Scaling Teams for D2D: Developer-to-Developer Tools
In this episode, WorkOS CEO Michael Grinich and former Stripe COO and author of 'Scaling People' Claire Hughes Johnson cover how the early Stripe team navigated explosive growth, both from a product and people perspective.
Michael Grinich (00:02):
Welcome to Crossing The Enterprise Chasm, a podcast about software startups and their journey moving upmarket to serving enterprise customers. I'm your host, Michael Grinich. I'm the founder of WorkOS, which is a platform that helps developers quickly ship common enterprise features like single sign-on. On this podcast, you'll hear directly from founders, product leaders, and early stage operators who have navigated building great products for enterprise customers. In every episode, you'll find strategies, tactics, and real world advice for ways to make your app enterprise ready and take your business to the next level.
Today I'm joined by Claire Hughes Johnson, former COO of Stripe, and now startup advisor and angel investor. Prior to Stripe, she spent a decade at Google. Over the course of seven years at Stripe, Claire helped the company grow from 200 employees to more than 6,000 and from tens of millions in revenue to billions. Today, millions of companies use Stripe, including Fortune 500 companies such as Amazon, Google, and Salesforce. Claire, welcome to the podcast.
Claire Hughes Johnson (01:05):
Thank you Michael. Good to be here.
Michael Grinich (01:07):
So to get started, take us back in time to when you joined Stripe. What did the company look like during those early days? On the first day you joined the company, what was the state of the business and sort of maturity of customer base?
Claire Hughes Johnson (01:18):
I joined Stripe in 2014. It was about 160 people. This was toward the end of the year. That was a year they were really growing quickly, both in terms of the scale of the business and in terms of number of employees. And mostly a lot of the sales, like the activity... First of all, Stripe, you know you could just go on the site and integrate the API and start using Stripe. And in fact that was how a lot of our acquisition worked. But we did have an inbound sort of sales lead process and we did have a couple of reps who were inside sales, the beginning of an inside sales team, which was helpful because there are questions where people are interested like if they bring a certain amount of volume, they want to negotiate, that kind of thing.
And then the founders both, but especially John Collison, the co-founder, was getting involved in some of the larger sales deals. And I would say that a lot of those customers looked like Stripe. They were very growth stage, high growth, interesting, mostly internet-based businesses like DoorDash and Instacart. Kickstarter was a big deal that was coming online when I joined. But meaningful size, just to be clear. I think that there's sometimes a misconception that Stripe is a small business product and it's actually always had businesses of all sizes as customers. And that was true when I joined. Very, very big range.
Michael Grinich (02:43):
Stripe is sort of famous for having this incredible experience around documentation and self-serve. Getting started, I think it became the gold standard for especially developer products. What was the sales motion like when you came in from the self-serve side and how did sales start to engage with those customers? Can you just unpack that a little bit?
Claire Hughes Johnson (03:00):
Honestly, there wasn't a lot of a sales motion. Really the prevailing wisdom was we want to get you up and running as fast as you want to get yourself up and running. And so for the vast majority of our acquisition, there wasn't an interaction. I would say we saw some of it in the support volume, sometimes questions or issues people had. But as you said, I mean, there was a lot of push to have a really elegant API and a very easy integration and very helpful documentation. And even if you look over time, we've innovated and there were a lot of different ways to integrate Stripe and some are quite lightweight today like Stripe Checkout. And that is because fundamentally you're coming to Stripe because you want to just get off the ground and start accepting payments or moving money or building commerce infrastructure for your business.
And we always had that philosophy and I think some companies build sort of a growth funnel around their self-serve and start reaching out to those customers and we do a bit of that, a bit of recommending choices you might make because now we have additional products. We might say, "Hey, are you interested in this?" But it's certainly not developed early on. Early on it was just like, "come in," you're usually a developer, you're integrating Stripe and you're done as quickly as we can help you get done and there's not any sales, no sales interaction.
Michael Grinich (04:21):
I want to ask you about the funnel that you just mentioned. Stripe is one of these products that you don't really need it until you need it, right? Until you actually integrate it, which I'm sure makes tracking that top of funnel and acquiring customers pretty different, pretty complicated. Very different than just running performance ads. Someone clicks and signs up. How did you think about the piece of new customer acquisition for that type of platform?
