Guy Podjarney: $7.4B Startup Founder; How to Analyse Market Size; Good vs Great Messaging | E1018

1. 0:00 – 1:59

   How Guy Podjarney Founded Snyk

   1. GPGuy Podjarny0:00

      ... I would rather crash and burn than pivot to just sort of focusing on the security audience, in that, like, I don't want to build just another slightly better mousetrap. I want to build something that matters.

   2. HSHarry Stebbings0:10

      (upbeat music) Guy, I am so excited for this. I remember when we first did a SaaStr show many years ago. We get to do this in-person now. I've known you for many years, so thank you so much for joining me.

   3. GPGuy Podjarny0:20

      Oh, thanks for having me on. Always a pleasure.

   4. HSHarry Stebbings0:21

      I want to start today with a little bit of context. So how did you make your way into the world of startups? And most importantly, how did you come to found Snyk?

   5. GPGuy Podjarny0:28

      So I've, I've sort of been working in startups throughout my professional career. I was in the, sort of the cyber parts of the Israeli Army, uh, did that for, uh, about two and a half years, and then went into a startup in the OpSec space that got acquired by another startup that got acquired by IBM. I moved to Canada in the process, I'm Israeli, sort of moved to Canada in the process, left IBM to found a web performance startup company, sort of more in the, in the DevOp space, you know, making websites faster. And, and so I, at that point, I kinda had, you know, shy of a decade of sort of application security experience, trying to get people to appreciate that it matters, trying to shift left, you know, get developers to embrace it. Leaving them, got my entrepreneurial of founding startups experience going with Blaze, which ran for about, you know, two and a half years maybe, uh, in, in or around that, and sold that to Akamai where I was CTO for about, sort of three and a half years, and moved with them to London. So that's kind of my life story in, uh, in short. And, and during the, sort of the Blaze days, the sort of the, uh, the performance days, I was part of the first wave of DevOps, and sort of the first kind of seminal presentation, the velocity and such about how it sort of is different than the waterfall approach, and the cultural revolution that came with that. And so Snyk was ... basically, once I was ready to leave Akamai and found another startup, uh, Snyk was, uh, was a bit of the combination of those journeys. It was about bringing kind of the DevOps ethos and a lot of my sort of learning doing angel investing and from the first startup and all of that, into, uh, into the world of security and application security.

   6. HSHarry Stebbings1:54

      I told you we'd go off, off script, but, uh, I'm, I'm too into that. Uh, Ed Sim actually recommended that I ask

2. 1:59 – 5:05

   Why The Israeli Military Breeds The Best Entrepreneurs

   1. HSHarry Stebbings1:59

      this one. I think it was, he said you know, you obviously spent time in the Israeli military, and, uh, I think it's H2100?

   2. GPGuy Podjarny2:04

      Yeah.

   3. HSHarry Stebbings2:04

      Yeah. Uh, he said, and I, I used to have the same question, there is an unparalleled amount of very successful entrepreneurs who come out of this, you know, unit from the Israeli army. What do you think it is that breeds this level of success of entrepreneur within this kind of concentrated group of people?

   4. GPGuy Podjarny2:21

      Yeah, I think, you know, there's probably a lot of aspects to it. I'd say at the core, in Israel, thinking outside the box is the default, and so in general, in Israel, there is an element of, uh, lack of respect to, uh, the status quo, (laughs) and, uh, and kind of willingness to try things out. So I think that's the starting point. And I think what the army does is, uh, it's very good at filtering a select group of people, uh, that have certain aptitudes, you know, specifically maybe, you know, technical depth or sort of initiative, and bring them together, and put them in a high-intensity sort of surrounding, and you learn that everything is possible, uh, in that surrounding, because there is a task to do, and you have a bunch of, like, high-caliber individuals around you, and it needs to get done. There isn't really the option of not doing it. So you bang your head against the wall, and you do it enough time, you learn that sometimes you break the wall, and you just sort of get a little bit in that habit. And then once that's, sort of, uh, uh, kind of conditioning, maybe, happens, they end up acting a little bit like the Ivy Leagues in sort of the US, in which, uh, someone got out of the army a couple years before you, they go off, they reach out, you have this diploma of, uh, ability, of potential, you know, from the army and some mileage, uh, and they pull you out. And so I think that creates a certain network, and in that network, there is this sort of sense of, there is no problem that is, that is impossible. It does have its negativity. I mean, Israel is not great in, uh, well, the army has all sorts of negativities on its own, but also from a tech perspective, Israel is really good at tech. It's not as good in product. You sort of notice a lot more technology-driven, uh, products. And at Snyk, for instance, we started it in Tel Aviv and in London, and in Tel Aviv, I had, you know, this like, you know, anything is possible, fearlessness, sort of tech-depth, security-depth, and in London, I had, um, a kind of inner product discipline, dev thought leadership. It's amazing how little source leadership comes out of Israel despite the sort of, the huge kind of wealth of technology creation that happens there.

   5. HSHarry Stebbings4:06

      Why, why is that as well? 'Cause you mentioned that kind of the constantly thinking out of the box being inherent to kind of the Israeli mindset, and open source very much aligns with that in terms of kind of community and anti-establishment.

   6. GPGuy Podjarny4:17

      Yeah, I mean, I think there's probably like slightly more technical aspects of just, like, language and, uh, and, uh, maybe days of work or things like that, but I think more than that, it really is about the things that are sort of natural in your, in your sort of environment, you know? And I think, I think actually the open source community is, is quite finicky. It's very, it needs to be very, uh, uh, courteous in certain areas. You have to sort of really be, be mindful of one another and collaborate and sort of do that in a, in a patient fashion, which, you know, Israelis are not well known for, uh, not always the case, but also it's, it's very...

   7. HSHarry Stebbings4:48

      I haven't, haven't come across that in many Israelis. (laughs)

   8. GPGuy Podjarny4:50

      Well, I think Israelis are, they say it like it is, you know, on average, of course I'm stereotyping, but I, when I moved to Canada, I was saying that I'm a, I'm a very, uh, um, polite Israeli or a very assertive Canadian.

   9. HSHarry Stebbings5:00

      (laughs)

   10. GPGuy Podjarny5:00

       You know, it really depends on what your sort of benchmark is.

   11. HSHarry Stebbings5:03

       Uh, you also said, uh, a line there in particular,

3. 5:05 – 10:36

   Serial Entrepreneurship and Fundraising

   1. HSHarry Stebbings5:05

      you said, "At this point I had like 10 years of experience," and you know, you said about kind of the multiple founding journeys before Snyk. I had a guest on the show the other day that said about, uh, serial entrepreneurship being overrated. I thought it was an interesting statement. Do you agree with that, or do you actually think that's complete bullshit and there is so much value to be had from the serial entrepreneurship?

   2. GPGuy Podjarny5:26

      I, I actually think entrepreneurship is a, is a profession. So I, I'm, um...... maybe I'm on the opposite side of, opposite side of that spectrum, you know, for that, uh, comment. I think there are some things that you only learn by being an entrepreneur. So if you want to, like, you know, fundraising is probably the most obvious one. But also just the sort of the initial journey of finding product market fit. Starting from a blank slate is just not something that typically is a, is a reality, you know, in any other surrounding. You know, getting the first hires and figuring out how to do it, convincing people (laughs) to join you (laughs) in that first... Like, you know, the number of people that turned me down definitely in Blaze and even in Snyk, you know, is, uh, unpleasant. And so I think there are some things that you learn there. But also, eh, I, I think, I think what happens is that, um, you know, I like to say that, you know, if you're comfortable, you're not growing, you know, in the... There's like a Freud better statement that says there's no growth without pain. And I think, you know, startups are mightily uncomfortable. (laughs) Uh, you're sort of throwing yourself in a surrounding in which you need to learn things very quickly, figure it out, run around. And so I think when you immerse yourself in a space, you build a certain perspective. Like, when you, when you, when you found a company, you learn a ton very, very quickly. You know, I feel like for me, for instance, my knowledge of DevOps is much deeper than probably it would have been, uh, because I founded a company in sort of the performance base in the DevOp space, uh, versus if I had worked, you know, at that type of surrounding.

