Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan, and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch, and grow your SaaS business.
Today's interview is with Pete Kohman.
Pete is the co founder and CTO of Optimizely, a leading website optimization and a B testing platform.
The company was founded in 2010 and to date has raised over $88 million in funding.
Optimizely has over 8,000 customers, including major brands such as Salesforce, Disney and Starbucks.
Prior to launching Optimizely, Pete worked at Google for three years.
Pete, welcome to the show.
Pete Koomen (00:57.460)
Thanks, Homer.
Omer (00:58.980)
Now, I gave the audience a brief overview of your product and business, but tell us a little bit more about yourself personally.
Who is Pete when he's not working?
Pete Koomen (01:07.300)
Sure.
So actually, I'll start by pointing out one thing you mentioned that we're a website optimization platform.
That's true, but we're no longer just a website optimization platform.
We now have products for both iOS and Android native applications as well.
Omer (01:20.990)
Nice.
Pete Koomen (01:21.550)
Yep.
And then as to your other question, I don't know.
I think I'm a fairly normal guy.
I live in San Francisco.
I really love.
I love rock climbing, and I try to do as much of that as I possibly can here in Yosemite and then around the world when I have the opportunity.
You know, beyond that, I exercise a lot.
I enjoy reading, I play music when I can.
Yeah, cool.
Omer (01:47.340)
Now, we like to kick things off with the success quote to better understand what drives and motivates our guests.
What is one of your favorite quotes?
Pete Koomen (01:56.060)
I think my favorite quote over all of these years, and maybe it's because we really learned this the hard way more than once, is Paul Graham's quote, make something people want.
That's sort of become the tagline, I think, for his startup, Incubator Y Combinator.
And yeah, it's a lesson that we have learned over and over again, most often the hard way.
I think we're a little slow, but I just think it's one of the most powerful things for entrepreneurs.
If you can actually do that, if you can make something other people want, most of the rest of it figures itself out.
Omer (02:31.670)
Yeah, that's a great quote.
And I think that as we tell your story, I think the audience will be able to see sort of what your experiences were when maybe you built stuff that people didn't necessarily want, and then how you were able to skyrocket with success when you Sort of really nailed that.
Okay, so let's, let's give the listeners a better understanding of Optimizely.
Who are your target customers and what are the top pain points that you're trying to solve for them?
Pete Koomen (03:04.130)
Sure.
So optimizely's customers are essentially anybody who has a.
A website or a mobile application.
We build products that help you make your website better or make your mobile application better.
And the way we do that is by allowing you to run what are called A B tests.
And if you're not familiar, an A B test is.
It's a pretty simple concept.
It's the idea that let's say you've got a website, you want your visitors to do something or maybe some set of things.
If you're a political candidate, you might want them to make donations, or if you're an E commerce site, you might want them to purchase things.
And an A B test is designing multiple versions of that website and then giving one of these versions randomly to every single person who lands on your website and then just measuring as you go along the impact that that version has on the number of people who purchase or donate or whatever it might be.
So it's sort of a scientifically controlled way of improving your website or mobile application.
Omer (04:05.050)
Okay, now I want to talk about where you got the idea for Optimizely from.
But before we do that, I'd like to start a little bit earlier.
From before you'd launched the company, you were working on another couple of startups and really sort of tell the story from the first startup to the point where you decided to launch Optimizely.
So what, you were originally at Google with Dan, your co founder, and then when did you guys decide to launch that first company?
Pete Koomen (04:38.390)
So we actually, we got to know each other at Google like you mentioned, and we discovered a shared mutual interest in entrepreneurship.
And we're going to leave the company in, I think late 07 or early 08.
And then Dan saw a talk given by young Senator Barack Obama on the Google campus and was just completely smitten and quit his job three weeks later and moved to Chicago and became the director of analytics on the early Obama campaign.
The only reason I'm including this detail has become it really was a formative experience for him and really led to a lot of what we ended up doing at Optimizely.
But after that experience, he decided to that although campaigns are fun, he didn't ever want to work for the government and moved back to San Francisco.
He and I started working with the Third co founder on a project that we call Carrot Sticks.
It was a learning platform for young kids.
It's just an easy way to learn math on the computer.
And after about nine months, it was just fairly clear that that wasn't working.
The third co founder moved on and is doing really cool things elsewhere now.
And now we started our second company.
And that was.
I won't even go into that now.
But that failed after about two and a half months.
