The first few years of a SaaS startup are all out war. Random short-lived moments of sheer elation while waging the daily battle to beat the odds and live to see another day. A lot of us never get there. And for those that do survive and thrive, the problems they face each day change, but they don’t get any easier.

Sameer Dholakia, CEO of SendGrid; Josh McFarland, CEO and Founder of TellApart, now Senior Director of Product at Twitter; and Raj De Datta, CEO and Founder of BloomReach, sit down with Ajay Agarwal, Managing Director at Bain Capital Investments, to discuss the “second five years” and the next chapters in their companies’ journeys.


They delve into the “rational” and “irrational” thought processes when it comes to acquisitions, nostalgia for the early days, creating a strong company culture that energizes employees, and even when to top off or say goodbye to the key folks who don’t have the interest or the aptitude for the next phase of the journey.

Check out the full transcript below! 

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Ajay Agarwal:  We got a great, great group here with us. The title of this next discussion is “The Second Five Years.” Believe it or not, despite how young this crowd looks, they’re on the next five years of their company journey.

It’s my pleasure to introduce Sameer Dholakia, CEO of SendGrid, Josh McFarland, CEO and founder of TellApart, now Twitter, and Raj De Datta, the founder and CEO of BloomReach.

Guys, maybe a good place to get started is have each of you tell the audience a little bit about yourself and the company, and what you guys do. Then we can get to some questions. Raj, you want to start?

Raj De Datta:  Sure. I’m Raj De Datta. I’m CEO and co founder of BloomReach. BloomReach is in the personalization software space, probably an analogous space to the optimizing folks that were here a little earlier but centered on the enterprise. We built a platform that you can take any website or app and plug into it. It builds experiences on the fly with algorithms to drive traffic and revenue for large brands.

Josh McFarland:  I’m Josh McFarland. I was up until recently, founder and CEO of TellApart. TellApart, we founded in 2009 under the vision of being able to help major companies tell apart their high value customers from the rest.

It’s a predictive analytics and machine learning data play that then we would plug back into their marketing stack. If that was programmatic ads, if that was email, if that was actually onsite optimization. Last May, Twitter ended up acquiring TellApart. I now run all business products for Twitter.

Ajay:  Thanks, Josh.

Sameer Dholakia:  Good afternoon, everyone. My name is Sameer. I’m the CEO at SendGrid. SendGrid was founded in 2009. Really going after solving a very specific pain point and problem for, at the time, developers, who are building applications. Invariably, that application would need to allow somebody to sign up with an email address, get a confirmation. If they forgot their email or forgot their user ID, set a password reset.

They needed to be able to engage with the user but on an automated basis from an application generated basis. That was the specific problem that SendGrid set out to solve. We’re now the largest Cloud based email delivery platform on the planet where you’d send out 22 billion emails every month for over 60,000 companies around the world.

Ajay:  All the spam in my inbox is your fault?

Sameer:  No, explicitly not them. Explicitly not them. We actually don’t allow them on our system.

Ajay:  Excellent, good stuff. I thought a good place to start maybe since we just talked about it with Dans Roker, is culture. All three companies, very strong culture and values. The thing that will be interesting for the audience to hear is how’s the culture had to change?

I know Raj, early days of BloomReach, one of the things you implemented was no titles at the company. That’s obviously changed in the course of the second five years. But maybe you could share with the audience things that have held true with the company over the course of this journey and things that have had to change and why as the companies evolved and grown over time. Who wants to start?

Sameer:  I’ll take that first.

Raj:  You want to go ahead?

Sameer:  No, go ahead. I’ll…


Raj:  My co-founder and I actually wrote the culture document that has a fairly simple set of values before we figured out what the business was or what the product was. That’s how important it was to the company that had these five core values. What’s been most important about them has been the fact that those things haven’t changed.

The principles, the core values, the culture itself has been unchanged in the first five years and in the next five years, but a lot of what we thought deeply about were the mechanisms to make the culture real in the minds of everybody who came to work.

Of course those mechanisms were very face-to-face mechanisms in the early days. Just to give one example, one of the things that we believe in a lot has been this idea of “We,” that we’re all in it together. It isn’t a culture of stars, it’s a culture of all in.quote1-datta

One of the mechanisms we used to use were the Peer Awards where somebody could stand up at an all hands meeting and give a $100 gift certificate to Amazon to anybody else they wanted in the company as long as they could stand up and explain to the rest of the company why they were doing it. It was no limits.

