20VC: MongoDB CEO, Dev Ittycheria on Why Sometimes You Have To Be Inefficient To Be Effective, The 2 Different Types of Decisions and How Great Leaders Respond To Each & Why Value To Overhead Ratio Is The Metric To Use When Selecting Investors

Dev Ittycheria is the President and CEO @ MongoDB, recognized as the world's most popular next-generation database and the first database company to go public in over 26 years. Prior to their IPO, MongoDB raised from some of the best in the business including Sequoia, USV and NEA to name a few. As for Dev, before Mongo Dev was Managing Director at OpenView Venture Partners, Venture Partner at Greylock Partners, and CEO/Co-founder of BladeLogic, which was acquired by BMC for $900 million. Dev has also sat on some incredible boards including AppDynamics, athenahealth and BazaarVoice. In Today’s Episode You Will Learn: 1.) How Dev made his way into the world of startups? How Dev made his entry into the world of venture? How that led to his joining Mongo as CEO? 2.) How has Dev seen his style of leadership change over the last few years? What are the 3 core benefits of being vulnerable with your investors? Why does Dev believe you sometimes have to be inefficient to be effective? What element/trait would Dev like to improve and develop as a leader? 3.) Where does Dev believe the majority of leaders make mistakes when it comes to scaling their teams and orgs? How does Dev think about the debate of whether to promote internally or hire externally for a role? Why does Dev believe the asymmetry of information there is dangerous? 4.) What has been Dev's biggest lessons when it comes to the speed that information is relayed within orgs? How does this differ between good news and bad news? What can leaders do to create environments where bad news is shared freely? Where do many go wrong here? 5.) How does Dev advise founders on the criteria they should use to determine which investors to work with? What has been so impressive to Dev about working with Sequoia? How would Dev describe Roelof Botha's style of board membership? How can investors crucially build trust with their CEOs? Items Mentioned In Today’s Show: Dev’s Fave Book: High Output Management As always you can follow Harry and The Twenty Minute VC on Twitter here!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is the 20 Minute VC with me, Harry Stebbings, and I've long admired the company we're featuring today. They've category created in such a smart way. They've become a poster child for the New York tech ecosystem and just so much respect for their leadership. And so it's a huge honour today to welcome Dev Itty Turea to the hot seat today. Now, Dev is the President and CEO of MongoDB, recognised as the world's most popular next generation database and the first database company to go public in over 26 years. Prior to their IPO, MongoDB raised from some of the best in the business, including Sequoia, USV and NEA, to name a few. As for Dev, before MongoDB, he was Managing Director at OpenView Venture Partners. He was also a venture partner at Greylock Partners. And before that was CEO and co-founder of Blade Logic, which was acquired by BMC for $900 million.

• 0:42Harry Stebbings?

  Dev's also sat on some incredible boards, including AppDynamics, Athena Health and Bazaar Voice, to name a few. I'd also want to say a huge thank you to Roll Off at Sequoia and Chip at Flybridge for some fantastic question suggestions today. I really do so appreciate that. But before we move into the show today, digital hit a new gear in 2020 and companies need the tools that will allow them to flourish in our ever-changing world. That's where Amplitude comes in. Amplitude helps the top product and growth teams at companies like PayPal, Instacart, Peloton and Atlassian build product experiences that convert and retain customers. With their product intelligence platform, you and your team will better understand user behaviour, ship great product experiences faster and retain more customers.

• 1:23Harry Stebbings?

  And they've become the gold standard in analytics for teams asking what is happening in their digital products? Why users are converting and what to build next? See for yourself how companies like Twitter, DoorDash and Cisco build for growth using Amplitude. And visit amplitude.com/20vc and check this out. Discounted scholarship plans are available for qualifying startups. That's amplitude.com/20vc. And speaking of incredible products there, Harness is a truly modern digital wealth platform that leverages technology and best-in-class advisory firms to give you access to the best experienced human advice to maximise your finances. Harness helps tech employees and investors find the best solutions for their finances, from navigating stock sales to receiving partnership K1s.

• 2:07Harry Stebbings?

  And they have the best advisors in the US. They know this because they diligence them through over a hundred and twenty different attributes per advisor, meaning the process is both seamless and free. And don't take my word for it. They've helped founders and early employees from companies like Stripe, Facebook and Plaid, and partners at VC firms like Coaster and General Catalyst. Go to harnesswealth.com forward slash the twenty minute VC to sign up. Plus twenty minute VC listeners can receive a hundred dollars off their first year fees when they sign up for an advisor on the Harness platform by entering the twenty minute VC all in letters and then zero eight at the end. That's the twenty minute VC all in letters, zero eight. And finally, I have to take a moment to mention HelloSign, a great example of a company that found incredible success in building a product focused on user experience.

• 2:51Harry Stebbings?

  HelloSign is the effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. And they raised a total of sixteen million dollars in funding and recently got acquired by Dropbox for an impressive two hundred and thirty million dollars. Check out hellosign.com forward slash two zero VC to join the thousands of companies and founders who value fast, secure and simple e-signatures. But that's quite enough from me. So now I'm very excited to welcome Dev Itty Turiya, President and CEO at MongoDB.

