🎧🍌 How Amplitude Scaled to $300M ARR | Spenser Skates, Co-founder and CEO
How Large Action Models will change B2B SaaS, lessons from Amplitude's early mistakes, how to choose board members, and what most people get wrong about Founder Mode
A few weeks ago, I hung out with Spenser Skates for a few hours. We unpacked everything he's learned in 13 years of building Amplitude.
We talked about the importance of data in product design, how Amplitude is thinking about AI and “Large Action Models”, and the future of user responsive software.
We also get into the early days of building Amplitude, when to go multi-product, how to construct your board as a startup, hiring executives at various company stages, lessons from closing three acquisitions, lessons scaling to $300 million in ARR, inside Amplitude’s 2021 IPO, and what most people get wrong about Founder Mode.
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Timestamps to jump in:
4:45 Using data to build great products
8:31 Why data is existential to every business
13:14 How to go multi-product
15:48 Every startup becomes a distribution company
19:29 Lessons from three acquisitions
29:09 AI hasn’t changed B2B SaaS yet
31:24 Challenges of incorporating AI in B2B SaaS
33:09 Amplitude’s AI experiments
36:29 Navigating technology hype cycles as a public company
39:40 Amplitude’s opportunity in LLMs
43:08 User responsive software
46:16 Surprising things that slow your speed of execution
51:27 What people get wrong about Founder Mode
59:48 Pivoting into Amplitude after YC
1:04:42 Nine months to raise Amplitude’s first round
1:08:31 Surprises from closing the first customers
1:12:46 Two sales lessons for technical founders
1:13:44 Scaling to $300M+ ARR
1:17:14 How to choose board members
1:19:55 Inside Amplitude’s IPO
1:21:56 “Stock price is an output of the business”
1:26:36 Evolving from startup founder to public company CEO
1:31:54 How hiring execs changes as you scale
1:34:32 Why DEI is important at Amplitude
1:39:46 Relevance of gaming and startups
Referenced:
Find Spenser on X / Twitter and LinkedIn
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Transcript - (read on Rev)
Find transcripts of all prior episodes here.
Turner Novak:
Spenser, welcome to the show.
Spenser Skates:
Awesome. I'm really, really excited to be on this. What's the name of the podcast by the way?
Turner Novak:
It's called The Peel.
Spenser Skates:
Ahhh, Banana Capital and The Peel.
Turner Novak:
You're not a listener?
Spenser Skates:
No, I listen, I see it on Twitter, I see it on TikTok. It's all that. It's good.
Turner Novak:
Yeah, you've been starting to kind of ramp up your tweets lately.
Spenser Skates:
You've noticed I was going to do it subtly, but yeah, I'm trying to figure out how to build a following. One of the things, I've been frankly really poor at, at Amplitude is getting the word out there. To this day, there are competitors of ours who are much smaller that in certain circles have a bigger brand and it drives me fucking up the wall. And so I'm like, I'm learning how to go from salesperson to marketer and so a lot to learn from you.
Turner Novak:
Yeah. We'll talk about sales. You're a public company, you do a lot of sales. I guess really quick, what is Amplitude and then just what's the scale of the business for someone who's just not familiar?
Spenser Skates:
So Amplitude's digital analytics platform. So we do product and marketing analytics to help you understand what your users are doing in your product, where they're getting stuck, how you can make a better product. And we believe that data is critical for building great products. And so we've built the best in class product analytics. In the last few years we've added a whole bunch to the platform. So we've added experimentation and AB testing, we've added session replay, we've added activation, which is targeting users and we've added guides and surveys, all of which are products that work much better together with good data on your customers. And so we've built out this whole suite, we think of it as the, we call it digital analytics platform and it's to, so and we sell that to customers and we've been doing that for the last 13 years. In terms of scale of company, we're about 300 million in ARR. Public company, went out to the public markets about three and a half years ago in 2021.
Yeah. So now it's about how do we set our, we're early days in this category and I am thinking a lot about how do we scale here to a billion in ARR, become the market leading player for what we do in digital analytics in this next generation of helping companies build better products.
Turner Novak:
Nice. And I think the customer base is just the logos I remember seeing in I think the investor relations stuff that you have. It's like Zoom, IBM, the NBA, I don't know FanDuel, Calm, I'm looking at the sheet now to make sure I get these right. Capital One, Burger King, the company that runs Burger King.
Spenser Skates:
RBI, yeah.
Turner Novak:
It's just a pretty broad, just big businesses like corporations they use and have some kind of app or digital product web. Can you use it for your website too?
Spenser Skates:
Yeah, yeah. So anytime a user is using a digital product, so if you're using a website, if you're using a mobile app, if you're using an IoT thing, if you're using VR or AR, if we have, our product is in airline kiosks as an example.
Turner Novak:
Oh really?
Spenser Skates:
It's also in for Ford, they use this to track, they have a smart console worth all the different controls like your radio, your air conditioning, and they use it to track all the different interactions that a user makes with their car so that they can figure out, "Okay, what's most used, how do I make that experience really good and seamless?" And so anything that's a user interacting with a product we support and we do a great job of. And so we want to, and our thing is to help companies build better products. And like you mentioned, we started out a lot of small companies selling to tech startups, but we worked to large tech companies and then now to non-technology companies. So we have everyone from Walmart to NBC to Ford to the NBA, to DoorDash, Atlassian, Intuit, Square, all customers of Amplitude today.
Turner Novak:
Yeah, I remember seeing, I think, that you have 42 customers that do over a million in business? I was like-
Spenser Skates:
Yes.
Turner Novak:
You would just think of the product, product analytics that can't be that significant of it, but it seems like people pay you a lot of money to use the product.
Spenser Skates:
They do. One of the things I've realized is that, I mean, so first just for a 300 million ARR company to have 42 customers over a million, that is an outlier. Most customer bases are way more, your average customer size is going to be way smaller. The reason is because the problem of data in your product is a lot deeper, more complex and more important of a problem to the success of your digital product than businesses give it credit for.
Turner Novak:
Like how so?
Spenser Skates:
I'll give you a really simple example. So one of the inspirations for Amplitude was Facebook found that the best predictor of long-term engagement was how many friends you added. You might say, well, it's obvious. The whole category is social networking. But what was crazy is no one figured that out before Facebook because they didn't have the data to do so. And it was only because Facebook had built out a data science team that they found that insight and they architected a lot of the success of their company around that.
And so we help every single company out there do the same thing. And it's existential to these companies, if you can figure out a little bit better of a product market fit than your competition, you'll win. You'll win the entire pie. If you're either in the technology business, you're either first place or you're completely out of the game. And so that edge that you can get with understanding your users a little more deeply is massively meaningful. Let me give you one other example.
DoorDash figured out that the most important predictor of whether someone was going to do a repeat delivery was whether their first delivery was on time. So did they give an accurate delivery estimate and did it show up within the boundaries of what they said and what was interesting. And you can look at that and you can be like, "Well, it's obvious," but it wasn't because you might think it's just about speed.
Turner Novak:
As fast as possible.
Spenser Skates:
Exactly, exactly. Their biggest competitor a decade ago was Uber Eats and Uber Eats was focused on deliveries in 30 minutes or less and they were like, "Okay, we're going to optimize the app around 30 minutes or less." But what DoorDash figured out people were willing to wait longer, 40, 50, sometimes even longer if you are accurate, and that expanded the range of options they could give people and you could make the trade-off as a user.
It's like, "Hey, do I want something in 25 minutes or am I willing to wait for the restaurant I really want, 45 minutes." And as long as you were accurate about that, you were happy and you would come back. And so it's one of these things that's more subtle that you would not have figured out without understanding the data deeply. And what was that insight worth to DoorDash? Well, I mean they are the number one food delivery provider in all the United States today, and it would've been a tiny fraction of the size had they not figured that out operationally. So these questions are existential to these businesses and we are in the very early days of figuring out how data can be leveraged to build great products. And so we're providing the key infrastructure that allows you to do that and it's valuable to people. It's incredibly valuable.
Turner Novak:
Yeah, I think I wanted to ask you why it's so important, why product analytics is so important. I mean, you really answered the question and then I think just wrapping up high level about Amplitude, I think it's like $50 billion market or something. How do you just think about what the opportunity is?
Spenser Skates:
I mean, it's massive. I mean it's tens of billions, no question in that. You look at the companies that are paying us millions of dollars, most of the non-technology companies are still not fully deployed on us. So they're just ... Like NBC, we're only in a few applications. We're still not in the main application, Peacock. Ford, we just got into the main driving console, which is great. Walmart, we only work with the mobile marketing team there. So it's early days for a lot of what we do. And so if we are successful in building that out, I mean that's easily a multi-billion dollar business, if not tens of billions.
I think the analogy we look at quite a bit is we think of ourselves as the next generation of what Adobe has built out as part of its marketing cloud where-
Turner Novak:
That's a big part of Adobe's business.
Spenser Skates:
Totally. The marketing cloud's about a five, six billion dollar business overall. The data part's about half of that business. And so it's very substantial and we think of ourselves, they've done a great job building for the internet as a marketing channel. We are building the data infrastructure for the internet as the product and value delivery itself. And that's so much more valuable. Now it's early days in the market. We're 300 million ARR, so a lot for us to execute and do, but that's very much what we're aiming at.
Turner Novak:
So you have multiple products that you offer at this point. What did you start with and originally was it mobile analytics and using an app?
Spenser Skates:
Yeah, so very, very early on it was branded as mobile analytics. Then we started, we got a lot of requests where people wanted to tie the mobile and web experiences together. So we called them mobile and web.
Turner Novak:
That makes sense.
Spenser Skates:
And then we realized really what we're about is this switch from internet as a marketing channel to internet as the product delivery, product and value delivery. So the application itself, anything with a login with a user that you're doing multiple interactions over time, that's what we want to track.
Turner Novak:
And then how did you think about when was the right time to start adding new features, capabilities or entirely new product lines? I know you kind of call out that some of these, when you talk about some of these non-internet native businesses, some of them aren't fully deployed, they're not even using all the products yet. How did you think about when you should add a new product line?
Spenser Skates:
Okay, so very simple equation. It's almost formulaic for SaaS companies like us. As you pass a hundred million in ARR, that's when you go from one product to multiple products.
Turner Novak:
Why is a hundred million ARR?