That works really well when we were 20 people because 20 people could stand up. Today, we have 250 people and there are 180 peer awards given a quarter. The idea of someone standing up in front of the all hands meeting and talking about each individual person just simply doesn’t work.

Ajay:  That’s right.

Raj:  We tried to come up with all these different mechanisms where you have top 10 video peer awards. You have still the stories in person, but you have documentation of those stories online. It’s all about the mechanisms to enforce those cultural values in a scalable fashion.

Ajay:  Absolutely. Makes sense.

Sameer:  I would reinforce the distinction that Raj is drawing between values, which is, I do believe deeply at SendGrid. We have a value system called the Four H’s – Happy, Hungry, Humble, and Honest. That value system is embedded in the company. It will never be dislodged. I believe it’s one of my number one jobs to continue to nurture and reinforce that culture of values.

To Raj’s point, the mechanisms on how you highlight those and how you exhibit those in the company, those do change over time as you scale. But I believe that that value system should not change. It should not change as you scale, but you have to work hard to make sure they don’t.

Josh:  TellApart. I’ll talk about some of the transition to Twitter, but I believe then and I believe now that we still have one of the strongest cultures in Silicon Valley. I heard this from multiple people that knew very little about what we did, but they always heard we had an amazing culture and amazing team.

Interestingly we never actually sat down and did the cultural document or the four pick your favorite alliterative letter. I made a commitment to people when they came in. I said, “Look. We as a company are gonna try and impact you in three ways. One, we’re gonna impact your resume.

“When you leave this place, if and when you choose to, your next boss will look at your resume and say, ‘Oh, my gosh. You worked for TellApart. You must have learned so much.’ The second is we hope to impact your bank account because that’s the bet that you’re making on us as a risky startup. The third is I really want to have an impact on your memories.

“Years from now all you’re gonna have is a set of stories that you can tell to your friends and your grandkids and things that you can write down for generations to come.” When I impress that upon my team in the different functions, if it was team meetings, if it was these parties we had called TellAparties, I said, “Make it memorable.”

That was something that really belied everything that we did, is this emphasis on making it good enough to be memorable and important enough that it should be memorable. As we transitioned into Twitter we were about 85 people when we were acquired to we’re a little over 4,000 people as a global company now.

The thing that I told my team on the way in is I said, “Look. We’re being brought in in part because of our culture. This is not about a dilution. This is about us amplifying what is great about what we do and bringing that to the rest of the company.” Now a lot of our traditions we’ve expanded to be much more encompassing of all the business facing product groups.

I think about the commitment that I made to my people and that I made to Twitter. I wrote this in an email actually the day before we showed up for our new hire orientation. I said, “Look. A year from now here’s what success means as an acquisition. It means that you come out of a meeting, and you think about the people that were sitting around that table.

“You have no idea who was native TellApart and who was native Twitter because we’re gonna to feel like one.” A big part of doing that is a principle that I have encouraged over and over, which is assuming positive intent. “Assume that the person on the other side is good, smart, well meaning, and hard working.

“If there’s some clash that you have because we come from the startup mentality and we’re going into 4,000 people that need more structure, remember that clash is probably around a lack of context, not an actual deep rooted disagreement.” That’s proved amazing for us on the way in.

Ajay:  Speaking of memorable, you have to at least share the fact that every TellApart employee got to sled ride in December in 70 degree weather down your parking garage. You’ve got to share a little bit.


Josh:  It’s one of the perks of being a small team that has huge revenues, huge growth, and was very EBITDA profitable. I remember. Ajay sat on my board. He led our B round with Bain Capital Ventures. I came to the board one January, and I said, “I’m gonna bring you some crazy proposals this year.

“We’re gonna triple our office space. We’re gonna double our headcount. We’re gonna acquire a couple of other companies. I just want you to remember everything is 40 percent off.”


Josh:  You look at me and you’re like, “What are you talking about?” I’m like, “We’re out of net operating losses, so we have to start paying taxes this year. Every dollar that we don’t spend is 40 cents to the government.

Sameer:  [laughs] That’s awesome.

Josh:  40 percent off. For our big holiday party, the TellAparty at the end of the year, we actually brought in a company from LA to manufacture real snow on the top of our roof where the parking was and then down. We had a two story sledding hill. Pretty awesome.