   3. HSHarry Stebbings6:44

      And I, I, I totally agree, and I get you. You mentioned that kind of you have to get good at fundraising. Do you believe that the founder has to fundamentally embrace and be brilliant at fundraising as founder and CEO? I was on a panel the other day and they were like, "No, you don't. That's not a cool job. It's about building the business." And I said, "That's bullshit." Fundraising is part of building the business.

   4. GPGuy Podjarny7:03

      Well, only if you want money. (laughs)

   5. HSHarry Stebbings7:05

      (laughs)

   6. GPGuy Podjarny7:06

      I think it's, uh ... I mean, it's hard to sort of think about how it's not a competency. It shouldn't... I mean, if you're an investor and you primarily invest in people who are good at fundraising, that's gonna be a fairly short-lived strategy. You know, you want to, uh, prioritize company building, product building, business building abilities. But if you cannot raise money, then the company cannot survive, you know. The whole idea of the growth industry is you raise money and... But also, like, raising money, you know, I, I, I like selling and I don't like deal-making. You know, like, I, I love getting people to fall in love with an idea that I have, with a concept, with something I'm building, you know, with a perspective I have. Uh, and so, like, that's selling. That's really getting someone to sort of believe the promise, believe the potential, believe in you. And I think that's very exciting. I separate that from the sort of the deal mak- making, you know, the sort of, "Okay, and how much are you gonna pay for this?" You know, "What is the, uh..." And I think that aspect, you know, maybe, maybe, uh, you can, you can actually be a very successful founder and not be very good at it. You might be leaving some percentages on the table. But I think if you're not good at selling, if you can't, like, get your idea through, if you can't, you know, empathize enough with someone looking at the market and kind of, you know, get your message through, eh, eh, I just don't think you're gonna be good at kind of, uh, building the company, you know, unless maybe you can hire someone to do (laughs) that for you. But that's, you know, probably more co-founder than, uh, uh, than, than employee in that case.

   7. HSHarry Stebbings8:25

      What do you think makes you good at selling?

   8. GPGuy Podjarny8:28

      Well, I guess I, I would say that I, m- my kind of core skills revolve around the combination of empathy and analysis. You know, I, I have, uh, you know, deep empathy, you know, and to, to people around. I, I find people interesting and I, uh, I think I'm a good communicator. I kind of phrase things well. But that also comes back to understanding what people might want to hear. And then I'm, you know, I'm, I'm analytical by nature, you know. I'm, I'm an architect, you know, I break things down into components, into, into pieces. I see that, the world as that. Everything is a product, everything is an architecture.

   9. HSHarry Stebbings8:59

      It's interesting, 'cause you're, you're kind of this strange unicorn there which is like the blending of art and science, I think. Do you know what I mean? Which is like you're deeply rigorous, analytical, engineering-focused, which is obviously the science. But then you have the ability to be creative and communicate and tell a story and excite, which to me is more of the art.

   10. GPGuy Podjarny9:17

       Yeah. (laughs)

   11. HSHarry Stebbings9:17

       And the annoying thing for me is there's very few people like that, and I'm not an investor in Snyk. (laughs)

   12. GPGuy Podjarny9:23

       (laughs) I think, eh, you know, thank you, and I, and I, I do think that, you know, different people have different strengths. You know, I, I am good at math, but I'm not anywhere near best at math, you know. I'm sort of reasonable there. But I can probably communicate mathematical ideas, you know, better than others. I'm, I think, a pretty good programmer. There are probably far better programmers than I am, you know, software developers. But, you know, I, I understand what needs to be built maybe a little bit better, and I communicate what has been built ba- better. And so I think, you know, you lean into that sort of core center. And also for me, it's, it's, um, it's just more interesting, you know. I, I've never... I, I don't like doing one thing and sort of mastering it, you know. Um, Apple has the whole, uh, rockstar versus superstar approach, right? It sort of talks about some people want to be, uh, rockstars. They want to be, you know, amazing at one thing, and they want to get better and better at it. Eh, eh, they're your rocks, they're sort of your foundation. And then some people want to be sort of superstars. They want to be, you know, they want to have more and more impact, they want to have more and more reach. Uh, and, you know, I've never related to the rockstar. I'd like... Nah, you can kind of make your judgment on the sort of the superstar kind of, uh, uh, achievement. But that is, that is my interest area. That's what draws me, is to have greater impact. And so many things interest me, you know, and that's where I get drawn.

4. 10:36 – 15:52

   How to Predict the Future of AI

   1. GPGuy Podjarny10:36

   2. HSHarry Stebbings10:36

      It's interesting. You said about one word there, perspective and selling your perspective, because I spoke to so many people from Tom Hume to Ed Sim, uh, to many others, and they all said that you have the ability to see around corners like no one else. And my question is, how do you create a framework or how do you allow yourself to continuously see around corners or put yourself in a position to see the future before other people do?

   3. GPGuy Podjarny11:00

      Yeah, I mean, I think, eh...

   4. HSHarry Stebbings11:01

      It's a really hard question. (laughs)

   5. GPGuy Podjarny11:02

      I think, I think, uh, so some of it might be sort of a certain aptitude. But I do have, you know, m- maybe running a company and sort of building the labs team, we have some amazing people there, have actually forced me to sort of try and distill some of these into methodologies. Um, I think the key elements are, you know, first of all, I, I think about the world, I try to sort of break things down into first principles. Not just I see that X is happening, but rather why is this happening, you know? Why is whatever DevOps disruptive to security? Like, what are the sort of the fundamentals? You break it down, you get down and say, "Well, it's, it predicates around independent teams." Okay, so it's independent teams are kind of at the core of this sort of Agile development approach, so how do you do security in Agile? So you end up, if you break it down into sort of the core principles, then you can now try to relate them to needs or, or to where you think...... has legs to sort of evolve and where not, and so I try to sort of break those down. The other thing that, that happens when you break it down is that you can grow your thinking, you know. I had this, um, I had this amazing guy leading our labs team at Snyk, Miki, and, you know, he's incredible and he can hold so much complexity in his head. And we had this conversation about how, like, even if you can hold a ton of complexity in your head, it's still limited, you know, even the best people around it. But when you think about a topic and you reduce it down to these sort of core principles, like you sort of say, "Okay, DevOps, you know, builds on, you know, blamelessness, continuous processes, and inde- independent teams," now even you yourself cannot bother yourself with all the, sort of the mess that is behind those statements, and you can build on top of that. And so you can build bigger and bigger pictures building on those components. And sure, you'd be able to drill down into one of these tracks a bit more than maybe someone who just hears those principles, but, but I think it allows you to think bigger if you kind of codify the world that way. I think the other piece that's very important to it, though, is, is that once you do that, you need to get into the habit of, of, of anchoring in the future. And so, you know, I, for instance, I love to ask, you know, our product managers and sort of, you know, angel investments that I make, "You know, this capability you're building, in five years time, would it be more or less necessary in the world? You know, and, and, and why? You know, why do you think that is?" And so as you, as-

   6. HSHarry Stebbings13:05

      Is there, sorry, just taking in on that, is there a right answer to that, and how do you analyze different variants of responses?

   7. GPGuy Podjarny13:11

      First, it, it really starts by asking the question, but it tries to sort of kinda step away a little bit from being stuck with something that is exciting to you to do today, but you're really just plugging a hole versus solving a systemic problem. Sometimes the fact that something will be less relevant in five years time, it doesn't mean you shouldn't do it. It just means that you should invest appropriately, you know. It might mean that it's okay to put something a bit more tactical about how you address it. It might mean you shouldn't rely on that as your growth vehicle. And when you're founding a company, if the answer to the core value proposition that you have, uh, isn't yes, you know, if you, if you can't kind of rationalize why it is more needed in five years time, you should pick a different idea. Because, you know, it, you wouldn't be at any sort of scale if you were just starting, you know, in five years time. That's when your idea should be most needed.

   8. HSHarry Stebbings13:58

      To what extent do you think you can actually say, and I know that sounds strange, but bluntly, the hardest thing I think about investing in AI today is the speed of evolution. You know, I'm, I'm kind of bluntly betting on great people who are directionally right because-

   9. GPGuy Podjarny14:12

      Yeah.