• 3:27Speaker 01

  You have now arrived at your destination.

• 3:30Harry Stebbings?

  Dev, it's such a joy to do this. I've heard so many great things from Oliver at DD, from Roloff at Sequoia, from Chathen at Benchmark. So thank you so much for joining me today, Dev.

• 3:39Speaker 02

  Harik, it's nice to be here and thank you for having me.

• 3:41Harry Stebbings?

  Not at all, but I would love to kick off with a little bit on you. So tell me, how did you make your way into the world of startups and how did you come to found MongoDB?

• 3:49Speaker 02

  So a couple of things. I, being a good Indian boy, I could do anything I wanted to do as long as it was either being an engineer or a doctor. So I went to engineering school and when I left engineering school, I realized I had no interest in sitting behind a desk, solving technical problems. I really got interested between the intersection of technology and business. And so I took a job with AT&T where I got a rotational assignment. It was supposed to be kind of a leadership track where I got rotational assignments in a variety of different functions, marketing, product management. Program management and even sales. And the thing I actually really liked was actually the sales part. And my parents, my dad was engineer. They had a fairly pejorative perspective on sales. They thought salespeople were like used car salespeople.

• 4:34Speaker 02

  But what I really found was that I liked engaging with customers, like to understand what their problems were and how I could help solve their problems. And I started to appreciate sales more as I spent more and more time doing a variety of things. Because I saw in those days, in the early nineties, the large companies had enormous amount of account control with customers. And so even though if you had the best mousetrap, it was still not easy to win business. Because these companies had such good account control, they're take the senior execs to the Super Bowl and have all these events. And had such deep relationships at the corner office. That if you're this unknown company with a better product, it was still not easy.

• 5:12Speaker 02

  And what I realized was the only way I could solve that problem was to build a really, really compelling sales organization to go compete for business well. And my interest in startups started growing as I was in the comms space. I was working at AT&T and then I worked for a smaller telecom company. And that's when VCs were making big bets in the communications space. Because the people were building out the internet and broadband networking was in vogue. And I had met a bunch of VCs who asked me to meet with potential companies who were trying to sell to me. And a couple of them asked me to join the advisory board. And lo and behold, those companies got bought by people like Cisco and others. And obviously the founders did really well. And what struck me was that these founders were having a lot of fun, that obviously done well financially. And they didn't seem that much smarter than me.

• 5:56Speaker 02

  So I said like, what am I doing wrong? And that's when I got the bug to potentially do something of my own. And I started my first business in nineteen ninety eight, which was like a first generation cloud computing company called Aplica, which I then merged into Breakway.

• 6:09Harry Stebbings?

  I mean, I love that as an entry point. I do have to also, given the perspective that you said about kind of starting in nineteen ninety eight and seeing that really fascinating time. Because you obviously saw the boom and then the bust and then also saw the bust of two thousand and eight. How did that early exposure impact your operating mindset, do you think, when you look back with hindsight?

• 6:26Speaker 02

  It's kind of hard to believe for me to say this now, but literally that company I started in ninety eight merged with another company who went public in October of nineteen ninety nine. And by January of two thousand, we had a five billion dollar market cap. But that seemed candidly at that time, normal. And what I realized, though, was that when we went public, this felt like the victory dance. We had declared victory, we created enormous value and all was well. But then I woke up the next morning and realized, oh, my God, we have a whole new shareholder base whose cost basis is so much higher now because they bought into the IPO. And they want to see value accrue from there. And I just realized operationally, culturally, and even fiscally, we weren't really ready to be a public company. Now, I wasn't CEO, but I was a section sixteen officer.

• 7:10Speaker 02

  And it just hit home to me that we were just not ready to be a public company. And that company, unfortunately, went belly up about eighteen months later as a function of the fact that seventy percent of our customers were dot coms. When their eventual capital dried up, it obviously impacted our business. Luckily, I didn't lose my shirt, I didn't spend my paper welt on anything crazy, but that experience was seared into me. So when I started my next company, Blade Logic, in two thousand and one, I was on a mission to prove, one, that I wasn't one of those bubble jerks who just got lucky. And two, that I was really motivated to build the business the right way and really focus on building an operationally sound business that was culturally set up to be a long and enduring company.

• 7:50Speaker 02

  And that when we did go public, we had all the fiscal attributes to be a very attractive asset to investors.

• 7:56Harry Stebbings?

  So you said that kind of waking up and knowing that you had a whole new investor base with a new cost base. A lot of founders I speak to feel this kind of weight of expectation or pressure when leading VCs like Sequoia invest in them. How would you advise them in terms of managing and dealing with that weight of expectation?

• 8:11Speaker 02

  Well, one, if Sequoia's investing in your company, you should take that as a source of pride because Sequoia doesn't invest in many companies. And they really, if you look at their track record, have done an incredibly good job of investing the best of the best companies. So, one, I think the something you said about getting money from Sequoia. Two, I would say clearly they see something in your business and in you to invest in you. And so now that it invested, they're literally working with you. And I would say this not just about Sequoia, but any top tier venture firm where they're now really working with you to build a great business. One of the things I encourage first time CEOs is to really treat investors as partners. Many times I see CEOs trying to portray that everything is working well, everything's perfect.