Sameer:  [laughs] 40 percent off. Come on.

Josh:  It was epic. It was great.

Sameer:  Those memories are really along the same vein. SendGrid has had a tradition since the first year as it went through hyper growth. The entire company flies down to Mexico, pick a city – Cabo one year, Cancún the next – for an alignment and kick off session for the year in January. It’s a huge part of our culture and our connective tissue. It’s a ton of fun.

I’ll tell you that there’s no better way to get people to connect to one another in a way that is beyond as colleagues, and they become teammates. They become friends in those non-work settings. Frankly, I learn as much from talking to all of our teams and our employees at those informal settings having fun, creating memories but actually that impact the business.

Ajay:  Not to mention your tolerance for Tequila’s gone up over the years.

Sameer:  Dramatically.


Sameer:  Dramatically as it turns out.quote2-datta

Raj:  One of the hardest things about scaling the culture though is that we all have the fun traditions, but people at the end of the day take startup jobs, primarily for the work. There’s a temptation to synonymize culture with fun, and most of culture’s actually about how the work gets done.

We have a similar commitment as Josh has, where we tell everybody that comes to BloomReach, our goal for you is that this is going to be the single, most impactful professional experience of your life. When you look back on your life, you’re going to say, “That is the one that defined my professional experience.”

But then translating that into every meeting, and every interaction, and every email, and every customer call, and every line of code that’s written, is really the hardest thing to try to figure out how to scale, as you scale the culture…


Ajay:  Shifting gears, all three of your companies were found in 2009, incredible growth in these early years, all the crazy startup stories, but now, as you reach a new phase, the next five years, TellApart being part of Twitter, how do you think about how aggressive you lead the company?

It’s one thing, when you’re 30 people, you’re trying to climb the mountain, you’ve these insane stretch goals, it’s another thing when you’re a hundred million dollar business, you’re multi hundred dollar business. Folks that may be joining the company today have different goals than folks that may be joined when you’re five people.

How do you think about leadership at this phase? Are you guys as aggressive as you were five years ago? Are the companies…? Do you feel the culture as aggressive or is that not sustainable?

Raj:  My perspective is we’re as aggressive as ever, but aggressive for the long term. That’s the difference. In the sense that, in the early days you’re super aggressive, at least we were very aggressive on surviving, and on tactical things that were required to survive and to make it to the next event, then the next customer, then the next product, and so on, and so forth.

It’s as important as ever in this period of time to be just as aggressive, but to set the context that the outcome of that aggressiveness has got to be something that’s sustainable at long term, and make sure people have an eye on that kind of a horizon.

The hard thing to do is that all the mechanisms that force you to actually try to be less aggressive, force you to try and compromise over here, or do something political over there to make someone happy. Fighting that in this period of time is super important.

Ajay:  Even more important.

Sameer:  Situationally, there’s also this context that we’re operating in now that is very different than the last five or six years as you…

Ajay: What are you referring to? [laughter]

Sameer:  …to the public market. I don’t know. Something’s going on in my stock tickers this last couple of months for people in this room. That puts up a different set of guard rails as you make strategic decisions that four or five years ago, aggressive, as defined by perhaps how many bets on the table do I want to have…

You had more degrees of freedom, there’s more latitude, there’s more capital, the fund, all those myriad of bets, that you have to think about very differently as a CEO today leading a company. That balance between growth and profitability is far more pronounced in our thinking, certainly over the last year and a half.

Ajay:  Josh, how things changed for you, now inside a 4,000 person company?

Josh:  It’s been interesting. It’s no secret to anybody who’s watched Twitter’s trajectory over the last year, really. The stock’s down way…I don’t even know the percentage from year over year, but it’s down a ton. Jack came back. Dick Costolo, the former CEO, left and Jack came back. He’s now a full time CEO. Bunch of management changes, things like that.

Twitter is, it’s super interesting, because inside of the company the attitude is… “I cannot believe the whole world does not use Twitter. We find so much value from this product. What do we have to fix about this thing to make it to where everybody finds this much value.”

The 300 million monthly actives, whatever we just was reported yesterday, whatever the new updated number is, is insufficient for the amount of impact that we have in the world. The fact that you watched Super Bowl, and Twitter is on every commercial. It’s all over the breaks, and the replays, it is a major part. In many cases, the primary screen instead of the secondary screen, depending on the event.