Spenser Skates:
You can generally get to critical mass with selling a product single product up to about a 100, but in order to get beyond that, you need to sell a broader set of capabilities. And so if you look at the history of every single SaaS company that's gone from a hundred to a billion, they added other products or other product lines selling to the same buyer through their channel. So you look at Salesforce, you look at ServiceNow, you look at Workday, you look at Adobe and their acquisition of Omniture, it's the exact same thing. And so the dynamics of a market, at least for cloud SaaS is such that single product generally once you own it and you can get to a hundred, maybe a few hundred million, but to get from there to a billion, you need to go multiple product because there's other pieces of value in order to complete the picture of what you're doing for your buyer.
Turner Novak:
It's kind of the whole adage of you start as a product company and then you essentially become a distribution company.
Spenser Skates:
Yes, yes.
Turner Novak:
You use your product to build up distribution with customers, and then because you have that relationship, they trust you more. You can help them solve different problems and it's probably more profitable for you to, when you spend all the time, the investment to acquire a new customer, instead of just selling them one product, you sell them multiple. So in theory, if you have a good product and you serve them well, everybody wins. You make more money, your customers get a better experience, et cetera.
Spenser Skates:
This is actually one of the hardest parts for great technologists to deeply understand is how critical the distribution problem is in the business. And so you can create a better mousetrap or a better widget, and that will be great, but it's actually, if you own the channel, it's much easier to go through and scale it up.
And so the specific technology and product matters less. And really what you're architecting the entire company around is a pipeline to a set of buyers. So if you're Workday, you've built up a great relationship with chief HR officers and they need a system of record for managing their employees, and that's what that is. Or if you're Okta, you're doing that with CIO's or if you're Salesforce, you're doing that with sales leaders and then you're going to bundle all sorts of things and it's actually pretty, it's actually easier. And that's the hard part of scaling the company. It's actually easier to attach other pieces of products or other technology through that same channel that you've already built. We just did this with guides and surveys where we acquired Command AI about five months ago, and they had done a phenomenal job of building a world-class guide and surveys product.
They had this thing called nudges. If you've been to any website recently or any app, one of the annoying things is you'll get what we call a pop-up party where you'll just get all this notifications, "Hey, do you want to accept these cookies? Hey, let's check out this new feature."
Turner Novak:
GDPR thing.
Spenser Skates:
Remind you, oh, reminder, you have a notification here. And so you get a pop-up party and it's like, okay, it feels like we're back to the 1990's when the internet first came up and you just got like pop-ups all over the place except now these are even worse because they're in the app.
Turner Novak:
Oh yeah.
Spenser Skates:
You can't just have a pop-up block.
Turner Novak:
It's on your phone and you like Uber Eats, I feel like is a classic where there'll be a bonus and then there'll be a little slider thing and you're like-
Spenser Skates:
All this stuff.
Turner Novak:
The X is tiny thing and it's hard.
Spenser Skates:
It's hard to get rid of it. It's the worst. So anyway, so we're starting to get what we call pop-up blindness as users, and they actually figured out, "Okay, well we actually want to give you a notification at a contextually relevant time." Okay, so if for example, they can detect if you are confused as a user and then show a pop-up that says, "Okay, hey, it looks like you may be confused, which do you want to do any of these things? Let me help guide you to how to do it." Or alternatively, you can, if you're power user and you want to know about the latest and greatest feature, they can customize a pop-up that's you. Or if you're very frustrated and you have what's called a rage click where you're just clicking around and nothing's working, they can also guide you through that specific experience. And so they've done a phenomenal job of building this technology and they've been going for about four years. Their company was about two million in ARR.
Fast forward to, we got to know the founders last year. We acquired the company and they joined Amplitude in October. And we've put out, we had them, they worked with us to rebuild their guides and surveys product on top of our platform. And now we're selling it much, much bigger scale, much, much faster than they were doing that on their own because we've built relationships with thousands of companies already, including a bunch of the ones that we just talked about. And so yeah, as a technologist, it pains me to say it, but the harder thing is to build the distribution channel.
Turner Novak:
Yeah. What do you see, so going back to our earlier conversation we had this before we started recording, I put Crunchbase on blast where I was like, I hate their new redesign. It's so hard to use. According to Crunchbase you've done three acquisitions. I was going to say, I don't know if that's true or not.
Spenser Skates:
It's true. They got that one correct. They got that one correct.
Turner Novak:
Okay, so you've done a couple of them. What do you think is crucial about doing a good acquisition? If I'm a founder, and maybe I'm nervous. I'm thinking about this, I'm like, "I want to acquire this company, but I've never done it before. I want to ask Spenser, he's done it a couple times, maybe he's done some things well, done some things wrong." What have you learned about doing acquisitions?
Spenser Skates:
So you have to have the most important thing. This is advice I got from Brad Renscher who architected Omniture's consolidation. What became Adobe Marketing Cloud. He said, firm on vision, flexible on details. And what that means is that you have to be really clear about what the vision for the combined company is, and you should not deviate from that. Now, how you get to that outcome, that can vary.
But let me tell you where this goes wrong for most companies is because, so when we acquired Command, the Command team, we were really clear. We didn't want them to run separately. We wanted them to fully integrate with Amplitude. We wanted them to rebuild their product on the Amplitude platform, and we wanted to do that right away very aggressively. A lot of companies who are acquiring smaller companies will say, "Hey, well, we haven't decided what we're going to do." Or they're afraid to say, "Hey, we're going to tear down your product and have you rebuild it, integrate it, or we're going to fully merge the teams," because they're like, well, hey, maybe you want to keep running independently, and so.
Turner Novak:
They may not take your deal. Somebody else's telling me.
Spenser Skates:
Yeah, exactly. Yeah, exactly. But that's a fatal mistake because what happens is that it's ambiguous around where you're going and why you're acquiring and what the value is. And so you end up in this limbo, and then when you actually do try to force whatever value is a bunch of people, "Hey, that's not what we agreed to or that's not what we signed up for." Much better you qualify that out at the start. If they're not down to be integrated into the larger company, then that's okay. Hey, we'll move on and we'll find someone else who is willing to do that. But you're not going to get the value by leaving it ambiguous and just letting them hang around and hopefully by osmosis letting the two companies merge.
So my biggest advice is just be really clear on the reasons, and there's kind of three general reasons. One is team, the second is technology and product, and the third is business. And so for us, we've very much focused on the first two. We don't want to acquire another business and integrate. That's a whole mess. And it's a very, very different sort of, that's like a private equity rollout playbook. But we do want to acquire great teams who have built great technologies and have that come onto our platform and be fed through our distribution channel. And so that's something that we've been very upfront.
Now to the Command team's credit, they were embraced it. They're like, "Yes, we are excited to do that because you have these thousands of customers and the sales team and this marketing engine, and that can get us out there and we can realize our vision of getting our nudges and guides and surveys products in the hands of thousands of companies much, much faster than we could do on their own." And that's what makes it worthwhile for both sides to make the acquisition happen. Because there's not just there's the cost, there's the distraction, there's the merging of cultures, there's all the risks that are associated with an acquisition, and you're doing that because now all of a sudden you can leverage this technology, which was just sitting in a much smaller pond to a much wider base of users.
Turner Novak:
It sounds like you thought about this a lot. Are you trying to do more acquisitions? Is this something you're excited about or ...
Spenser Skates:
Absolutely. Yeah, we're going to be more aggressive. We're going to be more aggressive with them. And so we're interested in looking at companies doing interesting things in the data space in AI. That's something we're looking for things that are synergistic where a lot of having the fact that you have the Amplitude analytics and the data set we do will match well with them. So yeah, we're very, very, we're going to be, we're going to do that more and more. I will say even on the other two acquisitions we did, I think the ClearBrain one was moderately successful, and then the Iteratively one was not as successful.
And I think the mistake we made with Iteratively was keeping the basis separate for too long where we delayed that by a year, and that it just caused, "Okay, there's multiple versions of the same thing. Which one do you use as a customer? Which one do we recommend?" And then they get even further apart. And then it's not until you unify them into a single thing that you get the value, but by that point it was like you missed out, you missed the boat. And a lot of what you could have created together.
Turner Novak:
Talking about-
Spenser Skates:
And that was our fault. I want to be clear, Iteratively team was awesome. ClearBrain team was awesome. Multiple folks from those companies worked at Amplitude for many years and I'm still in close touch with, and they helped us be successful with our activation product or with targeting or with other pieces of the platform. That was just us learning how to add them. And so by the time we met the Command team, it was great. And they were very, and it's different. You can't be a founder anymore when you're joining a larger company. You still you have to work within the broader machine, and there's not always things you can go as fast at changing, but you also have much more leverage because you have all these resources that you didn't before.
Turner Novak:
Yeah. Plus it's probably interesting. People might say, you give up your upside or whatever. And instead of being creating your own big public company, you get all the compensation and the value you create for stuff from that. But also you switch from, I'm thinking Command AI. They're probably around series A stage and they're like, illiquid private stock. That's Monopoly money valued from VC's. It's complete worthless valuation at the end of the day. Versus it's like, okay, you probably gave them stock in Amplitude or cash, and so you instantly actually get real appreciation. When you make progress and the company is worth more it's actually real versus ...
Spenser Skates:
Absolutely. Absolutely. I mean, yeah. And then combined, the real magic is that now combined, it's like both companies are more valuable as a result. So Amplitude is more valuable because we're able to sell a broader set of products. Command's more valuable because they get to the leverage of the distribution from Amplitude. And so the stock of the combined companies goes up a bunch. And so they've been amazing during that, and we've seen that. We've already seen that in terms of their ability to help accelerate our business.
Turner Novak:
And it reminds me prior guest to the show. His name Rahul Sidhu, he had a company called Aerodome. It was like a drone first response basically. You call 911, somebody responds, the first responder can immediately send a drone within 90 seconds to get to the site, and just-
Spenser Skates:
Wow. See what's going on.
Turner Novak:
It's way faster than a cop car, yeah.
Spenser Skates:
Yeah.
Turner Novak:
And so it was going really well. He's like, "I didn't really want to sell the company." But he had an opportunity to join Flock Safety.
Spenser Skates:
Oh yeah, of course.
Turner Novak:
They're the leader in public safety. Thousands of customers. I'm going to get these numbers wrong, but really big business, had all the distribution. And he's just like, "It would be kind of nice just to switch the stock from Aerodome, I become a part of Flock Safety, I get their distribution, I still participate in all the upside." I feel like it's a good way to go in some cases.