Claire Hughes Johnson (04:44):
It's funny that you would say it was different and maybe difficult I would say, "or amazing and easy," because there was a really high intent often and people just came in and started doing what they needed to do and we enabled that, right? And so what I think you're referring to is the sort of person who's getting educated, right? They're sort of thinking, "I think I might need payments and where would I do? And are we able to track that?" And I would say, yeah, you're right. That is difficult. And I wouldn't say we've even cracked that today. It used to be “I don't think we would capture your information on the Stripe site”, and we were sort of against that, right? Because it felt like a dark art of the internet a little bit. But now, if someone wants to be captured and says, "I'm interested or I want to download this white paper, I want to learn more."
There is that capability now on the site. We built that in three or four years ago, but early on there wasn't a lot of energy or work to either capture that intent or to build a way to track the super up-funnel. That said, we did spend time as a company on something that I think is important, which is being smart about a little bit less marketing, but more communication strategy, really thinking about our own sort of earned media. Like going out, Patrick and John, I think, are both very strong communicators, did smart interviews. We were active in Hacker News and IRC and some of the channels where you'd find developers who were interested in Stripe. Quora, you'd find Stripe engineers answering questions. And I think that some of that work on communications even off of our network was very valuable to brand building and establishing ourselves as a strong developer, D2D, developer to developer product.
And I think that made a huge difference in terms of getting the conversions. Well, both the interests, like people were educated, "there is this thing Stripe," and then coming and finding us and using the product.
Michael Grinich (06:43):
I've never heard that term, D2D, before. Developer to developer.
Claire Hughes Johnson (06:47):
Michael Grinich (06:48):
No, it's great.
Claire Hughes Johnson (06:49):
Yeah, I had one investor say to me that they thought that was Stripe's secret sauce.
Michael Grinich (06:54):
On that topic, I want to ask about the early sales team. You mentioned when you joined, there were a couple reps already in place, some people already doing that motion. I think developer products and maybe engineers famously don't like talking to salespeople. They don't like engaging with sales. That early team, what was the DNA of that? What type of people did you look to hire as you built it out and kind of what was the vibe of that sales experience so you didn't break that brand of trust you built with customers?
Claire Hughes Johnson (07:19):
Right, right. Well I will say your starting point is a good one, which is actually the early support team we actually hired. We had some early customers who were giving us a lot of feedback and we hired at least one of them who was sort of a self-taught engineer, who was excellent at answering other users' questions and giving us feedback. And we were like, "Hey, do you want to come work at Stripe?" That was before I joined, but I found him to be extremely valuable and we had this team called Support Engineering because it felt important to have engineers who were fielding some of the... because, you're right, it was very technical questions often. And that evolved over time. But in those early days, I think that was quite important. And in sales, when I joined there were two sort of inside sales reps, one account manager.
So once we'd kind of onboarded a more complicated customer, we offered a dedicated person who was going to work with that account both in their onboarding to finish their integration, which often took longer if they were doing something more complicated, but also as a relationship, to manage and to work together. So we had just those three. We did have a few people we'd hired for our biz ops team who were helping be AEs, being salespeople with John Collison, the co-founder who was out being one of the primary sellers.
And what was the profile? I mean I guess I would say the profile was mostly a smart general athlete kind of profile. The two inside sales reps had done some selling somewhere and done a role similar to that, but a lot of the orientation of the team and the company, frankly everyone at Stripe when I joined was… we were going to be whatever we needed to be to succeed. Even today, I would say we should pride ourselves on the sales team really knowing payments and the product quite well and being able to field quite a good level of depth on technical questions because that's what you're selling. It's a developer product and so that's an expectation and you have to provide good sales onboarding and training and support for that. But I think it'd be a mistake if we weren't.
Michael Grinich (09:27):
I'd love to hear about when this started breaking. Operationally, when you started scaling, when did things start not working as well as you hoped and how did you evolve that team in that process?
Claire Hughes Johnson (09:38):
What was not working when I joined in the following way, which is a good sign of product market fit, which is we could not write back to the inbound sales leads within less than 72 hours or longer. And I made probably one of the hardest decisions. Believe me, this is the opposite thing you want to do. We took the link off. It's just a bad experience. You don't want to write in and ask for information about a product and not hear back quickly. And so I took the link down until we could scale up a little bit more our process, our tools and our team. And believe me, it was a happy day for me and for the people that I was hiring to lead sales when we could put that back up and field that demand, but it's in the category of good problems to have.
