AppDynamics

“Datadog was a much, much smaller company when AppDynamics was out there killing it. And Datadog today has, what, a 50, 60, seventy billion market cap. I don't even know. I haven't tracked it. That could have been AppDynamics.”

“You need a unit of monitoring. You need to approach monitoring in a little bit of a different way where it represents something that is constant. So take Amazon, right? Like, let's just say take Amazon to a 15 year journey. And, you know, when they started off…”

“And typically something like that would only happen in dev or test scenarios. We brought that into production saying, if you do it safely, if you do it with the right heuristics, you can actually go down to that type of level. And that's really what gave us th…”

“Wherever the application or software is more critical to running the business, that's what we wanted to focus on. Cause you can't really afford to mess with it. And that was a good sentiment during that time. In hindsight, that helped us really, really well.”

“Second, we only wanted to build this for Java. Right. So there's obviously multiple languages, things like Ruby on Rails and all of that type of stuff was also very popular back then. But we saw that the core of the enterprise, you know, we wanted to really go…”

“What we said was, let's only do production. Let's not even bother to have a dev version. Let's not even bother to have like a test version, et cetera. Let's only do production, and there's only one cost. So if you want to run it in development, we can give you…”

“Netflix actually was one of the, you know, early ones. Priceline actually was one of the early ones. You know, Williams-Sonoma was one of the early ones.”

“And second, it was the overhead part of it on, look, I mean, you barely add one to two percent and you can try this out.”

“And the third thing we said, which was, I think, surprising to a lot of people is that why don't we do a POC in production, right? That was the biggest thing that I would say got people to take notice because they're like, they're this sure of what they built.”

“I think in the first year we started in oh eight, as you know, and it's been a while, but like just from my memory, the first year we did about a couple million, and then in the second year we did about 12. And the following year we doubled, the following year…”

“So that sort of really gave us that momentum because 60% plus of our leads you know, from then on started coming in from that.”

“And as we were getting closer to the IPO, then that's when we had the offer a little bit of back and forth here and there, and then eventually we're like, okay, let's, let's take this one, because we weren't going to float at probably around, around two bill, …”

“We just basically, by then, sold a billion in TCP. You know, I don't remember the exact sort of, like, Revenue number, but we had sold a billion in DCV.”

“We sold to everyone in financial services as well, which is always hard, whether it's Goldman, JP Morgan, You know, we sold the Bank of America, we sold to everyone.”

“Where we were coming up with, like, pretty high overhead, and this was actually at Netflix, and it took us about, you know, maybe a couple of weeks to resolve it, and it actually turned out to be a JVM bug because they were using IBM's JVM versus Sun's JVM, an…”

“In AppDynamics, our customer number three was Netflix. And Netflix was just transitioning. And it sounds like an old time ago, very long time ago now, they were just starting to transition from DVD company to a streaming company.”

“Some point in time, and that was the hardest decision I probably ever made, we decided to lose them. They were so much bigger than our customer number, you know, like they were customer number one in terms of their size, and our customer number two to 20 combi…”

“Normally what happens is like the number one company Is number one, not just because they have great product, but because they also have a very strong sales culture and DNA. No, most of the time you do want someone who is like spent. So they know what good sal…”

“About three months. And I got a lot of rejections. I got about 30 rejections.”

“Actually my first term sheet I got, it came with a condition that a business co-founder has to join a CEO.”

“And this conversation started three days before the IPO Cisco came in and said, you know, we'll, we'll pay you more than you. The price you will list. And we said, no, it's, we'll go IPO. Said, no, they came with another price, which is like, we'll pay you mor…”

“But if I have investors who don't want to do that for the longterm, we want to do in something different vision for what the company should be. Then you're kind of misaligned and that creates a big execution and uncertainty and risk. Unfortunately, we had thos…”

“I probably spend, like, One to two percent of my time managing the board in Harness or maybe not even that. In AppDynamics, I had like a kind of a broken board dynamic that I had to spend like. 25% of time, my time managing the board and the shielding our team…”

“I pitched about 20 VCs, you know, who rejected me before I got any funding for Abdanos.”