   10. HSHarry Stebbings14:13

       ... it's moving so fast. To the extent that you can say in five years time it'll be more or less necessary, I mean, who knows?

   11. GPGuy Podjarny14:19

       Yeah. I think it's very hard, you know. I, you know, AI is especially kind of disruptive at the moment, and I do think that there's, you know, AI as a whole will totally dominate the world. Specifically, there's a certain kind of a honeymoon period happening with GPT and LLMs, which I think, I think we'll find the right limits to it. I don't really know them. I think typically if you're immersed in a space, if you come from a space and if you sort of, you know, have sufficient sort of ability in it, you can, you can kind of roughly get market timing within a plus-minus two years, uh, time horizon. That's kind of my mental model. Though plus-minus two years is like life and death for a-

   12. HSHarry Stebbings14:52

       (laughs)

   13. GPGuy Podjarny14:52

       ... for a, for a startup, and so you do have to, you have to navigate the journey. And I guess, again, kind of my, my system over here is not so much to sort of perfectly align it. I mean, there is a certain, like you're making a bet. You're sort of saying, "I think this is necessary." You've asked the question about whether it'll be more necessary moving forward. You know, you have a thesis about your sort of theory of change and, and how you would do it. And then you, um, you know, you, uh, I try to, to apply this sort of big vision small steps-type lenses. And so big vision, you have to be working towards something that matters at the destination, but it has to be sort of a sequence of steps towards it. And ideally, you know, you don't regret taking any of those steps. If they take longer, if you get stuck in them in sort of, you know, for a couple years, um, you don't regret taking that step. Uh, and so you try to figure out the destination, figure, of course, your upcoming step, have a sense of what the next step would be. You don't really know past that, and you get going. And so if you get stuck, you still have something that you've built that is of value and you continue. And sometimes you, you, you find yourself on a different path, and maybe that's okay

5. 15:52 – 21:10

   Advice for Founders Going After Niche Markets

   1. GPGuy Podjarny15:52

      and maybe not.

   2. HSHarry Stebbings15:52

      Y- you said two words, uh, well, they had kind of a s- seriousism, but you said drill down and market size. When we drill down on the market size of Snyk, when Snyk was founded, this was a very, very small segment. In any traditional venture fund, you would say, "Ugh, its market size is too small." How would you advise founders who are building for initially very small markets, and especially hear that?

   3. GPGuy Podjarny16:17

      People have a lot of sort of cynicism around sort of a market size. I think you have to separate between the, uh, existingly defined sort of market sizes as whatever, what Gartner at the time said about, you know, application security market size, you know. Those are, are transitory. They're, I mean, those would, would change over time, and I think, I think they're not important, you know. You shouldn't make decisions based on those. They change. They have been proven to change over time. I think the second is, is the market size as actual kind of value proposition that you think you can deliver the world. How many people would need this? How much value are you providing? And I think for me, you know, Snyk, I never had any doubt about the market size there. It's, you know, we're, we're helping make software development secure, and the value proposition is the multiple of sort of the number of developers or the size of software development and the, sort of the importance of security. Both of those will just continue and the multiple is huge. And so, you know, y- you, I kinda had conviction, it was never a bother. What I do think is important for founders to appreciate is when you talk to an investor...... like it or not, the investor is gonna need to have a market size in their investment thesis. It is very important. You can't be big. You know, you can't be bigger than your market, you know. It has to be proportional. Um, and so you have two options. You can kind of ignore the TAM conversation, uh, and hope that your investor, you know, figures something out kind of that, you know, matches your needs. Or you can actually try to sort of walk them through it and think about it and explain why you think the market is big. And so I don't think kind of a, you know-

   4. HSHarry Stebbings17:46

      Mm-hmm.

   5. GPGuy Podjarny17:46

      ... blazing it away, you know, is, is the right approach.

   6. HSHarry Stebbings17:49

      But I think you can, like, use it as an advantage to show your, your depth and analysis of thought around market evolution as well. Like, I hate it when people say like, "Security market's 2 trillion." And you're like, "Okay, but the security market is actually heavily segmented and it's actually incredibly broad."

   7. GPGuy Podjarny18:03

      Yeah.

   8. HSHarry Stebbings18:03

      Can we segment it, show growth within different segments and show how we think it changes it? Do you see what I mean? That's how they'll ask.

   9. GPGuy Podjarny18:09

      I do and I think, I think especially in early stages or when you're talking about the idea, you don't know how the market exactly would evolve. You have to focus on value. You have to, you know, and that, within that value, you have to sort of size it. Okay, how many dollars do people typically pay, you know, for that type of value? Like, there has to be a dollar component to it, but you have to start from just sort of magnitude of value that you provide and then the dollars, you know, go from there.

   10. HSHarry Stebbings18:29

       I've changed my perspective a little bit on how I prioritize what I look for in companies. I used to be like, you know what? Amazing founder, that... Amazing founders find great markets. It's just about the founder. And actually, the beach that you're surfing on matters a lot, you know? Consumer ed tech, really hard business to be in, no matter how good you are. Like, how much centrality do you put on market versus founder, actually?

   11. GPGuy Podjarny18:54

       Well, I, I, I think it is very important that, you know, in the world of dev, you know, for instance... Actually, you know what? I'll, I'll give the example of from Blaze. You know, when I, when I started Blaze, uh, uh, what I did was I went from the world of application security that had deeper application analysis technology, you know, than probably any other industry. And I said, "Well, where else can that, can that expertise that I have be applied?" One of the compelling areas was, you know, the world of QA, of sort of quality assurance, and thought about it as well. Can I find quality problems, not just security problems? Yeah, I absolutely can. But nobody's paying anything in the world of QA. Like, there is, like, from a business perspective, it just was not at all compelling. And as I thought more about it, I got to, like, web performance and making websites faster and says, "Okay, there, there's, like, an industry that builds that." Today when you look at Snyk, you know, Snyk solves security problems and it does, you know, on, you know, sort of software and find security problems, and there is a real market, there is real dollars being spent. Now from this point, we can provide additional value and we already do it in a variety of ways by expanding into quality and s- saying, "Okay, look at all," so find quality problems. But as a standalone market, it doesn't really work. And so I think it's okay to factor again, factor it in in sort of the future vision and sort of the breadth, you know, things that are sort of maybe not amazing markets. Uh, but you have to, you have to, like, feed yourself on something where money is actually being spent or where you have a good theory of why money will be spent on soon.

   12. HSHarry Stebbings20:12

       We mentioned kind of the, the initially small market that you served in the early, early days. How important is being first to market, do you think?

   13. GPGuy Podjarny20:20

       I think first to market is, is poorly defined, you know. Like, what is first to market, you know? Was Snyk first to market? Snyk wasn't first to the AppSec market, you know. It was a very, very, uh, uh, well-established... I was part of the players, you know, in the AppSec market, you know, in, in, you know, back in the early 2000s. And so I think it's not well-defined. I think what does matter is being a leader in a market and having some gap. And, you know, to do that, you have to have something that is differentiated in an area that matters. If you're doing something that's a little bit more wild, a little bit more different, so if you're first to market with that approach, uh, and you successfully execute on it and, and kind of win some order, then you have differentiation. And being differentiated in a market, that matters. Um, and so it really is just about, about leadership and about differentiation more than about time. Being first to market is just one way, sometimes, to achieve that.

   14. HSHarry Stebbings21:09

       You

6. 21:10 – 27:24

   Messaging and Storytelling

   1. HSHarry Stebbings21:10

      said differentiation, that messaging is a great way to differentiate, the way you tell the world of your story. You said before, use messaging as a way to build the right product. What did you mean by that, Guy?

   2. GPGuy Podjarny21:21

      So messaging really forces you to distill what you do into, into kind of customer need. Uh, and I find way too often what, what companies, what, what founders do is they either, they come from, like, a very narrow thing. "I'll be amazing at this," you know, whatever sort of, you know, open source library that does, you know, codifies whatever access code, you know, in something "and it'll be superb." Um, but they don't, they, they love the technology or AI or crypto or whatever and they don't sort of translate that into sort of a customer need. And on the flip side, you see people saying, "I'll be a platform." I mean, I just had a conversation with a, with actually an investment of mine that started by saying, you know, "We are the most flexible platform for, you know, this and this in finance. We're in beta." And so well, like, that just does not work, you know? (laughs) And so I think what messaging does is it helps you-

   3. HSHarry Stebbings22:10

      Wh- why does that not work for people who don't understand that?

