Monetizing Open Source with Peer Richelsen (Cal.com)

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You see this landing page of an open source library and it says used by Facebook, Netflix, Amazon, right, and then you scroll down and you see donations by Steve and Anna and you're like what?
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Like how is Steve and Anna donating and Facebook and Amazon and Meta and everyone's using this for free and no one donates back To me.
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That's the opposite of of the strategy of open source.
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It's almost like a social welfare system where the top one percent of customers should pay for the bottom 99 and if you can figure out a way to do that, now you have a free product.
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People love it, they start using it, they share it with others, they share it with enterprise companies, enterprise companies keep paying.
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Free product gets better and as long as you can get this cycle going, you're always in a better shape than trying to monetize the bottom 99%, which is really hard.
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Welcome everyone.
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This is Ariel Camus, and you are listening to the Only Thing that Matters the podcast where I interview successful founders to deconstruct their path to product market fit and uncover the principles and frameworks behind their success.
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My guest today is Peer Richelsen, the co-founder and CEO of Cal.
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com.
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Peer has raised over $30 million from Cal.
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com and has built an open-source scheduling platform for individuals, teams and builders, offering a more flexible solution than traditional calendar tools.
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In this episode, we dive into the key strategies for building and monetizing a successful open source business leveraging a community of eager contributors to achieve product market fit, embracing the open startup movement.
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And the principles of building and managing a distributed global team.
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We also discussed his strong opinions on offering global salaries.
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I hope you enjoy this conversation a lot With all of Peer Richelsen .
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Hello Peer, it's so good to have you here.
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Thank you so much for joining us today.
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We got to know each other, like during the COVID times, supporting each other through those, you know, difficult moments of adapting our work, our companies, our way of approaching work, and a lot has changed since then and I look forward to catching up with you today on everything that has happened with you as an entrepreneur and your company, happened with you as an entrepreneur and your company.
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Um, let's start with that, like, can you give me a little bit of?
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Uh, yeah, what is cal?
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Um, if you, when you explain it to people, how do you explain what it is?
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yeah, yeah, first off.
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Uh, you were hosting office hours doing covet and everyone was like anxious as, and so you, you kind of like ease the pain, I guess, of COVID and pandemic, so thank you for that.
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Ariel was hosting founder meetups online, which is fun.
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What is Cal?
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I would say what Cal isn't.
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It's not a calendar, as may it sound like.
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We're not a cron alternative or Vim Cal or Amy, we don't do any calendar UI.
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I'm incredibly happy we're not doing that because I think it's there's so much micro interactions with a calendar and people think, oh, it's just a calendar, but like it is a very, very long and strong, like long roadmap to get to a point where people are like, okay, this is nice.
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So we only do the scheduling part and we do the scheduling for individuals, for teams and for builders.
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And we just recently launched the builders part where, if you want to build anything with Cal.
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com, you want to build a marketplace, you want to build a SaaS tool that has a scheduling component, a telehealth platform where users are booking users.
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It's very different to all the other scheduling tools that want to connect my calendar with my customers.
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So that's called Cal.
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com platform and that's a more developer focused tool where you get like a set of apis and front-end sdks and ui kits.
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So really we're doing both the consumer facing kind of scheduling tool where you as an individual sign up and it makes it super easy.
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The same way I joined your link to to book this podcast, um, so that's like one one part of our business.
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And then recently last uh, last monday we launched a developer focus one perfect and and it makes a lot of sense.
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I think the approach you took to launching first the b2c side, the consumer side, um, the way that I think about it, at least in the current product that I'm building, is it allows you to just have to satisfy one stakeholder and then, once that's incredibly good, then you can move to the B2B side of things, for example, and they're also more homogeneous, right Like, the type of customer reaching out that signs up for a consumer-facing product is a generic person who wants to do meetings right, it's very different than a developer who has 5, 10, 20 different ideas of where they want to build this in Like, the platform product has inbound from anywhere from, as I said, like, healthcare to hiring marketplaces or ADHD coaches or group violence sessions.
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Right Like it's such a different market.
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Each customer, each lead is such a different beast than reaching out to every founder to do their fundraising with Cal.
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com.
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Right, like, that's a little bit easier to start with in the beginning.
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Makes total sense and I'll ask the question that I know you're well prepared to answer, and it's how is this different from Calendly?
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Right, and I know that is probably part of the origin story of the company.
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I would love to hear how it is different and how did cal come to to be what it is today yeah, no, I mean hands down.
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I was a calendar user for many years, which is also why I'm still very, very much interested in this industry.
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I think it's very hard to just look at the market and start to do something that someone else does If you don't know the background, like the context right, like you need to become an industry expert.
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And when we met, I was building leanhirecom I don't know if you remember and that was a marketplace to connect remote, actually founders for initially founders only with remote companies, only with remote companies.
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And I always keep telling the story how I used Calendly as a scheduling infrastructure to make the meeting happen.
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Right, so very easy product you would.
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During the onboarding flow where you create your account, there was a string input that sounds like copy paste your Calendly link and then, if we find a company, we just forward that link to that company in the email.
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So very easy stuff, so very simple prototype.
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But as we got more traffic and more people, we realized that A, we don't see if a booking happens because it's a black box, right, you just send the link and they don't report it back.
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And second, people may not have a Calendly account.
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They copy it and paste it with a typo.
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They forgot to upgrade their account, so their link is a 404 and needs an upgrade.
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And others are just straight up not willing to pay for it or they don't want to use it, but they still want to use your product.
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And so after a while I was looking into the market and to me, having been in the industry for so many years, I know that open source solves that issue.
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Whenever you want something more custom that you can integrate into your product that's more sustainable and long-term and you can make changes and make you really feel like it's your product.
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I always look for open source projects and alternatives or repositories and I went on Google and asked for, like Calendly, open source, like that's literally it, and I was hoping to find a popular GitHub repository and just start cloning it and couldn't find it.
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And the same way, I couldn't find it.
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There was many posts on Happen News and Reddit of other entrepreneurs or developers asking the same question, right and so if you're an entrepreneur and you see other entrepreneurs struggling to find a solution that they really need, like these threads have like hundreds of messages like no, I don't know a solution, but let me know if you find one.
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Right, like if you find that type of product and you have that pain yourself, I think that's like basically a light beam shining on you telling you to like you should probably start looking into this direction.
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So I just started an open source repository, really with no intent to commercialize it.
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I still was running lean, higher as a business, um, and then eventually that github repository just gained more traction than the initial business how, how did, how did you validate or how did you decide that something that was an open source repository with no monetization behind it, with, I guess, uncertainty on well, to a certain extent, uncertainty on the willingness to pay?
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I guess there was some certainty because people were paying for it candidly and that's cool.
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But maybe the type of people looking for an open-source alternative had lower willingness to pay, not just need for more versatility.
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So what did you do to say, okay, let's check if this could be a business?
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Well, it's good if people reach out to you and ask you for like hey, how can I pay you?
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That's always a good sign.
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Did that happen?
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Yeah, I mean we've had like after launch, by the way.
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So we launched on Product Hunt Product went absolutely crazy.
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Product of the day, big one yeah, like 2,000 something upvotes, probably one of the most upvoted products by now, I agree, something upvotes probably one of the most upvotes upvoted products by now.
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I agree that that's really um, I see products of the day going with like 500, sometimes like like 91 000 votes and, yeah, like 2 200 200 yeah, and so that is.
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That is a sell shock right to me as a founder, to my co-founder who you know actually worked on on 90 of that prototype at bailey, um, and but also that makes a.
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That has a reason why it's so popular, right, because people are craving and looking for it, um, and so, yeah, we from day one we even had like larger corporations reaching out.
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Um, none of those deals like converted in the early stage because your product is just very horrible and shit, but some of them we converted a year or two years after.
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But when you build something that has just a sell-shop moment and we talk about this in YC also a lot of finding product market fit is like you know it when you have it and you can't really describe it otherwise.
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And product market fit typically also comes with a commercial market fit typically.
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Yeah, when, when you did the launch, I think that was like April 2020.
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2021, I think 21.
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Yeah 21.
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You were in the Thomas.
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Now, right, that's it.
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Yeah, yeah, your anniversary Actually, yes, very close.
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Which day?
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of April, was it, do you?
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remember.
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Yeah, let me open my product.
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I'm not sure we should celebrate.
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That's funny.
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It happens to me all the time as an entrepreneur, we I know there's so many anniversaries Exactly, and we're so focused on the future and the next milestone and we forget to celebrate the past.
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But we also fail, I think, very often to celebrate the, the little victories of the moment because we're always chasing something else, and it's such a big um lesson for life, right like the importance of celebrating every step, because I don't know, at least to me, there is no guarantee, especially as an entrepreneur, that there is a big destination out there.
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So you better enjoy the journey, otherwise you're setting things up for failure 100 absolutely um so where do I see that 15th of april, wow, okay, so really on the day two days ago again yeah, and we did.
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We did launch on the 15th of april again.
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So, wow, that's nice.
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I mean we always try to launch on the 15th, but I didn't know it was actually also the same day, so oh, pretty cool oh yeah, so you, you recently had the 4.0 launch and okay, I, I get, I hadn't paid attention to the specific dates.
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That's a cool one, um if you go back in time, every major release is on the 15th, even the minor ones.
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So we launch every month on the 15th, even the minor ones.
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So we launch every month on the 15th.
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It reminds me to the way that Apple used to do releases.
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I think having a date that forces you, that rallies the entire team to make something amazing happen, I think it's a very powerful thing.
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It's the best thing we ever came up with.
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And, to be honest, we actually and I got a little bit of heat by some engineers, but, like we also do our versioning as Calvary I don't know if you've heard of it.
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So, semba is, when you have a breaking change, you make a major update.
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So you like inform people that you know if you go from 3.0, 4.0 is a breaking change.
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I never liked that because I don't think the average person cares, nor you know, sometimes you ship something and you don't know it's a major breaking change.
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And so there's many things where I'd rather make sure we don't have any breaking changes ever and we've been very backwards, compatible in the past and then really focus on have a yearly cadence.
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So if I look back, if I see someone out in the wild using Calicom 3.0, I know, okay, that's a year ago, right, it's much easier than 3.74.56659.
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I'm like, is that a breaking change?
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I don't know.
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And so, and from a marketing point of view, you just make it so much easier to communicate, like where's the state of the product?
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And you know, after 12 same firefox is like version number 27 or something like.
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You just know if a product is mature and I, I, if we tell people every year we launch a major release and and it's at 5.0, they know the product's five years in the making, so it's like roughly five years um.
