What is good for the Developer IS good for Enterprise

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.

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Michael Grinich (00:19):
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.

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Michael Grinich (00:39):
Today I'm joined by Chris Bach, the co-founder and chief strategy and creative officer at Netlify.

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Michael Grinich (00:44):
Today, over two million developers and businesses have signed up for Netlify's development platform, including large enterprises like Nike, Verizon and Autodesk. Along the way, this meant that Netlify needed to become enterprise-ready and start building new features and functionality for IT admins. Recently, they raised a series D of over a $100 million, at a $2 billion evaluation and also acquired OneGraph. I'm super excited to chat with Chris about how Netlify is moving up-market and crossing the Enterprise chasm. Chris, welcome to the podcast.

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Chris Bach (01:14):
Thank you. It's a pleasure to be here.

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Michael Grinich (01:17):
So let's just dive in. Give us a quick update on Netlify. Where's the business and teams today and where's your current focus?

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Chris Bach (01:23):
Really fantastic, thank you for asking. First of all, we are lucky to be first movers of a mega market trend. Some context for the listeners here. The fundamental shift in the architecture of the web, that we took a big bet on when we started back in the day and helped pioneers, is really sort of coming to fruition. We collectively are moving away from legacy monolith, the applications, to this Jamstack approach where, of course, it's all about the decobblement of the web you're on in one end and the business logic on the other, which means a much faster and more secure and more scalable web.

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Chris Bach (01:55):
Netlify's role in this has always been to provide the overall viable workflows needed for this better web to become a reality. So we provide a broad developer platform and act as an orchestration layer, tying together all the different things you need for your web projects: databases, APIs, front-end frameworks, and so on.

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Chris Bach (02:12):
Yeah, as you said, we are growing fast. Last year, we were across 1 million developers and businesses. Now we're at 2.5. We are running core mission critical apps and sites for some of the largest companies in the world. On the team size, we're about 200 people now and looking to double this upcoming year. So yeah, lots of traction and it's a fun and exciting time to be part of this movement.

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Michael Grinich (02:33):
So much to unpack there. I'm really excited for this conversation. Before we go deeper, I wanted to go into one thing. You have a very interesting title, Chief Strategy And Creative Officer. Can you tell us about what your mandate is at the company and why it was important to have strategy and creativity as an officer level in the C-suite?

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Chris Bach (02:52):
Absolutely. So my co-founder and I have always... you know, we've known each other since high school, and we've always run the company very closely together and we continue to do so. And as we scaled... And I think this is actually an easy trap to fall in as a founder, we found that we were using a lot of our time looking inwards, trying to scale the org. And I wanted to spend more of my time being outward looking and having more time to spend on our oval strategy, positioning, special projects and so on.

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Chris Bach (03:18):
So after a lot of looking, we brought in a COO and we found someone incredibly experienced– Marcus Bragg. He headed up sales to Zendesk until IPO. He was the COO at AlienVault through the acquisition, by AT&T and so on, and to really help focus on building a world class execution machine. And that has really helped free us up. And so, yeah. Technically, my title was president and that had some overlap with some of the duties of a COO. So I changed my title and I think my title is less important than what you actually do. I do think that the overall strategy and positioning can be lost in the daily shuffle where there's all these things on fire as you're building out this hyper growth company, right? And I think as founders, you have to have an understanding, or you will have an understanding, that others won't necessarily.

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Chris Bach (04:01):
And so I think it's very important that you make sure that you have the time to look up, to look outwards and to focus on the things where you can add quite unique value. Yeah, I think that's super important. And then, of course you know all that said, my day is still very much filled with fundraising, executive hires, special projects like our new fund that I’m excited to talk about, right? And it remains, at the same time, incredibly important to me that Netlify is a place that people want to be a part of and where in many years, after long career, my hope is they, people can look back (and say) this was the place where they learned the most, right? So, yeah, lots to do.

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Michael Grinich (04:35):
So it sounds like you spend most of your time looking forward into the future. I want to do the opposite. Let's look back into the past. Earlier days of Netlify before you had this huge enterprise adoption and had scaled the business to this level. What was that like in that phase? What was maybe your first enterprise opportunity? When did the product really start getting commercialized? Where did that growth come from? And what was the state of Netlify's product for enterprises at the time?

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Chris Bach (05:03):
Netlify has always been developer first, right? It's always been a bottoms up motion, but even when we were just two people, Math and I, we were serving early clients like WeWork and Sequoia Capital. Yeah. I'm sure they didn't know there was just two of us, but yeah.