   4. GPGuy Podjarny22:12

      Well, it's because it's, you basically underappreciate, on one hand, you know, if you're sort of too narrow, that you have to expand it to the use case, to the need of the customer and, and, and understand their experience end-to-end. And sometimes even if, if you only provide a portion of it, they don't have a solution for all the rest of it and you're not gonna succeed. So you have to think about their entire use case. What is the value proposition that you want to offer them? What is the problem that you want to solve? And similarly, from the platform perspective, people underappreciate the complexity, but once again, you know, they, they, they think that they, they care about their tech. They care about how we'll build that. And my favorite sort of statement to tell founders is, "Nobody cares about your product." You know, they care about the problem that you're solving for them. And so why are you talking about your product (laughs) all the time? Like, you should really lead with what is, what is the pain, what is the problem that you're approaching? And so messaging is a forcing function to, first of all, understand what is the value proposition that you have. You know, what is it that you are doing for a customer? It has natural brevity constraints, like it has to be short. Uh, and so, so you have to distill it. You can't say, "I do this and this and this and this." You don't need to be kind of an, a messaging expert to know that that doesn't work. And so you have to naturally prioritize. It's a great forcing function. And once you do that, I think...... people perceive messaging as, "I already know what I'm doing and now I'm just dumbing it down or sort of simplifying it for the world," but it's not. You're actually simplifying it for yourself. You are focusing yourself. If you know that you are solving a problem, you know, f- like, for, for a user, you'll end up building a different product. Uh, I mean, I can give an example from Snyk, you know. So Snyk's ethos was always, you know, developer-first security. That was first, that was sort of who we are. And then open source security was our sort of, you know, the first product to market. And both were needed for us to be able to suc- succeed in the market. But the ordering of them was very important. The primary problem we're sort of addressing for companies is that developers were not embracing their security solution. Uh, and so that was, that was the problem. And our thesis was always like, it started from use open source, stay secure, and it evolved minimally to develop fast, stay secure, uh, which was the, the core. But it always focuses on, like the thing that you want to do, uh, as an organization, and then how do we, how do we help you address it?

   5. HSHarry Stebbings24:32

      How often should it change?

   6. GPGuy Podjarny24:34

      Well, I think messaging naturally evolves. You know, there's the, just the practicality of, uh, getting better at saying the same thing, you know, and so if you find yourself being on a call and saying, "Well, I like phrasing it this way, although on the website I say that way," maybe you should change what's on the website. The second thing that happens is your, your product evolves, and so your value proposition, you know, starts from something a bit maybe more narrow, maybe it shifted, maybe it expanded, and so your sort of messaging evolves. Um, so for instance, for Snyk, you know, going indeed from, you know, use open source, stay secure, to develop fast, stay secure, you know, the messaging evolves. But then also, uh, the market evolves and changes, and that's maybe over a longer horizon. I think a good example of that, again, in sort of Snyk world, is at the beginning of it, we had to convince people that, you know, they, they, they should engage developers, that developers can and will own security. And today, I think a lot, a lot of that is sort of accepted, and now the conversation, and therefore the messaging, the problem they have is more, "Well, how do I do that? How do I scale that?" And so the messaging has to adapt.

   7. HSHarry Stebbings25:31

      The challenge and the biggest challenge I see is one of kind of horizontal product marketing or messaging, which is when you are a Notion, when you are a Retool, when you serve such a breadth of use cases, how do you effectively message and product market? What would be your advice to founders who actually serve a very broad customer base, from dentists to accountants to developers with a h- very horizontal tool?

   8. GPGuy Podjarny25:54

      Well, you have to choose. Uh, (laughs) -

   9. HSHarry Stebbings25:56

      (laughs)

   10. GPGuy Podjarny25:56

       ... you can't, you can't be everything to everyone or you'll be kind of pretty crap at all of it. Your platform can have a vision, has an, have an aspiration of, you know, being everything to everyone, but it has to, it has to have a specific subset of users, a subset of the side of the market for which you're amazing at the beginning. And you know, there's a variety of reasons for it. On the product itself, it's because almost all of these problems are more complicated than you think they are. So as you unravel it and as you kind of really think about the customer's entire use case, then you learn that there's a lot more that they need to build. But even beyond the product, it has a go-to-market element to it. You know, you want to find a group of people that talk to one another. You don't, like, that's, that's the whole idea of kind of getting a certain flywheel is, you know, you get a certain momentum. So if you're only in the, you know, Node.js, uh, ecosystem technologically, then, you know, that community, you know, they, they talk about you. You're at an event, you hear about it from multiple people. A person that moves from one company to another brings you along, you know. But that's also true for HR software and HR leaders talk to one another. It's true for sort of, you know, finances. It's true for all of those. And so you have to, you have to pick a slice, be amazing at it, and evolve from it, and that piece needs to be sort of big enough and small enough, right? It needs to be big enough to care, that it can feed you for a while, that it can be an important enough anchor, that it can be a good stepping stone for adjacencies as you expand. But it needs to be small enough that you can make it to the top, that you can become a force kind of within that community.

   11. HSHarry Stebbings27:23

       I, I, I totally agree with

7. 27:24 – 34:16

   Biggest Mistakes and Setbacks in Snyk’s History

   1. HSHarry Stebbings27:24

      you there. Can I ask, I think we learn a lot from our mistakes. When you look back at kind of the history of Snyk, what are the biggest messaging mistakes you made? Is there one where you're like, "I can't believe we did that"?

   2. GPGuy Podjarny27:34

      (laughs) I don't know that the, like, I think Snyk has been naturally very iterative, and so we've made a lot of, uh, sort of small steps and some of them were reverted back and some, some not so much. Uh, I think the primary challenge that Snyk has and always kind of the needle to thread is this developer versus security. You know, I think if you were... The homepage is a good example of it. What you say, you only have one homepage. So let's say you can create a single landing page that is more developer oriented or a single landing page that is more security oriented, but the homepage you have to choose. You have to actually prioritize and you have to sort them. Um, so what I would say is that, uh, at the beginning, we were so tunnel-visioned on developers that at some point, a security person coming along that didn't happen to have a GitHub login couldn't register to the service. We were so kind of focused on sort of satisfying the, "Uh, the developer."

   3. HSHarry Stebbings28:24

      ...

   4. NANarrator28:24

      Mm-hmm.

   5. GPGuy Podjarny28:24

      So like, so narrow-minded of like, "No, no, no, this is all about developers," uh, that really, and I say at some point, we're talking eight months after the product launch, like for a long while, security people, unless they had a GitHub account, like the only way to register was with GitHub.

   6. HSHarry Stebbings28:38

      Did it just go up and to the right, though? Because we look at it today and it's like, ah-

   7. GPGuy Podjarny28:41

      (laughs)

   8. HSHarry Stebbings28:41

      ... however many billion dollar company it is, and I, I should know that, but, um, like however many billion dollars, did it just go up and to the right or was there this-

   9. GPGuy Podjarny28:48

      Oh, not by a-

   10. HSHarry Stebbings28:48

       ... was, was there a board meeting with Adam-

   11. GPGuy Podjarny28:50

       Not by a long shot.

   12. HSHarry Stebbings28:51

       ... Sim at 2:00 where you looked at each other and went, "No, this isn't working to plan-"

   13. GPGuy Podjarny28:54

       Yeah.

   14. HSHarry Stebbings28:54

       ... that might have heard about?

   15. GPGuy Podjarny28:55

       It's amazing how sort of, uh, history remembers the successes and not the sort of the failures. No, not at all. You know, Snyk, uh, I think what worked well at, at Snyk from the beginning is getting developer adoption. And so we were very, very, very focused on the most important thing we're looking to crack is get developers to embrace the security product. If we figure that out, revenue will come. And I think we've been-

   16. HSHarry Stebbings29:16

       That's not always the case though, is it? I mean, we see a lot of tools which get a lot of developer adoption-

   17. GPGuy Podjarny29:21

       Yeah.