And then for the third company, we came back to this idea that Dan had, which was that he had run a whole bunch of these AB tests for the Obama campaign in 08, and they'd had a huge impact, but they were also really difficult to do.
And is there a better way that we could design to do this?
Could we build tools that would make it much easier for companies to run these kinds of experiments on their website?
And that was the genesis of optimizing.
Omer (06:22.560)
Right.
Okay, so you guys, how did you come up.
So you've got this idea, and then how did you guys.
What did you do next?
Pete Koomen (06:32.240)
Well, this is sort of after two failures, we were now, I think this is 2010.
We'd sort of seen the writing on the wall for this second project we'd been working on and casting around for something new to work on.
And Dan thought, well, let's see if we can tackle this a B testing problem.
And so we put together a really quick prototype.
And at this point, we were actually part of the winter 2010 Y Combinator class.
And we brought it in and showed Paul Graham, and he just instantly, it was like a light bulb went off.
And just.
I think it was actually his wife, Jessica, who said, this is AB testing for marketers.
And at that point, I think one of the things we did that I'm so proud of is we actually.
Dan called a few of the agencies that he worked with during the Obama campaign and pitched them the idea of optimizing.
We hadn't written a single line of code, and he asked them if they'd be willing to pay $1,000 a month to get early access to the product.
And two of them said yes.
And the reason we did this was because after two failures, we'd gotten so skeptical about our own instincts around what people actually wanted that we forced ourselves to earn revenue on Optimizely before we actually started working on writing the code.
And as an engineer, that was a really unnatural thing to do.
But it really helps highlight how our mindset had changed over that first year around our priorities and building things.
People Wanted.
Omer (08:06.080)
How long did it take with Carrot Stix, your first startup, to go from idea to the point where you started making money?
Pete Koomen (08:14.800)
I think we earned our first dollar with Care Stix after maybe five or six months.
And so with our second idea, I think that same time period was compressed down to about a month and a half.
And then with Optymyze, it was one day, like I mentioned before, and I love that metric, just as a way of highlighting how customer centric we'd become in our approach to building companies.
Omer (08:38.880)
So you said you hadn't written any code, so what exactly was this prototype that you were showing Paul and his.
Pete Koomen (08:47.280)
Actually, I gave those events out of order.
We went and got this revenue signal first.
We built a super fast prototype, showed Paul Graham, and then things kind of rolled after that.
Omer (09:00.600)
Got it.
Okay.
And so when Dan was making these calls, what was he showing these guys?
Pete Koomen (09:13.400)
We had nothing to show.
It was a description of what the product would do.
Omer (09:19.800)
And that was it.
Pete Koomen (09:20.680)
And that was it.
And that was it.
And I mean, that speaks also to, I think, the size of the market opportunity that we really stumbled on there.
There was a real need for what we were doing.
And the idea of a tool that allowed non technical people to run and manage AB tests was something that these folks who built websites and who optimized websites for a living immediately saw the value of.
And it was a great signal for us.
And if I were starting another company today, I would be looking for a strong revenue signal like that before investing a serious amount of time in something.
Omer (09:59.200)
Now, did you guys get any actual commitment?
Do these guys actually pay you up front or was it more of sort of a verbal thing that yes, we're interested, we would pay this?
Pete Koomen (10:09.440)
No, I think we started sending them invoices and we got actual revenue.
Wow.
Omer (10:14.880)
Wow.
Pete Koomen (10:16.800)
Yeah.
It's not hard to find someone who says they would pay for something.
It's a lot harder to find something who says they will pay for something.
Omer (10:25.150)
Exactly.
Yeah.
Okay, so you've got people who've given you money.
You don't really have a product.
So what did you guys do next?
Pete Koomen (10:33.310)
So we started building as fast as we could and we actually had a just a weird and actually fairly tragic turn of events in the Haiti earthquake in January of 2010.
So this is maybe a couple weeks after the events that I just described to you.
And this horrific earthquake happened in Haiti and many people died.
And a bunch of folks got together and set up a foundation called the Clinton Bush Haiti Fund.
And the goal was to raise as much money as possible for the victims of the Haiti earthquake.
And because there was a lot of overlap with the folks who worked on the Obama campaign, we got a call.
Excuse me.
We got a call and said, hey, we've got this website.
We just threw it up.
We have one IT guy who's struggling just to keep the thing online.
Dan, I know you did this sort of stuff for the Obama campaign.