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So we?
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We spend so much time often focused on the features, on the technical side and we forget that we have to sell right.
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And sometimes very simple messages even if in their simplicity is where the key is right, and just not complicating the versions, but also using them in your advantage to be able to sell.
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It makes total sense.
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Let's talk about selling.
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You mentioned that often with product market fit comes some kind of a commercial success as well.
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At which point, before or after you launched officially Product Hunt, the first version, you started seeing revenue.
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How were those early days of actually starting to charge for the product?
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Yeah, we actually made revenue before we gave people access to the product.
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It was very interesting.
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It was a time where we had launched the website, we had launched a prototype, but it was barely functional really, and we almost oversold our vision on the landing page of more of a promise market fit than a product market fit, where we know we could build these things.
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We just haven't gotten the time yet to to ship these, and so we had kind of like these, um, uh, angel donation almost, where it's like, um, like a, a pre-sale race, really right, like a pre-sale of the product.
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And so, I my surprise, we've done like a decent amount of money, like a decent amount of revenue.
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Before we had certain things ready, which is great because the revenue graph goes from, you know, zero to something rather quick.
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And the second thing we did is we started with a paid offering only.
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So when we released the beta, after like two, three weeks after product, and we we had it paid only, which means you, in order to use the product for free, you would need to self host.
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So it's always an option, even up to this day.
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It's an.
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It's an option with a easy docker file.
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But, um, we wanted to really work with people who care, and that's the one who pay you right, they care and they give higher quality feedback.
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They stay around longer they they are, they want to be early, they want to be you know, user id number 37, right and and brag about it.
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And so we had this really small niche, maybe like a couple hundred people that really loved the product, and then we just closely worked with them.
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We invited them into our Slack channel.
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We had this big monolith Slack channel, so we had a community mixed with our core team.
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We had no separation.
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These were contributors to the codebase, or some of them were just suggesting.
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Customers, contributors, fans.
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They didn't need to pay for that.
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They just needed to be committed to making the product better.
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Yeah, yeah, and so one interesting metric was just to see how the community grows.
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Because if you're an open source, you want to make sure that you have a good developer and community ecosystem, and so having everyone in Slack decreased the amount of friction to talk to people.
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You have a general channel where everyone's asking questions and then if someone has an issue, I can make a new private group with an engineer from our core team with that customer right.
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So it's really easy.
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Immediately stopped, like immediately started breaking.
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Once we had like 3000 people in the channel, because now it's like the wild west and it's like it's really horrendous for larger communities.
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Um, I do like the idea from like zero to 200 people.
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Um, it's, it just feels magic to like have everyone in one channel and kind of like be working on this together.
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But, um, after a certain stage, we just move to discord.
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Um, frankly speaking, I don't even like discord nowadays.
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I think it's a hot mess of notifications.
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I, I don't think it's, and it doesn't help with seo, it doesn't help with searchability.
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People ask, keep asking, the same questions over and over again without doing any research.
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I, rather I might be moving off of discord in the next couple of weeks or months.
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Makes sense, but in this initial zero-to-one stage, being able to talk to your customers as YC, pounds over and over on us.
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It's so, so, so important, and you can do that because it's a small little volume of people.
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But do you think this can also work for non-open source companies?
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How will you do it differently, if any difference, if you are not an open source company?
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Well, I mean, I think there are examples of large communities that are not open source.
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I think Raycast comes to my mind.
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They are like a bit of a hybrid where all of their app store extensions are open source.
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Um, because they they they had the correct analysis that that, um, github is the best place to build apps on, like integrations.
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Um, the core product, raycast, is not open source, so I would not put them in a open source bucket, but at least they have a very, very active community and ecosystem.
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Because I guess the commonality is not open source but you have people building stuff for the product and I think that allows them to have this very closed, tight-knit community where you can talk to people very closely.
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Yeah, and what they've found out is by empowering people to make it super easy to build apps.
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The same way, google and Android and iOS try to make it easy for you to build apps.
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I mean, that's everyone's incentive really to make it as easy as possible.
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So I think they found a good way to have their marketplace on the web while still owning, being the gatekeeper of what goes in and what not.
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I mean, ideally I'd love to have Raycast fully open source, but I don't think that's going to happen.
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Other communities yeah, I mean any company that is community driven in the first place, right, like companies like On Deck, maybe companies like yours.
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You probably want to have a community.
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Yc is, at the end of the day, a corporation, a VC firm, absolutely and for those of you that might not have gone through YC and I would love to hear your experience, pierre.
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But like having access to Bookface, the private community for YC founders it's crazy the value that I get from that, like almost every day of my life.
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It's insane, and I think it's the only email that I open religiously is the daily digest of what's happening there.
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What's going on?
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I don't know if your experience is similar.
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Same.
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Yeah, it is after all these years and all these new people and people complain about our batch W19, that it was too large.
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It was the largest batch, I think, up until then, and they were like, oh, what if this reduces the quality.
00:22:18.259 --> 00:22:57.671
But I think YC has always been it's just more quality people, really, it's more of good, and so, uh, quality hasn't really decreased ever and that's really hard for a community to grow it's really hard to do and I guess you got a taste of the opposite as you scale into getting people that probably show up to the discord server just to get support and not because they're invested in making the person better, and spam and scams and insane expectations to an open source repository, like they demand you to reply within five minutes because they didn't install npm before and they run.
00:22:57.711 --> 00:22:59.556
They run npm and it doesn't work.
00:22:59.556 --> 00:23:07.486
And you're just like bro, like come on, like I have to do stuff, you know, yeah, there are better places to ask about it or figure that out.
00:23:07.606 --> 00:23:09.451
But uh, yeah, it's hard.
00:23:09.471 --> 00:23:19.468
It's hard unless you like spend a lot of time and I guess there is um probably a disproportional amount of value that you can get from something like that in the very early days.
00:23:19.468 --> 00:23:34.126
Because, you know, I think there is something really important about, uh, your story, the story of cal, is that it was a need that you had right and that gives you insights into the what makes the product successful.
00:23:34.126 --> 00:23:38.707
That it's much harder to get if you're building something for a target audience that you're not part of.
00:23:38.707 --> 00:23:47.457
But even when you are part of your target audience, there is always variability and I think being able to talk to them in a very direct way, um, it's super important.
00:23:47.457 --> 00:24:14.990
I I've had to go through the painful process of having to like try to schedule calls with people for interviews, um in in maybe moments where I didn't spend as much time building that community, and it's so much harder to engage people and you can try to offer, you know, money, vouchers, discount stuff, but it feels so different when you had invested in the community and they just want to reciprocate the value they're getting from being part of the community.
00:24:14.990 --> 00:24:25.259
But just spending time with you and telling you stuff, like, I think, if you can generate that, that's amazing and I can clearly see that as one of the advantages of open source and I would love to get a little bit deeper into open source.
00:24:25.259 --> 00:24:31.035
I think that's something fascinating that you bring into the world of how to build companies.
00:24:31.526 --> 00:24:44.289
I think probably for a lot of people, and especially like for some entrepreneurs, they might think wait, but if I give away, you know my code, the whole thing, how can I really make money with this?
00:24:44.289 --> 00:24:48.969
And I wanted to read a quote from a quote that you wrote.
00:24:48.969 --> 00:24:49.810
I wouldn't be surprised.
00:24:49.810 --> 00:24:55.838
And it said like going head to head as a SaaS company against existing market leaders is a fool's errand.
00:24:55.838 --> 00:24:57.586
Hence we are doing something similar.
00:24:57.586 --> 00:25:07.791
We are doing similar things in a fundamentally different category open scheduling and there is a concept like the open source, the open sort of that I would love to go a little bit deeper into with you.
00:25:07.791 --> 00:25:14.719
We started talking about it, but in your experiences, what are the, the, the advantages and the disadvantages?
00:25:14.719 --> 00:25:16.143
Why going open source?
00:25:16.903 --> 00:25:29.727
yeah, um, so I actually I don't know know why I removed my blog on my personal page, but I used to have a blog post that said like to open source or not to open source?
00:25:29.727 --> 00:25:35.306
And I had, like this what is this again from Shakespeare, the posture.
00:25:35.306 --> 00:25:42.434
And I don't agree with the idea of just looking at Cal.
00:25:42.434 --> 00:25:56.049
com and applying everything we do to an entire different product, slash industry, because it's not like, let's pretend open source is a technology, right, whenever a new technology comes around.
00:25:56.049 --> 00:26:06.019
There's two types of entrepreneurs, right, the ones that have an existing problem and now they're like oh, what if this technology can solve this?
00:26:06.019 --> 00:26:06.161
Right?
00:26:06.161 --> 00:26:23.547
And then there's the other type of entrepreneur and I don't want to be rude, but most of them are less successful with whatever they're doing, and they take a look at a technology and they and they try to come up with a problem like what can I solve with this technology?
00:26:23.547 --> 00:26:39.791
And so you and once you this is courtly, you know like as a, as a hammer, everything's a nail and um, and you start to let's say, oh, I like I get dms of people saying I want to start an open source company, but I don't know what to work on.
00:26:39.791 --> 00:26:42.178
I'm like that's not how you approach anything.
00:26:42.178 --> 00:26:46.676
That's the same problem you have with crypto, the same problem you have with AI.
00:26:46.676 --> 00:26:51.796
It's like I want to build an AI company but I don't know what to work on any ideas.
00:26:51.796 --> 00:27:03.005
I'm like you're clearly looking at the wrong picture and the thing always goes back to the problem, right, like I had a problem and I could only solve it with open source.
00:27:03.005 --> 00:27:20.858
If you have the same problem that you can only work, solve with open source, you're in a great business and so when and also if that's a great market, it's a big market and it's probably also commercial market then you're in a great place.
00:27:21.984 --> 00:27:35.249
The projects that I find hard to monetize and even open source is kind of famous for lack of funding, which I partly disagree with but there are projects that are just really really hard to monetize.
00:27:35.249 --> 00:27:49.573
A programming language is very hard to monetize because you and me, we would never pay for React, we would never pay for JavaScript, we would never pay for Nextjs, we would never pay for a more advanced router.
00:27:49.573 --> 00:27:52.670
Developers fucking suck when it comes to paying.
00:27:52.670 --> 00:27:59.065
They make six figures, but paying five bucks a month for React to use them sounds ridiculous.
00:27:59.065 --> 00:28:01.484
For good reasons you wouldn for React to use them sounds ridiculous, for good reasons, right?
00:28:01.484 --> 00:28:03.932
You wouldn't pay to use English.