But that was breaking when I joined. I mean we just had too many inbound inquiries to keep up with and we did actually, for quite a while, have a lot of that type of demand. So building an outbound motion wasn't really as important as building a really strong inbound motion and that's where I focused a lot of my energy. And remember, we also were launching countries then, so we were building up local sales teams and account managers in countries and they were mostly facing the same thing. Some of those markets weren't as Stripe-aware and we needed to build. In fact, those roles could look a little bit like an evangelist developer community person alongside building a sales team to field than the demand that came in.
Michael Grinich (11:07):
Can you share more about that horizontal expansion? I think we were talking about Stripe expanding vertically before in terms of just capacity at each country, but that different dimension of expanding across different regions or geographies or countries with all the risk and compliance needed, it was pretty different. When was the right time to do that? How did Stripe navigate that?
Claire Hughes Johnson (11:26):
Stripe has a set of operating principles and then one that has never wavered is “Users first”. It's the first one, and I think you can say that, but Stripe really lives it. If there's user feedback or an issue, everybody's going to jump on that first. A lot of the international expansion was happening because the users wanted and needed it. And don't forget, if you're a user in the US and you're expanding into the UK or Germany or wherever you want Stripe to be there. It's much easier and better if we can be your partner and provider versus you having to integrate with some local solution. And so it really compelled and pushed us in a very good way to get into some key markets pretty quickly. And yes, you have to build actually more local fraud models and there's integrations with the banking infrastructure. I mean it's very different.
Let's just say this. At Google, scaling AdWords, marketers, the product was basically the same and the marketers sort of what they want in those markets. Someone would tell you they're different and I'm like, no, they're all just, they want a product that works with internet ads. Whereas with Stripe, payments is very oddly local and that has to just do with consumer preferences and behaviors, but also the regulatory environment and the financial ecosystem that you're playing in. I mean, it's a fun strategy challenge. It's a fun scaling challenge, but it's real. And I think what was most important is that we brought people on locally because you have to be in there and know the market to do some of that work. And I don't know what to say. People are like, "well, how did you do this thing?" And I feel like the answer is often because you just worked very hard and you built multiple things at once, and ultimately you had to hire excellent people and give them frameworks.
I mean, that's what my book, which I think we're going to touch on, Scaling People, which is about company building and about management, but a lot of it is about building structures within which you can scale. And if you hire talented people and you give them a good structure, you say like, "here's a model. Go create your version of that in the UK”, for example, or in Australia. And you're really empowering and relying on those individuals, especially when your product has differences, to do that localization and internationalization effectively.
But the answer is it was just a lot of work and it was replicating some functions probably before we'd figured out all our tools and processes, which is not always great, but you got to do what you got to do. Growth is growth. When it takes you there, you got to go there, right?
Michael Grinich (14:01):
I love that phrase that there's no silver bullets, it's only lead bullets to do stuff like this. I want to also ask about the multiple products that Stripe has. So you talked about expanding horizontally in terms of different countries, but Stripe also started off with just a simple payment API and then expanded across many, many different offerings and different ways to interface with that. How did that evolve and how did you know when to expand? And I'm really curious about this from the kind of more business and operational perspective because for startups, people say you should focus and only do one thing well, and it feels like a lot of Stripe's benefit is actually the breadth of the platform in ecosystem today.
Claire Hughes Johnson (14:38):
Yeah, I mean this is a constant conversation even today, which is depth versus breadth. And I actually put it to the founders when I was interviewing for my role and we sort of sketched out their ambitions and I was like, okay, but if you were forced to make a trade-off, what would you do? And they kind of just refused. They refused to answer me and they've refused to make the trade-off, which ultimately ended up being kind of true for Stripe, which is we kind of tried to refuse some of the prevailing wisdom of just focus. And sometimes that went well and sometimes it went less well. But ultimately, I'll go back to what I said, which is we're very user driven and all of the products that we've added have been really a version of being pulled by our users in a direction that they were really seeking because we had a lot of platforms on Stripe.
So Shopify or even if you think about the ride-share platforms like a Lyft or an Uber, they had different needs for how they wanted to onboard drivers or pay-out to them. We built this instant pay-outs product that was in partnership with Lyft, really. I think that was something to keep in mind is that it felt very in line with our values to be that user driven. Still, we had to have some battles between focusing and getting engineering and product resources the space to keep doing the work on the core payments work while we were adding. And then if you're asking from a business and operations point of view, again, I think from a sort of go-to-market perspective, because a lot of this was user driven and fit with what they were trying to do with the product, it actually was fairly organic to fold it in.