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Chris Bach (05:15):
So, I mean, like it was early on, but I can maybe dive into an early client. There was Smashing magazine. They were the most popular online publication in the world for web developers and designers. So having them migrate the new category of the Jamstack to us was a huge early deal for us. And I think that most SaaS businesses, they'll have at least one client where you do the work that doesn't scale. Right? You know, and you could say that Smashing was kind of it for us. Now, they were using a ton of different systems, databases, caching, plugins, you name it, right.

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Chris Bach (05:45):
Conference sites and eCommerce store and huge publication as well and hundreds of thousands of comments collected over the years. So we wrote an article for them on this new category and it became the article with the most traction in all of 2015. It also showed how Smashing itself would be six times faster if they were running jams like at Netlify. The intern asked us, "Well, what would it take to make it a reality?" Truth is that at that point, a lot needed to be built out. Now, the hit list, CMS's and the hit list commerce space were nowhere near as mature as they are today. So we had to spend a ton of hours helping them succeed, but it made a big impact for us. It was the first big use case really demonstrating to the world just how superior this new architecture was.
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Michael Grinich (06:30):
That's an amazing story with Smashing magazine. In those early days, what other decisions did you deliberately make to push Netlify towards being enterprise ready for those larger customers?
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Chris Bach (06:40):
There was a lot of them, right? For example, Advanced Redirects, right? We have a very extremely advanced engine around that, but it was a way to get those early clients. Like I mentioned, we work in Sequoia Capital over, because it enabled them to gradually migrate to this new stack. So in the old world, you would typically have to build out everything and then flip the switch and then you go to a new stack and that's a little hot when it's early days and it's not a very mature category and so on. What we enable was that they could just do it page by page. And so that functionality was not something that the average individual developer needed very much, but it was a very much an enterprise feature. And so we could see that that would be a gatekeeper otherwise, right.
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Chris Bach (07:20):
And so that's one of the things we prioritize and I know we'll get into it more, but there's always a balance of whether you let someone eat your roadmap and you end up building something that won't scale with you into other enterprises early on, and you keep the focus on wanting to build out of standard, but still you have to make yourself useful for enterprises along the way as well.
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Chris Bach (07:40):
Today, we have hundreds of features that are security and DDoS Protection and all the other things that we've been able to build up, but that specifically cater enterprises. But yeah. I think you have to be careful in not pigeonholing yourself. You can't have someone eat your roadmap. You have to balance the needs of large, single enterprises early on that will come in and it'll meet a lot for revenue very often. It's hard to say no to, but you have to balance out what they need towards what everyone else will need as well.
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Michael Grinich (08:12):
I'd love to go deeper into that. Can you tell us about a time when you said no to a feature to build for an enterprise that you said, "No, we're not going to get our road map eaten by this big, big potential juicy deal that's right in front of us." When has Netlify ever said no to a feature?
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Chris Bach (08:26):
Absolutely right. Often it's been around private networks early on and on-prem solutions and how we plug into those kinds of environments, where we were saying, "Well, we'll get to that. But at this point it just doesn't make sense to focus these efforts cause there was other things that were more pressing." Netlify is a very broad platform. We spend from local development all the way to multi-cloud network, so we needed to make sure that we weren't spending too much time early on, on something that would be relevant to a select few enterprises.
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Michael Grinich (08:56):
Were these features all packaged as part of the basic developer-getting-started plan or did you start using these to package into an enterprise version? I'm curious if you can talk about the packaging structure strategy for your offering.
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Chris Bach (09:08):
I mean, packaging, I think we all know here, both us on the call and everyone that listening that's something that's continuously evolving. There's no right answer here. Super hard.
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Chris Bach (09:18):
There's always going to be a compromise, but I think early on there are things around compliance, right. And language-based redirects and so on that you're not going to need if you're developers figuring out how this work and you starting experiment with your block, and so those are very, very easy to gate and make available for enterprises only. And then there's other things that are much more hard to say, "This is developer only or enterprise only", and it has users both ways.
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Chris Bach (09:44):
There you just have to, I think, go a lot by trial and error and figure out what's the value add that you can add to a certain functionality. Feature a product or service that will make a lot more sense for enterprises where they will feel that there's a fair value exchange when they pay for it as an enterprise. But there's also a version of that that works on a Freemium tier. So developers can get a full experience there as well.
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Michael Grinich (10:07):