We looked at this, and we’re like, “What do we have to rethink?” Jack came back and he said, “Look, there are no sacred cows.” You want to change the way the timeline is ranked, which we announced yesterday. Since the beginning of time, this thing has just been in reverse chronological order, and now it’s not.

You can opt in to the fact that it can be filtered, it can be algorithmically done, and it is a way better experience once you do that. That was, I think, 18 months ago, it would be heresy to even suggest that. The number of changes that are being introduced on the product side are just mind blowing for a company that is 10 years old that’s doing 2.2 billion in revenue last year.quote3-mcfarland

To your point, “How aggressive can you be?” It is imperative to be aggressive at every point, because otherwise you’ll end up in a state like we did, which is the product didn’t change much for two years, and user growth flat-lined, and now we’re at the point we’re saying, “Let’s start start with a blank sheet of paper,” when we think about what we want Twitter to be, and then be very aggressive on the timelines at which we roll out these major changes.

Ajay:  That makes sense. Great story, Josh. How do you see your team? Your senior team, the team below that team. Clearly, as startup, you have these key folks who got you to where you are today. As you think about that next five years, how do you go through that exercise, who are the right folks for that next phase?

Is it self selecting? Do you proactively try to drive that? Some tough, tough decisions, because clearly, some of those valuable people in the company…How do you manage through that, some of those transitions? Even during those first five years, all of your companies went through a number of those phases. I’m curious to hear how you guys think about the people side of it.

Sameer:  In the case of SendGrid, we certainly had a lot of changes. We’ve brought in a new CFO, COO, a new CMO, a new chief product officer, a new VP of engineering. In terms of feeling like I can speak to this one intelligently, we’ve certainly done a lot of that. In some cases, it was us deciding, in some cases it was us mutually deciding.

A lot of the conversation has to be around, “OK, chapter two, next five years,” what are the skills and work that needs to get done. To Raj’s point, in some of our cases, it was literally the executive self selecting and opting, and saying, “Actually, what I’m distinctive at, what I enjoy doing, what I’m passionate about doing is early stage stuff.”

Ajay:  That’s right.

Sameer:  It is that first chapter and not the second chapter, and scaling is actually less exciting to me. By the way, we were then able to–he’s a tremendous guy, a great leader in the company, and I love him to death. We still stay in touch, but then we brought in a CFO who was super excited about chapter two. It worked beautifully because this is my passion. I actually am skilled at and passionate about taking something that is there and helping scale it.quote4-dholakia

That’s the clarity that we all have to continue to drive for. Our organizations out in the group is what are the things you need to do distinctively at that executive position in the stage that you are now at and have that conversation openly with the executive and say, “Do you get fired up about this anymore or not?” You have to assess, do I believe that they can scale to that.

Ajay:  Makes sense.

Raj:  On the executive team side, what we’ve tried to…As I look back on BloomReach, I feel like it’s gone through three phases.

The first phase was very much we’re founders and a small team. We’re here to take the hill, take the world, however you describe it. It was very much groups of people sitting together. Didn’t matter if you were an engineer or a product manager or a salesperson or a founder or not a founder, you were just in it together to try to make it happen.

We made a very deliberate decision at some point in that company journey where we said, “No, we really need to have an executive team. It’s time.”

Josh:  When we couldn’t fit the whole company in the board meeting…


Josh:  That was about the time.

Raj:  That’s a hard time because it is a cultural change for the company when you make that transition. But we made that transition. For us, I would say that all came together around 2012, about three years in. We filled out all the major functions. We found great people. I spent months recruiting to find what I thought were the great people for that phase.

Now, fast forward three years later, we hit the milestones we wanted to achieve over the last couple of years. Now it’s who’s recommitting? Who’s got the energy for the next phase? Who’s got the aptitude for the next phase? What new blood do we need to bring in and what new functions?

It’s yet another explicit conversation. We thought about it in those phases. One of the beneficial things about that has been that that team has been able to execute together in a very stable way for multiple years.

One of the challenges I see in a number of other cases is where there’s constant churn on the executive team. Sometimes it’s good people coming in, good people going out, but you don’t develop a rhythm for how you execute together. You need that for some period of time so that you bring stability to the rest of the team and the rest of the organization to make it happen.