00:28:04.545 --> 00:28:14.111
It's just such a core thing, fundamental thing, and so I think if you head out and you build a better React, you better know what you're doing.
00:28:14.111 --> 00:28:28.577
I think Tailwind is an amazing example how they've probably made a million dollar business by now because they understood very early on we can never monetize the fundamentals.
00:28:28.577 --> 00:28:33.717
We need to build on top of these fundamentals and package them up and sell them to people who really care.
00:28:33.717 --> 00:28:41.518
And you know, tailwind UI is all of their pre-built components for a one-time fee.
00:28:41.518 --> 00:28:45.211
Maybe they have a subscription by now, but to me that's clever.
00:28:45.211 --> 00:28:51.857
And so there are ways to monetize these more fundamental, lower level things.
00:28:51.857 --> 00:28:56.896
I'm pretty sure if Facebook cared, they could find a business model for React.
00:28:56.896 --> 00:28:58.150
I'm happy they don't.
00:28:58.150 --> 00:29:01.375
Please don't commercialize React, really.
00:29:01.375 --> 00:29:23.538
But so long story short, as long as you know what problem you're solving, I think you will be able to monetize it, and as long as you have an added service or added product on top that uses your fundamentals, I think you're in a good place.
00:29:25.166 --> 00:29:32.507
Why will someone pay for using CAL instead of just using the free open source version like self-hosted?
00:29:34.509 --> 00:29:37.934
Well, that probably goes back to every self-hosted product.
00:29:37.934 --> 00:29:46.384
Running software has limitations and issues and it's time consuming keeping things up to date.
00:29:46.384 --> 00:29:55.806
Secure your own servers I mean, most developers nowadays don't even run their own servers anymore Like we use the cloud or we use serverless or we use whatever comes.
00:29:55.806 --> 00:29:58.691
Whatever you know gets us to success.
00:29:58.691 --> 00:30:04.140
I think a lot of people underestimate the saving power of self-hosting.
00:30:04.140 --> 00:30:06.894
I typically say self-hosting is more expensive.
00:30:06.894 --> 00:30:12.845
Even the enterprise license we sell for self-hosting.
00:30:12.845 --> 00:30:17.116
So Calicom is an open core.
00:30:17.116 --> 00:30:34.875
We have a 95-ish percent open source github repo and then there is, I'd say, five percent of the code base is enterprise only and these are like audit logs and and fcim and and all of that like workspacing and stuff.
00:30:34.875 --> 00:30:39.571
You as a hobby engineer or even as a small startup or agency, never need you.
00:30:39.571 --> 00:30:41.036
You will never need these products.
00:30:41.036 --> 00:30:42.872
You wouldn't even know they exist really.
00:30:43.605 --> 00:30:46.011
So these 5% we monetize.
00:30:46.011 --> 00:30:58.695
We require you to have a license, but you can have it on the SaaS plan for free not for free without setup or you can self-host, but the self-hosting license is actually kind of pricey.
00:30:58.695 --> 00:31:12.517
So if people reach out to us and say, hey, I want to save money, but I want your enterprise license, we typically tell them like, I don't think you're the right customer and so self-hosting is never really a way to save money really ever.
00:31:12.517 --> 00:31:21.239
It's more about being in charge of your own data, making changes, changing every line of code, being on your own upgrade schedule.
00:31:21.239 --> 00:31:22.220
Some people don't want to upgrade.
00:31:22.220 --> 00:31:57.656
That's perfectly fine, as long as they patch the vulnerabilities, security issues, and so I think, instead of taking open source as something that's cheaper than other companies, you change the perspective on like this is more than other companies give you so if let let me try to summarize this to see if I if I get it right what you're saying is that by making it open source, you get way more people to contribute to making the product awesome.
00:31:58.077 --> 00:32:04.251
You have this community of highly engaged users that you can learn from.
00:32:04.251 --> 00:32:05.457
That can help improve the product.
00:32:05.457 --> 00:32:20.054
Then for many of them, in the early stages, it's expensive to run their own servers or to even host the open source version on the cloud, because you have to maintain that and that takes focus away from your core business, which is not scheduling.
00:32:20.054 --> 00:32:30.695
However, as the companies grow and maybe they do have, you know, a larger team, they can afford, like you know, and then it's compliance, so it's actually a need.
00:32:31.136 --> 00:33:28.382
At that point you say, okay, we are open source, but we will reserve, uh, strategically, a series of features, uh, that you will have to pay a license for, so that we don't get the largest clients, who are the ones that can pay the most, actually getting this for free, completely correct yes, 100 and um, if you look, if you take a look back at the, the dark side of open source this has happened so many times where, um, you see this landing page of an open source library that does something, converts a to b, and it says used by facebook, netflix, amazon, right, and then you scroll down and you see donations by steve and anna and you're like what, like how Steve and Anna donated and, and Facebook and Amazon and Meta and everyone's using this for free and no one donates back.
00:33:28.382 --> 00:33:30.446
There's no commercial engagement whatsoever.
00:33:30.446 --> 00:33:36.278
Um, to me, that's that's the opposite of of the strategy of open source.
00:33:36.358 --> 00:33:38.750
To me, I think the top one percent is really like.
00:33:38.750 --> 00:33:47.877
It's almost like it's like a social welfare system where the top 1% of customers should pay for the bottom 99%.
00:33:47.877 --> 00:34:03.693
And if you can figure out a way to do that, not only do you have a amazing free product, right, like, our free product will always be more of more high quality than any one of our competitors, because we have this big, strong enterprise pipeline that just subsidizes everything.
00:34:03.693 --> 00:34:03.913
Right.
00:34:03.913 --> 00:34:11.782
And it's a vicious circle because now you have a free product, people love it, they start using it, they share it with others, they share it with enterprise companies.
00:34:11.782 --> 00:34:28.903
Enterprise companies keep paying free, product gets better and as long as you can get this vicious cycle cycle going, I think you're always in a better shape than trying to monetize the bottom 99, which is really hard makes a lot of sense.
00:34:28.923 --> 00:34:39.233
Otherwise you're like failing to capture most of the of the lessons there right and have you had any case or maybe do you know of anyone that that did this wrong?
00:34:39.233 --> 00:34:46.559
And by trying to charge they end up, like you know, getting their community mad and destroying that precious community.
00:34:46.559 --> 00:34:48.806
All of all the time, of course.
00:34:48.907 --> 00:34:55.759
yeah, I mean, um, I think, uh, I I big fan of docker and its founder.
00:34:55.759 --> 00:35:20.878
The founder was our yc partner and solomon and they had and they had a similar issue where they went after consumers and enterprise and I think eventually I don't remember fully, maybe I'm wrong, maybe you need to correct me in the show notes, but I do think that they sold part of the enterprise business to another company to do all of that stuff and then they doubled down on the consumer facing and they tried to charge a monthly fee for developers.
00:35:20.878 --> 00:35:23.733
And every developer was like, well, fuck you.
00:35:23.733 --> 00:35:37.396
And again, that's the perfect example why you would probably not pay for React per month to use React, because for them, docker is just a scripting language to run containers.
00:35:37.396 --> 00:35:43.849
They don't understand what it means to you, know what the value is behind it.
00:35:43.849 --> 00:35:44.771
So, yeah, that definitely happened.
00:35:44.771 --> 00:35:45.853
I don't know if Docker went back.
00:35:45.853 --> 00:35:48.617
I think they went back and focused on enterprise again.
00:35:48.617 --> 00:35:54.972
To me, that just makes so much more sense because every engineer eventually works at a larger corporation anyway.
00:35:54.972 --> 00:35:58.635
So like, if you can win the engineer, you win the enterprise.
00:35:58.635 --> 00:35:59.951
Like that's just how it works.
00:36:02.047 --> 00:36:11.900
There's other examples there's tons of open source companies that change the license and try to bully you into whatever getting a license.
00:36:11.900 --> 00:36:18.818
I'm really not a fan of these delayed open source licenses that have popped up.
00:36:18.818 --> 00:36:27.916
You know where they say it's a commercial license, but in two years uh, versions two years older are open source.
00:36:27.916 --> 00:36:33.655
Like me, as a maintainer, I never want my community or any customer to be on a version that's two years ago.
00:36:33.896 --> 00:36:38.856
Two years ago we launched like two years ago is fucking dark shit.
00:36:38.856 --> 00:36:43.748
Like if we had this license, we would not have been open source up until this point.
00:36:43.748 --> 00:36:54.572
And and then now people are allowed to use the two years old code base that's full of bugs, full of vulnerabilities, full of issues.
00:36:54.572 --> 00:36:59.112
They would spam my discord channel about bugs that we've already fixed.
00:36:59.112 --> 00:37:09.996
Like I don't know who came up with that type of concept, but you're basically saying like a big fuck you to the whole community saying like everything's commercial, you can still contribute.
00:37:09.996 --> 00:37:23.775
And then in two years, you know when everything's, when we're already, you know, far away in puppy land, you can use the leftover crumbs, I suspect that is a solution to a different problem.
00:37:24.405 --> 00:37:47.231
I'm speaking out of intuition here, but that once you are far ahead but you have customers that don't want to migrate to newer versions for whatever reason, and you can't afford or don't want to, like you know, bother maintaining the older versions or like keeping the backwards compatibility, you have to say, okay, sorry I can't help you, but at the least I can open source this.
00:37:47.231 --> 00:37:50.503
I look good on paper and you get to maintain it for me.
00:37:50.503 --> 00:37:51.565
And who maintains this will?
00:37:51.606 --> 00:37:54.054
also help me with the other clients that have this old version.
00:37:54.054 --> 00:38:01.518
Um, otherwise I like it sounds like a really bad way of creating an open source company if you start just with that version.
00:38:02.626 --> 00:38:07.157
None of these companies, in my opinion, should call themselves open source companies, because they're not open source first.
00:38:07.157 --> 00:38:14.324
They are open source second, and that's also fine, but I think you want clarity.
00:38:14.324 --> 00:38:18.737
Also, how do you even keep track of what two years has gone?
00:38:18.737 --> 00:38:19.568
Do you need to check in?
00:38:19.568 --> 00:38:28.697
I need to wait one more week and then something gets open source the feature that I need that was shipped in one week, like, come on, like, nobody keeps track of that.
00:38:28.717 --> 00:38:41.789
Yeah, my, my philosophy has been um, everything's, even the commercial parts, are source available, right, like, you can look at them, you can copy them, you can change them For a commercial use.
00:38:41.789 --> 00:38:42.512
You need a license.