You mentioned Freemium, I'd love to hear about the typical enterprise customer journey, where they start, where they come inbound, how they grow and what are those different phases that they move through.
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Chris Bach (10:19):
Absolutely. I mean, we have a developer-led GTM. That's not unlike AWS, Twilio and Stripe and so on, and then the actual sales motion in itself that complements the developer. But we quickly expand into the organization layer enterprises as well, where you have your engineering managers and such. Customer journey at Netlify often starts with a single-use case in mind. It could be eCommerce or something like that, but Netlify has a very agnostic platform. We're not trying to build a small vertical around a database or a singular tool, a framework or something like that, and so it's a very horizontal play. And so very often we'll see that once they start using us, we'll quickly be able to move with them into other kinds of platforms that have very different needs. And so many of our customers will have hundreds of different developers, dozens of teams and also includes DevOps project managers and so on. And in fact, we quite more than double the developers per client per year, as we have a land and expand motion.
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Michael Grinich (11:18):
That sounds like a really complex sale that you're doing for those customers. I'm curious if you could talk about how your sales team is structured, maybe even how you thought about building the initial sales team earlier on and what it's evolved into now.
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Chris Bach (11:30):
It's not more complex than Netlify starts very often with someone kicking its highest and figuring out this new way to building for the web. Then they started scale, taking that into enterprises and then we connect with them, and they reach out to us as they graduate into needing everything from certifications to the expertise of our solution engineers and so on and so forth.
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Chris Bach (11:52):
And then we go from there as they continue that journey to this new stack and using Netlify for more and more projects. Sales, I think... So, we’re 40 today across the org and that includes solution engineers, customer success, and so on. So it's a growing org – very much so.
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Chris Bach (12:06):
When it starts early on, I think I'm often asked around that, and I think it's very important that you use early sales in cases like ours to learn. I think more than saying, "Hey, it's super important that we get these deals closed." I think, early on, especially if you venture back and you can afford it, get those salespeople out there and figure out, “What does the client and the customers need?” That valuable information is everything, right?
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Chris Bach (12:36):
I think that's where you start, and then, once you have something you can see, now we can scale this. Then you need a different kind of people to help scale this and make repeatable models that aren't necessarily the researchers in the same way. Then it's just scale out there. You start getting the graduate disciplines of BDRs and AE's, and then you grow with customer success and sales engineering, and you layer that as you move on. Of course, you start working very closely with security and support, as well, as you get more and larger clients that are going to need help getting there as well.
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Michael Grinich (13:09):
I'm curious how you approach product development for enterprise. You mentioned some of this coming from sales. You start hearing about this as those folks are going up-market. Are you also proactively going out and trying to figure out, “What does Netlify, for the biggest enterprises, look like?” How do you think about your enterprise roadmap today?
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Chris Bach (13:26):
We are super customer-centric organization and we work extremely closely with our customers on the enterprise side of things and we have customer advisory boards. We do the largest stamp site survey in the world every year. We have tons of events and conferences, and we just work very close. We have a big partner program that's only being expanded all the time, and so, we live off of getting this feedback in many ways all the time.
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Chris Bach (13:48):
That said, we have tons of examples. Multi-team governance and Single Sign On and role-based access control, performance, a vast network that simply has to be the best in class, having four nines, at the very least. There's so many examples that are important once you graduate into enterprises. But at the end of the day, I would say, what's good for developers very often, what's good for enterprises and vice versa, right? It's not like it's two different companies that is catering devs on one side and enterprises on the other. I very much see that if you're doing it right, you have a much more homogenous roadmap that brings and caters developers, but also caters those developers in these very large organizations.
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Michael Grinich (14:27):
You've talked some about balancing between growing top of funnel, getting more users and monetizing. Really, enterprise here is clearly for monetizing, growing the financial side of the business. How do you think through that balance and that split, and what does it look like right now at Netlify in terms of expanding, maybe your customer base, the broad developer set, versus focusing on the commercial audience.
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Chris Bach (14:47):
I think it's a great question. Right. And it's always a tough one and I think it always starts with understanding how does one feed into the other? So there's several faces on this. What do you put into growing the category as we did in our space right. Netlify started out betting everything on a market trend that didn't exist yet. So, like GitHub, right? It's not really relevant if you haven't qualified the use of it first, and so in that way, how much do you go into communicating the virtues of the category versus communicating the virtues of your own product and services and how much time do you spend on communicating a category versus your own brand. It’s something that's going to be in flux forever, and of course, the same thing goes here on when you talk about how much do you allow to focus on top of funnel and do content flex sample that's more targeted towards more junior developers that are just coming on learning how to code versus the ones bringing out use cases that are more relevant for enterprises and then many rules of thumb here.