   18. HSHarry Stebbings29:21

       ... and a lot of love, and revenue does not come.

   19. GPGuy Podjarny29:24

       Yeah. And, and I think, I think it depends. You have to sort of assess your market, and I do think that I had, you know, a certain depth of understanding in this one. My sense was, in security...... it's not nothing is ever easy, but generally speaking, it's closer to money, you know, there is business to be had. You know, I was fairly confident that I can monetize in security. I felt I wanted to build a, a company, you know, sort of figure out a solution to a problem that matters, and that problem was getting developers to embrace security. And so I thought the most difficult thing, the biggest thing to prove, was that developers will actually embrace this security solution if you build the right company, if you build the right solution. And so that's why we were so focused on it. I entirely underestimated the gap between getting that to be successful, which we did, to actually getting a commercial business (laughs) going. And so we-

   20. HSHarry Stebbings30:10

       What was the gap? Time?

   21. GPGuy Podjarny30:11

       So we s- we basically successfully got developers to embrace this, and then at some point we sort of opened up the payment gateways and allowed people to pay for it and nobody did. Uh, (laughs) and then we sort of worked through it. And this is, so maybe about a year into the company, we had GA'd. You know, we've had a beta out for about nine months. Uh, and we had, you know, thousands or maybe tens of thousands of users at the time, and we opened up sort of the online purchase and, and nothing. Like a, a minimal, minuscule trickle came in. Um, and really, a year later, we were still at 100,000 ARR in the bu- so at this point, it's like two years in, uh, and, you know, many millions of dollars burned and, you know, tens of thousands, uh, of, uh, of users. So something successful.

   22. HSHarry Stebbings30:57

       Did you still believe then?

   23. GPGuy Podjarny30:58

       So I had to, I had to reaffirm the conviction, you know? I had, I had two primary moments where I had to do that, you know? One was, I had a, a, an advisor who was an- sort of a... I really kind of, uh, think of him in, in high regard, who kind of heard... He wasn't super involved, but sort of heard the conversation doing it and says, "Guy, uh, I think you're fucked." Uh, I don't know if I'm sort of allowed to sort of, uh-

   24. HSHarry Stebbings31:17

       (laughs)

   25. GPGuy Podjarny31:17

       ... swear here. Uh, he says, "Guy, I think you're fucked. You know, you're, you're basically classic dev tool kind of pitfall, which is, you know, you're, uh, you get a lot of, uh, developer love, but nobody's willing to spend money on it." And really, kind of I, I was, I was pissed. I was really annoyed. I kinda came back to San Francisco, kind of flew back to London, and basically spent sort of the, uh, the weekend sort of fuming and thinking, "Am I?" You know, "Am I doing it..." And the, the, the bottom line was basically reaffirming the conviction that, like, I would rather crash and burn than pivot to just sort of focusing on the security, uh, audience, in that, like, I don't want to build just another slightly better mousetrap. I want to build something that matters, and what matters is breaking through to developers. Um, and so that was a big one. And then, I guess sort of a similar, maybe a little bit more, uh, frequent (laughs) case is, uh, uh, even before that, I had a, a whole horde of VCs come along, see the thousands of users outside, see the visibility, and basically trigger a preemptive process, and I leaned in. I said, you know, "Okay, like, it looks compelling." I think, you know, like I, I basically, you know, drank my own Kool-Aid, and I leaned in, and everybody, and I mean everybody, kind of, you know, looked at the company and repeatedly, everybody, and I mean everybody, (laughs) uh, looks at it and says, "Oh, amazing usage, no revenue. Uh, can we stay friends? Maybe we'll consider for the next round. We don't know you yet, yeah..." Da-da bla bla bla bla bla.

   26. HSHarry Stebbings32:38

       Do you have any advice for founders having been through that, then?

   27. GPGuy Podjarny32:41

       I think you have to be careful around how quickly you lean into a preemptive notion. Um, preemptive... And the idea of sort of VCs coming along and sort of saying, "Hey, maybe I want to... I want it so bad I will pay up ahead of time," is very, uh, ego-boosting, you know, and it feels very good. Uh, and, and then you also know that you don't want just one horse, you know, like you don't want just sort of, you know, one bidder. And so it's very easy to say, "Why don't I talk to everybody now?" And when you do that, you're sort of going a bit all in and, and you... I think you can really burn, kind of you leave some scorched earth. I think for us, if it wasn't for Ed Sim and Boldstart and, you know, sort of like him and Eliot being believers... And they basically topped us up. They took... We did get some offers. We just didn't get the, like, the right offer from the right investor. Um, and, uh, and I had a whole personal thing. My father-in-law passed away literally kind of during the same sort of week on it, and I was sort of, you know, thinking of whether I take VC calls from the Șiva, from the sort of the, uh... It, it was, it was an intense period. Uh, and they stepped up and says like, "Look, we see it. We believe it. We think you're sort of on the right path. Why don't you take this sort of smaller, this bridge check, uh, on the best valuation that you've received and in this sort of term sheet, but a smaller amount of money?" Um, and that was great, you know, like on really all around. Uh, and that set us up and allowed us to get to the point, you know, it still took... This was still eight months before we got to 100,000 ARR. (laughs) But then four months after that, you know, instead of 100,000, we were at 650, and a year after that, we were at four and a half million. And so basically the, sort of the roughly two years in, two and a bit years in, um, the, the, the dollar funnel started going to the right direction.

   28. HSHarry Stebbings34:15

       I'm

8. 34:16 – 40:56

   Advice to Founders on Timing

   1. HSHarry Stebbings34:16

      in many companies that are, you know, 100K in ARR after several million dollars burnt and several years, and honestly, as an investor, I'm going, "Oh God, why don't they just, you know, give me my money back or give up or do something different? This is not fucking working." Um, what do you say those founders who's been through it, and how do they know whether to keep going or actually just, "It's not working."

   2. GPGuy Podjarny34:39

      Just call it a day. I think you have to, you have to have an understanding. To me, it comes back to that sort of first principles thinking. And so you have to break it down and says, "Why is it not working?" I mean if, if, if the answers are only, "Well, if only I built this feature. If only I, like, talked to that person," then I, I think you're missing something. You know, for us, I think there was... Pretty quickly, there was a deeper understanding of saying, uh, our challenge was, you know, developers like depth and security needs breadth. And so we built this amazing product for the Node.js surrounding, and the Node.js developers wanted this. And eventually when security... But we didn't really care, uh, or we didn't give any time to security audiences and what their needs are. And once you started talking to them, you understood a few tactical things they needed, which were important and we innovated for, but also you understand that security, they can't have every director of engineering use their own sort of security tools. They need to be able to govern a security concern across, and so they need breadth. They need a certain amount of coverage. And so we were on this path of saying, "Okay, we need to broaden the, uh, technology stacks that we support." Uh, and so we had a certain theory for it, and we were proving it out. So I think if you're just churning, uh, if you're just trying to kind of, you know, hit in different directions, then, then...... uh, it might indeed be sort of a problematic sense. You have to have a theory of change of, like, why? W-What is it fundamentally that is causing my current situation, and what am I doing about it to significantly change it? Whether it is reach, whether it is, you know, core product principles, and therefore, which use cases do they enable, you know, whether it is indeed, you know, sort of a, a different sort of buyer persona than a user persona, et cetera.

   3. HSHarry Stebbings36:13

      That's a really interesting one, different buyer persona versus user persona, because I think what we're seeing now with kind of t-the downturn in the macro is the kind of reversion back to purchasing power to the CFO in a lot of cases, um, away from kind of individual contributors and teams having a lot of purchasing power. And so we now have, you know, uh, very segmented, you know, buyer personas and then user personas as you put it. How do you think about effective messaging when the person buying is not the person using?

   4. GPGuy Podjarny36:39

      Yeah. It's really tough. I mean, I do think this is a, this is a bit of a tough moment for PLG companies. I still think that there's a, it's a temporary, uh, reality and so you have to think about, you know, the right approach.

