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We're really lucky to be the center of mass, or the stewards, if you will, of this really vibrant community. I say it's our superpower, but it really is; we're just incredibly grateful for the tailwind that they give our business, both in terms of helping us build better software, through pull requests, contributions b... |
When we started, it was just my co-founder, Torkel, who created Grafana in 2014, and he was kind of doing the majority of the development. We managed to hire a couple of people to work with him in Stockholm, and now we have almost 40 people working on Grafana. Like I said, 95% of our effort is on open source. So it's l... |
**Adam Stacoviak:** \[32:21\] The way that I like to think about it, especially in this case, is that the adoption of \[unintelligible 00:32:25.07\] open source is the foundation from which you can even possibly build Grafana Labs... Anything, in terms of commercial viable or anything. So if the open source isn't adopt... |
So I love the idea that 95% of what you do is open source, and that's that five-ish percent or more, if I'm just using the words you use to define that... Right? I mean, if the open source part of it isn't a solid foundation, then what company can you build on top of it? Not much. |
**Raj Dutt:** Yeah, you're totally right. We'd just be like a normal software company that has to -- it'd be like pushing a string up a hill. It would be really, really hard. The community gives us a really large base of users who already use and trust our software. They know Grafana, they're already solving problems w... |
**Adam Stacoviak:** Well, that's awesome... |
**Raj Dutt:** So yeah, that really helps with our sales efficiency. That gives us a significant structural advantage. So yeah, I think community is absolutely the foundation. And the way they explain it to someone who's not familiar with open source, who came from, say, an enterprise software background, is imagine if ... |
**Adam Stacoviak:** Oh, yeah. |
**Raj Dutt:** That would be an unbelievable -- you know, tens or hundreds of millions of dollars worth of marketing in order to do that. And that creates this structural advantage from a sales standpoint for the business. |
Now, of course, the downside is those 500,000 companies aren't actually running trials, because most of them will say "Thanks. This is great, and I can use it forever, and I don't have to pay you a single cent." That's just the way that open source works. Open source has never been about value capture. Open source has ... |
But if you try to go too far, and capture too big of a slice, or get that balance wrong, you're gonna hurt the community. And that is ultimately, I think, a mistake that other open source companies have made, and that's ultimately a really -- you know, you might have a good quarter or a good year when you do that, but ... |
\[36:09\] Having a healthy community and providing really valuable open source software that's free to use, that solves real problems, isn't crippleware, isn't shareware, or freemium... We don't like those words. That's not what open source is about. That's why that's so important to us. |
**Adam Stacoviak:** Yeah, freemium is an interesting aspect. I just had a conversation actually with the founder of Snyk on that exact subject... And it was interesting, because there's parts of the freemium model I can appreciate, and Snyk is open source; they have a freemium -- probably similar in business models, bu... |
**Raj Dutt:** Right. |
**Adam Stacoviak:** That's sort of what it is... I mean, is that not what open source is at large? It's this large freemium model, this large 500,000 proof of concepts out there? |
**Raj Dutt:** I guess it's similar, for sure. Freemium and open source are -- I guess there's a pretty wide overlap in terms of the go-to-market motion. They're similar in terms of distribution models. But where they're very different is the freedom that open source provides its users. So open source used to be called ... |
**Adam Stacoviak:** Right. FOS. |
**Raj Dutt:** Yeah, exactly. |
**Adam Stacoviak:** Free and open source software, yeah. That term became uncool at some point. |
**Raj Dutt:** Yeah. You're aging yourself, Adam, because people don't remember that anymore. |
**Adam Stacoviak:** That's right. |
**Raj Dutt:** It kind of got rebranded as open source, but... Back when it was called FOS-- |
**Adam Stacoviak:** Well, it's shorter, right? |
**Raj Dutt:** And I think it's more business-friendly. |
**Adam Stacoviak:** Right. |
**Raj Dutt:** Free was a really interesting word for FOS. But the F in FOS, the word free - it was never about free cost; it was about freedoms, and the freedom when you get the source code under a liberal license to kind of do what you want and never have to worry about what happens if that vendor goes away, if that v... |
**Adam Stacoviak:** True. |
**Raj Dutt:** So open source is different in that way, where if we start doing a bad job, or if we start getting that balance wrong between value creation and value capture, then people in our community can be like "You know what, Grafana Labs? We're gonna go our own way, and we're gonna fork Grafana." And if someone c... |
We own the trademark. We don't have the right to prevent forks from happening. We don't have the right to stop someone or a group saying "You know what - we can do this better than Grafana Labs, and we're gonna create a better Grafana by using all the work that Grafana Labs has done." And that's what makes open source ... |