• 8:53Speaker 02

  Because a lot of them suffer from imposter syndrome and they struggle to be vulnerable because they struggle to talk about like issues perhaps with a co-founder. Maybe have issues with their big customer that they're trying to close. Maybe there's some issues around the product, that things are not going well. And candidly, I would tell them that same process myself, but I've learned over time that vulnerability is not a weakness, but a strength. And any seasoned investor, if they hear that things are going perfectly well, will either worry, one, that you don't know what you don't know, or two, that you're lying to them. Either case, both things are bad. And so I encourage CEOs to share bad news quickly. So with my board, I share bad news very, very early and it does a couple of things.

• 9:35Speaker 02

  One, they then trust me because I'm not trying to hide information. And two, now they're really motivated to help me actually solve all those problems. And so that's been really effective for me in terms of building a strong relationship with my investors and I encourage other CEOs to do the same.

• 9:51Harry Stebbings?

  It's incredible to hear about that kind of strength through vulnerability there. And I think it comes through kind of maturity and experience. And I guess it takes me to a big question for me, which is like, when you look at your role as CEO today and how you approach it. How have you seen your style of leadership change over the last decade?

• 10:04Speaker 02

  Yeah, I would say that that's one of them. Like I've learned that vulnerability is a strength, not a weakness. And that's really played well, not just with the board, but also with my own management team and people in the company. Because it's okay to be the village idiot in the meeting when you say, you know, I just don't understand this. And when I say something like that, because I generally don't understand something, I can see people's faces, they relax because they probably were struggling with what the presenter was presenting or what decision we're trying to make. And informality breeds more candor. And so the temperature in the room goes down and you have more authentic conversations. And so that's been something that has really been seared into me. The second thing I've learned over time is that good news will find me anywhere. I could be literally on an island in Timbuktu and I'll get a call.

• 10:46Speaker 02

  Or a message saying, hey, we closed that deal, we hired that rock star engineer, the product got shipped on time, et cetera. They'll find me no matter where I am. But bad news, bad news travels very slowly, especially up the organization. And it's far worse than what people are telling you. So whenever I see bad news or hear about bad news, I assume two things. One, I'm the last to know, and two, it's far worse than what people are telling me. Imagine a situation where you're having a customer and things are going badly with that customer. The sales team and all the people working on that customer are saying, oh, my God, this is a effing disaster. Meanwhile, by the time that information comes to me, someone will say, hey, Dave, just FYI, we're having a little issue with this customer,

• 11:27Speaker 02

  but we're on top of it. And so what happens is that the more senior in the organization, the more inoculated you get from bad news. Because that filtration process basically dulls all the sharp edges of the information, and it also delays how quickly that information gets to you. And so that creates two issues. One, you don't think things are that bad. And two, the time between identifying a problem and solving the problem is actually elongated. So you, as a leader, have to create a culture where bad news is shared very, very quickly, that people can be comfortable sharing bad news. Because once you have that news, it's actually actionable. And because it's actionable, it actually engenders trust with the people who work for you, because then you're actually motivated to go solve that problem.

• 12:06Harry Stebbings?

  I mean, there are two really important things for me to pick up on there. In terms of kind of creating that culture, which really allows for that bad news to be spread, is there anything that you think works in terms of creating that really kind of environment of trust and security for employees and for colleagues to share the bad news freely?

• 12:22Speaker 02

  One, as a leader, you have to embrace bad news. You have to thank people for giving you the information straight. You have to recognize those people because the tone is set at the top. And if you are someone who doesn't like hearing bad news or basically shoots the messenger, then guess what? You're not going to get information given to you straight, and it's not going to make you a very good leader. So it's all about how you recognize reward people who are quick to share bad news and obviously who are motivated to do the right thing. And so I believe incentives drives behavior. So you have to try to create the right incentive system for people to share bad news quickly and obviously, and then to take action.

• 12:58Harry Stebbings?

  In terms of the taking action, I always think of two different schools of thought and it just makes me a little bit confused. There's one, like the speed of decision making is so important and it's kind of a good decision made today is better than the perfect one tomorrow. But then on the flip side, there's the you have to pause, ingest the data, think rationally, and then strategize on the next steps. How do you think about and advise on which one to err on the side of?

• 13:20Speaker 02

  Actually, Jeff Bezos has spoken about this topic and he describes two types of decisions. One is type one decisions that in some ways are irrevocable. So you have to spend a lot of time. So potentially as a VC, making an investment in the company, you know, if you decide the next day after you wire the money, oh my God, I made a mistake. Well, guess what? You can't call them back and say, can I get my money back? Conversely, there's type two decisions where you don't need perfect data to make a decision. You just need good enough data and with some good judgment, you can make a decision. And the value there is to actually make a decision quickly because if you realize you made a bad decision, then you can just quickly correct that decision. So it really depends on whether it's a type one decision versus a type two decision. And so if it's a type one decision, you really have to spend the time and do the research and do your homework and make

• 14:05Speaker 02

  sure you have as good information as possible to make the right decision. And in type two decisions, you probably get to about 70% of the data you need and then you can act and obviously recognizing that you can fix that decision if it turns out to be a wrong one.