   5. HSHarry Stebbings36:50

      What makes you think it's a temporary reality?

   6. GPGuy Podjarny36:52

      Well, I think a lot of the fundamentals that got us to, to sort of the PLG movement is the fact that, uh, modern organizations, uh, rely on an empowered workforce that can make decisions and move quickly. You know, it's the understanding that the organization that is big and tries to make all the decisions centrally never moves, you know. Nothing ever gets done because everybody sort of, everything needs to roll to the top or get consensus. Uh, and so I think that appreciation, DevOps is an example, but it really works in sort of finance, it works in many others, is, you know, moves to the point in which you expect teams to own things and run with things more. And for that to happen, you have to give them empowerment, you have to give them autonomy. At the moment, everybody's looking for places to cut, and so, you know, empowerment is not the word of the day and things get centralized. And, and you have to, like, if you're a startup, you have to acknowledge that in the current reality, and you can shift your messaging a little bit to focus on, you know, for instance, productivity or, uh, you know, basically things about cost savings that this product can provide, uh, but it's a little bit tricky because you might get lured down a path that is not product-led, that is enterprise, even though your market is really best situated to be one with product-led. So it's a bit tricky, you know. I have a few angel investments like that and it's, uh, it's not easy. You have to make a case-by-case decision. Um, but I think, you know, fundamentally, over time, I still think product-led, empowerment-oriented solutions that focus on the user versus the buyer are important. You have to help your users communicate with your buyers. Uh, you have to help them understand what is the use case, what is the value proposition. I mean, I've said use case probably already a dozen times and I say it all the time because people, people confuse this with, with, like they say, ROI, they say, uh, um, features, you know. They say, they talk about the technology, they talk about just finance. All of those are not important. What's important is the value to the customer, you know. All of these things are just sort of, you know, uh, symptoms of it. And so you really have to understand what is the value. And my favorite statement to customers to say like, "Look, if we align on the value that we provide you, we should be able to align on the price." Um, so I mean, I think if you, if you figure that out as a, as a company, what is the value you provide, now it's just an articulation element, it's just sort of a, it's about how do you get that message across.

   7. HSHarry Stebbings39:01

      So I agree it's a tough time for PLG. I also think it's a tough time for unbundled specialized products. I think we're going to see this kind of reversion back to a world of bundling where everything's just cheaper. You will probably give up your Calendly and go back to Google Calendar if you are in a large organization, as an example, and I'm not picking on Calendly-

   8. GPGuy Podjarny39:18

      Yeah.

   9. HSHarry Stebbings39:18

      ... but just an example. Um, do you agree with that reversion back to bundling, and how do you advise founders then here in an unbundled world? (laughs)

   10. GPGuy Podjarny39:26

       It's always a bit of a balance, you know, between them and so, um, best-of-breed products for the point activity that they provide are presumably better, they're best of breed, and so they will have the individual, uh, or the specific small unit provide value, while, uh, presumably the sort of the platform solutions or the broad solutions, you know, the idea is that their overall value will be better. And so even if they're sort of on, on every point case, they're only 80% as good, um, then, um, you know, they will, uh, they will eventually provide more value to the organization. So it does indeed come back to, like, who is making that decision? I think right now there is a lot of platform consolidation, and I will admit that Snyk is benefiting from that, you know, now that we have the breadth, but, uh, but I think a lot of it is from, uh, just from, from cost savings perspective, you know, single vendor relationships, uh, things of that nature. But I think there are ways to build a platform that may- actually makes it truly better in total if you make your products work together. Um, and so I think it really, it again comes back to that notion of how much additional value, how differentiated you are. If you're a point best-of-breed product that is doubly as good, you know, is twice as good as the generic product, you probably will still succeed, like companies or customers will still want to use you as long as you articulate that value well. If you're, you know, I think what maybe has changed is, you know, the appetite for a product that is 20% better but is indeed, you know, separate and has all the overhead of having another vendor and another solution

9. 40:56 – 43:13

   Painkillers vs Vitamins: Which startup are you?

   1. GPGuy Podjarny40:56

      implemented.

   2. HSHarry Stebbings40:56

      Products are often categorized as either painkillers or vitamins. Do you invest in vitamins?

   3. GPGuy Podjarny41:02

      I think i- it's about what is your primary value proposition versus, uh, secondary. And so, you know, um, I mean, is a productivity tool a vitamin? It depends, right? If you have, if I can save you sort of two developers out of ten, um, you could have ten (laughs) and you can work and it might not be necessarily your sort of pain point, but I can pretty easily, if you pay me for one and I save you two, that's pretty good math.

   4. HSHarry Stebbings41:24

      It's probably the extent to which it provides productivity, like a 5% increase-

   5. GPGuy Podjarny41:28

      Yeah.

   6. HSHarry Stebbings41:29

      ... is a vitamin.

   7. GPGuy Podjarny41:29

      And the credibility or sort of the, the, the how likely or you know, how, how much of a leap of faith is it for me to sort of believe that it actually is sort of saving me? So like automation tools for instance, are very easy to prove that they demonstrate productivity, you know, versus, you know, metrics and analytics tools which sort of says, "Hey, you'll just be able to optimize better," uh, so there's a lot more sort of a leap of faith. And so I mean, I think...... m- it is better to have a nerve, it's better to have like a pain that you're addressing when you're talking about the primary. I like to think, I have this like two-by-two in my head, which talks about, uh, um, kind of pain and frequency. So if something is, uh, is low frequency, high pain, you know, something like, uh, maybe like a big incident that happens or maybe, you know, building your sort of R-back system or something, uh, then really you need a strategy that is all about presence, you know. You need to, you know, it's, it's, it's, uh, it's high pain, so when it happens, you need to be there, you know, and, and be available. If something is low frequency, uh, is a, sorry, is high frequency, low pain, then it's all about friction, you know. It's something that always bothers you a little bit and so the effort of picking up a solution needs to be proportional to sort of the, the pain that you're, that you're sensing. So it's really all about friction, you know. And, and so I think those are the two primaries. If th- if something is high frequency, high pain, it's all about comparing it to the existing solution, because, eh, like there's no way that they're not doing anything about something that is high frequency, high pain, and so it's all about the better mousetrap. It's all about differentiating from existing approaches to solving it. And if something is low frequency, low pain, and maybe that's like a version of some of the vitamins, then it can't be your lead. At best, it can be a feature, but it can't be the primary thing that you're doing.

   8. HSHarry Stebbings43:09

      Yeah. No, I really like that kind of, uh, matrix to kind of think through.

10. 43:13 – 57:06

    7 Powers: The Foundations of Business Strategy

    1. HSHarry Stebbings43:13

       We're both big fans of, uh, 7 Powers, Hamilton Helmer, um, I think probably one of the foundational books that I get everyone to read who joins 20VC. Why do you think it's really important for founders to understand 7 Powers and where their powers lie, first?

    2. GPGuy Podjarny43:26

       So I'm a big fan of the powers, uh, framework. You know, I, you know, for those who don't know it at a high level, it just, it talks about how do you deliver value to a customer, you know, eventually forming as like free cashflow, in a way that is, uh, sustainable, superior, and significant. So something that is truly better, it's truly superior, it's significant, it matters that it's better at whatever it is that it does. You know, it's not whatever, an ice cream truck with sort of the tallest roof, you know. It doesn't matter. Um, and it is sustainable. It's hard to copy. Um, and so that's the idea of these seven powers, which is kind of like, like moats, but moats are all defensive and I love the sort of the powers beyond being more elaborate, they talk about how to, how to sort of, uh, provide value and create a bus- a valuable business. Uh, I think the, the reason it's important is the, the, the worst thing that can happen, in my opinion, to a startup is not to crash and burn, but to get stuck. It's to build something that is like a little bit valuable and you build it up to a business that is two, three, five million in ARR, not dismissing the sort of the difficulty of doing that, but then you get stuck. You sort of, you grow at a 20% rate from sort of that rate, and it's too good to just walk away from, but it's sort of really not what you signed up for when you, uh, or your investors signed up for. And I think, I think powers really are about the ability to grow your business. You think ahead, again, you anchor in the future, and you say, "What is it that I'm, that I'm building that will actually allow me to build on and grow?" Uh, and if you don't have power, uh, if you're sort of building something that just has product market fit but is actually pretty easy to copy, if you're building something that purely relies on operational excellence, then you're, you're in a pretty risky situation, right? It's, and if, if any competitor comes along or like a burst of incumbent sort of operational excellence, uh, and you might sort of lose your place, you know, you, the, the idea of power is indeed to be that multiple. And so I don't think you should like dive in and only care about power at the beginning. You're sort of, you need to be building value or like sustaining some value you created. But if you don't think about it, then, then you're, you're carrying that risk of just getting stuck.