There are some products since then we've developed that you might say might need a separate sales or a special product sales force, which we've played around with, but in the earlier days it was all pretty natural. Our Atlas product is quite separate, but that also was fine because it is really quite separate and people get that. But everything else that we built that was very payments-adjacent was fairly... I mean, if my team was listening to this, I was about to say it was fairly easy to fold in, they're all cursing me. They're like, "no, it was not. We had to learn so much”, and it was challenging. I think it goes back to, my book has, probably the longest chapter, is on hiring, and I look back and I think it's because you have to be really smart about who you hire and how you onboard them because you're asking them to do, you know, whatever: Pat their head and rub their stomach and jump on one leg if you bring in multiple products really early, which we did.
Michael Grinich (17:11):
Let's talk more about your book. Tell us about why you wrote it, what's in it? It hasn't been released at the moment of recording this podcast, but it's coming out very soon.
Claire Hughes Johnson (17:19):
Very soon. It will be out March 7th and you can buy it on Amazon. It's called Scaling People: Tactics for Management and Company Building. And it was not my idea. Patrick and John Collison, the co-founders of Stripe, really pushed me to write the book. And it was because when they were building Stripe, they didn't feel like there was a very tactical, like this book has specific examples, it has exercises you can do, guides, templates. If you want to see what a QBR template looks like, here you go. Here's an example. Here's a hiring rubric example. I map out what a difficult conversation might look like if you were giving someone difficult feedback. And I provide some frameworks, kind of my own that I've used in my career for management, but it's quite tactical. They had not found a resource like that. And then all three of us, honestly Michael, as we were building Stripe, found that we were talking to so many of our users, founders, CEOs of companies of all sizes.
And when you end up... We were talking at these dinners we'd have often less about payments and commerce infrastructure and more about scaling and how did you guys do this? Like sort of your podcast. How did you move up market? People want the tactics and the examples of that. And so that's what the book is really about. And I'm not going to pretend I'm some academically trained expert, but I did help scale Google from, it was probably 1,800 people up to about 60,000 and then Stripe from about 160 to now we're over 7,000. And so those are some hard won lessons that I tried to share.
Michael Grinich (18:53):
Today, you also do some angel investing and advise companies. I'm curious to hear what advice you would give early stage entrepreneurs as they're looking to scale up and potentially cross the enterprise chasm themselves with their products.
Claire Hughes Johnson (19:08):
I'm actually talking to quite a few companies that find that they're doing that sooner than they expected. And I think part of that is the market right now and also that they're learning where their product’s sweet spot is. Some of them it's with enterprise sooner than they expected which I think is exciting, by the way. I mean not to be a shill for my book, which I guess I am, but I would say you then want to mature your company's way of operating an organization because enterprise as a customer have expectations of your maturity level, whether that's with your support processes or offerings, your sales, your ability to integrate and support their integration and even your legal review of getting into contracts. You know this, you need to be more mature than you were ready for. And I think my book is meant to help accelerate some of that company building work, but I do think bringing in some experience is pretty valuable, the right people with the right experience because there are expectations on the other side.
So my advice would be pay attention to how mature you are as an organization and your go-to-market in particular. And also do you have people who have worked with that segment and they know what those expectations might look like, and then how are you going to start to match those expectations? Or by the way, reset them. I think it's very reasonable to say, "Hey, the product is at this level." A lot of enterprises want you to share your roadmap, which I think is uncomfortable, but come up with a version of your roadmap that you can start to articulate that you feel confident in, because that will give them confidence that you're investing and committed to improvement and to meeting more of their needs. Because often you won't have a perfect fit for what they're probably looking for if you're less mature. But my main advice is be ready to operate at a higher level, faster than you might've expected.
Michael Grinich (20:54):
That sounds like some really good sage advice, and I think for everything else we can look forward to cracking open your book once it starts shipping.
Claire Hughes Johnson (21:01):
Thank you, Michael, I appreciate it.
Michael Grinich (21:03):
Thanks so much for joining the podcast, Claire.
Claire Hughes Johnson (21:05):
Michael Grinich (21:11):
You just listened to Crossing The Enterprise Chasm, a podcast about software startups and their journey moving upmarket to serving enterprise customers. Want to learn more about becoming enterprise ready? The WorkOS blog is full of tons of articles and guides outlining best practices for adding features like single sign on, SCIM provisioning and more to your app. Also, make sure to subscribe to this podcast so you're first to hear about new episodes with more founders and product leads of fast-growing startups. I'm Michael Grinich, founder of WorkOS. Thanks so much for listening and see you next time.