Spenser Skates:
Totally.
Turner Novak:
Where you just get stock, stock in a great asset, and sometimes your investors are excited about it too. It's like, "Flock Safety, we've been trying to get in this company for years and the founder wouldn't take our money, but now we get some."
Spenser Skates:
Absolutely. Done right it can be great for all sides. Now, I will say I have to warn people there's a reason they say 90% of acquisitions fail is because it's so easy to screw this up on all the different elements that we just went through. I think we've looked at companies like Data Dog and others that have done this well, and I think we've figured out at least something. There's an element of randomness too in terms of how the teams mesh together and how much the ... Normally you can get the technology and the product and the market risks down, but then it's people. People are just random.
Turner Novak:
It seems like alignment seems to be a big thing just to get right.
Spenser Skates:
Yes, yes.
Turner Novak:
Which is not what you would think. It's not the sexy part of it.
Spenser Skates:
No, no, no. You can have a million bankers giving you fucking all these synergy models, spreadsheets, like, "Oh, you can all make cost redundancies and if we just triple this company's growth this will be worth this much." You have all these bankers pitching you on all these crazy things, but the key thing is you need to be clear in your own head about why you're doing it and then agree on that between both sides.
Turner Novak:
Yeah, that makes sense. I know you're thinking a lot about AI.
Spenser Skates:
Yes.
Turner Novak:
What's, I don't know, current lay of the land? How are you thinking about it in Amplitude right now?
Spenser Skates:
So, first thing to be really clear about, it's very, very early days for AI. Particularly in B2B SaaS. I think we've seen amazing breakthroughs in code generation, in application development, in obviously all the text and image generation stuff. But if you look at it within B2B SaaS, it's still very, very early days. I don't think I can name a B2B SaaS company frankly that has done AI well.
Turner Novak:
Is there a best example you can think of?
Spenser Skates:
No. That's my point. Most of them, it's like, "Okay, we have a chatbot, and that's a wrapper around the UI."
And it's like, all right, this is literally more work. Well, one, you're just regurgitating help docs at me. Two, this is more work to try to ... I can just create new ticket here as opposed to trying to type this fucking thing telling me to create a new ticket. Why would I use this thing? And so I think it's still very, very early days in terms of the impact that AI is going to have on application SaaS. I'm not talking about infrastructure, I think there's been a lot of great examples of doing amazing things on the infrastructure side, but on the application layer I haven't seen much.
Honestly, look, I'm going to hate on Salesforce and I respect Benioff and they built the greatest SaaS company of all time, pioneered the whole category for us. You look at ... I don't know if you saw the Super Bowl ads on the AI stuff that Salesforce had.
Turner Novak:
It's Matthew McConaughey. Was he doing some stuff?
Spenser Skates:
Yeah, he's like, "Oh, it put me outside in the rain eating at this restaurant and gave me food I didn't like."
And it's like that's not going to ever fucking happen. And even if you spend millions of dollars in Salesforce, Matthew McConaughey is not going to have a different outcome. Or he's taking the wrong route to the airport and it's like-
Turner Novak:
That's not even AI though.
Spenser Skates:
This is clearly fucking made up. These are not real uses cases at all.
So, I say that because I was actually talking with one of our board members about this is that he's found, yeah, I think AI ... Somehow B2B application SaaS has not figured out how to crack AI use cases yet. And so it's very, very early days on it. And I don't know if that's the it just disrupts too many of their assumptions about the workflows or how value is created or how the use cases are forming-
Turner Novak:
Pricing and business model.
Spenser Skates:
It's still early. I'll just talk about it for Amplitude. Everyone is expecting this magic insight finder. Like, "Hey, we're going to tell you how to increase conversion in your application." One of the challenges with that is that a lot of the context is not actually in the data already by default.
Turner Novak:
So, what does that mean?
Spenser Skates:
So, what different properties mean ... Okay, so that Facebook example, you had to understand, or that Door Dash example, you had to understand, okay, this particular variable means delivery time and this is what you want to look at and you want to see how it's correlated here. And part of the value is having a human go through that process and set up that experiment and ask that question.
And somehow, if you're just feeding it to them, it's not perceived as the same value and it doesn't register in the same way. And so it's like, "Okay, well, what needs to be true about how that insight is packed up and how it's generated in order for someone to see it, understand it, value it, and then spread that insight around the company?" That's just a small example from the Amplitude space, but there's a still a lot of figuring out about how is this going to generate value and application layer B2B SaaS that I think we're in the very early days of.
So, now, I want to be clear with all of that said, we're all in on it. We're going to go really aggressive. It's part of why I said we're going to look at acquiring teams. My co-founder, Jeffrey, is working on it. A bunch of folks from the command team are working on AI at Amplitude, and we're looking at how to staff it up because there's ... We're figuring out exactly what the product paradigm is that works.
We've done a lot of great experiments. We have a chatbot, we have Ask Amplitude, where you can create charts, and it's actually pretty effective at doing it, and you can iterate with it, with the chatbot on what that chart looks like. We have things where we'll automatically detect anomalies in your data and surface them to you.
We're just starting to build an agent where we will create variations of your website for you to run A/B tests on, what we call feature experimentation agent. We're creating a bot that will automatically create guides and surveys for you. We're trying to figure out this insights piece where we figure out, okay, how do we actually create insights that are valuable and surface them to you in the right way.
But anyway, that all said, we're all in. We're being really aggressive about it. But it's still very early days for how it's going to impact the space.
Turner Novak:
Yeah, it seems like, to your point, when you talk about ... The meme that I hear is the software now does the work for you. It starts to replace labor. So, it sounds like what you just described is there would be a person that has to set up these A/B tests on the website, measure them. But the Amplitude product just does it for you-
Spenser Skates:
Yes.
Turner Novak:
Instead of me having to do this manually, I just see the results-
Spenser Skates:
Hell yeah.
Turner Novak:
Of the test you did automatically. Okay.
Spenser Skates:
Exactly, exactly. So, and I want to be clear, we have some prototypes and we have an early demo on it, and it's not ... We're figuring this out, but the good part is we've been able to build out a team on this and we're going big on it, and I'm spending quite a bit of time myself on it. So, I say all that because my point is, I think, the transformations that I think we've seen in other spaces have yet to happen in SaaS. And so I think we're going to see there's an opportunity for companies to take the lead there, and that's one of our aspirations.
Turner Novak:
It's pretty crazy. You've probably seen I think Stripe, with their annual report that they put out, they show this chart of the growth rate of a traditional SaaS company or traditional SaaS startup and then the growth rate of an AI-native company.
Spenser Skates:
Oh, it's nuts. It's absolutely nuts.
Turner Novak:
They grow twice as fast, whatever. They hit whatever revenue milestones basically in half the time of traditional.
Spenser Skates:
Yeah, you see ones that get to 100 million in ARR in a year. It's nuts.
Turner Novak:
It's the new meme, right?
Spenser Skates:
Which is absolutely nuts. But then it's like, okay, that stalls and half of it churns out the next year. And so it's a very different ... The adoption of these products, it is nuts. The customer demand ... So, we showed a, what I call, concept video, not even a demo, for what this AI could do at our customer advisory board. We had a customer advisory board where we got a bunch of our top customers. And at the end of it we had them vote on what they were most excited about, and by far it was the AI agent. Even though the vast majority of what we showed them was fake and they knew it, they were like, "Hey, if it can even do a fraction of this, we're in." So, there is a lot of demand for this, and I think the companies that figure out how to tap into that can do incredibly well.
Turner Novak:
So, when you think about all these big technology waves, things that get a lot of hype, with crypto and Web3, if I'm on your board, I'm like, "Spenser, we need a Web3 strategy."
Spenser Skates:
Oh my fucking God.
Turner Novak:
You can say, "We're not doing this in Amplitude. This is not relevant to our product, whatever."
If you're Delta Airlines, it's like, "No, we're not going to give you an NFT with each ticket."
But with this, you can say, "Yeah, there's actually customer ... We can solve problems for customers with some of this stuff."
Spenser Skates:
Absolutely. Absolutely.
Turner Novak:
So, the extreme demand that just is there from people that you can use it to solve problems. It's so much more, I don't know, visceral and real than maybe some prior false start of these new platform waves. You always see people put up presentations of the eras of the web are desktop and the internet and then mobile and then Web3 was one for a while.
Spenser Skates:
Crypto, yeah.
Turner Novak:
But now it's like, "We're crossing that off."
Spenser Skates:
The funny part on crypto is that there was this post, I then it was by Moxie Marlinspike, where he dove ... He was a technologist that dove into how OpenSea and a bunch of these other blockchain-based systems worked. And he was literally like, "Okay, the goal is decentralization, but one is everyone is using OpenSea or one of these other providers, so it's effectively a centralized database. And then if you just took the part where it was on the blockchain out and just used a regular database, this whole thing would run 10 times more efficiently. And you'd get the exact same results and, frankly, people wouldn't even be able to tell." I always thought that was a funny one with the crypto wave. So, that jury's still out on exactly how that's going to net out.
Turner Novak:
Yeah, actually you could probably ... Did you get pitched of, "Amplitude, you should put all the data on the blockchain"-
Spenser Skates:
Oh, it would be insane to do it. There would be no reason to do that with us. Our data, so we are in the petabytes of data, and to put that on a ... You're not going to-
Turner Novak:
It's slow.
Spenser Skates:
You can't transfer that. If you're in gigabytes, megabytes or even maybe gigabytes you can do that stuff, but once you start getting into terabytes or petabytes, where we are, it's like, "No, that's not happening."
Turner Novak:
So, it's across the whole entire customer base, I think I saw a number in the website, it's 18 trillion interactions of the product that Amplitude as tracked.
Spenser Skates:
Yeah, yeah, we have five petabytes of data and that's growing. That's growing 30% year on year.
Turner Novak:
That's just any time anyone that uses a product in Amplitude is covering any-
Spenser Skates:
It's just any action. So, it's huge, huge, huge.
Turner Novak:
So, when I'm on my phone, I scroll up and down and up and down, I just made 10 interactions?
Spenser Skates:
A ton of events, yeah, exactly. Just as a comparison point, ChatGPT 3.5 was trained on about 500 gigabytes of open source internet text, and so this is ... We're at the five petabyte scale, which is 10,000 times larger.