• 14:18Harry Stebbings?

  Yeah, absolutely. In terms of kind of the two different decision making types. In terms of kind of the self-reflection and hindsight, when you look at those changes in terms of how you operate as a leader, are there elements today where you'd like to improve or amend your leadership style?

• 14:31Speaker 02

  I would say one of the things I struggle with is patience. I'm not, if you talk to some people, I'm not the most patient person. It served me well in many cases because one of my strengths is to create a sense of urgency around a particular issue. But there's times when I do think that being a little more patient and recognizing that sometimes you have to be inefficient to be effective is an important attribute. And that's something I constantly need to work on. That the best answer is not the shortest path between point A and point B. It's making sure that you really, for example, get your team to buy in. And then once they have conviction about something, even though they may take long to get there, then you actually have served the business better by getting broader buy-in on a particular decision versus forcing everyone to kind of buy into a decision when

• 15:15Speaker 02

  you've not really convinced them that that's the right thing to do. So understanding that being inefficient to be effective is a thing that I always need to kind of work on.

• 15:23Harry Stebbings?

  You mentioned the team there and kind of communicating that throughout the organisation. I do want to kind of hone in on the team a little bit because MongoDB has obviously scaled so incredibly well over the last few years. And a lot of people say that with company scaling, people are destined for certain stages. Would you agree with that? And what have been your learnings here on the plasticity of people to scale with the company?

• 15:42Speaker 02

  Yes, one of the attributes I think of is really important for leaders who can scale is that they're students of the game and not the master of the game. And what I mean by that is that you have to have the attitude that you don't have all the answers, that you have to listen well, you have to ask good questions, you have to be incredibly curious and through that process you can be, continue to grow as a leader. The leaders I see who fail are the ones who think they have all the answers, are not good listeners. And once you think you're the master of the game, it's pretty much over. And what they'll tend to do is cut and paste from their last experience. But every company has a unique circumstance, different types of customers, different competitive environment, different buying behaviour, different financing requirements, et cetera.

• 16:26Speaker 02

  And so just trying to cut and paste what you learned from the past to your current company is a recipe for disaster. So the best leaders are really embrace being a student of the game, not a master of the game. And I think that's something for leaders to scale. And frankly, in my experience, I started Laid Logic, a software company. I had never actually led a software company, let alone actually worked at a software company. So I took the approach of, you know what, I need to go talk to people who build great software businesses to learn from them. And then with MongoDB, I never was a database expert by any stretch of the imagination. So when I joined MongoDB as a CEO, I spent a lot of time trying to understand not just the database industry, but also just open source in general in terms of how we can actually build a real business.

• 17:08Speaker 02

  Because there were very few examples of successful open source companies. And I think being a student of the game, not the master of the game, really helped me with both endeavours.

• 17:16Harry Stebbings?

  I love that being a student of the game. I mean, you were a VC, I am a VC. I think it's the hardest thing with venture where it's like you see a healthcare company and you go, ah, selling into healthcare, I hate it. I've done it before. Two port photo companies went bust, not for me. How do you really kind of have this mental plasticity to approach every situation with that fresh perspective and not rely on past data points, which really it kind of present the wrong outcome to you in a potentially new situation? How do you have that renewed perspective and how do you create that?

• 17:45Speaker 02

  Well, I have some guiding principles. One of them is I believe strong in product market fit. So for example, one of the things that got me very interested in MongoDB because when I was a VC, I was looking at the next generation database market. This was in the early part of this past decade when a lot of companies were getting funded and there was a belief that given the way explosion of data and how applications were built, that they needed to be a better mousetrap. And I looked at a couple of competing investments to MongoDB and when I did my diligence, it was clear that MongoDB was way ahead of the competition in terms of like, you know, developer mind share and even commercial traction. So I ended up passing those investments. So when I got the call from MongoDB, I was intrigued enough to take a meeting and met with the founders and the board members.

• 18:26Speaker 02

  And when I started doing some diligence, what became clear to me was that while the company had great product market fit, there were a lot of things that were broken inside the company. It's go to market was broken and frankly, the leadership team, there were a lot of people who I probably just didn't think were a good fit. And so you could say that, you know, that could be a scary thing to join a company when there's all these things that are not working. But what gave me conviction about MongoDB was that you never bet against a product that people love. And one thing was clear that even with all its issues, there were tons of developers who loved MongoDB. And so that to me was one was, you know, a starting point. The second thing that was also helpful for me to understand was the nature of MongoDB's licensing model.

• 19:06Speaker 02

  And one of the challenges open source companies have had is that other companies have stripped mine their IP and built businesses without having to give anything back. And so the open source companies have struggled to really build a viable, endurable commercial business. MongoDB did not have that problem. We actually had a very, I would say, while the open source license at the time had a more restricted license that Allowed us to leverage all the benefits of open source, like the virality in the community and so forth, but still build a real software business. And the third thing that I really focused on was really building a great go-to-market organization. And this comes back to my early experience of the fact that when you marry a great product with a great go-to-market execution, that's when magic happens.

