it. But as it turns out, that's not how everyone who buys software wants to buy. Some of them actually want to be guided through the process by a salesperson. Um, and one of the interesting things is particularly in Silicon Valley, because so much of the DNA here is from Google, there's so much resistance to actually hiring and building out a great sales team. But that's actually a place where, in my opinion, that like your instinct as a CEO founder just to say, hey, look, I want, you know, transparent pricing that's accessible to everyone that every, you know, can use is just the wrong thing. And so, you know, that's a place where there's playbooks and best practices. And, you know, I would— my advice would be learn those, copy those. And then, you know, once you've learned them and mastered them, you can innovate on it. However, there are other things where it's really important to stick to your values and who you are. Like one of the things that we have is humility as a company value. And our expectation is that in any conversation, you're approaching it as an individual who wants to learn and hear about the perspectives of other individuals and the data points from them. And so that's a super important cultural value that when I've compromised on it, like that hasn't worked out and like that's been the wrong choice. And so kind of knowing what you should flex on and what you shouldn't, I think that is the core essence of the difficulty in hiring outside executives. You have to do it in order to scale your company successfully, and then you have to make the call as a CEO on what you adopt from them and what you don't. And that trade-off is one of the hardest and one that I'm still learning today.

So it's like humanity is the core tenets of what made UiPath. And maybe I'll tell you some other time how I got there. But I want to tell you that in terms of building sales team, you are absolutely right. In B2B, you need amazing salespeople around you because they convey the message in simple words. They can describe what you are doing and they can inspire customers and they can convince them to to take your product. So for me, the lesson was not to build sales, to love sales. If you don't love something, you are not going to build something great. That's the process they have to go. And humility, I think, helps a lot. And I want you to tell me a little bit more about your company culture, because you all know that makes a durable company. Everything else can copy, accept your company culture, because this is how you build people together. To me, one of the biggest lessons into building and scaling team was culture. And I think the most important— I sum it up to chemistry. I always made this mistake, hire the best that I can have access to in a particular time for a particular job. And I made the compromise to hire the best but not the chemistry, it never works. It destroys teams. Culture to me, it's like a framework, it's like a north star. It's in every decision, it's like humility. But we are not humble, but we have to aspire to be humble. We have to put the humility in our decision process, in what we are. So I wanna really see you getting more into your company's values And how do you apply them day by day? How do they transform Amplitude?

So we have 3 cultural values: humility, ownership, and growth mindset. And those are core to Amplitude and have been there since the start. And those are my expectations for how everyone behaves, for how we hire, what we celebrate, and then when someone's not a fit, how we move them out. I think one of my observations with culture is that particularly for cultural values is that I can say a set of cultural values and that will change them maybe 5 or 10%. But the real value comes in how you're deliberate about scaling it as part of your processes. And so are you deliberate about including them as part of your hiring process? Are you deliberate about including part of them in your performance review and promotion process? When someone's not a fit, are you deliberate about citing them as why? Do you have rituals where you celebrate and promote them? All of those are very much part of the culture here. Now, I don't think we do a great job on all of it, but I think that's where you can really do a good job and kind of be deliberate about scaling culture. I do think leading by example is very important on them as well. What else would I say? You know, on the sales point, One of the things we were very deliberate about in the early days was to embrace the sales mentality, that sales is the thing that drives revenue and makes this company successful. Um, and I remember talking with one of our earliest engineers in the early days, they were like, oh, why do salespeople get commission? Like, this is unfair. They get paid more to close these deals. We're all helping out to close these deals. And I'm like, hey, it's just different. This is how the this works. And, you know, if you want to be a salesperson too, you're welcome to and be on a quota and have commission. Um, but it's just a different incentive structure. And, you know, he argued about it, and I'm like, nope, I'm holding the line on it because this is how you build great sales teams, you know. And so we're going to embrace it. Um, and so that was an important moment because, you know, I think after that, you know, we got everyone on board and everyone to celebrate whenever we closed deals and celebrate having great sales talent here at Amplitude. And so there's actually always been a really tight alignment between engineering and sales here at Amplitude from the very start. And I was very deliberate about creating that, you know, because the stereotype is that engineers look at sales and be like, what do these people do all day? They just go out to fancy lunches and get paid a lot to do nothing. And then sales looks at engineering and be like, you know, what are these people accountable to? They keep saying they're going to ship something and never do. And so we were always very deliberate about not having that culture and saying like, no, like as an engineer, you have to see the value in sales and bringing in customers and revenue. And as a salesperson, you have to see the value in engineers and a great product. And so I think that tight alignment between those two core company functions has been really strong at Amplitude since day one. Engineers will celebrate account executives closing great deals, you know, and get really excited about that. When we closed a record deal last year, engineering team had a whole party for it. And then vice versa, you know, our sales team knows that the reason they're able to be so successful is because they have such an incredible product and there's such incredible innovation behind it by our engineering team. And so I think, you know, that's an element of culture.