00:38:42.512 --> 00:38:43.286
Now what happens?
00:38:43.286 --> 00:38:52.873
We have like a little bit of a DRM check that like pings one of our endpoints and sees if you have a license key inside your environment variables and if it's a valid one, it returns true.
00:38:52.873 --> 00:38:56.454
If it returns true, your component gets unlocked and you can use it.
00:38:56.454 --> 00:39:04.871
So, obviously, any engineer that was born in 2000 or in the 90s knows how to remove drm.
00:39:04.871 --> 00:39:05.934
That's like the easiest stuff ever.
00:39:05.934 --> 00:39:06.876
You just remove that function.
00:39:07.920 --> 00:39:13.246
Um, and we specifically have comments about, like, if you remove this without a license, you're violating the license.
00:39:13.246 --> 00:39:15.992
It's a copyright issue, yada, yada, yada.
00:39:15.992 --> 00:39:18.297
Of all these three years.
00:39:18.297 --> 00:39:22.567
This has happened once that I I'm aware of, and I reached out to the founder.
00:39:22.567 --> 00:39:24.711
Um, the founder wasn't even aware.
00:39:24.711 --> 00:39:31.753
They hired a third-party contractor who clearly didn't give a shit, um, and they rectified rectify that issue.
00:39:31.753 --> 00:39:47.704
And um, my point of view is, the types of people who violate your license are the ones who will never pay for your product in the first place, and so if you give it to them for free, you just need to be okay from an ego point of view.
00:39:47.704 --> 00:40:00.010
People are using your commercial stuff, but don't be offended by the fact that you're making less revenue, because you would not make that revenue in the first place right, you're not losing.
00:40:00.150 --> 00:40:02.474
You are not losing business, you're not losing anything.
00:40:03.115 --> 00:40:06.565
I have never seen a well never say never.
00:40:06.565 --> 00:40:23.951
But it's very, very rare that a large corporation such as the companies we sell to actually go into the code base, remove drm, open them up to millions of litigations, potentially, like that engineer gets fucking fired if the cfo or this, the, the gc, finds out about that.
00:40:23.951 --> 00:40:36.030
Absolutely so you're in a hot mess and it's way easier for you to ask procurement to get a license key than to spend an entire day removing drm and doing all of this illegal, literally copyright illegal stuff.
00:40:36.030 --> 00:40:43.454
Um, and so I never woke up and be like oh what if Amazon takes out our DRM?
00:40:43.454 --> 00:40:47.355
I don't think that's ever going to happen really no, no, no.
00:40:47.887 --> 00:40:50.750
It doesn't make sense for those large companies to do something like that.
00:40:50.849 --> 00:41:01.338
I completely agree, and I think the good news for anyone who is considering starting open source is that you have now a lot of like companies.
00:41:01.338 --> 00:41:14.570
I can I can think right now, like github, for example, having you know publicly traded company that you know is has an open source model from the beginning, super successful, um, but I'm curious about and I've never had to go through this myself.
00:41:14.570 --> 00:41:17.365
I'm curious if you have some kind of like framework.
00:41:17.365 --> 00:41:18.748
Maybe we can come up with it together.
00:41:18.748 --> 00:41:21.735
For how do you make the decision?
00:41:21.735 --> 00:41:27.431
Like you said before, you don't start open source and then figure out what to build that is open source.
00:41:27.431 --> 00:41:33.833
You find the problem and then you decide does open source make sense for this product and this solution?
00:41:33.833 --> 00:41:35.510
How do you make that decision?
00:41:35.510 --> 00:41:43.210
How do you like evaluate, for example, will I make more money by being open source and by being, you know, not non-open source?
00:41:43.210 --> 00:41:46.143
Like will I be more successful by any definition like?
00:41:46.143 --> 00:41:47.967
How do you make that that decision?
00:41:49.130 --> 00:41:53.902
yeah, again, I think it really boils down back to your, your industry, um.
00:41:53.902 --> 00:42:23.072
We and knock on wood were very fortunate that we're working on a product that a lot of enterprise and highly regulated industries and and um, just larger corporations like desperately need um, and so we've always had a good sales um habit and muscle of selling like six-figure contracts early on um and and and so, and these are deals that we are winning because we're open source right.
00:42:24.528 --> 00:42:25.192
Why is that?
00:42:25.192 --> 00:42:26.884
Why open source allows you to win contracts.
00:42:27.628 --> 00:42:31.030
For compliance, for compliance, for they need it on-prem.
00:42:31.030 --> 00:42:31.994
They want to self-host.
00:42:31.994 --> 00:42:35.175
They also want to look through the code.
00:42:35.175 --> 00:42:40.753
They have their own independent contractors that they hire for code audits and security vulnerabilities.
00:42:40.753 --> 00:42:50.039
And open source Even Elon Musk has said it publicly in an interview is known to be the most secure technology because you have a million developers.
00:42:50.284 --> 00:43:05.690
I don't know how many times our README has been opened, but it must be over a million times and we have like 500 contributors and a dozen third-party researchers that try to find holes in our code base.
00:43:05.690 --> 00:43:18.592
It's one way to reverse engineer an API and try to find vulnerabilities, but if you actually see how people have written code, it's so much easier to be like okay, there's a check missing, I can get into the system.
00:43:18.592 --> 00:43:24.942
So after three years, we've had no breach of anything.
00:43:24.942 --> 00:43:36.077
We even have people who started implementing a more advanced encryption authorization system than before.
00:43:36.077 --> 00:43:42.630
We've had a community contributor adding 2FA factor login just because he was like, hey, I think this could be fun.
00:43:42.630 --> 00:43:43.913
And I'm like, yeah, let's do it.
00:43:44.393 --> 00:44:02.849
And so you know, when I say open source makes better products, I firmly stand by it, because there's just so many things that an engineering team can build and all of the rest typically gets thrown into a roadmap that you will never look at again.
00:44:02.849 --> 00:44:04.657
The classic backlog problem.
00:44:04.657 --> 00:44:22.342
When the backlog is is public and and you may even start incentivizing certain things with bounties, with algoraio and some other companies and products, you start to see where you know the the Pareto of like 20, 80 80 20 rule.
00:44:22.342 --> 00:44:28.838
Right, like your team works on the 80 percent of the most important things, but the last 20 percent will never be done.
00:44:28.838 --> 00:44:39.936
Well, now you have a community that does the last 20 percent, and these are small PRs, bug fixes, vulnerabilities, even small features that are not really of high priority, but it's.
00:44:39.936 --> 00:44:48.168
It's nice to have them for a bunch of people, and so I would say open source builds the better products, but also the more secure ones as a side effect.
00:44:48.228 --> 00:44:55.813
Really, I want to go back to the, this idea of like being able to work on stuff that you wouldn't work otherwise.
00:44:55.813 --> 00:44:57.480
I'll get back to that in a moment.
00:44:57.480 --> 00:45:02.530
I want to maybe recap or summarize something you said before so that it's clear.
00:45:02.530 --> 00:45:04.275
Maybe there is more that you want to add to this.
00:45:04.394 --> 00:45:07.329
I asked you like why will someone decide to open source?
00:45:07.329 --> 00:45:37.960
And there are a lot of benefits, right, and but one you said makes a lot of sense also because connected to the business side of things is that if you have companies that are highly regulated, uh, or, you know, massive in size, which also are have companies that are highly regulated or massive in size, which also are the companies that can also afford paying the most, they will be more likely to need, for compliance reasons and also for auditing processes, to have the self-hosted version, and open source facilitates or actually makes that possible, makes that possible right.
00:45:37.960 --> 00:45:47.592
So that is a great, I think, way to think about it, because it's aligned with the type of customer, enterprise, customer that will allow you to capture a lot of the business value, so it's terrific.
00:45:47.592 --> 00:45:56.733
Is there any like principle or indicator that you should not go open source?
00:45:56.733 --> 00:45:58.672
Like going open source will be a big mistake.
00:46:01.186 --> 00:46:03.333
Yeah, I'd say there are a couple.
00:46:03.333 --> 00:46:10.976
I think to really make a business work in open source.
00:46:10.976 --> 00:46:13.527
It's a bit of a I wrote about this at Cal.
00:46:13.527 --> 00:46:16.335
com slash about as well.
00:46:16.335 --> 00:46:28.570
When you're, let's say, when the SaaS business captures 50% of revenue, the open source version captures 1% of revenue.
00:46:28.570 --> 00:46:30.731
I said this before 1% pays for the 99%.
00:46:32.228 --> 00:46:49.601
If your market is too small to and you multiply your market by 1% and you come up with a total revenue of, I don't know, 500K or a million, it's really hard to go beyond that Because you reach your total market cap really quickly if you only monetize 1%.
00:46:49.601 --> 00:46:53.932
I mean, I don't know how much the total market cap of Tailwind CSS is.
00:46:53.932 --> 00:46:58.672
It's every JavaScript developer really, every developer, web developer, really.
00:46:58.672 --> 00:47:07.032
So that's a huge time, it's a huge market and I don't think they have 1%, even Probably a half a percent maybe.
00:47:07.032 --> 00:47:16.077
So be aware that when you build something in the open source, it cannot be an open source marketplace to buy and sell fish.
00:47:16.077 --> 00:47:23.978
It's not a market where you can monetize 1% of enterprise sales.
00:47:23.978 --> 00:47:32.494
There's no enterprise company that sells fish as a marketplace that needs a highly customized open source marketplace to buy and sell fish, right.
00:47:32.494 --> 00:47:34.480
So, of course, just an example.
00:47:34.480 --> 00:47:53.619
But be aware, when you choose to be open source, try to find the largest market of your interest, because it's going to be hard to monetize Not hard, but you will probably disregard 99% of the market to make revenue.
00:47:53.619 --> 00:48:14.253
And also, if you don't have a, we actually introduced a free plan after we felt comfortable with our product and comfortable with our support, because you also want a free SaaS tier because otherwise the alternatives people are self-hosting and you don't want to cannibalize your own traffic.
00:48:14.253 --> 00:48:16.871
Really you want to make it the same offering.
00:48:16.871 --> 00:48:17.914
People have self-hosted.
00:48:17.914 --> 00:48:30.050
You should have hosted just for ease of use, and I don't like it when people say it's paid only on hosted and then it's like here's the red lead to host yourself and no one ever does that really.
00:48:32.146 --> 00:48:42.065
So my recommendation is if you are interested in open source, well, first you've got to have a really really big problem that you can only solve with open source.
00:48:42.065 --> 00:48:45.494
Best um examples are emails.