Josh:  Makes sense. These conversations should be explicit. You should be able to talk with your senior management, or in my case the next layer of my directs, have a conversation openly and honestly about whether or not they’re up for this next challenge, because in all cases, whether you’re startups or whether you’re a big company that’s looking to it’s next big wave of growth, it is really freaking hard.

This also has to be introspective by the way. You have to first ask yourself the question before you ask that of your next person. For me to say, “Look, here’s what your burn down looks like in terms of your equity. Let’s just get that on the table. This is basically what we’re looking at. This is putting aside compensation, performance, all the future grants that you can get, but this is what we’re dealing with right now.”

“Here’s the trajectory that you’ve been on for the years that you’ve been with us. Here’s where I think you can go. Does that excite you? Are you up for that? Or can I help you find something that is a better fit, either inside the company or out?”

Because to Raj’s point, you have to know that the people that are around you that you’re surrounding yourself with, your team, is going to be there through thick and thin. It can’t be like, “Gosh, I wonder if this person is going to stick around for three months, six months? Might they last the end of the year?” Those things just completely erode the ability to be productive.

Everybody senses it. Everybody gets it. We have this sixth sense for who’s on the fence and might be interviewing right now. It’s like half a day out for “the doctor”.


Josh:  That stuff is so counterproductive. Being really explicit with these conversations amongst your core team is imperative for us as leaders.

Ajay:  One of the topics I thought it would be interesting to touch on is by definition the fact that companies have a second five years means they haven’t been acquired in the first five years.

Josh, I’d like to hear from you first. You sold TellApart Twitter last year for $560 million. The company, I know this since I was on your board, growing 100 percent a year, profitable, generating cash, didn’t need to fundraise ever, big market, great team. How did you think about that decision?

Then I’d love to hear from Raj and Sameer. Conversely, how do you think about the decision not to sell? Certainly now, looking at the environment we’re in today, all these are conscious decisions. Neither one is right or wrong. I’m sure founders are constantly trying to think through those forks in the road. Love to hear your collective insights on that topic.

Josh:  I’ll give you our framework. First is that old adage, great companies are bought not sold, turns out to be true. There’s inbound interest for TellApart. When I brought it to Ajay and James from Greylock, it’s the entirety of my board, the three of us, we basically said, “Here’s where we are today. Here’s where we can get as an independent company. The time in between is going to be really hard.” Welcome to the last six years.

At every stage, it’s a lot of work. It’s fun. It’s rewarding, but it’s a lot of work. There’s basically a value that we expect and then there is not just the work but also the risk that you will assume during that timeframe. You look at the cash you have in the bank and the fundamentals of your business. You come up with a gut feeling about how you feel about that outcome. Then you weigh different options that are presented throughout a process like what we went through.

They honestly come out to about parity because as a founder who believes in your business that’s doing well, you’re like, “We’re going to freaking go to the moon.” If it’s inbound, typically it’s interesting enough that it says that company also believes we’re going to go to the moon but there’s a net present value of the assets versus what there might be.

My point is it’s insufficient information. At which point, you basically sit down with your trusted advisors. You say, “What do we think we could accomplish if we to tie up with this other company?”

For us, that was the big thing. That was the motivator is saying we’re going from this local maxima in being a great, well run, profitable company albeit small, 85 people, to thrusting ourselves onto this global stage with 97 percent global brand recognition with Twitter and saying, “If we could bring the things that we brought to our customers to all of Twitter’s customers across the world, what would that look like? Could that be game changing? Would we, TellApart, be known as an important part of that playbook?”

All of that is coming true for us today. So I feel very confident that we did the right thing. But it wasn’t easy. It basically relied on a lot of gut instinct and a lot of discussion with trusted advisors.

Ajay:  It sounds like, Josh, in your case, clearly the financial component was a component, but really the motivator was the fact that you saw an opportunity to continue the mission of TellApart inside of Twitter and actually expand the impact.

Josht:  That is by far and away the biggest thing.

Sameer:  I would say that that dimension is what I kept coming back to in my head, which is it’s all about the mission and the vision. What’s the best way for us to operate to achieve that? If every one of your employees lives and breathes that mission and they’re fired up about that, then there are lots of different ways of financing that, of operating that, inside, independent, part of something else. But it is all about that mission and vision.

As a scaling start up, there’s certainly lots of things about your culture and your way of doing the work that you love so that there’s an allure to being able to continue to do it your way in our SendGrid way. So I would love to be able to continue to do that.