Can you help us make the website better?
And this was literally, I think, two weeks after we committed to actually working on this product.
And it was the world's most perfect use case for it and for a really worthy cause.
And so we spent three sleepless nights sort of building a product as fast as we could while simultaneously running experiments for these guys.
And we were able to, over the course of many experiments, improve their donation rate by 10%.
So people were donating 10% more on every single visit.
And that ended up, I think, earning an extra million or so dollars for the campaign.
And that was.
First we got a revenue signal and then we got just a huge use case signal that this could really add tremendous value and have a big.
And at that point it was just work as hard as we possibly could to get this thing up and running.
Omer (12:26.760)
So were the two of you writing the code and building the product yourselves?
Pete Koomen (12:31.800)
Yes, we were, initially.
Omer (12:33.640)
And so what were you able to build in such a short amount of time?
Pete Koomen (12:39.880)
Well, we were able to build a platform that we could use to essentially do this.
If you look at our product today, you're able to sort of, you have a visual editor where you can take your website or your mobile app, you can click on things, you can change text, and you can change images and move things around.
And none of that existed at first.
This was really just a way for us to inject raw JavaScript into people's websites.
And so we gave them a simple JavaScript snippet that point to a file that we had control over.
And then we built a simple way to change what was what was injected there, to modify the contents of their pages.
And then we built a simple analytics framework to help us measure the impact.
And so that was like the absolutely minimum viable thing that only Pete and Dan could use.
And, you know, then after that, we took more and more steps to productize it and turn it into something that anybody could use, not just the two of us.
Omer (13:37.330)
Yeah, I think there's, there's often a temptation when you're building a product to start to, you know, even before you have your first customer to start to productize it too much?
Maybe.
And it sounds like maybe.
Did you guys do more of that with your first two startups?
Pete Koomen (13:55.570)
You know, I mean, I think you're right.
I think that is a huge temptation, and especially if you're an engineer.
Right.
The building is always the easiest and it's usually a lot of fun.
Like, I love building stuff.
So there's always a temptation to kind of lock yourself in a room and make something that's amazing.
One of the hard lessons we learned early on, I remember, specifically with carrot sticks.
So this was our learning platform for kids.
We kind of went into it with the assumption that we liked math and we like computers.
Therefore, we just build a way to combine the two, and kids are going to love this thing, or at least teachers would.
We spent a long time working with, I think, some folks from Stanford who helped us design this adaptive, amazing curriculum.
And we coded it all up and we just spent a lot of time on it.
And I think when we actually, after all of that, went and brought it into a classroom, it was like, painful to watch these kids try to stay focused with their teachers, uncomfortable urging to keep playing carrot sticks.
And they all just wanted to play games.
And it became pretty clear that even though we could put this really cool educational label on the product, the teacher really was just interested in a way to keep her kids occupied.
And while she graded papers and the kids didn't care about the fact they could solve math problems on computer screens, all of them had computer screens everywhere in their lives.
By this point, we had to go back to the drawing board and we ended up simplifying the whole thing, making it into a game where kids could compete in real time with each other.
And we brought it back and they just ate it up.
It was awesome.
That was kind of a harsh lesson in validating your ideas, you know, before you spend a lot of time building them, because you don't.
You don't really understand your customers the way you should at first.
Omer (15:45.420)
So what happened to Carrite Stix?
Pete Koomen (15:48.700)
Well, we kind of kept it up and running.
We just stopped working on it and we actually shut it down maybe six months ago or so because it was, you know, just.
It was losing money.
You know, it never.
There was a way for people to pay for it.
A lot of kids use it, actually, with no marketing budget, no one even working on it.
It grew from a couple hundred users when we stopped working on it to, I think, 50 or 60,000 students each month using it, which is awesome.
I mean, that was awesome.
But by that point, we Were well off to the races with optimizely.
And there may well be a business in there.
Education is really hard.
But the conclusion we ended up coming to is that not only is education a very difficult space littered with the carcasses of ambitious companies, but we're not parents, we're not teachers, we're not kids, we're not administrators.
We're too far removed from this world.
We thought to do a great job of solving problems there.
Omer (16:43.450)
Yeah, that's a really good point.
So looking back at those early days, what do you think was one of the biggest mistakes that you made?
Pete Koomen (16:54.170)
I think that the one I mentioned before, before optimizing is just building something that people didn't want.
That's the easiest mistake for any entrepreneur to make.