00:48:45.494 --> 00:48:51.347
Everyone uses email, um, maybe video calls maybe you want to build the largest video conferencing tool?
00:48:51.347 --> 00:49:03.556
Um, maybe you want to build um the next uh, spotify, I don't know, doesn't make much sense to be open source, but maybe with AI you have a new way of generating.
00:49:03.556 --> 00:49:15.215
Maybe it's an open source Spotify that's powered by AI, where you have open prompts and people can share their prompts publicly and you can make music together and stuff like that.
00:49:15.465 --> 00:49:17.432
So at any given time, Cal.
00:49:17.432 --> 00:49:20.875
c om is very different to all of its pre-processors.
00:49:20.875 --> 00:49:25.273
Right, it's, it's a successor, it's different, it's, it's, it's um, it's better in my opinion.
00:49:25.273 --> 00:49:32.697
So if you build something open source, have a big market and try to be better, you have to be better.
00:49:32.697 --> 00:49:39.907
If you're just, if you're just a free, open source alternative to something, you'll always be a free, open source alternative that fucking sucks.
00:49:39.907 --> 00:49:50.231
You won't raise funding, you won't hire the best team, you will never build the best product and I think that's kind of like the open source 1.0.
00:49:50.231 --> 00:49:50.753
That's just been a like.
00:49:50.773 --> 00:49:59.673
Compare LibreDocs with Microsoft Docs or Microsoft Office it's a clear loss.
00:49:59.673 --> 00:50:10.911
Or Thunderbird Mail knock on wood has been great back in the days, but it's just not a good client if you compare Thunderbird with Superhuman or even Gmail, to be honest.
00:50:10.911 --> 00:50:44.378
So you kind of really want to double down on building the best product, regardless whether you're open source or not, and by building an enlarged industry, by capturing 1% of the revenue, you end up product, regardless whether you're open source or not, and by by building in a large industry, by capturing one percent of the revenue, you you end up building a good business and that leads you to to build the best open source project awesome thanks for sharing all of that and it's interesting, and probably somehow connected, that uh, you're not just an open source company but also an open startup and you have this like uh, you have a lot of data about the company publicly available in the website.
00:50:45.989 --> 00:50:46.851
How did you get to that?
00:50:46.851 --> 00:50:49.793
And, by the way, I'll make it well anyway.
00:50:49.793 --> 00:50:50.815
No, go ahead.
00:50:50.815 --> 00:50:52.469
I would love to hear your perspective on this.
00:50:53.132 --> 00:50:53.693
How do we start?
00:50:53.693 --> 00:50:55.853
Yeah, pretty much day one really.
00:50:55.853 --> 00:50:59.871
Me and my co-founder, we sat together we said, well, we're already sharing code.
00:50:59.871 --> 00:51:06.286
Of course, it's hugely inspired by other companies.
00:51:06.286 --> 00:51:07.990
Uh, open startup is nothing we've invented.
00:51:07.990 --> 00:51:08.210
There's a.
00:51:08.210 --> 00:51:15.614
It was actually more popular in the indie hacker bootstrap space, which is kind of interesting because all of them went back to like removing their open pages.
00:51:15.614 --> 00:51:23.208
If you take a look at all the famous bootstrappers on Twitter or Xcom, they all, kind of like removed their data.
00:51:23.208 --> 00:51:26.614
I've always been a big fan.
00:51:26.614 --> 00:51:28.958
It made me feel closer to the company.
00:51:28.958 --> 00:51:30.007
I felt more invested.
00:51:30.889 --> 00:51:39.514
If you're into sports, you care about all the statistics of how many defense a person had, how many scores, how many assists.
00:51:39.514 --> 00:51:41.298
Right, like, that's just interesting.
00:51:41.298 --> 00:51:44.054
If you're into sports, you want to know everything about your team.
00:51:44.054 --> 00:51:49.601
To me, having an open source project, you're already sharing code.
00:51:49.601 --> 00:51:54.074
You're already sharing your issue backlog, your communications, your Slack.
00:51:54.074 --> 00:51:55.557
Everything's open, everything's public.
00:51:56.125 --> 00:52:01.438
It feels more alien to then keep stuff for yourself, right?
00:52:01.438 --> 00:52:05.614
Especially when it comes to shared success.
00:52:05.614 --> 00:52:08.070
Right, you want to showcase your community?
00:52:08.070 --> 00:52:10.036
Hey, this is how it's going.
00:52:10.036 --> 00:52:11.668
Here's where all your energy.
00:52:11.789 --> 00:52:14.856
You know like, remember people who are working on open source.
00:52:14.856 --> 00:52:18.795
They do it on a weekend, because they really want to work with you.
00:52:18.795 --> 00:52:22.516
They really want to improve and improve their own product.
00:52:22.516 --> 00:52:30.422
So what's better than going back to them and telling them hey guys, hey, everyone, listen we've grown 40% month over month.
00:52:30.422 --> 00:52:31.625
Here's all the data.
00:52:31.625 --> 00:52:40.679
I think there's nothing more exciting about that than contributing to a project but also seeing its success in real time.
00:52:40.679 --> 00:52:48.967
And then the open startup, open salary policy that's something, I'd say, that is even more controversial than sharing numbers.
00:52:48.967 --> 00:52:54.217
That is also something we haven't invented.
00:52:54.217 --> 00:52:56.530
I mean, nothing's really invented in 2024.
00:52:56.530 --> 00:53:04.614
Some of it is still with AI, so Buffer and some other companies were sharing the salaries for a long time.
00:53:04.614 --> 00:53:10.539
I've always been a huge fan of transparency within companies.
00:53:10.539 --> 00:53:17.094
We could have easily just made this internally right, and that would have been already a dramatic step for most companies.
00:53:17.811 --> 00:53:19.972
That's what we've done for like five, six years.
00:53:19.972 --> 00:53:22.353
And it's a huge game changer internally.
00:53:22.353 --> 00:53:51.887
Appspot I think it's another company that does that, but they have an interesting philosophy on why not sharing salaries particularly, and I think the principle is we can share everything except stuff that is not just ours to share, and if I share someone else's salary, I'm sharing information that is not just ours to share, and if I share someone else's salary, I'm sharing information that is about the person and it can have implications Like I want to make this up, you know, like family members or friends, knowing they make a lot of money going to them and asking
00:53:51.907 --> 00:53:59.934
for something and I and I always found it very interesting To interrupt you here We've never forced people to do that.
00:53:59.934 --> 00:54:02.628
We, we've clearly said it is an opt-in policy.
00:54:02.628 --> 00:54:04.793
Uh, there's no peer pressure.
00:54:04.793 --> 00:54:11.195
Even if you feel like it, there's no negative connotations if you don't do it, nobody really cares like within the team.
00:54:11.195 --> 00:54:16.117
But if you, if you want to be part of this movement and you're fine with it.
00:54:16.117 --> 00:54:23.751
I think so far we've only had three people who did not share their salary for like undisclosed reasons.
00:54:23.791 --> 00:54:25.757
Whatever reason, yeah, yeah, exactly.
00:54:25.757 --> 00:54:28.527
Do you still share it internally in those three cases?
00:54:28.527 --> 00:54:30.692
No, no, no, not even internally.
00:54:30.692 --> 00:54:31.833
Fair enough, yeah.
00:54:32.114 --> 00:54:35.065
Okay, and so it's.
00:54:35.065 --> 00:54:37.288
I mean, the manager knows who hired them, right?
00:54:37.288 --> 00:54:51.742
Yes, of course, but no, I think it's people and I got a lot of negativity from investors or other founders that said like, oh yeah, this is cute in the early days, but this will not scale with you.
00:54:51.742 --> 00:55:00.958
That doesn't even go into the whole global policy, global salary policy, which is even more fringe and controversial in my opinion.
00:55:01.465 --> 00:55:11.519
So what I've learned over the past three years is global policy, global salaries, public global salaries, um, or, the best way to keep fairness.
00:55:11.519 --> 00:55:18.456
It's the best way to fight racism, gender, gender um, what's it called?
00:55:18.456 --> 00:55:22.085
Uh, pay gaps, wage gender, pay gaps is that what it's called?
00:55:22.105 --> 00:55:30.463
yeah, yeah, um discrimination among whatever, yeah, any, just it.
00:55:30.463 --> 00:55:37.297
Really it's impossible for me to hire a junior engineer at this rate and another junior engineer at another grade.
00:55:37.297 --> 00:55:42.628
Um, but there's no way I can be racist to one or the other.
00:55:42.628 --> 00:55:44.739
Uh, because it's all the same.
00:55:44.739 --> 00:55:52.581
Like for you to make more money, you need to become a mid-engineer, senior engineer and, uh, lead engineer eventually.
00:55:52.581 --> 00:55:56.469
Um, it's, it's more fair.
00:55:56.509 --> 00:55:58.257
When it comes to work equals money.
00:55:58.257 --> 00:56:03.956
You know, we all have this concept of like if I work, I make money, if I work more, I make more money.
00:56:03.956 --> 00:56:05.280
If I work better, I make more money.
00:56:05.280 --> 00:56:09.007
How is it that remote companies and it?
00:56:09.516 --> 00:56:45.106
I understand that not every salary works in every country, but to me, the fact that a junior, fresh software engineer who's written the first line of React comes straight out of uni in San Francisco gets an internship for a hundred grand, and then you have a senior engineer in India making maybe 75 or 50, half of the revenue, and you all come together in a retreat in Portugal, on both sides of the world, and one person makes twice your salary, just because they were born in a high expense state.
00:56:45.106 --> 00:56:53.885
Cost of living yeah, as a manager, I should not care what your cost of living is If you cannot make it work, don't apply for my company.
00:56:53.885 --> 00:56:55.539
And like this is where this is.
00:56:55.539 --> 00:56:56.422
This is all public.
00:56:56.422 --> 00:57:09.663
Like sure, we discriminate against people in the Bay Area, but also, truth be told, there's work outside of the Bay Area, that's fantastic, and that is.
00:57:09.762 --> 00:57:17.164
That is because the benchmark salary use is too low for the Bay Area, but it's probably very high in almost every other place.
00:57:17.164 --> 00:57:20.543
Exactly which market do you use as a reference?
00:57:23.057 --> 00:57:34.936
We kind of have a combined, mostly because me and my co-founder are spending time between New York and Europe, so we kind of took a New York and Europe salary and like took the average really.
00:57:35.115 --> 00:57:47.005
So it's like between in on the ocean kind of, and so but you use your the two founders kind of reality to then set the benchmark for everyone else in the team.
