Confluent

“IBM is still around because they went and bought Red Hat and HashiCorp, and now they're buying Confluent.”

“Certainly for engineering decisions. They're mostly knowable and there's mostly kind of right and wrong answers, but usually, especially the early phase of the company, you're making a lot of kind of very big critical decisions with a lot of unknowable aspects…”

“I think CEOs need to know, you know, about 80% of what their executives know about their function, I think, over time. So really kind of learn that discipline. Not enough to be good Add it, but enough to be, to know what good is and know if it's going well.”

“Our approach to that was for the IPO was very much like, okay, databases, data at rest. But now all the parts of the company are connected. There's going to be an equally important problem of data in motion. And so, you know, the goal was to convey, Hey, these…”

“When we went to quit, LinkedIn was like, oh, okay, well, this is, you know, first of all, we don't really want you to leave, but if you're going to leave, we do think this is really valuable. We would be interested in investing. And we were like, okay. Off the…”

“And it went from something where LinkedIn was going to be the kind of major investor to being, you know, a smaller part of the round. And it went from kind of a seed investment to a series A through the course of that fundraising process. But yeah, it was, you…”

“What we had pitched was actually very close to what we built. It's just, I said we were going to do it in a year. And I think in practice, The first thing we launched was much less than that. And to do everything on the slide took like five years.”

“Amazon had a system that was actually built in, I believe imitation of Kafka called Kinesis. So it was incompatible, but kind of looked roughly like it. And that was popular. And we were like, oh man, that's going to take the opportunity. And if it doesn't, Th…”

“I think inherently that a second product is always. Kind of irrelevant to people's main goals, you know, and the, all the pressure of a business is to satisfy the customers that you have, the big prospects coming in the door, that, that kind of main flow of bu…”

“Originally it was like a small group that was working on the cloud offering. And then we were like, no, okay, everybody. Only does the cloud thing, and we will work on the software product in our spare time. Team by team, which is a very dangerous thing to do,…”

“One of the more recent versions of this was we felt is very important for the company to do the processing of data, not just the flow. And we worked on this largely unsuccessfully for a number of years.”

“Anything that's not working At a high level is inherently cross-functional. And you know, you'll see a weird phenomenon where people in each function are often don't have enough global context to totally diagnose it.”

“If you kind of just go back and say, well, okay, you know, what would the three month version of it look like? Maybe that's totally impossible, but a significant portion of the time, there is something you could do in three months. And what would that be? Is t…”

“Click houses, Aaron Katz is doing phenomenal with, and I'm not an investor, but he's doing phenomenal, but that may be the one breakout since Confluent.”

“You know, 40 to 50% of the revenue actually goes to each side of the marketplaces. And a lot of people just don't know that.”

“At Conform, we get a ton of inbound customer requests, as you can imagine. Coming from the field or directly from customers, we use LLMs to take in those asks to summarize what they're about, to find other asks that are like that one, like really in a compelli…”

“If we're making a series B investment, it's by exception, like elastic. Series B investment. Terrific return. Confluent. Series B investment. Terrific return.”

“More and more companies start to literally stream the data with pre-calculated vector embeddings.”

“So this conference started four years after Apache Kafka was open sourced and became successful and It was very much an organic decision.”

“Confluent kind of started with a proven technology that was used at, you know, roughly 50% of Fortune 500 companies at that point in time.”

“The first one was operational ease, you know, offering tools and enhancements to simplify the deployment, management, and scaling of Kafka clusters, which is actually, I think, the right starting point for many open source companies.”

“Kafka, you know, that was one of the reasons why we couldn't or we didn't sort of narrowly focus on an ICP like traditional companies do for good reason. It was because, you know, the Kafka adoption base was so broad and for Confluent to quickly convert those …”

“For the success of an open source company, all the creators should be part of it. And when that doesn't happen, you have two companies and they're competing on things they shouldn't be competing on, which mostly comes down to pricing and it's just a race to th…”

“Features that directly Enabled the end users of the open source product. We believe should ideally remain open source or be open source.”

“So about two years in, we realized that there must be a SaaS offering because at that time, the whole industry was in the middle of this transition from on-prem environments to the public cloud.”

“Sales was just a whole different, you know, dynamic. It was The most difficult one to solve for because in the early days, you know, if you're offering a software product, you have the traditional salespeople who are used to selling a subscription-based softwa…”

“We actually decided to not split it. And that was because we ultimately wanted to transition to a cloud first business. So we put in a, instead a lot of thought and a lot of investment in sales enablement you know, internal education of why this is important, …”

“And today, our cloud business is growing and is, you know, almost larger than the software business as well.”

“So we introduced value-added offerings like stream processing, KSQL, under licenses that were similar, very similar in spirit to the open source friendly Apache two dot O, but these licenses had specific provisions that prevented other entities from just offer…”

“We kept the foundational teams the same. So there was only one team ever working on Apache Kafka and the foundation. There was only one team that was ever developing a specific proprietary feature set. So we never split, you know, specific teams or individual …”

“Would it have just been feasible if we started with a SaaS only offering? And the answer is probably not because, you know, one of the most important things an open source company needs to do is quickly establish yourself as the market leader, quickly establis…”

“At Confluent, we could lean on the brand of a very popular Open source projects, so the zero to one branding phase was actually really easy. With Ocelor, you're, you know, humbled that you're starting with something that people don't really know about.”

“I specifically chose a company that would be entirely different. You know, the reasons are like, A, one is just simplicity. You know, you kind of have the experience you've had already balancing building a software business and a SaaS business and trying to ba…”

“We spent a lot of time focusing on convincing the company that they didn't need a team managing Kafka or their team could be much smaller. Effectively, you're dealing with a, you know, target customer base that just wants to do it themselves, right? So the DIY…”

“And back then I remember that the CPO of MongoDB and today Atlas, their product is the most successful cloud product out there, arguably.”

“And proactively reached out to the CPO there and regularly had conversations, hired him as an advisor at Confluent and was very helpful in avoiding some of the problems that they ran into and learning from the experience that they were, they had because they w…”

“And again, I think many organizations think of this as kind of a pricing model change or a billing model change, but we have learned and I have learned over the years, it's actually so much more than that. It really takes a cultural change and kind of a mindse…”

“In our case, we've actually, we have a hybrid model. We maintain a subscription model and we have consumption elements.”

“His first deal was Confluent. Series A. Seven million at a 24 post. The company's trading at a 7.6 billion dollar market cap today.”

“Last year we participated, we anchored direct lists like Roblox, we anchored IPOs like Confluent, we anchored our own IPO like Grab by way of SPAC.”

“I actually mentioned that Salesforce, I think, will get in our space some way, somehow, and I think I'm fluent. We'll also step into the observability space. I think also Snowflake will get there because it's just that makes no sense for companies that control…”

“So Confluent which is the company behind Kafka which is like the real-time sort of message bus, like move, move data around in real-time had a wonderful IPO. They just checked today. There are like seventeen billion market cap.”