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But the mafia thing is interesting. Mafia is obviously a bad word, or a negative word. I think people use it because we were from New York, so it was kind of like an East Coast thing to contrast with the typical Silicon Valley (or Silly Valley) kind of a... |
**Adam Stacoviak:** Yeah. So then let's fast-forward some -- we'll go back again; we'll tell a lot of your story, so let's not camp out here for too long, or get stuck here, I suppose... When you talk about Grafana Labs today, and the kind of company you're building today, and you mentioned a do-over; learn from then, ... |
**Raj Dutt:** I think it's a good question. I don't think it's a black and white, or binary answer rather... We've been at this for Grafana Labs for about six years now already. But the big mistake we did at Voxel, in retrospect, was not capitalizing the company sufficiently. Cash was always a thing that was constraini... |
\[12:23\] With regard to exits and timeframes, I'm a firm believer in -- I think we have this imprinted in the DNA of Grafana Labs, we like to say we're long-term greedy. We're not trying to optimize for a particular exit or a time horizon for an exit. I really think that if you try to do that, you're gonna end up maki... |
If you end up getting acquired or you end up going public, whatever your metric for success is, I think the way that you do that no matter what your business is is by just trying to build a good business for the long-term. If you get taken out in an awesome exit, so be it; but if you're trying to optimize for that, I r... |
It's kind of a cliché... Some people say that companies are bought, not sold. I think there's a certain degree of truth in that. If you're trying to optimize to sell -- "I wanna sell to Google in five years, or something like that", if that's your plan, you're just gonna make a bunch of bad decisions that take away fro... |
**Adam Stacoviak:** So I guess the question might be then "How do you make different choices?" Given that, aside from simply just saying "We're optimizing not to be sold", but this idea of long-term greedy, or -- is that what you said, long-term greedy? |
**Raj Dutt:** Yeah, long-term greedy. |
**Adam Stacoviak:** Okay. Make sure I had it correct... Which I like, by the way; that's super-cool. I'm not sure if you coined that or not, but I like it, so I'm gonna keep using that; I like that a lot. |
**Raj Dutt:** We definitely didn't coin it. In fact, I think Goldman Sachs coined it, so... |
**Adam Stacoviak:** Oh, is that right? |
**Raj Dutt:** ...not necessarily a company I admire, but I think it's a good phrase. |
**Adam Stacoviak:** Well, I think it's got some opportunity, I suppose, to think -- I guess greed can be a negative connotation to it, but... You know, I'd rather be long-term than short-term greedy, if I wanna be greedy at all. Let's focus on the long-term, because there's different attributes and attitudes that come ... |
**Raj Dutt:** Sure. |
**Adam Stacoviak:** Which is sort of this idea - if you're constantly looking back, you're thinking like "How could I have done differently? Who could have I been sold to? What choices could have I made to be acquired?", instead of thinking about the future, growing a company that's worthwhile for the employees of that... |
**Raj Dutt:** Sure. |
**Adam Stacoviak:** ...if you're looking back and you're thinking short-term gains, or exit strategies, you're gonna miss out on the opportunity. And you'd mentioned this idea of this window of opportunity, and this is something I think that I personally am retrospective about... Like "Am I growing, or are we growing t... |
\[15:53\] Because for me, for example - I'll camp on this for just a second - I may desire not to build a New York-headquartered media company. Now, we may be in every way a media company, but we'll probably never have a New York office. There are certain choices we're making that are different than other "media compan... |
So parallel that to what you're doing - maybe you've got particular personal desires, maybe your business has certain specifics that it needs to do to be the business to capture this window of opportunity... What is that for you? |
**Raj Dutt:** I guess it's a combination of those two things. On the personal level, I really love to travel; I really love doing business internationally. Pre-Covid I was on the road probably 300 days a year... And one of the things at Voxel that was interesting is, you know, even though we were a company of 50 people... |
One of the things with Grafana Labs is we're remote-first. We have just over 150 employees, but we're in like 20 different countries. And that's really fun, that's really exciting, but it's also a way to just get the best talent, no matter where that talent is. So that's kind of the, I guess, merger of personal and bus... |
The open source angle is also part of that. At Voxel we really saw how infrastructure was changing, like you said, from bare metal to containers, to serverless now... We also saw how software was changing and how -- you know, Marc Andreessen likes to say "Software is eating the world". Open source is kind of eating the... |
So that's something that we've been really trying to focus on in the last six years - creating a vibrant, healthy and diverse community, and serving its needs, which is all about value creation in open source land, with the demands of our commercial strategy, which is all about value capture. That tension I think exist... |
**Adam Stacoviak:** Yeah. |
**Raj Dutt:** It's definitely a combination of a belief that we're doing things that will allow us to create really good software, that our community and our customers love... And we do it in a way that we think is really effective, which is remote-first, and having people all over the world... Which by the way, is how... |
For myself and my co-founders in the core team, we really believe in those two things... And that kind of reflects in a lot of our strategy, a lot of our day-to-day decisions... We're also what we call "big tent", which means that we really value interoperability of the wider ecosystem. |