00:57:47.005 --> 00:57:48.496
Yeah, yeah, okay.
00:57:48.675 --> 00:57:54.768
Okay, okay, perfect, and we also use pave to like make sure it's not outrageously low, outrageously high.
00:57:54.768 --> 00:58:02.740
But, truth be told, probably 60 to 80 percent of our team make way more than their market rate and what does that mean?
00:58:02.740 --> 00:58:06.425
You attract the highest quality of people in those markets, right?
00:58:06.425 --> 00:58:14.414
Like, compensation is a key factor for incentivizing the team, but also hiring quality people is a key factor for incentivizing the team, but also hiring quality people.
00:58:14.414 --> 00:58:21.003
If I have the choice, let's say you take 150K or maybe 300K total comm, including equity.
00:58:22.641 --> 00:58:31.603
If you get a junior engineer in the Bay Area and you get the most senior, diehard engineer in another country, like, who do you hire as a manager?
00:58:31.603 --> 00:58:33.478
You probably hire the best person, right?
00:58:33.478 --> 00:58:52.878
Um, and so that's been, that's been something where, uh, we've had just amazing success and also from an ethics point of view, um, that person the bay area will find a job, that they will always be fine, they, they will find a job, they will find find an internship, they are fine.
00:58:52.878 --> 00:59:01.206
And also, even if you end up hiring them at like 250, they are like six months away from getting a better offer from Netflix.
00:59:01.206 --> 00:59:30.096
So it's just not an interesting market for me, and same thing probably also true for New York a little bit different, but that person you hire at 150, that's four times the salary of the local market is incredibly loyal, incredibly incentivized, incredibly senior, incredibly smart, incredibly interested in your company, and that's the talent we want to attract.
00:59:30.175 --> 01:00:14.155
really, one of the common arguments that I've heard, for example, from the founder of GitLab, against having this global salary is that it goes against and I think this is a very subjective thing and I would love to hear your thoughts on this business purely as a business because you are overpaying on one side, meaning that that's money that you cannot spend on hiring other people that could allow the company to grow faster, get bigger, capture more business value, and so it's also detrimental for everyone in the company because at the end of the day, especially if you're giving equity to people, people will end up owning a chunk that is much smaller.
01:00:14.155 --> 01:00:19.105
Like how do you rationalize, uh, your decision against an argument?
01:00:20.427 --> 01:00:23.940
do they also give less equity to people in cheaper, in low-cost countries?
01:00:23.940 --> 01:00:29.900
I don't think so um, wow, okay but then, then, what the fuck is that even?
01:00:29.900 --> 01:00:30.842
What does that even mean?
01:00:30.842 --> 01:00:36.657
Like you get compensated for your work, right, and that's the principle of work.
01:00:36.657 --> 01:00:50.918
Like if, if, um, if you work in germany and you hire a job, you get hired for a job, your next person should earn the same money, right, like yeah, I think, by the way, it's job, right it is.
01:00:51.038 --> 01:00:58.262
is it's the business side versus the principles, right?
01:00:58.262 --> 01:00:59.106
No, I understand.
01:01:00.155 --> 01:01:17.889
But to build a business is just a combination of people you hire, really Like it's just a team of people you hire, and if you try to see your team from a cost analysis, not from an impact analysis, I think you're already in the wrong boat.
01:01:17.889 --> 01:01:24.684
Just be honest For me, to save money, I hire one person less.
01:01:24.684 --> 01:01:27.621
It doesn't make sense.
01:01:27.621 --> 01:01:29.139
Let's say you have 10 people.
01:01:29.139 --> 01:01:32.826
They all make 100 grand just for math Simplicity.
01:01:33.394 --> 01:01:34.503
To cut everyone's salary by 10%.
01:01:34.503 --> 01:01:35.744
It's much easier, grand, just for for math simplicity, to to cut everyone's salary by 10.
01:01:35.744 --> 01:01:39.469
It's much easier to just let one person go right.
01:01:39.469 --> 01:01:41.271
So much easier.
01:01:41.271 --> 01:01:48.103
Like get, I think my future company reduces the amount of of c players.
01:01:48.103 --> 01:01:52.278
That that's the one that dragged down the company, not the mental model of like.
01:01:52.278 --> 01:01:56.547
Oh uh, you know that that you said of like it drags everyone down.
01:01:56.547 --> 01:01:57.789
It drags everyone's compensation down.
01:01:57.789 --> 01:02:03.108
No, get rid of bad performers first and have more room for high performers.
01:02:03.108 --> 01:02:09.146
And you know, I don't think this global policy speaks against high performers.
01:02:09.307 --> 01:02:28.480
Really, if anything, you attract high performance in outside of the bay area locations no, I agree with that, but I think the argument is not so much that you attract bad performers, but then you, because you can hire fewer people, you end up with, uh, suboptimal capacity to grow the business, which means why?
01:02:28.659 --> 01:02:34.789
would you be able to hire less people, Like if I have a global salary that is below SF market?
01:02:34.789 --> 01:02:42.688
I have friends who run in-house SF companies with four engineers and they spend a million dollars a month in costs.
01:02:43.110 --> 01:02:43.994
And I'm like why would you do that?
01:02:43.994 --> 01:02:51.021
And I think that is the unmeasurable upside of building businesses outside of the Bay Area right.
01:02:51.021 --> 01:02:52.838
In today's world.
01:02:52.838 --> 01:03:02.481
If you adopt a more remote, friendly policy, little policy, you're going to attract amazing people who are around the world without having to compete in this crazy market in the Bay Area.
01:03:02.481 --> 01:03:06.061
Of course there are other disadvantages of not being in the Bay Area.
01:03:06.061 --> 01:03:09.974
I've lived there for like six years and there are advantages, right.
01:03:10.436 --> 01:03:11.376
It's amazing to be there?
01:03:11.376 --> 01:03:14.501
Yeah, absolutely, but it's amazing for founders.
01:03:14.521 --> 01:03:16.824
Let's be honest, it's amazing for founders to be there.
01:03:16.824 --> 01:03:19.407
Yes, it's a horrible place to hire people.
01:03:22.456 --> 01:03:22.996
But also to live.
01:03:22.996 --> 01:03:27.067
Listen if I hire an engineer, look at our team.
01:03:27.067 --> 01:03:34.365
People live in Spain, italy, argentina or some of the most beautiful places.
01:03:34.365 --> 01:03:45.128
We also have a bit of a nomad stigma to us but, like people, are able to choose in our company where they want to be without a pay cut.
01:03:45.128 --> 01:03:55.418
If someone moves from and this happened many times I think we've had nine people in total that have moved countries many times.
01:03:55.418 --> 01:04:00.114
I think we've had nine people in total that have moved countries from London to New York, from San Francisco to Manila, you know all the way on the other side of the cost spectrum.
01:04:00.755 --> 01:04:01.719
I've moved five times.
01:04:01.719 --> 01:04:02.282
Since then.
01:04:02.282 --> 01:04:08.297
We've had a team member who went from India to Dubai, which is a really, really stark contrast.
01:04:08.297 --> 01:04:14.965
And all of this because we have a steady global salary income.
01:04:14.965 --> 01:04:20.840
It empowers people to be in charge of their life, and life also means where you live.
01:04:20.840 --> 01:04:21.141
Right?
01:04:21.141 --> 01:04:28.248
If we had a localized salary for India, we would always lock people into that local market.
01:04:28.248 --> 01:04:33.206
They can move a city, maybe, but they will never move from India to Dubai.
01:04:35.057 --> 01:04:36.242
Why wouldn't they move to Dubai?
01:04:36.474 --> 01:04:39.065
Because the salary just doesn't empower you to make that move.
01:04:39.065 --> 01:04:39.315
What if?
01:04:39.335 --> 01:04:41.804
you adjusted the salary to Dubai, if they moved to Dubai?
01:04:42.554 --> 01:04:51.501
Well, okay, then this person has to call me as a manager and the typical manager says sorry, that's out of budget, like maybe next year, Okay, so it gives you less control.
01:04:51.983 --> 01:04:52.905
It's different.
01:04:52.905 --> 01:05:00.007
Empowering people means there's no gatekeeper empowering empowering people means you're in charge, you can.
01:05:00.007 --> 01:05:00.916
You can live your life.
01:05:00.916 --> 01:05:01.818
Here's how.
01:05:01.818 --> 01:05:02.219
Here's how.
01:05:02.219 --> 01:05:03.282
Like guardrails.
01:05:03.282 --> 01:05:05.856
Like you, you probably have a tough time.
01:05:05.856 --> 01:05:11.057
It's not impossible, but you have a tough time to live on 150 in new york or in san francisco, right, that's just.
01:05:11.057 --> 01:05:13.423
You know it, but it's not great.
01:05:13.423 --> 01:05:19.619
But if you fly to Argentina now and you have a US salary income, you're going to have a great life.
01:05:19.619 --> 01:05:21.623
So make a choice, really.
01:05:23.478 --> 01:05:27.722
So you are accepting the trade-off of like there are places that are outside of our.
01:05:27.722 --> 01:05:38.818
You can still move to the Bay Area, but I'm not going to be able to like pay you a salary, then you will get a more competitive salary.
01:05:38.818 --> 01:05:40.427
You, that means you're willing to say no to people that want that, or you or not.
01:05:40.427 --> 01:05:42.596
I cannot adjust yourself in that way and you're willing to lose people because of that reason.
01:05:42.596 --> 01:05:47.938
But that's fine because of all the other advantages that you gain on the other side bear in mind.
01:05:48.157 --> 01:05:50.222
Bear in mind we we don't have the.
01:05:50.222 --> 01:05:55.818
We have this global policy for for pay bands for junior engineer, mid-engineer, senior engineer.
01:05:55.818 --> 01:05:59.728
Um, maybe junior designer, mid-designer, senior engineer.
01:05:59.728 --> 01:06:03.746
We've never hired more than one designer, but our team is mostly engineers.
01:06:03.746 --> 01:06:10.701
When we hire a head of something, now that's a different tier, right, that's a and.
01:06:11.001 --> 01:06:15.547
And the truth is now, your, your salary comp changes.
01:06:15.547 --> 01:06:29.934
Because when there's great upside when it comes to engineers, let's say, in in eastern europe or india or latin america, chances are the vp of sales, the head of engineering's the uh, you know, vp of technology.
01:06:29.934 --> 01:06:36.960
They are in other parts of the world, they are closer to where the economic innovation happens.
01:06:36.960 --> 01:06:38.945
They are probably in the Bay Area, probably New York.