Turner Novak:
Wow. And that's, I think, the big opportunity in just generally with LLMs and AI, it's data, having data to use-
Spenser Skates:
Massive amounts of data, yeah.
Turner Novak:
So then how do you think about that with where you're sitting? What kind of opportunities do you have?
Spenser Skates:
Oh, that's part of what makes us so excited is that we have the opportunity to use this data to help generate insights for our customers and feed that back in their products, and that's a very unique position that we're in is that we have the data and you could train, customers could train models on it, and then they can feed that back into recommendations for their end users about, "Hey, here's a special deal that I know this group resonate with," or "Hey, I know this set of customers will like this different product experience better." And so that's a really exciting thing.
And I think very, very little ... There's very, very little research has been done on that. There's these things called large action models, which is when you replicate the actions of users at scale, but even those have been trained on quite limited data sets compared to what we have.
Turner Novak:
Interesting. Yeah, it reminds me of ... Have you ever come across a product Ada? It's customer service.
Spenser Skates:
I haven't.
Turner Novak:
So, I had Mike Murchison, the founder, on a couple weeks ago. So, their product is they have one of the larger AI being used, AI application products, and it's basically just people use it for customer service. They're sort of these AI agents, these non-human employees that just live in your customer ... Inside of all your customer service that you deliver-
Spenser Skates:
Oh, interesting.
Turner Novak:
And so if they sort of replace humans. So, instead of having me and you are on the customer service team responding to people, it's just an AI that just does the stuff. And then if there's a break of, oh, there's some issue where we can't do this refund, this person in APAC because of currency, I'll get a ping and I jump in and take over for the AI. So, it's an interesting example of AI in production that's being used at scale.
And it's interesting because you kind of talked about the opportunity that they have where this example of doing a password reset. So, you and me, we're on the customer support team, someone emails and they're like, "I can't log in." And maybe the first wave of this, pre- any kind of automation at all, is you respond to them and you'll be like, "Oh, here's a link to reset your password," and you manually type it out. That became automated. And then eventually it's like in Yap there's a button to get an email to reset your own password. And then the next iteration of it is actually figuring out why their password got messed up, and it's because in the last update of the product there was a bug in how the password got stored or transferred into the updated database, and so it logged out their account or whatever.
And then the next iteration is, okay, well, can you actually then figure out the bug and fix the bug? So, the current process is-
Spenser Skates:
Totally, totally.
Turner Novak:
All right, there's a bug in our app. We need to go back to the design team, product team, we need to incorporate in the sprint and it might get updated in two months or whatever. You can actually then just go fix the app. So in the course of somebody getting their password reset to a minute later, you have an update out and there's no bug in Yap anymore.
Spenser Skates:
This is something I'm really excited about with software, which is what I think of as user response of software. So, the problem with software today is that me, Spenser, gets the same set of code for a website as you, Turner, as the same as anyone else out there. We're all running the same piece of software. But that makes zero sense because there is so much data in how we interact with that software and what our preferences are that that software should be adaptive to who we are as end users.
And there's really small ways that people are starting to customize software on a per person basis. You might have a favorites list or a recent list or recommended algorithm, recommended feed.
Turner Novak:
Yeah, you open Netflix and it kind of knows what you might want to watch.
Spenser Skates:
That's right, that's right. But it should go a lot deeper than that. The UI ... Okay, first, features that you like should be surfaced to you. That's a really easy one. Features you don't use should not be surfaced to you. And then you go kind of a level deeper than that and it's like, okay, actually the whole interface you could customize and change on a per person basis. And then you go even further than that, you could actually build features that you think will resonate with a particular user. And all the sudden you kind of take this to the limit. You get to the state where software is being completely customized on a per user basis.
And that's what I'm really excited, call that self-improving products at Amplitude, and that's the vision of where we're taking this company is that we want the ability for software to be customized on a per person basis. And the exciting part is we have the data on people's preferences and what they like and what they don't and where they get stuck and what they want to use, and if we can inject ourselves back into the building of the product, we can do that.
Now, the cool thing is because of the platform we have, we have the analytics, which is people's preferences, and then we also have hooks in with feature experimentation, through guides and surveys, through activation and targeting, where we can actually proactively change the experience. And so we're just at the cusp of starting it now to start to do this. And that, I think, is a magical unlock in what software can be for each one of us.
And that makes it so much more valuable. I was just using, as an example, my Samsung smart TV, and the thing is stupid as hell. I hate saying that because they're one of our customers too, but to get ... When you download an app, I probably want to open the app right after I download it on the smart TV. If I'm downloading HBO Max, I want to open it up so I can actually watch the thing, but then you download it and you have to go to a separate screen and then it's not anywhere in your favorites and you have to go to apps and you have to search for it. And it's like, "What?"
Eventually I figured out how to pin it, but it's like, "Why the hell am I doing that? Software should be able to reactively figure that out for me."
So, anyway, that's the future we're excited about building and enabling. And the key part obviously we have in that is with the data that we have on what users like and what their preferences are.
Turner Novak:
That's pretty cool. One actually super interesting point that I heard you mention before, we're talking about innovation, I actually hate the word innovation, but your language was sometimes you would think if you want to be more innovative and move faster you hire more engineers, you have more people on the team. You actually think if you have too many engineers and too many people working on things, you actually become less innovative. How does that ...
Spenser Skates:
Oh, one of the challenges is most people think it's like, oh, the more engineers, the more innovative, the more output you're going to have, so it's linear. So, if you have 10 engineers you get 10 output, if you have 20 engineers you get 20 output. It's a linear curve. The reality is actually opposite. It's not only is it not linear, it actually slopes down at some point.
Turner Novak:
Really? How does that happen?
Spenser Skates:
A lot of things happen as teams get larger. Ownership gets diluted. Specialization increases. The number of dependencies between individuals grows as the super linearly, as the square of what's happening. People don't have context. This is actually an observation Fred Brooks had in The Mythical Man-Month, which was about the development of OS2 way, way back in the day where adding software engineers to a project that is late will make it even later.
Turner Novak:
Really? Okay.
Spenser Skates:
Because it's not a strict function of the number of engineers working on it. There's the knowledge of the code base and how to make an impact and how to make changes in order to deliver what you want. And so you have to be very, very deliberate with how you add capacity to a team because in the immediate adding to a team, you're going to slow it down. And then if you don't set up boundaries, if you don't set up the mandates thoughtfully and well, then you inevitably slow down.
So, it's no secret the most SaaS companies at our stage, between 100 and a billion, their rate of innovation slows down dramatically. So their ability to create new products and put things out there. And so we know in our category that we are still in the early days, and if that happens to us, we'll die, we'll be dead. And so we need to keep ... So, we've been very intentional about how do you limit the rate of growth of the team so that you keep up the ability to where you give really concrete areas of ownership to people and you hold the bar high in terms of what you expect them to do and the knowledge transfer does not get lost on the current state of the system and how to improve it and innovate on it.
Turner Novak:
So, it's not stop hiring engineers. You still probably are growing the team, right?
Spenser Skates:
Yeah.
Turner Novak:
And so you need to think about how you design it so you don't ... Is there a way to actually increase?
Spenser Skates:
Yeah, so the trick is you're not going to linearly increase, but you want it to at least be going up so it's increasing, so it's monotonically increasing as opposed to going down. And there's a number of ways.
So, one is new innovation should be done in a team that is siloed from the core team because processes that you normally run ... You'll do a quarterly planning, but for a team that's building a new product, quarterly planning makes zero sense. They have no idea what they're going to build next quarter let alone next week. Instead you want to do something like a weekly check-in where you set the direction and that's it, and you don't plan any longer than a week. And so that's a very simple example of processes for a large team are not appropriate for a new piece of innovation, and you need to be able to keep both. In order to do a new innovation within a company, you need to be able to keep that group siloed from the existing systems and processes, which does not happen by default.
By default what happens is an engineering leader or product leader says, "Here's the process we're running. I want everyone to adhere to this," because it's what makes their job easier, but it's actually not the thing that makes ... They actually need to apply a different one for different teams.
Turner Novak:
Interesting. Yeah, I can see how that can be extremely difficult to navigate. Especially when we just talked about when you're in that hundred to one billion phase is when you need to add new products and you basically need to continue to be innovative.
Spenser Skates:
Yes, yes.
Turner Novak:
But then it's harder I guess. Do you see a lot of companies, I don't know, they die in that phase? I don't know if that's a fair statement-
Spenser Skates:
Oh yeah, a lot of companies stall out. You look at frankly most of the peers in our category, a lot of them have either slowed or shrinking or flat. So, absolutely. Absolutely. Happens all the time. And I know B2B SaaS the best, but I'm not surprised if you look at across lots of companies you'd see the same thing.
Turner Novak:
You said something that I thought was ... I would not have thought this about founder mode. Do you remember when founder mode was the big thing? Everyone was talking about it and, "Oh, I'm doing founder mode now," or whatever.
Spenser Skates:
Yeah.
Turner Novak:
What's your opinion on how that's kind of played out?
Spenser Skates:
The most interesting part about it was how few founders embraced it and how many backed away from it.
Turner Novak:
Because I thought people were saying, "I'm doing founder mode now," right? That was kind of the thing, like, "I'm going back into founder mode."
Spenser Skates:
Totally, totally. You can't find any company at scale that's, say, 100 employees or more, there's been very, very few founders. Even Brian Chesky himself did an interview where he backed away from a bunch of the concepts.
Turner Novak:
Oh, really? I didn't see that one.
Spenser Skates:
Which was funny because he first said it. The reason is is because the reality at any large scale is the company is ... The success of a company is the output of the team. Even Jobs, very famous extreme example founder mode was said his best product he ever built at Apple was the team.
I think a few things. First is the key thing, the first key thing I took away from founder mode, is that you have to ... You are responsible for the success of the business and you cannot delegate those details to anyone else. And there might be other ways of doing it, but as a founder, you have to be in the details of the business. And for us that's engineering and sales. For other companies it may be something else.
The second is that the right executives, and this is what I think a lot of people get wrong on it, can set you up so that you are empowered to make and drive decisions which are important for the business. Let me give you the most recent example of this I just experienced.