You’re also a fiduciary and a steward of the value of the shares. If there’s inbound stuff, then you’re like, “We should look at that. It’s our job to do that.” But I think to Josh’s point, you have to assume we’re in this to, in Jim Collins speak, build a built to last company, one for the ages.

Raj:  The toughest decision in the world, to continue forward versus sell and continue forward but in a different context as Josh is doing. Ultimately, there’s a rational calculation and then there’s an irrational calculation or maybe non calculation.

The rational calculation, what’s the opportunity? What are our challenges? What are our products? What are our assets? How much funding do we have, etc.?quote5-datta

If you’ve been a successful company in the first five years, even if you’ve been a successful company in the first five years, provided that you have a legitimate option to sell the business at a good price, the rational option seems to always suggest that you actually should sell the business because it’s freaking hard. A discounted version of freaking hard is still freaking hard, so you probably should sell the business.

But the irrational part is really just where are you? Where are you in your journey? I’ve found, at least for myself, I had the irrational goal of accomplishing the goals that we had set from a product vision perspective and building a multi billion dollar company. I just hadn’t done it yet. That was a good enough reason to continue forward.

Ajay:  Makes sense. That’s great. Raj, you as part of this next phase just completed a large round, $56 million of funding that closed last year. Probably the environment was probably starting to shift at the time, maybe not to the extent it has in the last couple weeks. Curious how your observations going through that process any feedback you’d give this audience having just completed a large fundraise?

Raj:  Just in time. No.

As I was going through this process, I was thinking to myself, “This has been my ninth fundraising process as a entrepreneur, three start ups, multiple fundraising processes. I have a pretty good sense within the first week about whether it’s going to be brutally difficult, unbelievably easy, somewhere in the middle.

I could pretty much tell within the first week or two that this was just going to be really hard. If we were not a great company, it might even be impossible.”

Perhaps the biggest lesson I would give to anybody trying to fundraise in this market, looking at fundraising, is just don’t take it personally. It’s not about you. Most of the time when the fundraising process is hard or the fundraising process is easy, it’s just factors outside of your control. Look at the facts as they are in the environment that you’re in. Look at the company that you have under the circumstances that you have it.

Just make a practical decision. Don’t take it personally. Don’t think it was because of you that it was really easy, and don’t think that it was because of you when it’s really hard.

Ajay:  No that makes sense. Good advice. Let’s shift gears here and final minutes talk about how you guys are evolving your businesses.

Sameer, one of the hallmarks of SendGrid is this incredible developer community. You get all kinds on inbound leads to your website, somewhat optimizing fact where folks start using it. Some of the startups become very large companies and therefore large revenue generating customers of yours.

One of the big initiatives for you in SendGrid is augmenting the product and the solution to go after the marketer as well. How have you thought about that evolution and that bet that SendGrid is making? Clearly marketers need email too.

How are you going about that and not losing this great developer community that you have, but at the same time, getting SendGrid to win the hearts and minds of the CMO?

Sameer:  We talk a lot about the extension of the platform and extending to another persona as opposed to moving to one. The biggest tagline that I recently read was around the distinction between, “Is it really a company, or is it just a product that became a company?”

For SendGrid I genuinely believe that we have a mission to help people with their customer communications driving engagement and growth, broadly speaking. That has lots of room for us to continue to expand what we do and how we serve them. It was interesting. I expected when you add, you can’t be a one hit wonder.

As you extend that platform you expect a different persona and a different buyer to be an extremely challenging extension. For us it has been, I would say, remarkably easier. I expected it to be nearly impossible. It’s still hard, but on a relative basis to my expectations it’s been much easier.

We launched this product in the first week of December as an email marketing tool as an extension to the transactional email. Now you can do promotional emails through our platform just as easily. We’ve signed up over 1,800 paying customers in the first six weeks. You would say, “Well, we have 60,000 customers. Maybe that’s easier for you.”

Actually half of those new 1,800 customers are net new. They’re people that never interacted with SendGrid at all. We have just figured out a machine for this low touch, high velocity model to get them in the door, start using our stuff, and building high quality, high value products that people love and get value from like this on day one.

We’re driving that extension from the platform probably.

Ajay:  Particularly some of the early employees feel like you’re abandoning the developers, all this energy around the marketer. The roots of the company are serving the developer. How do you manage that dynamic?