01:06:38.945 --> 01:06:46.797
So now you need to readjust your thinking of okay, what's my total time of employees and what's the best salary for that one?
01:06:46.797 --> 01:07:09.753
So, yes, I'm not saying we're cheaping out, but will be, we are and we will be paying salaries that make sense in other geographics, right, so there is a chance that a vp of engineering makes more money than someone else because the total time of where we can hire this person is much smaller, right, but is that?
01:07:09.793 --> 01:07:21.648
adjusted by the tier, the seniority, or also do you adjust there like if you find the perfect vp of engineering in san francisco, will you pay higher than because that's in san francisco?
01:07:23.538 --> 01:07:32.840
well, we would still look at the total time of where we can hire a cfo and it's it's kind of like all right, if the time is big, the average is in the middle, right.
01:07:32.840 --> 01:07:37.849
If the time gets smaller, you probably get smaller to the higher end of the market.
01:07:37.849 --> 01:07:41.385
So your average is in the middle, but at a higher rate, yeah.
01:07:41.385 --> 01:07:51.130
So if suddenly your time of hiring is just SF and New York, you cannot go below New York, really Right.
01:07:51.130 --> 01:07:57.548
So now you have to adjust your salary band for this type of region you can hire from.
01:07:57.630 --> 01:08:22.447
we still don't care about the region, but it's just very unlikely that you hire a VP of finance in whatever Denmark possible, just rare right, I've been there and I understand that, like we also at Micros have like open salaries just internally Everyone knows them we do adjust partially to cost of living, to adjust for persons in power.
01:08:22.447 --> 01:08:38.400
It's a different philosophy that we're discussing, but one of the first things that I noticed as we're starting to scale was that the more senior side, like it again, as you said, it's a smaller uh pool of people in the world.
01:08:38.561 --> 01:08:47.024
Yeah, exactly, and and that also gives them more, uh, negotiating power, and we do not negotiate right because these aren't the salaries in our calculator.
01:08:47.024 --> 01:08:50.759
Uh, that means we need to like, proactively adjust for that reality.
01:08:50.759 --> 01:08:52.001
So you, it is what it is.
01:08:52.001 --> 01:08:56.470
Do you use PAVE also for senior compensation?
01:08:57.297 --> 01:08:57.859
We do PAVE.
01:08:57.859 --> 01:09:01.524
We do use PAVE quite a lot.
01:09:01.524 --> 01:09:04.765
We never take it as face value, right?
01:09:04.765 --> 01:09:16.104
Because if everyone starts using them then it kind of defeats the point, because PAVE is a market index and if everyone indexes into PAVE it's kind of like you know.
01:09:16.104 --> 01:09:17.555
I mean, that's typically how.
01:09:18.096 --> 01:09:18.921
Yeah, vicious circle.
01:09:19.336 --> 01:09:28.145
Yeah, vicious circle, yeah yeah, yeah, no, I mean we always make a reality check, but PAVE is a good estimate for sure, especially because PAVE has different regions.
01:09:28.145 --> 01:09:46.007
So a lot of times we just take an average out of all regions and so if SAP is 250, UK is whatever and 250, New York is 150, and then the United Kingdom is maybe 100.
01:09:46.007 --> 01:09:52.032
And you merge it all together, you get a pretty good grasp of what you can do as a total comp, Gotcha Okay?
01:09:52.051 --> 01:09:55.055
perfect, it's up.
01:09:55.859 --> 01:09:56.701
Yeah, well, go ahead, go ahead.
01:09:56.701 --> 01:09:57.925
Yeah, I think I think we will.
01:09:57.925 --> 01:09:59.930
I'm not cheaping out on this.
01:09:59.930 --> 01:10:10.787
I think we will have you know, vp of finance, and eventually, as the company grows, that I just have to be in the Bay Area or maybe have to be in New York if you go public at the New York Stock Exchange.
01:10:10.787 --> 01:10:14.317
But again, this is not communism.
01:10:14.317 --> 01:10:15.962
This is not like everyone makes the same money.
01:10:15.962 --> 01:10:17.305
This is clearly not how it works.
01:10:17.305 --> 01:10:18.516
This is pure capitalism.
01:10:18.516 --> 01:10:29.118
But fair right, where you paid money, it sounds so funny how paying for work for, like, equal work, equal pay you know that used to be a banner when people went to the streets, right?
01:10:29.118 --> 01:10:30.681
I don't think that's controversial.
01:10:30.681 --> 01:10:33.509
If you pay equal work with equal pay, I don't think that's controversial.
01:10:33.467 --> 01:10:53.927
If you pay equal work with equal pay, I don't think that should be controversial at all no, I, I think even you can argue uh, in favor against it from a business point of view, and I don't think there's like a perfect definition, but at the end of the day also, the cool thing about being a founder is that you get to build the kind of company and culture that that you want, and you don't need to get everything right to be successful.
01:10:53.927 --> 01:11:05.684
You need to get a couple of things right at any given point, and the rest you get to decide how you want to shape it, what's the kind of company and people you want to work with, and I think that's as you said.
01:11:05.684 --> 01:11:10.001
You're still within the boundaries of capitalism, of supply and demand.
01:11:10.001 --> 01:11:19.242
Even if you pay here, but the market is demanding this, you're not going to get anyone, but within that you can then make up your own rules, and I think that's a pretty powerful, amazing thing.
01:11:19.322 --> 01:11:19.844
It's really cool.
01:11:19.844 --> 01:11:23.262
Yeah, I think a lot more about my company building than product building.
01:11:23.262 --> 01:11:38.030
I mean, I'm a product person like a diehard product person, but also, you know, I think a lot more about how does it impact culture, how can we keep our culture and how can we grow as a team and win together.
01:11:38.030 --> 01:11:51.019
And all of these ideas I think a lot of people initially don't think about, and so if you can buy yourself a little bit of headspace, and think about that, I think it takes you very far.
01:11:51.038 --> 01:12:19.523
I've had this observation that companies that go remote, like fully remote, fully distributed, especially across different, very different time zones there's a need for them to be much more structured on their company building efforts, Because if you don't establish some of those best practices from day one it's pure chaos, right, and you get out of companies like like, get lab as well.
01:12:19.595 --> 01:12:31.278
I'm seeing in your company, I'm sending my company and it's a difficult trade off because at the beginning what you need to be doing is, you know, executing, finding product market fed, talking to the customers.
01:12:31.278 --> 01:12:48.061
And it's very easy to forget on crafting, not just the writing of it but the essence behind the values of your company, the mission of your company, the guiding principles of how you will make decisions, how you will compensate, how you will hire.
01:12:48.061 --> 01:13:03.769
But because you don't get the chance to be in person with the team and have this really tight feedback loop of how the company culture is evolving, If you don't base your decisions on these more established principles, things can go really bad pretty quickly.
01:13:03.769 --> 01:13:05.962
I don't know how it's been your experience about it.
01:13:07.435 --> 01:13:15.698
I think I do agree, when you hire people who've never worked remotely, I do agree, when you hire people who've never worked remotely, you need to.
01:13:15.698 --> 01:13:20.262
There's a lot of like an upskilling curve just to like understand how to work asynchronous and work in a remote environment.
01:13:20.262 --> 01:13:27.725
People I hear a lot of times on Twitter when there's many ways to do a remote company wrong.
01:13:27.725 --> 01:13:37.161
Right, like, if you try to mimic the office experience, if you try, if you think we've had X amount of meetings in person, let's do them in zoom.
01:13:37.161 --> 01:13:50.342
We'd never do zoom calls, which sounds odd, but like we not never, but like we try to really reduce it down and maybe a 10 minute standup versus a one hour long brainstorming session.
01:13:50.342 --> 01:14:09.739
Like empower people to write good spec, think on their own, come up with a good plan, post a plan and then have other people comment on it has been so much more efficient and healthier for your like, work-life balance than being in a eight hour long zoom call grind fest.
01:14:09.739 --> 01:14:13.166
And I think that's why people hate remote work.
01:14:13.166 --> 01:14:17.980
It's not the remote work per se, it's the constant Zoom calls that kill you.
01:14:17.980 --> 01:14:19.222
I couldn't do that either.
01:14:20.545 --> 01:14:45.587
And then there's the other side, where managers are not being taught how to work remotely and they try to micromanage and they don't understand the dynamics between different time zones and how to work asynchronously and there's all kinds of different people think that team building things that you need like Friday games on a Zoom call.
01:14:45.587 --> 01:14:47.162
No one wants that really.
01:14:47.162 --> 01:14:54.809
I think what we've seen work for us and we check our company morale religiously.
01:14:54.809 --> 01:15:09.480
We have a HR person who does interviews of how people feel, how stressed they are, how they feel like the morale is in the company, how they if the excitement is, are they excited about the work they do and do they get recognition?
01:15:09.480 --> 01:15:10.645
So all of these points.
01:15:10.645 --> 01:15:14.179
We also publish every survey every month on telecomsopen.
01:15:14.179 --> 01:15:16.024
So if you want to see the data, it's really cool to see it.
01:15:17.074 --> 01:15:19.363
We'll definitely put the link in the episode notes.
01:15:19.384 --> 01:15:30.216
Yeah, and so that helps for me as a founder, because you're not only building a product, you're also building a company, and if the company morale tanks, the product quality tanks, and so that's been great and so that's been great.
01:15:30.216 --> 01:15:45.350
But I think the way to solve that morale is to work on more exciting things, to give people room for it, to not micromanage them, to I mean, of course, everything about like mental health and not burning out and having off time, deload and all that stuff.
01:15:45.350 --> 01:15:46.171
That's common knowledge.
01:15:46.171 --> 01:15:50.658
But then also to choose your own friends.
01:15:50.658 --> 01:15:59.929
I think that's a really, really important one, because when you have an in-office company, your co-workers are in person and you have to get along with them.
01:16:00.690 --> 01:16:05.543
If there's a co-worker you don't like personally, you'll have a bad time.
01:16:05.543 --> 01:16:11.819
If I work remotely, I just don't interact as much with people, and that's good and that's also bad.
01:16:11.819 --> 01:16:14.524
It's good if it's a professional engagement.
01:16:14.524 --> 01:16:33.018
It's it's um, it's bad when you think you have to be a friend, like a close friend, with your remote worker, because you you will never be, you'll never be as close to a remote colleague on a personal, social level than to your neighbor who's across the street or your best friend.
01:16:33.018 --> 01:16:36.078
And so we have the policy make your own friends.
01:16:36.078 --> 01:16:38.243
Hang out with your friends, take the time.