    3. HSHarry Stebbings45:28

       Do you believe in defensibility at the early stages? This is something that's kind of, uh, I'm very strong, which is like defensibility from day one is bullshit, I always think. Do you agree with that or do you actually think when you're looking at companies you angel invest in, "Ah, highly defensible, I like this," and defensibility plays a big part of your mindset?

    4. GPGuy Podjarny45:44

       Well, I think at the, at the beginning, you can't be defensible. You have nothing, you know. So, uh-

    5. HSHarry Stebbings45:48

       (laughs)

    6. GPGuy Podjarny45:48

       ... I think the, maybe the only exception to that is if you have very unique knowledge in the founding team-

    7. HSHarry Stebbings45:52

       Oh, exactly.

    8. GPGuy Podjarny45:52

       ... then maybe that's an exception to that.

    9. HSHarry Stebbings45:53

       I think, I think now actually is a really unique time with kind of this new wave of AI companies, which like if you come out of 10 years of, I don't know, Stanford's AI lab, that is a defensible moat of knowledge which other people likely don't have.

    10. GPGuy Podjarny46:05

        Potentially, although now that has grown, you know. So that's, uh, you know, so that's the cornered resource kind of power, right? And do you have some sort of very unique set of skills that nobody else can have and are they indeed, indeed superior and indeed significant? Um, but I think-

    11. HSHarry Stebbings46:18

        Have, have you seen Taken?

    12. GPGuy Podjarny46:19

        Uh...

    13. HSHarry Stebbings46:19

        Liam Neeson.

    14. GPGuy Podjarny46:20

        Uh... (laughs)

    15. HSHarry Stebbings46:21

        There's a brilliant line where he's, his daughter gets kidnapped-

    16. GPGuy Podjarny46:23

        Yeah.

    17. HSHarry Stebbings46:23

        ... and he calls the kidnapper and he says, "I have a very unique set of skills" (laughs) -

    18. GPGuy Podjarny46:27

        (laughs)

    19. HSHarry Stebbings46:27

        ... and it's exactly that statement.

    20. GPGuy Podjarny46:28

        So-

    21. HSHarry Stebbings46:29

        Terrifying.

    22. GPGuy Podjarny46:30

        So it could be. I think specifically right now in AI, I mean, the space is moving fast enough and there are enough people that it's not really a cornered resource. I mean, it can be, uh, you know, a necessary and a valuable capability. But I think it's hard for that to be alone. But what I do think is critical is to think about how does this business become defensible. So say like if you assume success, if you assume you found product market fit, which absolutely should be consuming your, like 90-plus percent of your attention should be on product market fit, not power at the beginning. You know, you have to build something of value to then sustain and differentiate.

    23. HSHarry Stebbings47:01

        So step, sorry, step one, get product market fit, and then we think about the seven powers.

    24. GPGuy Podjarny47:05

        Correct. So I think when I invest, I think about, you know, some theories about how you could build a defensible project over here. If this was to succeed, what is it? Would you have a network? Would you be accumulating some data? Would you be, uh, you know, uh, uh, aggregating like, you know, accumulating switching costs, you know, from, from within the customer? Is there any sort of counter-positioning that you're doing in here? Are you doing something that incumbents, even if they see, they would choose not to adopt? Like the, you know, Netflix/Blockbuster example, right? Or for Snyk it was DevFirst. You know, DevFirst, uh, is something that is counter-position to the security industry because-

    25. HSHarry Stebbings47:38

        If, if you look at this with traditional journalism, they will never send you questions ahead of time. Ever. And they choose not to.I will always do that. It's a counter-positioning example, I think.

    26. GPGuy Podjarny47:47

        I, I, I mean, I think so, and I, I don't know the sort of the industry well enough, but it's, it's an example of that, of saying if people are already well-incentivized to believe and stick to the existing system as it works, because that is what makes them powerful today, uh, then counter-positioning against them. And so, I think, uh, uh, you know, per Helmer's book, you know, the two powers that you build at inception are cornered resource and, uh, counter-positioning. And so you can come in indeed with sort of some unique knowledge or perspective, or with a counter-position that is hard, that's like the innovator's dilemma, hard for sort of the, uh, the incumbent to produce. I don't think you should focus on those, but as an investor, even at the early stage, I try to theorize about what could it be. And then once you theorize that, you put that aside, and you really just focus on product-market fit, and you have to get something working. Once you get something working, then you start tweaking. Then you, like, when you're getting to the point where you hit product-market fit and now you need to sort of scale some things and things like that, then you, maybe you, you should tweak priorities. You shouldn't overhaul priorities, but you should tweak priorities for things that matter, you know? It could be, uh, the type of, like, uh, legal license you give to your customers around the use of data that you have. It could be investing in some viral mechanism. It could be, um, you know, y- you know, trying to sort of invest in stickiness, in sort of switching costs.

    27. HSHarry Stebbings49:02

        If we think about kind of product-market fit, just as the first chapter, before we move to the seven powers, I had a ambassador update last night and it was a 1.4 million ARR business. It's got there over a two and a half year period. It's kind of been a little bit slower than everyone thought. It's not growing particularly fast, but it's, it's not doing badly, but it's taken quite a lot of cash to get there. And I just looked at it and I said, "Does this have product-market fit?" I don't know. Customers are staying, they're paying, there's enough of them. There's enough money, 1.4 million is not nothing. But it's not, it's not being pulled out of their hands.

    28. GPGuy Podjarny49:38

        Yeah.

    29. HSHarry Stebbings49:38

        Uh, was it very obvious for you when you had product-market fit? And when, more often than not with your angel investments, is it obvious?

    30. GPGuy Podjarny49:45

        Yeah. I think, you know, sometimes it is, sometimes it isn't. To me, product-market fit is really about when, when demand kind of outweighs your capacity to satisfy it. Uh, you know, when you kind of can't, you know, hire people fast enough, you know, spin up servers fast enough, whatever it is, you know, to sort of scale, uh, because demand outstrips it. Then I think you sort of hit product-market fit. I think, you know, kinda like first to market, it's a little bit of a, of a, of a poorly defined term. You know, for Snyk, there were at least sort of two elements to it. There was kind of the product user fit of getting to developers, and so I think we hit that one pretty quickly, and there was a lot of learning still about sort of getting that done, but I think we got that. But it was very different between that and the product buyer fit, which is probably a bit more akin to product-market if you're talking about the business.
11. 57:06 – 1:01:27

    How to Unlock Speed of Iteration

    1. GPGuy Podjarny57:06

    2. HSHarry Stebbings57:06

       In terms of product market fit, I think the single biggest... I've done now astonishingly, uh, 170 investments for, in over like eight years. Um, but the single biggest determinant of companies that reach product market fit versus those that don't, I've found is, like, speed of execution, like granular speed of execution. Do you agree with that? And how important do you think speed of execution is in terms of getting to product market fit?

    3. GPGuy Podjarny57:30

       Um, getting to product market fit req- is, is heavily reliant on execution. It does, you know, it, i- i- it's a, uh-

    4. HSHarry Stebbings57:36

       But you know speed. You know when teams, you just feel how fast they move?