Sameer:  That is hard. I would say that we have to very consciously and explicitly continue to drive what built this company, is these t shirts. We give out 10,000 of these SendGrid t-shirts every single year at hack-a-thons, development oriented events, computer science departments around the country. We are all about continuing to invest in that community.

We have a community development/developer evangelism team that does this on a global basis. We have them all over the world, and it’s a huge investment for us. We spend millions of dollars every year on that team.

Ajay:  I need one. [laughs]

Sameer:  Absolutely. I’ve got 18, so you can have one. [laughs] It has to remain a core focus of the company. It is hard, but you have explicit trade offs. People will say, “Well, gosh. We’re spending a lot of energy on the new marketing product from the development. Are we investing as much as we need to in these four features for the developers around the API?” and so on.

You have to make the hard decisions and say, “OK. Well, this is our core business and 95 percent of the revenue today, so we got to make sure we continue to take care of that.”

Ajay:  “And it’s growing.”

Sameer:  “And growing really well.” [laughs] You got to keep investing in that.

Ajay:  Totally. Josh, I’m curious. Clearly one of the reasons why Twitter paid so much for TellApart was the synergy of bringing the power of the direct response capability and also the cross device capability. In some ways now that you’re part of a larger platform I assume the day-to-day product focus and initiatives have changed.

How have you managed that evolution? Everyone’s as you said a Twitter employee, no difference, but how have you managed that shift of driving the organization in this new direction as part of Twitter?quote6-mcfarland

Josh:  One of the key principles behind deciding to do the acquisition at all is I basically said to the parties that were on the table, “Look. I’m not interested in being a tuck in acquisition where you get slotted in and put on a shelf and you collect dust for two years while you refactor on somebody else’s stack.”

That’s not interesting because we had spent six years building this incredibly highly performant, successful, profitable business with basically almost zero churn from within our revenue base, incredible year over year growth, and a pretty diverse portfolio of offerings. I said, “Look. We’re interested in taking this engine and plugging it in as part of this larger platform.”

It had to be compelling. It had to be like, “Here’s how TellApart will disproportionately help with the success of this bigger organization.” That’s what we found with Twitter. I remember one of the very first meetings that I did with the management team there. We went back and forth. I educated them about our business and how we think about things. They told me about their view in the world.

It was all coming to a close. I said, “Let me give you a mental model that I’ve just developed in this room, and tell me if it maps to what you think.” I said, “Most businesses in the media landscape can be drawn on a two by two matrix. You’re either selling to brand advertisers or you’re selling to direct response advertisers.

“Then you’re either selling ads against inventory and publisher placements that you own or that others own in a network.” I said, “There was this two by two. You can say ‘Google search was all about owned and operated inventory sold to direct response advertisers. Twitter is mostly about owned and operated inventory sold to brand advertisers.'”

I said, “The interesting thing for me having sat through this meeting with you guys now is there’s a z axis on this. Think of it as a cube, and each quadrant has three faces that face out. That last axis differentiates between people who are logged in users of the product and people who are logged out users of the product.”

For Twitter that’s the difference between somebody that has the app, is logged in, and pulls up their timeline to consume it and somebody who consumes tweets because they’re embedded on other people’s websites. I said, “Here’s the magic I believe of the Twitter plus TellApart tie up. We bring to the table direct response, which we’re good at.

“Twitter is very nascent in its offerings. Two is we do no work with Twitter, so this is definitively that next category of off-Twitter network business. Then finally we are agnostic between whether somebody’s logged in and logged out because we have this cross device network that we built up that’s deterministic and very robust.”

I said, “I think together we fill out the monetization opportunity across the cube.” For me that was the big “ah hah!” of saying, “Wow. If we come in here and can fulfill our promise and we can really be this significant technology asset that’s brought into the fold, then it will be less than a year that that starts to show the fruits of labor.”

Just yesterday on the earnings call two things were announced about TellApart. One is that we’re powering the dynamic ads for Twitter, which is one of the highest growth opportunities. Then the second is that our business has just been killing it.

On both fronts this idea of continuing to do well at what got you to where you are plus investing in the future in the combined product is what has driven us forward.

Ajay:  That’s really cool. Raj, how about you? What’s the big business goals for this next phase? How’s the business transforming during this next five years?