• 19:48Speaker 02

  And so we spent a lot of time building a truly world-class go-to-market organization. Today, it's actually quite sophisticated and complex because we have multiple modes of how we go to market. That has paid massive dividends for the company because that's enabled us to really deliver outstanding results consistently year over year.

• 20:04Harry Stebbings?

  I'm so intrigued. You said that about the licensing. I mean, I think the biggest shift that I've seen with open source is just every provider really trying to move their clients off their own, you know, AWS or whatever, onto managed services. Do you think the kind of prior model won't work for open source companies where they don't manage the services and they don't have the higher margins as a result? How do you think about that transition to the requirement to be managed services for their clients?

• 20:26Speaker 02

  I think it starts with the customer. I think the customers typically today want to consume infrastructure as a service. Customers realize that with the complexity of applications, the work in terms of managing and maintaining the infrastructure is getting more and more complex. But that's really undifferentiated work. It's not really going to create a competitive advantage for that company to build competency around that area. What's really going to build a competitive advantage for them is building world-class software products or leveraging software and data in unique and innovative ways to drive their business. So what companies are realizing is why am I spending all this time investing in maintaining and managing my infrastructure versus like focusing on what really matters? So that's why there's this push to use services or especially cloud services as a way to consume technology.

• 21:11Speaker 02

  Then I think for open source companies, if that's the case, then the question is like, why would a customer choose to use you directly versus, say, a third-party cloud provider? And I think for us, we were the originators of the code. There was no prior art model to DB. Two, we built a truly world-class managed cloud service through Atlas. And three, we believe that it was important to support the three major cloud providers, not just run on one particular cloud, but we support. Amazon, Google and Azure. So by virtue, we are the most widely available cloud service. And so because of that, our business has grown very, very quickly. Literally from standing start, that business was started in two thousand and sixteen. Now is north of a two hundred million dollar run rate business. And it's really helped fuel our growth.

• 21:54Speaker 02

  And so I think those factors were why we really focused on building a service around MongoDB. I've seen some other open source companies who've kind of worried about cannibalizing the core software business and kind of been cheapest about building a service. Some open source companies do not have as restrictive licensing model as we do. And so the cloud providers have stripped mine their IP. So now they're in essence, they're competing with the cloud providers directly. So I think there's other challenges that other companies had. We were really, really committed to building a cloud business and that ultimately is our future.

• 22:27Harry Stebbings?

  I mean, amazing to hear about the revenue growth there. I do want to take it back to the team because the big question always for me, Dev, is when you have that incredible scaling, like you mentioned, sometimes people scale, sometimes people don't. How do you think about internal upleveling versus bringing in externals? And is there a right way to think about layering and doing it the right way?

• 22:46Speaker 02

  One of the classic mistakes I see a lot of people make is when they're assessing an internal candidate versus an external candidate. And the biggest mistake they make is they don't fully appreciate the asymmetry of data that they have between the internal candidate and the external candidate. And here's what I mean. That internal candidate you work with for a number of years, you know what they're really good at. But you also know that some areas maybe that they're not so strong in. But you have a very nuanced and more complete view of that person. Whereas that person who shows up for the job interview with a sterling resume, looks good on paper, says all the right things in the interview, dazzles you with their charm and personality. All of a sudden, you're like, wow, this person is really, really strong. But the challenge is that you have very little data about that person.

• 23:26Speaker 02

  Even if you do reference checks and other things, you still have far less information about that person than the internal candidate. And the mistake I see a lot of people making is that they quickly gravitate to that external candidate because they look so good. But then literally six or twelve months later, they realize, you know what? This person also is nuanced. There's some things they're good at and some things they're not good at. And oh, by the way. They may not actually have been better than that internal candidate. And all of a sudden, now you've demotivated the internal candidate and potentially lost that person because that person decided to leave and go somewhere else. Now, I'm not suggesting that you only promote from within, but my point is that just make sure you understand the asymmetry of information they have between the two candidates you're looking at.

• 24:05Speaker 02

  In terms of assessing candidate scale, a big signal for me is the quality of the organization they're building. I believe the quality of an organization is directly correlated to the quality of its leadership. And so when I see leaders struggling, I can usually tell that by people and their team getting frustrated, potentially leaving, and their inability to continue to attract great people. That, to me, is a telltale sign that that leader is struggling. And so obviously, you need to start digging and understanding why, but that's something that I looked at. And when I joined Maong V B, one of the first things I did to assess the leadership that I was inheriting was really to assess the quality of the teams that they had built. And that helped me really prioritize where I needed to spend my time.

• 24:49Speaker 02

  And so that, to me, is one of the best signals you can ever have in terms of assessing can someone scale.

• 24:55Harry Stebbings?

  Karen, if you do decide that the external is more suitable for the position and you do engage in that process of bringing them in, is there a right way to do it without disincentivizing or discouraging the existing team or person within the team that wanted that role?