So, we just had Francois Ajenstat, our Chief Product Officer, join us a little over a year ago, and one of the things he helped me do is he set up a two-hour product review for me every week with a place that I was trying to drive an improvement in the user interface of Amplitude. So, the user interface of Amplitude had gotten very calcified over many, many years, and our sign-up process was 12 steps long and it was a total mess. We asked 20 questions as part of the process. We had you verify your email. You had to type in all these different fields and remember them. It was just-
Turner Novak:
Your average customer probably just wanted to get in, see if they like the product, try it.
Spenser Skates:
Yeah, exactly. I'm like, "All right, we got to cut all these screens, we got to cut out email verification, or we got to cut out all these things you need to remember and just get the sign-up process down to three screens." Create username and password, put in your data, you get charts. That's it. But in order to do that, nobody owned it at Amplitude and ownership is distributed a lot of places like, "Well, this team owns account sign up and this team owns this marketing funnel and this team owns the data set up."
It was like, "For this to happen organic, it's going to take way too long. I just need to be very deliberate about what I want to drive and rally the team to do it." We ended up making massive changes to the interface in about four months. Launched that last year. Amplitude made easy and dramatic difference. We got 40% more sign-ups as a result of it on a weekly basis, 40% more companies sending us data every week after signing up. Massive step change in the adoption of Amplitude and the ease of use that would not have been possible had I not been in the details driving it. A lot of people actually had the same aspiration to make that change to the experience at Amplitude. I remember talking to our head of design at the time, and she very much wanted to make this change happen as well, but there's just too much coordination required and unless I was driving that as CEO, it was not going to happen. That was a simple example of how building the right executive team can set you up to be very effective in the details.
Turner Novak:
The narrative around founder mode, before me hearing you say this, I might've thought that you would've just said, "I'm doing the onboarding. This is my thing, I'm taking care of it. It's just getting done." What you're saying, what actually happens is that you have a team that assisted you in doing that, and you probably had other things you were working on at the same time.
Spenser Skates:
I would not have been able to do it myself. Absolutely not.
Turner Novak:
You really think that the best way to do it is you still care about the product, you care about the business, whatever you're trying to drive results, whatever, but you set up the team in a way that actually allows you to do that and not have to be solo person founder. You're the only person in the business.
Spenser Skates:
No, you can't. I think a few things on it. One is that great executives can work with you to figure out, "How can we make this vision that you have a reality?"
Turner Novak:
Yeah, your CPO might actually be way better than you at all this stuff. You're relying on him, you're using his expertise to get things done faster.
Spenser Skates:
Totally. He actually did a good job because I was frustrated about this, and I'd go into product development leadership meetings. I'm like, "What the fuck? How do we change this? It's not acceptable." It's like, "Well, this team controls this, this team controls this. How do we do it? How do we prioritize it?" I'm like, "Man, I'm going crazy here." What he did a really good job is like, "Okay, what we need is a form that's dedicated to this as the right stakeholders in it and that the context is set about what we're trying to drive. Let's set that up for you, Spenser, and then you can go in and drive." That's been incredibly effective.
Anyway, that's a simple example. I think the other part about it that people miss is that it's perceived as micromanagement, but that's actually not what I'm trying to do. I'm trying to work with everyone in that room as a peer. I want them to tell me, for us to debate ideas back and forth so that we're coming to the best one. One of the things actually that I pushed at the start towards eliminating that we came back on because I saw it was actually the right thing was user templates. Guides for creating a funnel or guides for creating a retention chart. I was like, "Templates, no one wants to click through a wizard to have a series of steps they have to do. What they should do instead is we should just show them the result out of the box and they could mess with it."
But the team ended up coming back to me and showing me a whole bunch of data that showed that they were actually some of our highest used and most engaged with features. People who used it retained a lot better and it was like, "Wow, people actually value this. Maybe I'm trying to oversimplify the experience a little bit too much in this direction." That was a great example of... I wasn't religious about any parts of my view. I really wanted to debate with the team about how do we create the best end experience for customers?
Turner Novak:
It's nice that you're a company and a product around helping people use data.
Spenser Skates:
You can use data too.
Turner Novak:
It's good that you're still doing that.
Spenser Skates:
The part it's so funny, I'll tell you, this is the eating your own dog food part is that even then it's hard. It's so hard. It took us a while to tease out the fact that the lift we had got from the changes in the product process were 40% because we did a marketing campaign and then we rolled them out with a big announcement and launch. We saw a spike up where it's two X to use and we're like, "Yeah." We're like, "Okay, but how much is that is from the launch versus how much is the lat is from the improved signup process?" You get to get really detailed and nuanced. That's part of why I say this space is so early because even Amplitude, as focused as we've been on making it easy, it's still way too hard to use these data tools and even we're the poster child of, "Hey, we drive self-service among your organization."
Turner Novak:
Well, and speaking of using data tools, I know back to the original founding of the company, you were working on something else and that's how Amplitude came to be. How did this all start way back in the day?
Spenser Skates:
My co-founder Curtis and I first started this company called Sonalight, which was a voice recognition app where you could talk to your phone and send and receive text messages. This was 2011. It was obvious to us at the time you wanted to look at the data to figure out whether users were successfully using your product. We wanted to know if you have a successful first voice recognition event, what's the impact on retention? We ended up building out all this data, a lot of engineers with hubris. We built out all this data infrastructure to help us answer the question and spend way too much time on it.
But we actually found out some very interesting things. The crazy thing to us is as we talked to other companies, no one else had access to this data. We're like, "Okay, maybe a company can come out of this." When it came time to wind down Sonalight, we ended up saying, "Okay, there's a huge opportunity on mobile analytics here." Then mobile analytics became web, and mobile and then product and then digital analytics that we are today.
Turner Novak:
You were in YCE?
Spenser Skates:
Yeah, we did Y Combinator Winter 2012.
Turner Novak:
I think there's an interesting story. I remember seeing you were going to give people back the money or something if they wanted or something like that.
Spenser Skates:
Wow. You have a good memory, Turner.
Turner Novak:
Well, I don't remember exactly the full story. What exactly happened there?
Spenser Skates:
Wow, you have a good memory. This is a long time ago. We had fundraised from a few angels.
Turner Novak:
This was before, after, during?
Spenser Skates:
We did YCE, we went to demo day. I did a demo on stage of Sonalight, really impressive demo. I had my phone, I put it in my pocket. I'd do this huge thing about talking to my phone and I'm from the future. It's amazing. We actually got the most press coverage. It was us and this company called Pair or Couple I think that had a texting app or sexting app between a couple. We ended up raising a little bit of money. We got 150 just from being from YCE and then raised 120 on top from three angels, including one Adam Draper. After doing that, we realized looking at the data that it's going to be hard to make a successful scaled consumer company out of what we're doing at Sonalight.
It's just the voice's interface wasn't quite there and it was not clear if it was going to take off. We said, "Let's go do something else." We were like, "Well, hey, we raised a bunch of money and we don't feel right, and we should maybe give this back because we're not doing the thing we originally said we're going to tell all these investors." We asked Paul Graham and Y Combinator, they were like, "No, what are you talking about? Don't do that, keep the money."
Turner Novak:
Don't give the money back.
Spenser Skates:
They've already written it off at this point. "Better you have it to keep going on what you're doing next." By the way, they're investing in you not really in the idea at this point because it's so early.
Turner Novak:
Did you not really appreciate that at the time? You thought they had this thesis on voice recognition?
Spenser Skates:
Yeah, I don't know. They wanted to invest in that for some reason. I remember one of the angels, I won't say who, but one of the angels I was convinced, invested in us because we were the lamest company out of the batch, or they invested in three or four companies, all of which including us. I was convinced they were investing in those because they were the lamest companies out of the batch.
Turner Novak:
Was the valuation low or something? They thought this-
Spenser Skates:
I don't know. I think we were all on the younger side too, so that was part of the appeal. It's like, "All these kids will figure something interesting out." I couldn't tell. But anyway, we ended up pivoting that company into Amplitude and of course all these years later ended up doing incredibly well. Thank goodness for them and thank goodness for us, we didn't return the money back at the time. On a per share basis, they invested at four cents a share in the seed round, and it's 1116 or something as of 11 or 12-ish right now. Our peak was at 80 at one point. They made out just fine, got more than 200 X return on their initial capital.
Turner Novak:
Well, I think you mentioned too, that it was a real grind when you raised the first round starting the company. Can you just talk us through that? I don't know how it went, how you got it done, just tell people what it was like.
Spenser Skates:
Yes. It was brutal. That was the first time I wasn't sure if we were going to make it and I felt like I just don't want to do this anymore.
Turner Novak:
But you stuck with it obviously.
Spenser Skates:
I did. We were trying to raise a million dollars. We had been working on Amplitude for a year. We didn't have any customers. We had a bunch of people using it, but no one paying us. Really the only credibility we had at that point was we had the vision and we had the team. As myself and Curtis, and this was before Jeffrey joined us, and I remember I'd just go out every week and I'd pitch a bunch of VCs and angels and get a bunch of nos. Then it was repeat that in and out.
Turner Novak:
What was the pushback that you got? Why weren't people investing?
Spenser Skates:
It was the idea that mobile analytics was too late. We were too late. Flurry had already taken the market and what we were doing was too late to it. That was one. I think another one was we didn't have any traction really. People were right. I was also not a particularly good... I didn't know how to sell what we were doing and pitch what we were doing. That took a while for me to figure out. I'd go out, try to raise money, get a bunch of rejections each week. Then randomly two weeks later, I might get $50,000 to come in. It was like, "Fuck, it's a long way between $50,000 and a million."
Turner Novak:
It's five percent of the way there.
Spenser Skates:
Yeah, five percent There you go. Of course we do things like we count the 270 we had already raised under Sonalight. We'd be like, "Look, wow, we're making progress in the fundraise." It was brutal. It was absolutely brutal. The story I always told people at the time was it took six months, but I'm pretty sure if I look back in retrospect, it was probably a nine month fundraise. We were very, very unhot and non-sexy at the time. We did end up getting it done.
Turner Novak:
How did you get it done? What was convincing people?
Spenser Skates:
I don't know. I still don't know. I think I eventually got better at pitching it. I think the momentum of the round ended up carrying itself. We got to a tipping point around $650,000 where a bunch of people were like, "Okay, this looks like it's going to get done. I better get in now." Then we ended up going from a million dollars to raising two million quite quickly, super quickly.
Turner Novak:
Usually there's a risk of if you've raised nothing and I give you 50,000, that might be a month of runway and if no one else invests and you get no customer, the company dies. It's actually really risky.