“I spent a lot of time managing our board and industries. Like maybe about 20 to 30% of my time would go in there. We had, you know, All sorts of investors who needed just a lot of management. Doing it second time at Harness, it's much easier. I spend maybe one…”

“The finding the product market fit is still the same iterative process. Like, you know, we had to pivot at harness as well. We have to do like, you know, some of the assumptions were wrong and you have to pivot and correct goals and, you know, iterate through …”

“Most of those people, you know, it's great that they've been now, you know, significantly you know, grown in their careers and where they are in their journeys and work. So for them to come into a very early startup, you know, many times doesn't make sense. Li…”

“So the mobile APM, we were at least a year behind in market at Appdynamics because we were, you know you know, we were just not paying attention enough to it, right? And then we had to catch up and like build a good mobile APM you know, for mobile apps a year …”

“So at Harness, we do it differently that, you know, we look at like, you know, 40% of our business comes from SMB mid-market and 60% comes from large enterprise. You know, at AppDynamics, it was 95% coming from large enterprise and, you know, very small part w…”

“So when I look at just the partnerships or investments or acquisitions that I've been involved with, Meraki, OpenDNS, AppDynamics, Investments like Cohesity, Turbonomic, all of those relationships, they actually began with corporate development. And when those…”

“In fact, if I look at some of our most Strategic or financially successful acquisitions, moves like AppDynamics, moves like Meraki, they, in fact, were some of our highest multiple deals.”

“In AppDynamics' case, we acquired the company a day before it went public, and I think what that showcased Is when Cisco decides to do something, we can move faster than anybody else.”

“He's already built one billion dollar enterprise company, and there's likely to be another one very soon.”

“New Relic, AppDynamics companies like that. So they're all focused on the large enterprise accounts kind of exclusively, and most of our customers are SMB. They're more mid-market companies.”

“The first voice you'll hear is Jyoti's, followed by Satish's, talking about the initial insight behind AppDynamics, which was acquired by Cisco last year for 3.7 billion dollars. The night before it was set to go public.”

“I would roughly think getting to your zero to the first million ARR You are in the phase one of product market fit. Annual recurring revenue, which is like, you know, do you have a product someone will buy and it's solving some pain. Then you're like, you know…”

“Actually for the first four years, we had zero services.”

“The first 25 customers for the new products, we actually got the product management team to really sell it the way your founders will sell in the, in a brand new startup, instead of hiring a new sales force for that.”

“For the fourth one, we literally constituted what we call a SWOT team. It constituted the product management, couple of engineers, the best sales engineers, and one solution architect. We literally went and sold some of the top deals and created the sales enab…”

“When we did that math and this is again a rough math, like you never know that if we want to get to a billion dollars of revenue from a hundred million in like seven years, let's say, or six years, our plan was, we need to have like at least 40% of our revenue…”

“Yes, because we can't, like, if our product is superior, we are, the customer is getting superior value. Either we are lying about it, or we are misguided about it, or whatever, that we believe it is, but it's not. Or we are not articulating the superior value…”

“So at AppDynamics, the product was technical. Our users were engineers in, in many ways. So our, all our product managers had an engineering background.”

“I had to wait to start a company, not just AppDynamics. I had some other ideas that I wanted to start a company on, but I was in the U S on a immigrant visa and it's really hard because of the red tape here for an immigrant entrepreneur to start a company.”

“Some companies have a parallel process. Like, you know, you're doing a process for an IPO and you're doing a process for a sale process. We are not doing that for us. It just happened that Cisco came in just a little bit before the IPO and they made an offer.”

“We looked at the offer and actually we decided to say no to the first offer. They came back with a second offer, which we said no to, and then they came back with a third offer, which at that point, it was the right thing to do for all shareholders involved, f…”

“At AppDynamics, you know, it was a bit controversial, but I, what I used to tell the teams was like, I would go to the product team. And I'll tell the product team that you've got to assume that our sales team is, is not going to, there will be times when they…”