• 25:09Speaker 02

  Sure. I mean, obviously, it's important to communicate why that person didn't get the job. What was it about their skills or experiences or lack thereof that didn't make them suitable for taking that next bigger role? And I think it's very, very important to be honest and straight with people. And also, not just give them the feedback, but commit to working with them so that when other opportunities occur later and in a company that's growing quickly, there'll always be more opportunities that you're committed on making them and working with them and developing them to get a bigger leadership role. So to me, it just starts with basic communications and authentic feedback. And the feedback comes back in two dimensions. And as I said, there's really two reasons why people fail.

• 25:49Speaker 02

  One is either they have the skills to do the job, or they don't have the will or the motivation to do the job. And so when you give P. People feedback, you need to get feedback on those two dimensions. What is it that they're doing that is limiting their ability to go next level? Now, what skill gaps do they have, et cetera? Or what is it about their passion and energy level or work ethic that's missing for them to be ready? And I think when you break it down that way, it becomes much easier for someone to internalize in terms of what they need to work on.

• 26:18Harry Stebbings?

  Yeah, absolutely. In terms of that kind of skill gap and kind of really communicating that feedback. I guess part of bringing a great team together, the investors can help with that. And a lot of investors do claim to help with hiring. I spoke to Chip at Flybridge and Rodoff at Sequoia before. And I'm intrigued to ask, you were a VC before, so you have the hindsight and the kind of knowledge on both sides of the table. What did you look for in your investors when you were selecting them?

• 26:39Speaker 02

  First, obviously is money. So assuming that you have more than one investor giving you money, then the question is like, what else do they bring to the table? To me, depending on the stage of company you are, especially the early stage, one of the biggest things you're trying to race to is credibility. And is raising money from a tier one investor going to really help you with credibility with potential recruits? Credibility with potential partners and obviously credibility with obviously potential customers. And so that's another key criteria. The third thing is what is the conviction of that investor around your business? And that's evidenced by how much homework have they done? Have they spoken to customers? Have they spoken to the competition? And do they have real conviction and support to understand why about your business?

• 27:23Speaker 02

  Because every business is going to hit some problem or some speed bump. Every business is going to go through some challenging times. And the investors who have really done their diligence, who have really done their homework, will maintain that conviction even through those difficult times. It's those investors who've done drive by diligence, just wanting to be part of a party round. They're the ones who are going to panic when something goes wrong because they just don't have that inner conviction about your business. So my advice to any entrepreneur or founder is really, really make sure that your prospective investors have done their homework. And then the last thing I would say is like, what value add can they bring? A lot of investors say, well, I have this portfolio of companies you can talk to and maybe they'll become customers. That never works because no company is going to buy from you.

• 28:06Speaker 02

  Because there's some interconnection between a common investor. Sometimes they'll say, well, we have this roster, this huge network of people that we can leverage. And there may be some truth to that, but you have to really judge like how valuable is that network to you and to your business? And so you really have to get to the heart of like, what else do they bring? I've been fortunate enough to work with some great investors. One of the things that's impressed me, for example, with Roloff and Sequoia is that Sequoia was always, if not the largest, always one of the largest investors in the company. I've found in many other companies, the largest investor always feels like they have the bully pulpit. They talk the most and they dominate the board conversations. Roloff was very different. He spoke very little. He listened very hard.

• 28:46Speaker 02

  And when he spoke, he had some very insightful comments, whether it was asking me or the management team to think about things differently. Whether asking me or the management team to consider alternative options that are based on some decision we were contemplating. And really to reframe potential issues or problems differently is to kind of open our eyes to other points of view. And I found that really, really helpful. And to me, the real test of an investor and a board member is what I call the value to overhead ratio. Adding new investors and board members creates more overhead for the CEO. So why is that overhead worth it? Well, what's the value that they're providing?

• 29:24Speaker 02

  And that feedback, that insight, the credibility, the other benefits that that investor can provide all have to be assessed in terms of choosing a potential partner.

• 29:34Harry Stebbings?

  I'm so pleased you said that about kind of Roloff's impact on the board because I spoke about it before with Roloff before the show. I think a big question for me, honestly, Dad, would be, I've just gained my first few board seats over the last kind of eighteen months. And the question I have for you is, what advice would you give to me, having just joined my first few boards over the last eighteen months? And what would you advise me, given the experience on both sides of the table?

• 29:53Speaker 02

  Again, I would, I would be the student of the game and not the master. And the first way to be a student of the game is really trying to understand, you know, how you can be helpful. Learn from other great board members and investors of how they were really helpful to their companies. And you have to remember, you know, being a founder and CEO is a very, very lonely job. Because everyone, you know, they speak to you, has some agenda, not necessarily malicious agenda, but they have some agenda. And so it's very hard to get unvarnished feedback where someone's own incentives are not kind of being influencing the feedback that that person is getting. The more you can give unvarnished feedback, that not is all about you, but it's about helping them, the more you can build credibility with them in terms of them viewing you as a partner.