Spenser Skates:
Worst is one VC was like, "Yeah, I'll give you 200, but only if you could raise a million." The worst.
Turner Novak:
I hate when people do that. When you got to do, what I do is I tell people I'm in, and then I just help them raise the rest of the money.
Spenser Skates:
That's awesome. Good for you.
Turner Novak:
Well, and then sometimes strategically, I'm in and we'll sign the safe and I'll send you the money. Then sometimes people come in into the higher valuation and you actually get a deal because you came in really quick.
Spenser Skates:
That's the way to go. Kudos to you for not putting any entrepreneurs in that situation. This contingent one. It's the worst.
Turner Novak:
I know you said you follow me on Twitter, the memes and stuff. That's just low hanging fruit of making fun of bad behavior from VC.
Spenser Skates:
There's so much. I remember I told their first VCs, I'm like, "Oh, I fucking hate VCs." I was just being real with them for a moment and they're like, "Not us, right?"
Turner Novak:
Of course not.
Spenser Skates:
I'm like, "No. You guys are great." Appreciate it.
Turner Novak:
You mentioned you didn't actually have any customers. How did you get people to start using it? Do you remember those days of the first couple of customers?
Spenser Skates:
Yeah. One of the first customers we signed the very first... Before that, we just begged people to use it and we just basically give the whole thing away for free. None of those were paying us. I knew not many would pay us. I remember arguing with this one startup about like, "Hey, can you give us 50 bucks?" It's just like, "What are we doing here?"
Turner Novak:
Wow, they wouldn't even pay you 50 bucks?
Spenser Skates:
They wouldn't. They're like, "Well, maybe we need to see more value." It's just your time and meeting with us. It's not even worth that. It's worth more than that. Come on. What we ended up doing was, I remember I got introduced to this one company, Super Lucky Casino, by one of the investors who was checking us out. They ended up investing. I remember I show up to the meeting with the co-founder, CTO of this company, this guy named Brett Terrell, and we go through the demo and we spend 30 minutes showing him our little crappy analytics product and we get to the end of it. He asked me a question that had never been asked for before. He was like, "How much does this cost?" I was dumbfounded and I'm like, "What the fuck?"
Turner Novak:
Never paid.
Spenser Skates:
"What? What'd you just say? How much does this cost?"
Turner Novak:
Do you want to give me money?
Spenser Skates:
"Oh, shit. I better come up with a number." The first number that popped into my head, of course was $50 a month. That's what you pay for SaaS. $50 a month. Wait. I remember Patrick McKenzie's advice to always charge more. I'm like, "All right, let me think. Double that. Go to a hundred."
Turner Novak:
This is all within the course of two seconds?
Spenser Skates:
I was about to say a hundred. I'm like, "No. I really got to push it here. I need to think of a number that is bigger than a hundred." The biggest number I could think of at the moment was a thousand. 10 X that. I go to a thousand. I like, "A thousand dollars a month," with as much confidence as I could muster and to my absolute surprise he's like, "Wow, that's so cheap. Great. We'll buy it." I'm like, "Ph my God, this is incredible. All my dreams of being a professional software engineer that creates software that someone pays for have been Filled in that moment. Someone decided to pay me money for software, and I now have created a tiny, tiny, tiny amount of value for someone. All the years of toil and all the missed opportunities and all the money that had been put into us and belief that had put into us has been validated in that moment."
I was like, "I've achieved everything I've set out to achieve emotionally is starting a company. The rest is just gravy from here on." That was the first. That was the very first. Then we launched the company a few months later, and then we started getting on the train and the reason Brett wanted to buy us is because he had been a product manager at Zynga before, and he was used to having these amazing dope-ass analytics with concise the users all waste.
Turner Novak:
Did they build a bunch of stuff internally?
Spenser Skates:
Yes. Zynga had built a ton internally, but he didn't have any of that in his own company. He is desperate for anything, so he is willing to use the software from this little two-bit shop that had no product or customers or nothing to speak of.
Turner Novak:
He probably had just a full-fledged team of 10 engineers just all day building custom analytics for him.
Spenser Skates:
Totally. He was desperate for this. They were a small fifty-person company at the time, but he was desperate. He wanted this problem solved and he was willing to pay thousands of dollars a month to figure out how to get it solved. Anyway, Brett, I appreciate you all these years later. Thank you for believing in us. That gave me the confidence to go out and do the rest of this business.
Turner Novak:
Did he know he was the first customer?
Spenser Skates:
Yeah. I don't know if he knew at the time he was, but pretty soon he figured out and we took good care of him. We constantly built stuff for him. We'd be very responsive to everything he wanted. He'd come by regularly and helped him and his team out. It worked out. It worked great for both sides. Then I realized, "Hey, I need to go become a salesperson and start sell software all the time."
Turner Novak:
Then what did you find that worked then? What's a good system for thinking of... You just described getting the first customer. It sounds like you didn't really have a system, you didn't have a process.
Spenser Skates:
I'll say a few things about... One of my mistakes was spending too much time building the product because Curtis and I and then Jeffrey, were all engineers and we know how to solve problems, that people have a problem, we can solve it, but the going out and selling that was foreign to us. We were very reluctant to spend a lot of time there. That was a mistake.
Finally, after Jeffrey joined us, I switched full time. I switched from building the product to full-time selling it. One of my recommendations for early stage team is spend half your collective founding team's time on selling the product, build half the time, talk to users to sell half the time. That's where you should be allocating your time. Too many engineers are all in on this bucket and very little on customer development or sales or what have you. I got a sales coach, this guy named Mitch Mirando, who would give me tons of coaching and advice. I remember he'd meet with me every week and he asked me this one question. We go through the list of customers talking to me.
He is like, "What's the business pain?" I'd be like, "Well, they want to make some charts or some SQL dashboards." He's like, "Spenser, that's not a business pain. What's the pain?" He'd constantly be beating me up, asking me, "What's the pain?" Finally, in these meetings, I would ask these customers about, "Well, how painful is this? Why do you need this? What's the pain to you as a company? How would you rate this on a scale of one to 10?"
Then I started to learn the sales process is not about demoing your product. The sales process is about finding people who have the pain, who have enough pain and care about the pain. Anyway, we then started selling. Next customer is 2000 a month, next customer is three, then it was four, then it was six, then it was eight, then it was $10,000 a month. We eventually sold the product to these guys QuizUp in Iceland and had the team visit Iceland. There's actually a small tech community there. We're off to the races and grew from zero to a million in ARR in nine months.
Turner Novak:
Nice I guess compared to today.
Spenser Skates:
Not that nice compared to today. Even today, zero to a million in nine months is good. You go from zero over the course of... It was a good two years I think, or a year and a half at that point to all of a sudden now you're on the trajectory of building a business.
Turner Novak:
What was it? I think the rules back then, or the general mantra was you get to a million in revenue in a year or something.
Spenser Skates:
24 months. If you can go zero to a million in less than 18 months, that's good.
Turner Novak:
It was triple, triple, double, double. Then you venture that and then you can IPO roughly. That was the back 10 years was the thing.
Spenser Skates:
Totally.
Turner Novak:
It sounds like you did that. I think if I remember, you did zero to one and I think it was 4.5.
Spenser Skates:
Zero to one in the first year. Wow. You've done your homework. One to four and a half in the second year. Four and a half to 13 in the third year. 13 to 31 in the fourth year, 31 to 53 in the fifth year, and then it was eighty-something. Then we passed a hundred.
Turner Novak:
Nice. Then you're still growing, is it forty-ish percent?
Spenser Skates:
Today?
Turner Novak:
Yeah. What are you growing at today?
Spenser Skates:
Oh, it's brutally low. We're at 10%. We got to be growing a lot faster. We're 60% year-on-year growth in 2021. Now we're 10% year-on-year. We need to set ourselves up to grow at 20 and then 30% to grow a lot faster than we are.
Turner Novak:
But profitability wise, you have a pretty good profitability profile?
Spenser Skates:
Yeah, we're profitable today.
Turner Novak:
If you can stay profitable, inflect the growth rate up. The rule of 40.
Spenser Skates:
Yes. That's the goal. We just brought in a CFO, Andrew, who we laid out a plan and when we're going to get to different stage gates on that. I want to be clear, we're still this early days for this category in this business, and we're primarily focused on growth. The great thing is at the scale, you get all these economies of scale, so you can actually do it quite profitably.
Turner Novak:
Nice. One thing you mentioned was talking to your board members, I know you were pretty deliberate about bringing the right people on. How did you think about and prioritize who you added to your board?
Spenser Skates:
We got lucky, frankly, but through that luck, we have gotten a very, very incredible group of individuals. Very, very special group of individuals that are aligned towards the long-term vision of Amplitude and have provided an incredibly stable foundation for our success. I'm very, very lucky to work with the group. It started with Eric Bishria from Benchmark, who I frankly think is the best series A investor of this day and age by far. He's a modern version of Bill Campbell. I have learned 10 times more from him than I have from anyone else about what it means to be a great CEO at this stage. He's interviewed hundreds of executives for us and helped me think about all the different transitions we've made as a company from one million to all the way to 300, and as we go towards a billion.
He's very long-term oriented. We've been working together for over 10 years at this point. I just incredibly lucky to work with him. We've had Pat Grady from Sequoia, who's very long-term oriented as well, impressively so. A lot of investors say they're long-term oriented, but not many are tied to their fund cycles. But they actually change their fund structure specifically so they could be long-term oriented.
Turner Novak:
And not have to sell and not continue to hold?
Spenser Skates:
And not have to sell for seven to 10 years. That's starting to become a problem, especially as the life cycle of companies is getting longer and companies stay private longer. Pat's been incredible. Sequoia's been incredible. Jim Whitehurst, former CEO of Red Hat's been incredible. I've learned a ton from him. He's a living legend. Erica Schultz president of Confluent. As we think of what does great go-to-market look like at different stages, she's been an incredible help and supporter of me and of Amplitude and learning as I've been learning, "Hey, what does great go-to-market look like as you continue to grow?" Ron Gill, Catherine Wong, and we just added Tim Swole to the board who was the founder, CEO of Zora.
Turner Novak:
I actually saw that on Crunchbase. That was one of the things they showed you.
Spenser Skates:
Good. They got it right.