    5. GPGuy Podjarny57:39

       Yeah. I think of it as iteration. And I think there's, there's almost, like, a, an element of hubris in thinking that you can sort of get into your ivory tower, come out in a year, and come out with some wondrous thing that is precisely right, you know? Like, the, the re- it isn't really, I think, the best sort of bet for you to make. Uh, and so, you know, I'm, I'm a believer in I think what you need to do is you need to iterate. And I think that is the sort of the speed of delivery. How quickly do you iterate? You know, the faster you do that, the faster you learn. The faster you learn, the faster you're gonna hit product market fit. So I, I agree with that. The one caveat that I would add is you need to be iterating in the right direction. And so I think, uh, you know, I like to say that if you're good, then you optimize for the feedback you get. Uh, but you know, you, y- if you're not good, that's a different problem. And if you're, uh, if you optimize for the feedback you get, you wanna set yourself up to be getting the feedback in the area that matters. And so if you wanna build a product-led growth company and all of the feedback you get is from a dozen design partners that you work with in a top-down fashion with sort of the CTO, then, you know, you will optimize for something, but it's unlikely that you would optimize for getting a self-serve, uh, you know, community-led product. And so you, you want to, you want to iterate quickly, but you want to understand what is the sort of the fit between your product and the go-to-market, and you want to put yourself in a position to get the feedback in the right direction.

    6. HSHarry Stebbings58:54

       Can I be honest? Uh, I fucking hate this design partner bullshit.

    7. GPGuy Podjarny58:58

       (laughs)

    8. HSHarry Stebbings58:58

       Sorry. I know that's very uncouth of me to be so direct, but it's just like, whatever happened to early customers who helped you build products alongside you because they were passionate about your vision and bought into it with you and hoped that you would be able to eventually provide it?

    9. GPGuy Podjarny59:12

       Yeah. I thi-

    10. HSHarry Stebbings59:13

        Now a design partner is like intermittent fasting and skipping breakfast, you know?

    11. GPGuy Podjarny59:17

        I think it's, uh, you know, some of it is just sort of, you know, whatever, sort of, uh, washing a little bit of the, uh, of the wording. Some of it is that I do think that, you know, there are more startups now than ever. And so if you're a buyer, and, you know, we're a buyer now as well. We sort of, you know, you get those. You get inundated with these sort of startups around, and you know you want to do it, and then the workforce is empowered, so, like, seven different teams want to use, you know, 12 different products. And so I think there's an element of, uh, I think the difference between the early customers, uh, and the design partners is you're basically vying for their time more than you're sort of vying for their money. But from the buyer perspective, you know, from, from the, uh, from the, uh-... kind of customer's perspective is, you know, you're, you're already asking for your time. You know, don't ask for my money, help me. I mean, I, design partner is a term. I do think that it's important to get early customers that help you shape this. I think those customers should get some form of perk, whether it is a heavy discount or a whatever agreement. But I think most of the time, they also do it because they are passionate about it.

    12. HSHarry Stebbings1:00:16

        There are so many other areas I wanted to talk to you about but, you know, w- as I said, we look at Snyk and it looks like this, up and to the right. Post-product market fit, was there ever a time when it went flat or like, I remember you when you raised, you know, your, I think it was your A from Excel and from GV and from great people, and everything just always looked Snykes alright. Was there ever a time when it was like a flat corner and everyone was going, "Uh, what's going on here?"

    13. GPGuy Podjarny1:00:39

        So Snyk like, no, the, the flatness was mostly before we sort of hit the, uh, the, hit the curve (laughs) , you know, on it. I think since then, it's been, it's been like, eh, the opposite. It's like our CFO calls it, you know, kings in the curve, we're sort of, you know, going steeper and steeper. Our growth actually accelerated.

    14. HSHarry Stebbings1:00:56

        Mm-hmm.

    15. GPGuy Podjarny1:00:57

        Um, you know, all that to say, until the sort of the current market in which, you know, we like sort of others are, are definitely, you know, there's a certain amount of, uh, of sort of slap in the face or whatever cold water bucket that you get. You know, I think we're, relatively speaking, super well-positioned, lots of money in the bank, you know, the needs themselves of the market are not ones, they're definitely a, uh, um, a- an aspirin and not a vitamin. They can't choose not to do them, uh, but the numbers are different, uh, in this world.

    16. HSHarry Stebbings1:01:23

        This is so unfair of me to ask 'cause it's just such a broad and shit question, but I do wanna

12. 1:01:27 – 1:09:24

    Angel Investing and Venture Capitalists

    1. HSHarry Stebbings1:01:27

       ask it anyway. You've raised multiple rounds of funding from some of the best in the business. What do you think are the most common mistakes you see your angel investments make when fundraising with venture investors? And what are some of your biggest lessons from raising from some of the best in the business?

    2. GPGuy Podjarny1:01:42

       Well, I learned a ton from, uh, from, uh, from in- investing with, with various people, whether it's like with angels or with, with VCs. Um, I think the biggest mistake angels make investing with VCs is, um, uh, kind of under-appreciating the different, uh, context, especially if you're sort of co-investing with, you know, a, a, a, a VC that is primarily an A or a B VC and they're signing a seed cheque. You know, for them it's a very small bet. It is the opportunity to go ahead. While for you, it might actually be, as an angel, that might be your sort of primary cheque. And so you just need to like, eh, I think I, I put a lot of weight into the, uh, diligence and sort of the other vetting that, you know, some of the sort of the venture, uh, firms that I co-invest with, uh, do. And so I do value that a lot, but I also want to contextualise it for me and to say whether that's important. And for me personally, eh, eh, I guess I, what I've, I don't know if it's like a learning for me or from others, is, uh, I, I invest, while I expect a financial return, I invest largely for the learning, for the journey. I feel it helps me. First of all, it's fun. Second is, you know, it helps me actually in Snyk, you know, helps me sort of understand. I think it helps me be a better craftsman. And so I have all sorts of filters that the sort of the VCs don't necessarily have, like, you know, I, I don't know, I guess maybe some VCs do but like, my first filter is, do I wanna get on a call with this person again? Like, do I like them?

    3. HSHarry Stebbings1:03:02

       Mm-hmm.

    4. GPGuy Podjarny1:03:02

       Um, and then, you know, others are, you know, is this an area that is of interest to me? Yeah, and ironically, for instance, I don't invest that much in cyber. (laughs)

    5. HSHarry Stebbings1:03:09

       Mm-hmm.

    6. GPGuy Podjarny1:03:09

       Uh, and you know, eh, there are exceptions to that statement, but for the most part, I'm more passionate about sort of product-led and, uh, uh, those types of systems and cyber tends to be sort of more top-down. And so, eh, eh, eh, I think you, you build your personal preferences. Don't just sort of think of it as an asset class.

    7. HSHarry Stebbings1:03:26

       How many cheques have you written?

    8. GPGuy Podjarny1:03:28

       I'm close to 100 at this point, but it's, it's over the course of the last decade. Uh...

    9. HSHarry Stebbings1:03:33

       Can I ask, do you like financially allocate towards angel investing? Do you look at kind of holdings and go, "Okay, we're gonna put X amount here into angel investments"?

    10. GPGuy Podjarny1:03:41

        Um, only as a limiting factor, you know, is that I don't get, don't go overboard. I mean, my primary limiting factor is time. You know, I, I invest versus taking advisory roles because I want to know like the base minimum is you got my money and, you know, hopefully that's helping you build. Now on top of that, I want to be a value-add investor and I wanna learn from the journey. And so we're relevant and when, where I can, I take calls, and I do a fair bit of those. You know, I probably spend, I don't know, a day a week or so, you know, on, uh, on angel-related stuff. Maybe a little bit less. Um, so that is my primary limiting factor. Beyond that, you know, I, uh, I've kind of veered a little bit because I do as much as I do now in sort of direct angel investments and mostly actually kind of reduced my kind of, uh, LP allocation. You know, I find I do want to limit my venture exposure.

    11. HSHarry Stebbings1:04:26

        Yeah.

    12. GPGuy Podjarny1:04:27

        And I think it's important to remember for me is like, you know, most of my money is still in Snyk. You know, most of my money is in the venture, my business, like everything around me, I am in a high-risk mode. Um, and so in theory, the wise thing for me to do with, in the bank, is to put all my money in some fixed income account (laughs) and sort of, you know, get it there because really it's about sort of don't lose this, you know, the money that I have. In practise, I just don't work that way. I'm a risk-taker, and I enjoy the journey, and so...

Episode duration: 1:18:41