It's easy to build something you want.
I think it's much harder to build something other people want, and even harder to build something people want so much they're willing to not only pay money for it, but to seek it out and find it and pay money for it.
Those are big challenges.
I think once we had sort of found a problem that people actively needed to be solved, we ran into a whole different class of problems and those I'd lump under kind of scaling and operational challenges.
And we also had no idea what we're doing, what we were doing there.
I mean, you could argue we still don't.
I think one of the challenges we ran into early was scaling our sales process beyond just myself and Dan for optimizely.
And we built a product, and we launched in late 2010, and we had a way for anybody to sign up with their credit card online.
And we also signed a few larger deals with bigger companies.
And each of those bigger deals required a lot of time and effort on our part.
So we'd have to go in, we'd answer questions, we'd meet with them.
And this was like.
This was essentially what sales was, although we didn't really know it.
And we decided to try to scale that.
We hired a salesperson who worked for one of our competitors, and this person was remote.
They were in Chicago, and it just.
It didn't work at all like it was.
I think it took us three months to even figure out that Not a single thing.
You know, we got no new customers through it.
We didn't even know enough to know that that was bad, you know, because there was an open question like, is it possible for someone who isn't technical to sell this product?
We didn't know.
And so the first salesperson we hired Was, I think, somebody who was fairly effective when there was a script to follow and when there were a lot of resources there.
But that's not what we needed as a young startup.
As a young starter, we needed somebody who was also very entrepreneurial and was willing to sort of go in and make mistakes and write the playbook, so to speak.
And our second sales hire was someone who didn't have a ton of experience, was running a struggling mattress company he'd started in Seattle.
And you know, we gave him.
We kind of were very skeptical and we said, you know, you have, I think, 12 weeks to prove that you can add value to this company.
And they came in and just learned as much as they could as fast as they could and were ultimately very successful.
This person's name is Matt.
He now runs our entire Europe.
European operation.
Omer (19:24.550)
Wow.
Pete Koomen (19:25.510)
Yeah, but that was, that was not, you know, we definitely made some mistakes before figuring that out.
Omer (19:31.340)
Now, you know, sort of looking at what you did so you.
Well, I guess the first question I would ask before we, we sort of talk more is if you were starting another, if you know, another startup today, would you take that same approach and pre sell your product before you started working on it?
Pete Koomen (19:54.630)
That's a great question.
I think if I were building a product I was hoping ultimately to sell, then yes, I absolutely would.
You can argue that standards have risen in the SaaS space and the level of quality that you need before someone's willing to pay for something has increased.
And so I don't know if we could get someone to pay on day one, but I would certainly try as hard as I possibly could.
That approach doesn't work as well if you're building startup that you're not ultimately hoping to earn revenue directly on.
Like, there are plenty of examples, Facebook and Twitter, probably the most prominent of which of companies who built product lines for years that didn't earn a cent and were ultimately very successful.
And so I don't think that that exact approach works.
But I think the lesson that we learned, which was important, was that you should be as ruthlessly self skeptical as possible about the value of what you're building until you can really prove it, you know, and I think the shift can be as simple as like, instead of asking your friends if they think something is cool and taking that as a valuable signal, go and camp out in front of a Starbucks and get people to give you their email address because they're excited about something.
Like, you know, force yourself to do something that's hard to prove the value of Something.
I think that's the approach I would take.
Omer (21:15.410)
Yeah, that's, you know, really good.
I had.
I can't remember where I came across this.
I think it was with Noah Kagan, where at one point he was asking people to kind of go and ask your friends for $1.
Right.
And it was like.
It wasn't the money.
It was just the fact that, you know, you're taking that action and just doing something and getting out of your comfort zone really sort of helps to move things forward.
Right.
As opposed to, you know, especially if you're for, like, you know, you're a developer or you're sort of a technical person.
As you said, it's much easier just to lock yourself in a room, build on something, and just, you know, hope that somebody is going to want it eventually.
Pete Koomen (21:51.640)
Yeah, I mean, I think it's.
I absolutely agree with that.
And I think that it's.
It's very easy to fall victim to people's politeness in the beginning.
I mean, nobody wants to give someone else hard feedback.
And chances are, if you're an entrepreneur, you've heard your friends pitch you ideas that you thought were sort of stupid, you probably didn't say anything about it, and there's a good chance that your friends are doing the same thing to you.