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Chris Bach (15:41):
I'm sure you've also talked about this in the other podcast. Some say that, well as a SaaS, you have to have 2% to 5% conversion and free to self-serve and so on.
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Chris Bach (15:48):
I would say that, that completely depends on what you're charging. You got a 99.5% Freemium if the 0.5% pays you millions of dollars each month per client. So I would say for us, the ground truth here is that for us to be successful at scale, we depend on the shift of the architecture of the web, and that means building out a standard. Now, of course, we are going to need massive overall adoption for that to happen and at the same time we want to build a very healthy business. I think it's always going to be a balance, and it's always going to be a compromise.
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Chris Bach (16:24):
It's just like pricing and packaging. It's continuously evolving, but I think the best thing you can do, and the most important thing, is probably make sure that they're not at odds, that you're not ending up with a business that's a dual funnel approach where one doesn't actually really feed into the other. That you're ending up in a place where you are having to build for one or the other and it's not the same thing. I think that can be a little dangerous if you're trying to do a true bottom-up growth into enterprises.
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Michael Grinich (16:53):
You've talked about creating the category in this emergent new way of how people are designing and building web applications. I'd be remiss not to talk about the Jamstack fund, the innovation fund. Would love for you to tell us more about that. It was recently announced with this financing. What's the goal of that? What's the purpose in terms of Netlify, the ecosystem and also, even like Netlify enterprise in the business. Walk us through that.
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Chris Bach (17:16):
The beautiful and fun part here is that how incredibly interconnected it all is. So again, Netlify is here for the first time, being able to bring a solution to enterprises. So, in the old world, you had more of silos. You have a monolith that it's not just, let's say, the content management system, but also the template, the build tool, the glue code, everything else, right? You're going to have specialized developers working on that, and in the new world, you're separating the web UI from the back end, and now, you can break down these silos and have these web developers work across all kinds of properties with common workflows, but being able to mix and match and pull in the right best tools, frameworks, databases, APIs, and so on for the job every time.
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Chris Bach (18:00):
Now Netlify's role in this is to be an encompassing platform that can add as a conduit for the ecosystem, which leads me to very much the next natural point.
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Chris Bach (18:12):
That means that we are nowhere without the ecosystem. Again, we did not choose to build a vertical around a framework around a single tool. We are much more open-ended. So we are very dependent on having a mature ecosystem, and so that leads to the fund. Now, Matt and I early on started putting angel checks into the ecosystem, not to diversify our income and it wasn't a lot of money, but both to pay forward, but also to really push forward this ecosystem that we are so dependent on.
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Chris Bach (18:40):
That's why I'm incredibly excited to be able to do this. Now, when we have a plan of spending $10 million and we are attaching a program to it as well, compared to like an incubator, we are not taking percentages for that at all. We're coming in as a totally normal investor, but there's so many things when you're scaling a startup, just like we're talking about here from fundraising to building our early GTM, scaling the org and so on.
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Chris Bach (19:01):
So we're bringing in industry leading experts to help with that, including some of the ones that are at Netlify. We'll be working with fantastic solution engineering team and also helping all of us figure out like how can we communicate and build out standards in a way that pushes this forward.
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Chris Bach (19:16):
In other words, when the ecosystem wins, we win. We are completely one to one aligned. There's very much a joint effort. That's why I'm excited, because there's no contradictory interest here with these startups that we are becoming a part of and I would say the enterprise play here is complete natural elongation of just that, because when enterprises are really starting to use Netlify, it's not just for singular project, but more saying, "Okay, well this de-couple approach, this move off the monolithic applications, that's just synonymous for us with how we build for the modern web.
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Chris Bach (19:49):
Now Netlify can provide this platform, this standard of workflows, where it doesn't matter if we're building for the kiosks in the Burger King restaurants, or if it's a fitness spike that has an actual player running there and membership access, or if it's my.com or developer document. Its marketing sites. We can actually have common workflows for this. But the only way that we get into those enterprises is if you can choose services and tools that will work with this architecture and for that, we need to continue to involve the ecosystem.
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Chris Bach (20:23):