A lot of companies and a lot of vendors in our space try to own the entire stack, and sort of tell a customer that "It's my way or the high way", or "Replace all of what you have and buy my new shiny solution." |
\[19:54\] As an open source company, we take open in a whole new level, because we prioritize interoperability above anything else. So if a customer of ours has existing vendors that they're working with, companies that we really admire and respect, like New Relic or Datadog... You know, their data is in a SQL database... |
So yeah, that's a pretty long-term strategy also... But at the end of the day I think it's also about trust, which is what's really important in open source, and in any business. We're trying to be perceived as not just another vendor. We're trying to be perceived as a trusted advisor. That's certainly aspirational, an... |
**Adam Stacoviak:** Well, I think the big tent philosophy certainly leans in towards the trusted advisor. |
**Raj Dutt:** Yup. |
**Adam Stacoviak:** Especially that's part of your recent raise announcement, too... It's all over that. One of the big pillars of that was talking about this big tent philosophy, and I think that you can capture that trust necessary from the community, even from those in your company, that obviously work there for a r... |
**Raj Dutt:** Yup. |
**Adam Stacoviak:** And the reason they do that is because you're not trying to knock down buildings, you're trying to make sure the stop signs are in the right place, and the stop lights and whatnot work. You're not knocking down buildings to build your own city. You're helping other people make sure their buildings a... |
**Raj Dutt:** Absolutely. And the most interesting customers and the largest customers have a very complicated infrastructure. They're using all sorts of tools, and they have many vendors that a variety of teams are using in different ways. I agree with you that vendors should prioritize interoperability; I don't think... |
Our strict MO is that we don't really disparage the "competition", because we do prioritize interoperability. On the engineering side we will absolutely focus on creating good experiences with not just other open source projects, like let's say -- Elasticsearch is a great one. They have a fantastic database. Elasticsea... |
We also have our own logging platform, Loki. And in some ways, it competes with Elasticsearch for some use cases. Our bigger story and our macro, more important MO is big tent, and prioritizing interoperability, so we will literally go to customers and say "Look, you have Elasticsearch. It's great. We're not gonna tell... |
\[23:54\] So when someone comes in to, let's say, our sales team, the normal playbook with sales is like "Alright, give me the battle card. Give me the kill sheet on how to talk trash about all these other vendors, and why we're better and why they suck." |
**Adam Stacoviak:** The kill sheet. I like it. |
**Raj Dutt:** \[laughs\] And our core team is always like "Wait... No. That's really not what we do." We're happy to talk about the differences between different vendors, and that's part of being a trusted advisor, but there will be no kill sheets. We don't have this kind of "rip and replace" mentality. Like you said, ... |
Scott Fingerhut, who just joined us as our VP of Marketing, he likes to say that customers should own their own observability strategy; not a single vendor. And I think that's really right. Vendors are really just trying to come in and say "Alright, we're gonna take over your whole platform, we're gonna take over your ... |
So I think that interoperability is really key, and I do think it's tied to being a trusted advisor. And that's what makes Grafana fairly unique, is we kind of just natively connect to over 50 different open source projects, commercial projects, different databases, and we don't require that people move their data. Kee... |
And there's a lot of really good vendors out there, and a lot of really good open source projects, commercial offerings... And it's about respecting people's choices, at the end of the day. |
**Adam Stacoviak:** Yeah. You'd mentioned this tension between open source, the way your business and your open source obviously works and is being adopted out there, and the necessary business you've gotta build around it... Because hey, you took funding, you're building a business, you've got employees, you've got st... |
**Raj Dutt:** Wow, that's a really hard question, but a really good question. So how do we balance that tension... I guess contentiously, with great difficulty, with a lot of internal consternation. It's a really hard balance to get right, is the honest answer... And it's something that we definitely deal with every da... |
Now, if you pick someone from our sales team, they're gonna say "Well, every feature that we build should be commercial, because we'll be able to sell it." So it's a tough balance, and what we don't wanna do is we don't wanna build open source software that's crippleware, or that isn't useful, or that teases functional... |
\[28:08\] We wouldn't have a community if Grafana wasn't really useful and solved real problems and provided real value for our community. We wouldn't have a business. Our community and the 500,000+ companies that are using open source Grafana - that's a super-power for the business and for the commercial side of the h... |
So mission number one for us is actually growing the community, increasing adoption, and then monetization is number two. And that can be tough, particularly for our sales teams, because again, it's long-term greedy; it doesn't necessarily help when you have a quota to hit this quarter. That long-term greedy strategy c... |
And that's kind of like a pretty broad, subjective way to think about it, and it's certainly more of an art than a science, but that's kind of one of the so-called sniff tests that we apply when trying to strike that balance. |
I'd say that probably 95% of our engineering efforts go into open source. Even for the next several years, the large majority of our engineering effort will go into open source. Our whole business model and the way most open source companies work is it's all about monetizing a very small percentage of your users. I don... |
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