• 30:36Speaker 02

  And to me, one of the most precious commodities out there is trust. And so the more you can build a trusted relationship with that founder by being there for them, helping them around big problems, bringing new ideas that they may not have contemplated, but also recognizing that they're the ones in charge around the company and you're just there to help is incredibly important.

• 30:55Harry Stebbings?

  I totally agree in terms of creating that relationship of trust. I think there's one element that I just have to touch on before we move into the quickfire. And you mentioned it earlier, which is the incredible go-to-market you've built out. Because I suppose you rolled off about this before the show. And he said, it's incredible to see just how horizontal it is today with everything from self-service to inside corporate sales. How do you manage such a horizontal go-to-market? And have there been some big learnings for you on what it takes to make this real perspective successful?

• 31:22Speaker 02

  Yeah, actually, we have four different ways to go to market. We have an enterprise sales organization that goes after the largest customers. We have a corporate inside sales team focused on the SMB space. We have a self-serve business trying to monetize a long tail. And we have a partner organization that helps leverage partners to find and accelerate deal flow. So I would say that candidly, because we're going after such a big market, we realized that we just couldn't use one motion. Because obviously, hiring an expensive sales rep in the field would make no sense to go after a smaller customer where the deal sizes are correspondingly smaller. And moreover, hiring an inside sales team to go sell to a large bank who has a very

• 32:03Speaker 02

  complicated decision process, lots of internal competition in terms of legacy and new technology contemplating, you need someone who can navigate a complex decision-making process to figure out how to close a deal. And so we just realized that we had to build out these different go-to-market channels. And then the self-serve business is interesting because when we introduced Atlas, we realized that developers, frankly, just Wanted a frictionless way to engage with MongoDB without even talk to anyone. And we want to make that happen. And what's interesting now is that self-serve channels creating an amazing flywheel effect for our sales. Because now three out of four leads to our inside sales team is coming from a self-serve channel. And in many cases, sometimes developers in large accounts with a large bank or a large telecom company, et cetera.

• 32:48Speaker 02

  Want to potentially play with MongoDB through Atlas as a precursor to a big project. And so these channels are actually working as a flywheel effect. The key to making it happen is having a sales leadership team that really understands what they're doing. As well as a marketing and a growth team that knows how to like build a self-serve business. And making sure that they all need to work together for this to really work. This can't be people competing with each other or fighting with each other for resources. That people really need to understand that all these parts need to work well together to build a durable business.

• 33:19Harry Stebbings?

  That's incredible to hear about the three to four leads now coming from that kind of self-serve bottoms-up adoption method. I do want to move into my favorite though, which is the quick five apps. So I say a short statement and then you give me your immediate thoughts. Does that sound okay?

• 33:31Speaker 02

  Okay.

• 33:32Harry Stebbings?

  So sixty seconds per one, favorite book and why?

• 33:35Speaker 02

  Andy Gero's High Output Management. To me, that's a seminal book on management. And he's the one who breaks down, there's only two reasons why people fail. A lack of skill or a lack of motivation.

• 33:46Harry Stebbings?

  What's been the biggest challenge in scaling MongoDB?

• 33:49Speaker 02

  People. To me, I view the CRO as the de facto head of HR. While I'm responsible for strategy, I'm responsible for making sure the company is well resourced. At the end of the day, eighty percent of my issues are all around people. Who's rising, who's going sideways and who's going backwards? And I spend majority of my time talking through people issues to drive the business forward.

• 34:10Harry Stebbings?

  Are VCs biased against New York tech and why?

• 34:13Speaker 02

  I think they used to be. I think that's changing fairly quickly. Canley, when I was at Greylock, there was a bias against investing in East Coast companies. Because there was a perception that the best companies were on the West Coast. And for many cases, that was true. What's changed, I think, is one, that I think there's great talent everywhere. And the access to capital has now become much more freely available, not just in the East Coast, but frankly, in many other parts of the world. And what I've I'm finding is that one of the advantages of being in New York is one, I can walk out the door, out of my office, whenever I get back to my office, and basically see customers, you know, almost on every corner block. Two, when I travel to Europe, it's like traveling through the West Coast, so it's not that long of a plane trip. It's also fairly easy to get to the Middle East and other parts of EMEA.

• 34:58Speaker 02

  And then going to Asia, frankly, is not that much longer, a plane ride than, say, flying from California. The other thing about California is that I just find that the cost structure in California has got to such a point that it's very hard to build a business. Because when you map the money flows, you can basically see the money flowing from LPs to landlords. Because you have to pay new grads so much more because the cost of living is so much higher in California. And I'm not suggesting New York is cheap, but it's definitely cheaper when you think about all the options in the suburbs and the outer boroughs for new employees to find a good place to live. So I'm really excited about the East Coast, especially New York City.

• 35:33Harry Stebbings?

  Who's been your biggest mentor and what have been some big takeaways for you from that relationship?