01:16:38.243 --> 01:16:40.395
I don't play video games with your friends.
01:16:40.395 --> 01:16:43.266
Invite them over, um, because that's the ones you choose.
01:16:43.266 --> 01:16:49.016
I me, as a founder, I should not be choosing who you should be friends with, right I.
01:16:49.457 --> 01:16:50.797
I think that's the.
01:16:50.797 --> 01:17:17.021
The double edge of the double edge, sort of remote work, is that it gives you so much freedom to control how you work, if done well, that it's risky, if you don't know how to work remotely, to spend the whole day working, be in the house alone and then continue to expect, because you come from like a non-remote work, that you will get your socialization from the job interactions yeah, so I completely agree with that.
01:17:17.061 --> 01:17:23.042
The only thing I would say but it's not about friday, you know virtual beers, it's um.
01:17:23.042 --> 01:17:46.264
There's a lot of research that shows that teams that have high levels of like that allow high levels of vulnerability, for people feel the psychological safety to you know, express how they're feeling, that they can connect emotionally with each other, that they can give negative feedback to each other without you know being hurt or reacting in a defensive way, are much more likely to make you know better decisions, to drive better innovation and so on.
01:17:46.264 --> 01:17:54.275
So as long as you are creating intentionally elements of the culture that will foster that vulnerability, I think you're fine.
01:17:54.275 --> 01:17:57.083
I agree that that doesn't mean it has to be a zoom call.
01:17:57.083 --> 01:18:00.681
Where you like, play video games yeah, yeah, yeah, no for sure.
01:18:00.822 --> 01:18:01.224
I.
01:18:01.224 --> 01:18:05.775
I mean again, that's also where the hr person comes in and we've hired that person.
01:18:05.775 --> 01:18:25.863
When we were 20 people, um, like 27 also, it's like not that crazy, but, um, I think, as you approach 20, I think someone said like every, like every time you go, and intervals of seven, so like seven people, 14 people, 21 people, like something breaks, um, I find that very interesting.
01:18:25.863 --> 01:18:40.291
And so, at 20, 20, 21 people, we, we made the decision to bring on someone in full time to not only deal with onboarding, offboarding and sending people laptops and all that stuff, but also just to be more of a coach.
01:18:41.515 --> 01:18:49.590
This person has a bachelor, I don't know master in computer, not computer science, in sports science, not computer science, sports science.
01:18:49.590 --> 01:19:02.060
He's been a personal trainer for many years, so he knows the athlete point of view right, the, you know training, you need to train, you need to rest, you need to, you know be the best version, and.
01:19:02.060 --> 01:19:06.658
But that person also offers personal training to our team members.
01:19:06.658 --> 01:19:15.381
So if you want to do sports, if you want a training plan, if you want a workout plan, he will do check-ins with you, he will write the plan, he'll look at the diet.
01:19:15.662 --> 01:19:42.287
I like it it's amazing, uh, I think at least half of the company is using it, um, and, and that gives you a much closer connection also to your, uh, your yourself, but also to the, the coach you have, um, and so for me, you know, it's all connected right, like work-life balance, mental health, workout, good food, good diet, good um, workouts, um.
01:19:42.287 --> 01:20:00.130
I think if you, if you can ingrain that into your company culture, it's much easier to sustain the loneliness and pain of remote work that can happen as well, and and the the grind that they grind to build a company which is super, super hard, right absolutely um, yeah, I
01:20:00.610 --> 01:20:12.381
you're sharing a lot of things about your company that to maybe someone new or someone less familiar might seem like very kind of like, um, kind of counterintuitive, like uncommon.
01:20:12.381 --> 01:20:18.289
Like you are remote, global salaries, open source, open startup.
01:20:18.289 --> 01:20:25.454
You share a lot of data and at the same time, you have been very successful at raising capital.
01:20:25.454 --> 01:20:28.579
You raised, I think, 7.1 on your seed.
01:20:28.579 --> 01:20:30.402
You raised 25 on your.
01:20:30.402 --> 01:20:33.466
Your series say amazing investors behind that.
01:20:33.466 --> 01:20:40.105
Has any of them like complain, not complain as in, like hey, this might give you troubles in the future?
01:20:40.105 --> 01:20:41.476
I was like hey, you need to change.
01:20:41.476 --> 01:20:44.323
Has someone challenged from these investors?
01:20:44.323 --> 01:20:53.193
You know, group challenge some of these like unique things about, about cal I don't think so.
01:20:53.233 --> 01:20:58.917
We were very diligent when we raised funding to attract people who bought into the vision.
01:20:58.917 --> 01:21:04.282
We've had a investment memo but we also had a company values and visions memo.
01:21:04.342 --> 01:21:08.002
separate have you published that one.
01:21:08.002 --> 01:21:09.780
By the way, I've seen the memo but not the.
01:21:10.457 --> 01:21:11.320
It should be on our handbook.
01:21:12.296 --> 01:21:15.185
If you want, we can share them in the notes that would be terrific.
01:21:16.837 --> 01:21:17.059
It's handbook.
01:21:17.059 --> 01:21:17.059
cal.
01:21:17.059 --> 01:21:18.182
com.
01:21:18.182 --> 01:21:26.345
And then on the left side there's a vision statement Perfect, like filtering before is always easier than convincing people after.
01:21:26.345 --> 01:21:31.862
So, like, get good people on your team, I think, is the hard part.
01:21:31.862 --> 01:21:33.265
The rest comes after.
01:21:33.265 --> 01:21:36.722
I don't think anyone has ever challenged that.
01:21:36.722 --> 01:21:43.182
If anything, alexis Ohanian has been a fantastic board member, really supporting us with anything we do.
01:21:43.182 --> 01:21:55.582
We both share kind of like the future outlook of less people in an organization that are empowered by good leadership and AI.
01:21:55.795 --> 01:22:09.038
As funny as it sounds, but the typical software engineer today gets probably five times more done than a couple years ago, not because of AI, but also better tooling and better tools, better software, better frameworks and all that stuff.
01:22:09.038 --> 01:22:18.065
So I think I find it very unlikely for us to have 200 engineers anytime soon.
01:22:18.065 --> 01:22:20.122
It just doesn't sound right.
01:22:20.122 --> 01:22:32.630
And even if we are a series B, series C, series D company, I think I'd rather have a small team that gets a lot of shit done by having this culture that we have today.
01:22:32.630 --> 01:22:33.453
Again, remember we've gone from zero to version 4.0.
01:22:33.453 --> 01:22:33.972
Small team that gets a lot of shit done by having this culture that we have today.
01:22:33.972 --> 01:22:49.881
Again, remember we, we've gone from zero to version 4.0, with like almost a quarter million in bookings per month, with a team of like 12 engineers, right, um, that's, if you can get there, you can get to 100 million, like you.
01:22:49.921 --> 01:23:00.046
You just can absolutely at the end of the year, showing the investors that whatever you're doing is working right and, of course, if something is not working in the future, they will adjust.
01:23:00.046 --> 01:23:01.579
You will cross that bridge when the time comes.
01:23:01.579 --> 01:23:21.734
But I think, a very important lesson for anyone especially think a lot about like new entrepreneurs that might be wondering, like you know, is this weird will, like this, break the business and and the lesson there is like wait, you do get to choose which kind of company you want to build, which kind of culture, which kind of people you want to attract, and not just your team members but also your investors.
01:23:21.734 --> 01:23:28.609
And saying no to investors who are not aligned with your vision for how to run the company.
01:23:28.609 --> 01:23:37.435
It's an important step and it's hard to do, especially if you feel like tight on capital, but I personally believe that it's better to say no to capital.
01:23:37.435 --> 01:23:44.389
That will be very painful in the people because it's really hard to get a divorce from an investor.
01:23:45.219 --> 01:23:48.435
No matter how bad your burn is, do not raise from the mafia.
01:23:48.435 --> 01:24:23.625
Like, just don't you really want to keep your kneecaps, really and this is, of course, a more visual picture but there are people who you just don't want on your team and, and you know, no matter the desperation, I think I've learned in the hard way that like it's better to shut down a business than to to keep it alive with the wrong people, because every day you, every day, you'll not be happy about that decision and from that on it only gets worse, because now you have new expectations, right, like raising more money from bad people.
01:24:23.625 --> 01:24:29.125
Not only you bring on bad people, but you also raise the bar of expectations because now they have expectations and they want to.
01:24:29.125 --> 01:24:30.600
You know a thousand X their money.
01:24:30.600 --> 01:24:38.018
So I would rather really just and it sounds hard, but I would rather just shut down the business than raise for bad people.
01:24:39.302 --> 01:24:40.286
I'm of the same opinion.
01:24:40.496 --> 01:24:41.001
And then start a new.
01:24:41.001 --> 01:24:49.222
And then it's as funny as it sounds, as sad as it sounds start a new business, good people, right, it is very it's a very privileged thing to say.
01:24:49.222 --> 01:25:02.877
But also, you know, I've been at a point where you have no funding and you just need to put in the hours and bootstrap and, you know, get get to a point where you are in a good position to make good decisions.
01:25:02.877 --> 01:25:07.710
Um, a good product attracts good people, right?
01:25:07.710 --> 01:25:12.686
Good, good, good businesses attract good people that's such a common mistake, right?
01:25:12.707 --> 01:25:28.341
It's like thinking I need to attract capital so that I can attract, so that I can build a business, instead of like I need to build a business so that, I then gain the privilege of needing the money to build the business further right.
01:25:28.341 --> 01:25:30.081
But it's the other way around.
01:25:30.615 --> 01:25:31.539
It's always the other way around.
01:25:32.375 --> 01:25:39.704
It's been fascinating to get to know Cal and your approach to building the company and the culture.
01:25:39.704 --> 01:25:47.104
It's fresh, it's different in many ways and I think that's the key here.
01:25:47.104 --> 01:26:02.543
It's like to expose people to many different ways of building companies and building businesses to show that there's just no one single path and you get to choose them, and I'm really grateful for you sharing your journey and your approach and also excited for other people to learn about it.
01:26:02.543 --> 01:26:11.363
So thank you so much for dedicating us this time, thank you for having me Adil, thank you so much for tuning in.
01:26:11.363 --> 01:26:13.722
Your support means the world to me.
01:26:13.722 --> 01:26:18.283
If you enjoyed today's episode, please consider subscribing and leaving a review.
01:26:18.283 --> 01:26:24.224
It's one of the best ways you can help this podcast get off the ground and help more entrepreneurs like you.
01:26:24.224 --> 01:26:25.155
Thank you.