And, you know, unless you can figure out some way to really, really go out and test your ideas the way a skeptic would, I don't think you've really.
You've done yourself a service.
It's an easy way to waste a lot of time.
Omer (22:28.530)
Yeah.
So I want to talk a little bit more about how you started to acquire customers.
In the early days, you mentioned that, you know, Dan had made these calls and had got two of these agencies to sign up to paying you guys $1,000 a month to use this product.
How else were you going out and getting customers?
Was it all around sales and sort of outbound and getting in front of these potential customers?
Were you doing any marketing?
What sort of activities sort of happened in that first year?
Pete Koomen (23:07.000)
You know, I mean, I'm going to give you my answer, but I'm not going to try and suggest that we did this the right way.
You know, I don't.
We didn't spend any money on marketing until, I think, 2012, which is two years, you know, and I think that's more.
I wouldn't take that as a signal that marketing wasn't important.
I'd take it as a signal that we didn't know how to market.
I think we built A product that lent itself really well to word of mouth recommendations.
I think we also focused on building a really good product after validating that it was something people were willing to pay for.
So we had a lot of inbound demand.
A lot of our growth early on was folks who'd read about us somewhere, heard about us coming and signing up.
And when we talk about early sales, we tried some outbound things like kind of going through like look and see everybody who has Google Analytics on their website and try to find some contact at each one of these places and reach out to them.
That wasn't nearly as effective as, as selling to somebody who reached out to us to begin with.
So inbound sales is inherently easier than outbound sales.
It just puts more of the burden on marketing or word of mouth recommendation.
Some fun things we did, Dan and I as co founders sort of had this running competition to see who could sign the biggest deal with a customer.
And I think I put our first enterprise customer on the board and then he volleyed back and signed someone at higher than that.
And then I think I closed someone for I think 8,000amonth and he closed someone for 12,000amonth.
This was sort of a fun way to get us excited and get the company excited about what's going on.
I think it's pretty important if you're a co founder, if you're building something, you're selling to companies.
I think it's pretty important to be personally involved in the sales process for quite a while after you start working on it.
And it's, I don't think you need a ton of, I don't think you need a sales background to do that.
I think you really just need knowledge about what you're doing and a lot of passion for it.
And that sells itself.
And the reason I think it's important is because the advantage of being a technical co founder who is also selling is that your sales, your customer product feedback cycle is like instantaneous, right?
You try to sell something, you get a no.
You ask why it was a no, you find out, well, we just need to build X or we need to do Y and boom, you go do it.
And in the early stage when you're just iterating trying to find that fit, like that's critically important.
So that would be my advice to startup founders.
There is, even if you don't have a sales background or any kind of business background, that should not stop you from being your company's number one salesman salesperson.
Omer (25:52.380)
How are you reaching these customers?
And like the enterprise customer that you mentioned that you sign, were you guys just frantically making phone calls or just emailing people, or were you trying to get FaceTime in front of people running marketing at these companies?
Pete Koomen (26:07.530)
We did it any way we could.
And a lot of our early customers were.
I mean, if you've ever read that book Crossing the Chasm, it's a wonderful exposition on how this works.
But a lot of these folks, would you call them early adopters?
So they were larger companies with enthusiasts, technology enthusiasts working at them, who wanted an early edge over competitors or were just exceptional about new technology.
And they're often willing to jump on the phone, to sit down face to face, talk through the products in great detail.
And so, like, as a founder, I mean, these are your people, right?
They give you great direction on what's important.
Early on.
And as to how we found these people, we tried everything we could.
We'd work through our investor network.
We'd get introductions from investors.
As I said, we tried some kind of outbound efforts with, I think, mixed success.
But I think we're also very fortunate that we had a lot of.
We had a bunch of buzz early on, and we built a product that people could talk about.
A few other things that we tried to do to make it easier, I guess, to kind of grease the wheels.
We built our product in such a way that anybody could test it on their website without actually signing up.
So you could just go to our.
And it still works this way.
You could go to optimizar.com, type in your website address, and instantly see what the product feels like with your own website.
That made it easier for other people coming in and taking a look at the product to get a sense of what it was.
It also made it easy for us to give these amazing demos.
We could do a screen share with you, pull up your website and change something that you had maybe wanted to change for months, but because your IT team was bottlenecked, you weren't able to do it.
That was this magical moment for customers, you know, where the demo was truly personalized to what they were thinking about, what they were curious about.