So that's where enterprises get so much out of this. And Netlify’s about taking a lot of operations, turning it into code. It's about making sure that these companies can benefit from not being stuck in these silos, right? And we are working right now with a client that tried to build it themselves on WS and now they're looking to move over 3,600 developers and their own business case suggests that they will be saving 82,000 developer business days, working days over five years. I mean, that's huge, right?
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Chris Bach (20:55):
That comes from consolidating on Netlify, but also because then now seeing, well there's enough tools to cover all the normal use cases. That's the motion that we keep pushing forward. So, yeah, for the jamstack, for Netlify, for the ecosystem and for enterprises, this fund makes so much sense, and I love when things are aligned. I love when one thing amplifies the other, and I'm extremely excited about it.
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Michael Grinich (21:17):
That's super exciting. What an incredible impact on not just your customer base, but the whole ecosystem. I'm just super excited to see where that evolves. Zooming back out, thinking about the last several years as you've been building this company, what do you wish you would've known earlier in this journey and maybe what surprised you?
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Chris Bach (21:36):
Yeah, that's always a fun run, right? I think on the surprise part of it, you learn so much building this out. You almost feel like a completely different person, and the world has changed over the last six, seven years. At the same time, I think it surprises me that what we set out to do and how the API economy would keep growing, and how this ecosystem would mature and how we could help facilitate that lot extent been playing out to plan and maybe with so many unknowns and having to learn so much along the way, I think that's a bit surprising, right? Even looks similar to what we were imagining back then. Intentionality behind how you share knowledge in the company, like a knowledge sharing tool, and especially as we're all going to distribute it, that's something where it doesn't matter. If the information is there, it's there, right?
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Chris Bach (22:20):
Okay, we have Slack, we have email, we have notion or Google Docs or whatever it might be, and I definitely found that it mattered and how we shared that knowledge mattered. So, today, we have fairly solid procedures for that. We have our own handbook and so on that we engineered ourselves.
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Chris Bach (22:37):
But I think especially in modern startups that are very remote. It matters earlier, it's not something that you should just start to think about when you're 50 or 60 people. I think having really intentional knowledge sharing, especially asynchronously early on, is actually something that'll set you up for success.
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Chris Bach (22:52):
So that was one thing. Another thing was billing. Netlify is a huge platform that has so many different units. And we thought in the beginning, "We have great engineers. It's an engineering problem. Let them go fix it. We'll see you in three months." Ouch. There was a lot of considerations there, and a lot of things that we had to end up building out ourselves that we should have done in the beginning. You live, you learn.
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Michael Grinich (23:14):
Last question for you. What advice would you give early stage entrepreneurs, people at the earliest phases of building a new B2B SaaS app that haven't yet crossed the enterprise chasm, but are looking to grow?
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Chris Bach (23:25):
Early stage entrepreneurs. If you look at the ones that are thinking about should I be doing this or not? Should I venture out on my own? Should I be building this company? I think it's extremely important to truly focus on what it is you want to set out to do, and it's going to cost you more than you think. This is a very exhausting, long ride. There's very rarely super quick wins. So you really have to want it.
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Chris Bach (23:44):
But then I also think it's important to really look at... We are talking venture based SaaS companies here that are growing super fast, right? If you look at things broadly, many businesses shouldn't be. Many businesses will be set up for much better success by not necessarily taking that track. So I think that's really important to look at is what kind of business is this best served by being?
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Chris Bach (24:06):
It's not like you have to go through a certain Silicon valley model of racing every 18 months. I mean, some businesses that are trying to solve a very big problem and need to make an impact and can't wait for generating revenue before they do so and need a lot of engineering powers, etc. Makes perfect sense. But there's a lot of businesses that aren't like that. So I think just being aware that success comes in many forms, and then the most important one is probably not just to be governed by the gold, right? If you're only governed by where you're going. I found that the people that just look at the pot of gold at the end of the rainbow, they never tend to get there. I think you have to believe that you will enjoy getting there. You have to optimize while enjoying the process. That's the fun part. If you do that and you enjoy it and you are lucky and smart and surround yourself with people that are smarter than you are, then you have a chance of actually getting there. But I think otherwise it's really hard.
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Michael Grinich (25:00):
I think that's some really wise advice. Chris, thanks so much for joining us. This has been great.
Chris Bach (25:04):
Thank you so much for having me.
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Michael Grinich (25:11):
You just listened to Crossing the Enterprise Chasm, a podcast about software startups and their journey moving up-market 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.

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