To me, one of the power a CEO should possess is to make decisions. We know deep inside us what is the right decision, but it's hard because sometimes our kindness and our weakness stays in front of making the right decision. This is also one of the things that makes this job the loneliest job of the planet, because when you make this decision, We are yourself. It's you. And you have to look at the people in their eyes and tell them, guys, I understand your points. That is not the perfect decision, but this is the decision we have to ultimately make it. So we don't have too much time left, but I think this is the last question of the interview. But tell me about how is to be a CEO. How do you cope with anxiety? How do you cope with decision-making process? How do you cope with not all the time pleasing everybody but making them, you know, disagree and commit?

It's hard. The bar for that is higher than ever these days. To go from an entrepreneur who has an idea and insight to a leader of an organization, it's a hard transformation. It's a different type of role and there's no easy answer on it. I can say a few things that have worked for me. I think being really clear in your head on what your role is at the end of the day is really important. So what is it that only you can do alone? One of the rules that I use is there's kind of two decisions that only I and only I can make. One is where is the company going? And then the other is who reports to me? And only I can make those decisions. No one else can make those decisions for me. I can't delegate them. The good thing is almost everything else in a company, you can basically, you can be involved if you want, you know, whether it's being on big deals or being involved in the roadmap and how you build features, whether it's marketing and promoting, but you don't have to. But remembering that when it comes to the direction of the company and it comes to your executive team, you and only you can make those decisions. So that's, that's kind of one helpful grounding piece of framework. I will say the next thing is having a really good emotional support system is, is super, super freaking important. And so I've been very lucky to have the co-founders that I do that are still with Amplitude today. You know, they've been on that journey together. They have some of the load, they understand some of the challenges, you know, they can empathize and support. Like Curtis in particular has been huge for that, and I've been very lucky to work with him. I'd say my family, very lucky to have the support of my wife. You know, this is one of these things that kind of there's no good advice. So we've been together for almost 8 years at this point, and when we first started dating, I told her like, look, this building this company is really important to me, and this is kind of the one thing that I want to make sure to be able to do. Are you okay with that? Because it's going to require a lot of compromise and a lot of sacrifices, you know. And she said yes, and, and, and I've been very, very lucky to be with her, um, you know. And it's still— that, that's still a balance I'm, I'm learning, you know, as I grow older and as I figure out is like, you know, what's the balance between family and how you do your, your career, specifically when you're a CEO founder of a large-scale company. That can be really hard. I have, I'm very lucky to have the board that I have. I've been very intentional about building a group that is in it for the long term and is not looking for short-term returns. And so that's been really, really, really important to me. Like, I've been very deliberate about having those conversations with every investor that and every board member that's come on to Amplitude. And that's been a great source of stability through our journey. There's no easy answers on that. The thing I'm thinking about now is how How do I set myself up for longevity? I know it's something that you've thought a lot about too, Daniel. Like for me, I'm 11 years into this journey. I'd love to do it for many, many more. One of the things I did notice is most founder CEOs will end up leaving the business after about a decade or so because it gets, it's hard. It's hard. It's tiring. It's tiring to be the last one ultimately accountable for everything. So the last thing I'd say on that is getting help, getting help from executives. You have to learn that skill. Otherwise it's not gonna scale without like how to hire, how to bring 'em in, you know, as the first part of our conversation, how to know when to listen to them, when not to, that, that can be really hard too. Again, no, this one, there's, there's not any easy answers, but you know, hopefully that, that gives folks some perspectives and some of the tools.

Well, Spenser, I think this can go on and on for many hours. We have to put a stop now.

Yes.

But it was very inspiring, really. I was really inspired by your words, and I'm sure that, you know, the people that will listen will find it very helpful in their journey, whatever entrepreneur, engineers, salespeople, or people that want to build something. It's about passion, it's about staying in. I like the most, when you say you have to stay I'm saying, to be persistent. You need to be persistent, but you don't have to be obsessed by an idea. Ideas can change. You can pivot, pivot, pivot, but you have to be persistent in your journey.

I, I think that the last thing I'd like to, to close out with is, you know, we, we tried a few different ideas and some, some stuff works, some stuff didn't. And so it's, it's less about being obsessed with that. I think you have to be obsessed with the process of building a great business and building a great organization. And if you can get obsessed about that, then you'll go really, really far and do really, really well. And exactly what the idea is and all of that, like that can morph and change. And I think you've seen great companies built that were started from an idea. You look at the likes of say Apple or Amazon, and then you see companies that were started where they didn't actually have the same idea they started with. Like, you know, if you look at what Microsoft was or even Facebook, candidly, both ways of building great organizations can work.

Yeah, awesome, man.

I'll see you soon. Awesome, Daniel. Fantastic to catch up.