Omer (28:01.490)
Now, you know, you said, you know, the approach we took to marketing and selling our product isn't necessarily what I would recommend to others, but when you look back at what you guys did, it worked out for you pretty well in the end.
So if you were going back in time, would you do anything differently or would you still take that same approach?
Pete Koomen (28:24.120)
Yeah, I mean, when I say I wouldn't recommend that approach, I actually mean it.
I think there's probably a survivorship bias here in the sense that I think we've done well.
That doesn't necessarily mean every decision we made was the right one.
Ultimately, you know, I think that if I were starting again today, I'd probably make much more of an effort to learn about marketing and to hire someone who is really strong.
Very early on, you know, we didn't.
We think we made our first marketing hire in 2012.
That's when we really started spending money on it.
You know, I wish that person had been here earlier.
I wish we'd focused on it more.
Ultimately, I agree with you that it worked out, but it's not.
I'd probably try something different next time, to be honest.
Omer (29:09.250)
Okay, so let's move on to hiring.
We talked about this a little earlier, and I'd love for you to share your experiences and some of the lessons that you've learned along the way that maybe other founders could learn from about what it takes to build and scale an organization.
How many employees do you currently have now?
Pete Koomen (29:36.540)
We have somewhere around 350 employees now.
Omer (29:39.570)
Wow.
Pete Koomen (29:39.810)
Worldwide.
Omer (29:40.610)
So that's that.
You guys have gone from, what, two to 350?
Pete Koomen (29:45.490)
Two to 350.
Yeah.
Omer (29:47.410)
In just under five years.
Pete Koomen (29:50.290)
Just.
Just over five years.
Actually, we're now five years and three months, I think, old.
And yeah, hiring.
Hiring has been probably our biggest challenge from.
From very early on.
It has never been easy to hire people.
And, you know, when you.
When you're.
When you're just starting out, it very much depends on the size and quality of your own network.
You know, I've said it before, and I'll say it again, and hiring the best people you can possibly find is the single biggest thing you can do to help make your company a success.
I don't think there's anything more important than doing that.
And it also happens to be probably the hardest part of it.
Our first hire was Dan's twin brother, who is a software engineer.
And even that was a challenge, I guess you could say that set the tone for the hiring challenge through the rest of the years.
And so we hired folks.
We'd find them just anywhere we could.
Early on, it was mostly folks somehow connected to us in our network or recommended to us from an investor or whatever.
Kind of haphazard and opportunistic, really.
I don't remember when it was, but at a certain point, we decided we needed to get serious and build an actual hiring process, and we brought somebody in to help teach us how to do that.
And that was, I'd like to think, I think of it as kind of our first larger scale management learning, which was that we had this thing, this challenge for the company and we wanted to make it a focus.
How do you do that?
Well, it really meant going up in front of the whole company and saying, hiring is our number one focus, finding really good people.
And the easiest way to do that is the really good people that all of you know, sitting down with folks and going through their LinkedIn contacts or their resumes, hiring a recruiter come in and continue helping us beat that drum, reaching out, sending emails from our accounts to prospective engineers or whatever, and then spending a lot of our time.
At certain points during our company's growth, I'd say probably 50% plus of our time was spent just on trying to convince people to come work for us.
And that's not something I anticipated.
As an early stage founder, what were
Omer (32:20.450)
some of the hardest things about hiring people?
I mean, apart from finding them, I guess.
Pete Koomen (32:25.210)
Yeah, all of it, I guess.
I mean, I mentioned before, I think it's pretty important for startup founders to be the company's number one salesperson.
The whole sales thing ends up just popping up everywhere.
The biggest things you end up doing as a founder often feel a lot like sales, you know, sales.
Sales.
Selling sales.
I was going to say, you know, trying to sell your product, acquiring customers is sales.
Hiring people is essentially sales.
Raising round, raising rounds of investment for your company is sales.
And with a lot of those things early on, you're essentially selling a vision.
And when you're trying to convince somebody, even somebody you know quite well, to come work for you, it often means walking away from something that they're already quite happy with.
And if they're good, usually earning a fair bit of money with and coming and taking a risk with you.
And that's not an easy thing to do.
And so early on you don't have a lot of.
You can't pay people as much as they're making elsewhere and you're trying to hire the best people.
They're probably quite financially comfortable where they are.
They're usually working on something they find interesting and you need to kind of convince them that it's a worthwhile move to come and join the rest of your group of people crammed into a little room, working a lot of hours every day with a very uncertain future.