Turner Novak:
Interesting. Then one of the things you did was you went public in 2021.
Spenser Skates:
We did.
Turner Novak:
You could have sent an email to Tiger Global and they could have just given you all the money in five minutes, right?
Spenser Skates:
Totally. Yeah, they did give us an offer on a round at some point.
Turner Novak:
Why did you do an IPO in 2021? What was the thinking around doing that?
Spenser Skates:
I think once a company gets beyond a hundred million in ARR with good growth that you... I think the first thing is there's a bunch of opportunities that you can take advantage of as a public company that you can not as a private, so you have a liquid currency for your stock.
Turner Novak:
It's not like fake monopoly money too. It's basically this specific on out.
Spenser Skates:
Priced in real time by the market. That allows you to recruit, that allows you to do acquisitions, that allows you other things with debt or raising funds.
Turner Novak:
Acquisitions.
Spenser Skates:
Funds that are just much more difficult to do when you're private. Then secondly, it sets a higher bar for what great looks like and people recognize that. Companies, customers, partners, employees, other people in the ecosystem recognize that, and it's like that little edge that you can get over your competition.
So we're in a crowded space, and so it's like, yeah, we'll take every advantage that we can get to get Amplitude to help stand out. So I'm a big fan of taking your company to the public markets. I think one of the criticisms is that the bureaucrats take over and it's like, "Oh, you're driven by the quarter." And so but this is where you have to be very intentional as a CEO and leader about where you're taking your business and why, and not let the short-term pressures of the quarterly reporting and discipline around it oversteer your company.
And the great leaders, you look at Larry Ellison, you look at Bezos, or you look at Gates, Microsoft or Gates, they all did that incredibly well.
Turner Novak:
Yeah. What would you say is the right and wrong way to do that? Because I feel like you guys have a good example of you went public, the stock went up, then it went down. How do you just continue to focus on what actually matter versus like, "Oh, the stock price is down, employees are thinking this, investors are thinking this"? How do you keep people focused on what matters?
Spenser Skates:
It's a test of leadership by far, and people will look at it all the time. So I spend a lot of time explaining what the stock is. The stock is kind of an output of business, not the other way around, not an end in itself, if that makes sense. And so it's kind of like I think of it as exhaust coming from the business, and if the business does well, it'll reflect in the stock. But if you set your thing up to drive the stock price, you're going to get all sorts of weird bad results in terms of where you're taking the business. It's very easy to run into the ground as a result.
Turner Novak:
A lot of it's market driven too. Just like is the market going to value it?
Spenser Skates:
Oh. Oh, yeah. And any short-term thing, it's like I was walking the team through change in stock price. It's like, "Oh, why'd this change, change industry? Why'd this change? Election results, why'd this change? Hey, there was a sell off in this category." And it's like, "Okay, literally none of this stuff in our control." We build a great business and achieve what we set out to do, then we'll be successful and that'll reflect in a lot of things, including in the stock.
But in the short term, I think it's Buffett that said in the short term, the market is a voting machine, in the long term it's a weighing machine. And so if you're living, it's like a high school popularity contest if you're living by did you get invited to that party and are you in the know? It's like, "Fucking what are we doing here? It's no way to run a public company. This is no way to run any sort of organization, particularly a public company."
One of the exercises we did actually before we went out that I thought was very useful was to pretend like we had a stock price and show the team it going up and down every week. So at all-hands I'd be like, "Oh, it went up this much. Oh, it went down this much. Oh, it went down. Oh, now we're really worthless. How do you feel now?" And the point was the business hadn't changed and we were still focused on the long-term of what we were doing. And if you stayed focused on that, then you get incredible results.
There's also this thing because of one of the ways you can model the change in price of a stock is with a random walk. And so there's this thing in psychology where a loss is twice as devastating as the equivalent gain.
Turner Novak:
Oh, yeah, I've heard that before.
Spenser Skates:
And so if you just go down one day and you go up the next, you'll feel two times as bad about the going down than you will about the going up. And even if you end up in the same spot, you are psychologically worse off. So it's like why would you do that to yourself? It makes no sense.
Turner Novak:
Yeah. Yeah, because looking back, it's like the last X amount of time is I've just felt like shit and it feels like I haven't gone anywhere because I'm flat."
Spenser Skates:
Totally, totally. Well, you feel even worse than if you just hadn't looked at the thing at all, so-
Turner Novak:
Yeah, that's fair.
Spenser Skates:
... yeah, it's just a... Anyway, so there's all sorts of, having a... I just want the price to be stable, because that allows to defocus on, it allows you to plan around it better and all of that. But the good part is I've been really clear with the company about that, and I think people understand that we're in this to build something extraordinary over the long term, and that whatever volatility you may see in the short term is not reflective of the opportunity and our execution against that.
Turner Novak:
Yeah. Plus, if you think about public versus private stock or whatever, if you join a company when it's undervalued and you're getting compensated when something is, quote, unquote, "undervalued" and you're going to create value, you want to be getting paid from a stock price in equity that is actually worth way more than what you're really getting.
Spenser Skates:
Totally. Totally. Totally.
Turner Novak:
And you're getting a good deal then. So I mean, this is probably not something that's that exciting for people to hear when they're like, "Oh, my stock's worth less," but if you are getting more of it because it's like the market's probably going to get lower, that's actually could be a good thing.
Spenser Skates:
Absolutely. I mean, yeah, yeah. I mean, it's funny, even the Command guys, I was talking to them and the stocks appreciated a whole bunch since that acquisition, so they're like, "All right," where everyone's like, "Yay, we're happy."
So yeah, there's all these funny dynamics in the market that can happen because of things like that.
Turner Novak:
Yeah. In terms of how you've evolved from being the founder Spenser when you were Sonalight, pivoting, starting this product analytics idea to now it's a public company, the CEO of you have a lot of employees, big teams, what have you learned and kind of evolved and changed over that period of time?
Spenser Skates:
Oh, so much. Turner, we could do a whole podcast on this part.
Turner Novak:
We're doing a part two.
Spenser Skates:
Yeah, part two on this.
Turner Novak:
What's some of the biggest?
Spenser Skates:
I will say being a large company executive is very different from being a founder, and most founders do not successfully make that transition.
As a founder, you wire your brain in a certain way and you have to redo, undo a lot of that and redo it in a different way to be successful as a large company executive. And what's interesting, how even founders who are very successful will normally leave seven to 10 years in the business because this change is so dramatic.
Now, the funny part is, believe it or not, being a large company executive is actually easier than being a founder in a lot of ways, but just making the identity shift is very difficult.
So I'll give you a really simple example. As a founder, it's your job to lead from the front all the time. You should be out there selling the product, you should be building the product, you should be talking to customers, dealing with the fire, recruiting people, all that stuff.
As a large company executive, you cannot be leading by example on everything all the time. There's just too much stuff to do in the business. And you can no longer have to do, "Hey, I got to talk to this customer, I got to meet this employee, I got to do this thing on the PR side," and you have to be much more selective, frankly, stingy with your time. Whereas a founder, you're just being generous with it everywhere and you're just showing, hey, by sheer force of will that you're the most committed and you want everyone to follow your example.
But you have to rewire that thinking. And it feels bad. Now you become the person you hate. Now you're the person who's just crapping on other people's works and setting high expectations for them and managing them and expecting them to do something while you're not doing yourself because you're no... Not to say, there are places where you do lead by example. I'll still be on customers, I'm going to do product reviews, all of that sort of stuff. But there's a lot of places where I just can't because you don't have leverage, you don't have time, and if you do try to do it, you'll burn yourself out.
And so that is an example of the mentality shift that's really, really hard to do going from founder to large company executive. And so I've been trying to deliberately learn that over the last three years, and it's been quite the shift.
Turner Novak:
What's worked best?
Spenser Skates:
What has worked best?
Turner Novak:
Or how have you done it?
Spenser Skates:
How have I learned that? It was hard. I mean, frankly, you kind of learn it because you have to, otherwise you burn out.
I mean, we had to, we went to the public markets. We had the stock come off from its highs by almost 90%, or actually it was 90%, 84 was the high and low was $8, so just under $8. And then we built the entire executive team to be stage appropriate.
Turner Novak:
Oh, did you really?
Spenser Skates:
And that was brutal.
Turner Novak:
Okay.
Spenser Skates:
Yeah. If you look over the last three years, entire executive team has different set of folks. So new president, head of go-to-market, Brent Swachie, product officer, KJ, head of HR, Andrew, CFO, Wade, head of engineering, all new in the last 2, 2 1/2 years. And so that was brutal. So that was just like, "Hey, you just have to do it. There is no choice to be successful at this."
So part of it, it is just that you have to meet the moment and just go do it. I would say another part, you just talk to other CEOs and other founders who have gone through that change, you understand how do they spend their time, you understand where they focus on, they understand what you do and what you don't do. You understand, "Okay, how do you hold executives who are more experienced at a function than you accountable for the results? How do you get to run a cohesive team? How do you prioritize? How do you see a change that you need to make in the business, how do you communicate about that change and the expectations around it?"
And so there's no formula on it. The biggest mistake honestly was I should have gotten in front of that change a lot earlier as a CEO and looked at what founder CEOs spent their time on between the 100 million, billion mark. But yeah, now I'm here. You kind of learn through it and now we're on the other side of it.
And so now, there's still a lot more for me to learn about this topic, but I think I'm really excited about the executive team, we've got it. Really excited about the path forward and the innovation that we have the ability to make. And so I'm sure a year from now or two years from now I'm going to look back today and still feel like I'm an idiot.
But I feel like it's terms of like, "Okay, what does it mean to be a large company executive?" I feel like that mind shift has changed a lot. Yeah, you think a lot about people and resources and where to deploy them and, "Hey, is this problem get solved?" If not, it's not I can't dive into myself. It's my job to think about how do you rally the right group around it?
Turner Novak:
Yeah. And you mentioned there's kind of these different phases of hiring executives. There's, I don't know, early stage, mid-stage, later stage. How have you kind of evolved?
Spenser Skates:
Yeah, that's one of the more subtle things you learn over time. So early stage you want folks who are like founders who are going to make something happen from nothing. At early stage you have no brand, no product, no customers, not much, no talent, nothing you can do, and they have to make something happen just like you as a founder through sheer force of will.
Turner Novak:
You have to build it, sell it, recruit someone on the team.