Raj:  For us it’s all about the movement from first one product, then collection of products, then true platform. We’re very much in the movement from the second to the third.

Ajay:  What does that mean? Because a lot of people talk about platform and “I am a platform. I want to be a platform.” What kinds of concrete things have you had to invest in to truly become a platform company?

Raj:  First observation that we had was most startups don’t have any right to be a platform. We said, “We’re not gonna be a platform because we don’t deserve to be a platform first.” We have to win somebody and serve them really effectively.

In the phase that we’re in right now what we observe about our customers is that enterprises have a massive marketing stack with all kinds of different vendors. Consumers, their customers, expect a much more integrated experience. That’s actually a mandatory to deliver the ROI that they need for their businesses.

What the platform should enable any SaaS company to do is to take the individual applications so it should disproportionately add value to each other. Ultimately it should be possible that any input into that platform benefits all of those applications collectively such that those network effects grow. The ultimate incarnation of that, of course, is that third parties are able to build on that platform.

What does get confused a little bit is the people jumping to the third party piece right way, which is an end state and one way of adding value to the platform, but ultimately it’s about whether or not the sum of the parts is much greater than any individual piece being put together.

Ajay:  Where are you on that journey?

Raj:  We’re early in that journey. What we have is an amazing business that’s got a bunch of different products adding tremendous value to our customers, but we increasingly see people say, “Hey, give us three of those applications together. Can we write to your APIs ourself? Can we put data into one of your applications that flows through into multiple applications?

“Can you ingest data that I’m using in another application?” The signs are there for a much more robust personalization platform that serves multiple constituencies in one technology investment. What we believe is that that’s the basis for a very, very big opportunity.

Ajay:  That makes sense. I’m curious as we wrap up here and all of you think about the first five years and also some of your employees that have been there through that whole journey look back. Do you guys miss it? Do you miss the early days?

Do those employees who are with you today look back and say, “Man, those days were so much better”? Is there a lot of nostalgia for that? Because I know in the startup I was with, we always used to talk about, “Man, those early days were great.”


Ajay:  It’s human nature, but how do you guys feel about…

Raj:  Maybe the analogy is like having kids where you have a kid early on. Then four or five years later you remember that it was absolutely amazing…


Raj:  …why you should go have another kid. During that phase, maybe not quite the same perspective, but there’s some nostalgia for sure. There is a magical element to the creation of an early stage startup that deserves its mythical place in the entrepreneurial ecosystem and is worth being celebrated. There’s a lot of such moments that are possible.

What I feel and what I think a lot of us feel is that those are fleeting memories. They’re worth hanging onto, but there’s so much ahead that it’s a small part of the day.

Sameer:  I would say certainly at SendGrid the stories from the early years are just awesome. They’re super fun, and that’s how you build the place. I think every employee, when you lay out, and part of our job is to make sure you’ve got a mission and a vision statement that they look forward and go, “But man, the best is still ahead.quote7-dholakia

“That’s just rearview mirror stuff, and it was really fun. It’ll pull and tug at the heart, but the place we’re going to is every bit as exciting and we want to go on that journey with us.”

Ajay:  Awesome. Josh?

Josh:  For me, I’ll tell you. I don’t miss it at all. I look back with fondness on those early days, and we just had some amazing times, some amazing stories. I think I don’t miss it for two reasons. One is it still feels like a startup. I know that’s a trite thing to say coming from the dude who works for a 4,000 person company.

If it’s working hard with a team or quick replies to emails at midnight, those things are very much part of our ethos. Not just TellApart, but truly Twitter operates like this. It still feels like a very, very engaged environment. I have to say moving massive amounts of the world on the consumer side or revenue for our customers on the business side is so gratifying.

It was really fun as a startup when you signed your first million dollar ARR deal, which is just a mind blowing amount of money. Then you graduate to the big leagues. You’re doing these massive deals with the CMOs and the CEOs of these massive corporations, yet it feels like the early deal cycles of a startup. For me it’s been really fun.

I’ve never been in this position before despite having worked for large companies in the past. This is just a really high leverage time for everybody. To be there when the company is reinventing itself still feels like a startup.

Ajay:  I know for a fact you’re still working hard because I still get emails from you at three in the morning.


Ajay:  I know Sonia’s not happy about it, but clearly the pace has not changed. Well, guys. Thank you so much. This has been really great. If we can give our panelists a round of applause, please.


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