So I think that's the big difference between freemium and open source. And I also think that's why opens source has really captured the mindshare that it enjoys with developers, that freemium has never really been able to capture. Because that freedom, both to redistribute, to use, to modify, to base derivative works o... |
**Adam Stacoviak:** \[40:17\] Absolutely. You'd mentioned this tension - I'm not going back there, but kind of dove-tailing off of that; this tension and the obvious inherited value of FOS... I don't think it's a terrible term; I think the "free" still needs to be talked about in open source. I think the freedoms of op... |
And there's obvious reasons why an engineer may be more for open source and why a salesperson may be less... And it's not because they're greedy, it's just -- that's how they get paid. It makes sense. |
**Raj Dutt:** Sure, yeah. |
**Adam Stacoviak:** But that says you've gotta have some pretty keen eyes on company culture... Because to be able to lead that business is one thing; to be able to hire the right people and have them be motivated and believe that 95% of what you produce in terms of value creation should go to open source - how in the ... |
**Raj Dutt:** That's a great question, and that goes back to kind of a do-over comment that we started with - the realization of how important culture is in a company, particularly when the company is growing really fast. Personally speaking, I feel out of my element on most days, because at Voxel we grew the company t... |
**Adam Stacoviak:** Wow. |
**Raj Dutt:** So I haven't done this before... And the thing that I really realized \[unintelligible 00:41:57.07\] is how important culture is. So that's been something that's been really top of mind for me and my co-founders. And I think we've put into place a pretty strong team in terms of the senior leadership of th... |
I think it really comes down to that - we're all in this together. You're right, people aren't being greedy. A salesperson isn't being greedy per se when they fall one way. An engineer isn't being naive either when they fall the other way. |
**Adam Stacoviak:** Right. |
**Raj Dutt:** So I think that having the leadership team that really gets the big picture, holistically, is the only way that you're gonna have a fighting chance of getting that balance right. And my co-founders, Torkel and Anthony, I think really fundamentally understand the balance. Our engineering leadership, such a... |
\[43:50\] Just as an example, we hold sessions, from the key leadership down, explaining this dynamic. It's something we talk about internally a lot. And I think it comes down to also people having not just understanding, but respect for all parts of the company. It's about a shared mission, it's about realizing the im... |
I'm pretty pleased with the dynamic that exists today between the engineering teams and the sales teams. It's very collaborative, and I think that's gonna be challenging as the company keeps hitting new inflection points and keeps getting bigger and bigger, for sure. |
**Adam Stacoviak:** Yeah. So you mentioned you're at 150 people now, 400 by the end of next year. So by the end of 2021 you projected 400 people, which is a lot. Obviously, getting the right people in place makes sense. You'd mentioned the foundation of open source, this golden goose phenomena that both sides of the fe... |
**Raj Dutt:** So we've been kind of generating revenue for about four years... But we have only really had a sales team for about a year and a half. And that was a huge-- |
**Adam Stacoviak:** That's an interesting ratio... |
**Raj Dutt:** Yeah. Because we were lucky enough ot get a bunch of inbound interest from the community - sort of the core founders and founding team (if you will) of the company was just kind of handling sales in a very ad-hoc way. And we were learning a lot about what the patterns were, who our customers were... And w... |
And one of the big mistakes that I made at Voxel was not ascribing enough importance to having a really great sales team. And I think that's a mistake that a lot of technical founders or product-oriented founders make. As an 18-year-old starting Voxel, I had a very naive view of the world that I think is not uncommon, ... |
We hired our first sales director, Graham Moreno, from MongoDB about a year and a half ago. He really helped take what we were doing, which was very organic, ad-hoc, kind of founder and founding team-led sales, and he actually came in and brought that initial layer of process, and discipline, and repeatability into thi... |
So at this point, we now have about 15 salespeople at Grafana Labs. We have three teams, a West team and East team, and an international team. Our sales team and go-to-market efforts are really rocking and rolling. But we've kind of built it slowly, we built it at opportune moments, and I think Doug and Dave and Graham... |
\[48:17\] But we did it sort of after we were generating revenue, and that was deliberate... Because I think if you do that too fast, you kind of -- you wanna do that once you've figured out some basics in terms of how you're selling, who you're selling to, what they're buying. So it was really about accelerating what ... |
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