Spenser Skates:
Exactly. Exactly. Yeah. How do you create an event where customers will come and show up even though nobody knows about who you are? That's hard challenging yourself.
Turner Novak:
Can't just email somebody, just be like, "Hey, event team, put up this event.
Spenser Skates:
Totally. Totally. There's no team to do it.
Turner Novak:
Yeah.
Spenser Skates:
So you get executives who are very much like founders. For the mid-stage, you want someone, then you need to start doing repeatable processes instead of just starting stop all the place. So once you get to about 20 or 30 million ARR, you want repeatable. Repeatable is the key.
So it's like, "Okay, how do you create a sales process so that you can forecast accurately for the quarter? How do you get the right spec for the type of engineer you're trying to hire? How do you get your books in order so that you can reliably report your results?"
For the late stage, then you get, honestly, people who their main job is actually not even running those processes. Their main job now is to hire other leaders who run those processes. So now my job is to hire people who are good at hiring other leaders and rallying them, and now it's like the people who are actually doing the work a bunch of layers down.
Turner Novak:
How do you tell that someone's good at hiring? If I show up-
Spenser Skates:
Track record is... I mean, first is what you're going to work for for them. That's a good one. Track record of doing it before. Depth.
One of the questions I like to ask executives is like, "Tell me about the best hires you've made," and then I start testing them on how well they know these people, like what motivates them. It's like, "Oh, they want to make a lot of money. Cool. Why do they want to make a lot of money?" More in-depth you can go there, the better. You see who wants to follow them from company to company.
Turner Novak:
I've definitely heard that.
Spenser Skates:
That's a big part of executives. Executives who have talent will have multiple people who will want to work with them again. That's a strong sign. It's kind of a flag if they don't.
But just knowing that that's what you're hiring for once you're past the 100 million in ARR stage, that's the harder part. It's less about can you do all the work and scale the stuff yourself? It's more about can you hire a great team around it.
Turner Novak:
So, well, speaking about hiring and team composition, how are you thinking about DEI today?
Spenser Skates:
So first I just want to get my rant on this, which is tech industry fucking full of cowards as leaders. Okay? The fact that a few years ago these leaders were all in on DEI and now, "Oh, new administration, all of a sudden we didn't actually believe all those things that we set out to do and we're going to get rid of them." And to really silly degrees. I mean, Facebook getting rid of tampons, men's bathroom, it's just like what the fuck are we doing here?
And so it's like, "Okay, I'm clear. You just didn't have any principles in the first place. You only were interested in DEI at the time because your employees pressured you to do it, but you actually didn't believe in the power of diverse teams as a leader. And then now you're only flipping the other way because Trump got elected and Republicans are in power in Congress." It's like, "All right, this is the exact fucking opposite of leadership." And so frankly, I think 90% of the tech industry and CEOs and my peers are fucking cowards on this. So put that on the podcast. Yeah. Let's clip that.
Second is we haven't changed our view on this at all at Amplitude. We've been a believer in diverse teams from very early days where we've been intentional about how do we create more inclusive environments, particularly for underrepresented groups like women in tech from when Amplitude was very small to the last few years to today. And so we're still very, very intentional about that in terms of thinking about how we build out different teams at Amplitude, how do we build out our executive team, how do we build out our board.
The second part of it is, frankly, I think it's just Amplitude is a place where you belong and we want to include you whether you are trans, whether you are from a minority group, whether you are a different gender or different national origin, or whatever group you're from, you belong in Amplitude. And I think that is a very important message for individuals to hear from their leaders at this time, and so I want to make sure folks at Amplitude hear that, want to make sure folks in the broader industry who are thinking, considering joining Amplitude hear that as well.
So I just, I think it's frankly ridiculous that so many CEOs and companies have backed away from this stuff. It's complete lack of leadership on this issue. And it's like, okay, well, let me at least give Zuckerberg himself a few kudos. It's like, all right, this guy just wants power. This guy is just pursuing raw power in whatever form it takes. The principles just shift to follow that. At least that guy's clear about what he's doing. The rest of them, it's just like sheep. It's sheep.
There's a difference between, there's this great post online I love that talks about sheep logic, and it compares sheep to wolves. It makes the point that both sheep and wolves are very social creatures and very smart, very socially aware. And wolves are very thinking about the success of the pack, willing to make sacrifices for their family members, for other wolves so that the pack can survive and do well.
Whereas sheep are incredibly, they're very other aware, but incredibly self-centered. And so if they see one sheep panicking, they're going to panic too. If they see another sheep has found an interesting patch of grass, they're going to go try to eat it to the... If they see another sheep running off a cliff, they'll go join. And so anyway, I'm a strong believer in leadership as a wolf, not leadership as a sheep.
Turner Novak:
Yeah, interesting, because you would not think, in saying that sheep and wolf analogy, you would not think of the wolf as a leader. I mean, you think of the evil bad guy who's eating the sheep, right?
Spenser Skates:
Oh, but I love dogs. Who doesn't love dogs?
Turner Novak:
Well, yeah, exactly. But to your point, it's like yeah, the wolves are actually... Well, I mean, if you're leading a company, do you want to be a sheep or do you want to be a wolf?
Spenser Skates:
You want to be a wolf.
Turner Novak:
The leader of a company wants to be a wolf. Yeah, exactly.
Spenser Skates:
Hell yeah. Hell yeah.
Turner Novak:
So.
Spenser Skates:
Hell yeah. Too many sheep these days. Yeah, so.
Turner Novak:
Yeah.
Spenser Skates:
And that metaphor applies to a lot of different, there are a lot of sheep-like games, like investing as they joke, it's very sheep-like.
Turner Novak:
We're all sheep.
Spenser Skates:
Where it's like, "Hey, who else is in the round? Is it hot? I'm going to get down before someone else does. Oh, shit, this company's in trouble. Better peace the fuck out."
Turner Novak:
Yeah.
Spenser Skates:
Jesus Christ.
Turner Novak:
Just delete it from my LinkedIn or my Twitter bio. I was like, "God, Amplitude? I was an investor in that company. What are you talking about?"
Spenser Skates:
Exactly.
Turner Novak:
Or, "I am proud early investor, me and Spenser are best friends and we love the company."
Spenser Skates:
Totally. Totally.
Turner Novak:
Speaking of games, I don't know if you just mentioned games, we're actually, we're in, we didn't even call this out, we're actually in the Amp Food Office right now. You guys have a game night literally right outside of us.
Spenser Skates:
Game night hangout here. Sorry about the noise in the background.
Turner Novak:
Yeah, hopefully people can't hear it. So do you believe that games and gaming is relevant to working or operating a startup or building a startup?
Spenser Skates:
Games? Gaming? Yeah, there was a group of early employees, that's how Jeffrey, Curtis, and I bonded, frankly. And so it can be a good mutual interest and hobby. Yeah.
Turner Novak:
Do you have a favorite game?
Spenser Skates:
I've been watching, believe it or not, this will date me a little bit, but I've been watching a lot of StarCraft: Brood War recently.
Turner Novak:
You've been watching?
Spenser Skates:
Yeah, yeah. So there's this tournament called the ASL, the AfreecaTV Star League, which is basically all these Korean pros that are playing StarCraft against each other. They have it twice a year and the new season's about to start and so I'm getting pretty hyped up for that.
Turner Novak:
Interesting. Okay.
Spenser Skates:
Which is I know it's a game from 1999, but it's so, in terms of quality of skill, it's the most refined.
Turner Novak:
Yeah.
Spenser Skates:
Yeah, it's incredible. All of MOBAs and that whole, it was just a seed to what StarCraft did, and it's just such an incredible game.
Turner Novak:
I don't think people who don't play competitive video games or video games like you're the best of the best, it is extremely intense.
Spenser Skates:
It is very. I mean, it's nuts. It's nutty how good some of these people are. It's great. I mean, they're real athletes, so.
Turner Novak:
Yeah. I played a lot of Halo, Halo 3 back in the day. Do you remember Major League Gaming?
Spenser Skates:
Oh, yeah.
Turner Novak:
So I actually went to a tournament once. It's what made me realize I was not going to be a pro gamer, and this is in 2010.
Spenser Skates:
Oh, you have to be so good.
Turner Novak:
We got destroyed. So I played Halo online a lot. I got that MLG playlist in Halo 3, I got a level 50 in it, which is the hardest thing to do. I felt like I'd beat the game.
Spenser Skates:
Oh, that's amazing.
Turner Novak:
And then went to one of the tournaments where they had this local tournament in Chicago. I was in Grand Rapids going to school, and just with some friends from school, we started playing Halo together and we went to this tournament.
It's like a double elimination, you play two matches against each team and whatever. So we played total of four matches or whatever. Two, lost the first one, lost the second one. Loser's bracket. Lost the first one, lost the second one.
Spenser Skates:
It's brutal, the skill level. Yeah, don't go into a professional game. I'll tell you that right now.
Turner Novak:
Yeah. I describe it to people as like... speed chess, because you're constantly...
Spenser Skates:
It really is.
Turner Novak:
And it's like a team because you're all moving. If it's StarCraft, Halo, you're positioning around the map, influencing spawns, where they're going to be, where the weapons are. You're trying to force them to spawn in bad spots while having map control, and yeah, it's like you're playing chess kind of, but it's also hand-eye coordination at the same time. It's crazy.
Do you know what game you're going to play when you get out there?
Spenser Skates:
Oh, I don't know what. They're probably playing One Night Werewolf or Codenames or something like that.
Turner Novak:
Oh yeah, Codenames is fun.
Spenser Skates:
Yeah, yeah, yeah. It's a good, we do every Thursday night. Join Amplitude if you're interested in that sort of stuff.
Turner Novak:
Yeah, join Amplitude. We'll throw links in the description to the show, but how can people find you or?
Spenser Skates:
Spenser Skates on Twitter. Yeah, or amplitude.com. You can check us out there. Lots-
Turner Novak:
Slash careers also?
Spenser Skates:
Yeah, yeah, yeah, there's slash careers on it, or find us on LinkedIn. So a bunch of different places. We'll post on Twitter and LinkedIn, so.
Turner Novak:
Cool. Awesome. Well, this was a lot of fun. Thanks for doing it.
Spenser Skates:
Thank you, Turner. I really appreciate it. Thank you so much. Sorry I was late, and thank you for doing this. It's great, dude. I appreciate, dude, you did your background research on me, it's incredible.
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