• 35:37Speaker 02

  I would say my, one of my most seminal mentors was a gentleman named Steve Walensky, who was the chairman of my board at Blade Logic. As I said, I started Blade Logic never having, you know, let alone run a software company, but even worked at a software company. So Steve was incredibly helpful. He had built a company called PTC. And he helped influence my philosophy around marrying great product with great execution. The PTC sales force is truly legendary in terms of the sales organization they've built. Many people at MongoDB have PTC roots. John McMahon, who's on our board, is probably the only person on the planet who's been the head of sales of five different public software companies. And worked with me at two of them. And he's been a great partner and a great board member and someone who's insight and I really value.

• 36:21Speaker 02

  And Steve was really the grandfather of all that. And his influence on me and what it takes to be a great CEO was something that I can never repay back.

• 36:29Harry Stebbings?

  What would you most like to change about the world of tech and venture?

• 36:31Speaker 02

  The challenge I had raising money the first time, it took me three years to launch my first company. Obviously, I had no track record. I graduated from state schools. I didn't have like this kind of A plus pedigree. And what I would say was that there was a certain bias against me because I didn't have quote unquote all the right credentials. I would just say that I believe that there's still some bias today. I mean, today, now if I want to raise capital, I can probably raise it in a nanosecond because I've made a lot of people a lot of money. But I think there's still some systemic bias in the system about enabling women founders, enabling people of color to build great businesses. And I would encourage, and I think the tech community is doing a lot to change that, but I think there's more to be done.

• 37:12Harry Stebbings?

  Yeah, absolutely. Penultimate one, how has having kids impacted your operating mentality?

• 37:17Speaker 02

  You realize that you have to lead by influence and not by fiat. And I see that because obviously when my kids were smaller, you tell them what to do and you make it clear what they can and cannot do and what things are non-negotiable. As they get older, now I have two teenage boys, one who's in college and one who's in high school. You have to really lead by influence because they're not going to really resonate with you telling them what to do. You have to really influence them by explaining the why, you know, why it makes sense for them to do X, Y and Z. And also you have to develop a lot of patience because they may not always listen to you the first time. And they may feel like they're smarter than you. And I remember when I was a teenager, I thought I knew everything about everything. And so recognizing that you have to over communicate, you have to explain the why.

• 38:01Speaker 02

  And explain also not just what to do, but linking what their goals were. Where do they want to see themselves? And then working backwards and saying, what do they need to do today to position themselves to get to where they want? And if you can help connect that dots for them, then they can better internalize what they need to focus on now to get to their future goals later.

• 38:21Harry Stebbings?

  It's like having a whole new team, my word, it sounds exhausting. I do want to finish there with the final one is what do the next five years hold for you and for MongoDB? Can you paint that picture for us?

• 38:30Speaker 02

  Well, we're going after a very, very large market. The market is estimated to be about a hundred billion by 2023, and we have a little over half a percent share. And so if we even just get to five percent share, we become a massive company. So we believe that the market is there for us. We think the market is ripe for disruption. The world is changing very, very quickly. The incumbent technology has been around for forty years. This is a technology that was built and designed pre-cloud, pre-mobile and even pre-internet. We believe that we have a lot of evidence to show that people are really gravitating to MongoDB, given the large developer community that's really supportive of MongoDB. Now, we have over eighteen thousand customers of all shapes and sizes across almost every

• 39:12Speaker 02

  geography and vertical industry, using us for almost every conceivable use case. And we believe that what's happened in the cloud is that a lot of people obviously have leverage the cloud. There's lots of benefits to moving to the cloud. But in some ways, they basically replicated their own traditional data centers in the cloud with all these different data silos and different protocols to work with those different silos. And we believe that developers really want one API to have access to a platform that enables a wide variety of use cases. And we believe that, given our track record, given the approach and the way we make it very easy to work with data, that we're well positioned to get meaningful share in this market.

• 39:50Harry Stebbings?

  Dev, as I said, I had so many great things before the show, both from Chip and from Rolo. So I can't thank you enough for joining me today. And this has been such a pleasure to do.

• 39:58Speaker 02

  Thank you, Harry. It's great to be here.

• 40:02Harry Stebbings?

  I have to say, I think that was one of my favorite CEO shows that we've done before. I think it was incredible hearing him talk about the flow of bad news back up the organization and kind of how slow it is to do so. And then also the asymmetry of information when it comes to new hires versus existing hires. So I thought that was incredible. If you'd like to see more from us behind the scenes, you can on Instagram at H Stabbings nineteen ninety six with two Bs. I always love to see you there. However, before we leave you today, digital hit a new gear in 2020, and companies need the tools that will allow them to flourish in our ever-changing world. That's where Amplitude comes in. Amplitude helps the top product and Teams at companies like PayPal, Instacart, Peloton and Atlassian build product experiences that convert and retain customers. With their product intelligence platform, you and your team will better understand user

• 40:45Harry Stebbings?

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• 42:10Harry Stebbings?

  And finally, I have to take a moment to mention HelloSign, a great example of a company that found incredible success in building a product focused on user experience. HelloSign is the effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. And they raised a total of $16 million in funding and recently got acquired by Dropbox for an impressive $230 million. Check out hellosign.com/20vc to join the thousands of companies and founders who value fast, secure and simple e-signatures. As always, I so appreciate all your support and I can't wait to bring you another fantastic episode this coming Friday.