And that's hard.
And then of course, finding people then becomes hard too as well.
Once you exhaust your own network, how do you Actually turn this into how do you build a hiring machine that scales your company as fast as it needs to to keep up with customer demand?
And that ends up being, you know, you still have the same problem.
You still have to go and convince people to work for you.
But now you need to systematize the process by which you find them.
And that's.
That's hard too.
Omer (34:18.330)
Now, one thing I hear sometimes from people who've joined companies is the reality didn't live up to the hype.
And you know, quite often people are oversold on a vision and sort of realize that things later down the line that that's not the reality of where this company is going.
And I think on the other side of that, a vision doesn't necessarily mean this is set in stone, that this is exactly how things are going to turn out in five years time, but sort of for maybe other people who are listening and are kind of going through a process where they have to sell that vision to, to convince people to come and join them, what advice would you give them about trying to sort of find a balance between selling and getting people excited enough, but not selling it so much that people end up being totally disappointed with what you promised them?
Pete Koomen (35:25.840)
I mean, I think you should.
I think you should sell your vision.
Sorry, I think you should sell your problems right alongside your vision.
We have a set of values here that we encoded actually as part of this early hiring exercise.
And we have an acronym, optify, and that stands for ownership, passion, trust, integrity, fearlessness, and transparency.
The Y in Optify stands for the why in transparency.
And the transparency thing is something that we say over and over again.
It's meaningful.
We try to share as much as we can with our entire team and with our customers actually outside of Optimizely.
And the way that I feel that has influenced how I hire is that when I'm talking to somebody about Optimizely, I make it very clear how excited I am about the potential I think this company has.
But I also talk about a lot of the things that are keeping me up at night, a lot of the problems we have.
And the reason for that.
There's a couple reasons versus to counter this problem that you just mentioned, that if you only sell someone on a dream, they will inevitably discover that there are a lot of cracks and a lot of things broken and they'll feel like they got sold.
So that's one, you don't want that reaction.
Two is that the people I want to work with are the ones who are excited about Rolling up their sleeves and solving problems.
And I think really good people understand that nothing is ever perfect and there will always be problems.
And the way to be successful is not to design something that's perfect.
It's to have an attitude towards problem solving that is sort of always realistic and always positive about it.
And so I talk about the things that are broken about optimizely when I'm trying to convince someone to come work for us.
And I've.
I have often found that that doesn't actually hinder the effort.
I think it makes people feel more excited because they feel like they have an accurate picture of what's going on.
They're not sort of skeptical, they don't feel like an adversary in that process.
Omer (37:33.640)
I think that's great.
So transparency and sort of vision, plus the problems, I think that's a great way to share that.
Okay, so let's talk about the business today.
Do you guys disclose revenue?
Pete Koomen (37:48.130)
Not publicly, no.
Omer (37:49.330)
Okay, so I assume you guys are at least an eight figure a year business.
Am I in the ballpark?
Pete Koomen (37:58.050)
We don't talk about revenue, but we've managed to grow a lot.
We have thousands of very happy customers.
Omer (38:03.090)
Okay, so is there one particular thing that you're excited about in the business right now?
Is there anything that's coming up this year that is sort of getting you fired up?
Pete Koomen (38:16.100)
Absolutely.
So, I mean, we're thinking about a few things pretty hard.
The first is mobile.
What does experience optimization look like in a world in which people are using multiple devices all of the time to do different things?
How should I, as an optimizely customer, think about optimizing the experience for all of my customers when they're constantly bouncing back and forth between devices, between HTML and between native code?
So that's a really, really hard problem and I think one that a lot of people are trying to solve.
So we're thinking pretty hard about that.
We're also thinking about personalization.
So going beyond the idea of just AB testing, in an A B test, you figure out what is the average best experience for a large group of people.
When you personalize an experience, you use what you know about that individual to give them experience that is more most relevant to them.
This is a capability like a B testing originally that most of the big companies, the Googles and Facebooks, have and have invested a lot in, but is not something that most other companies are capable of doing right now.
And so we're thinking pretty hard about building products that make that easier for our customers.
And then lastly, it's something that actually sounds boring, but I actually think it's really interesting.
It's statistics.
So it's the statistics of big data.
And I think this is pretty interesting because we live in a very much in a big data world in which companies are collecting vast amounts of data and they're trying to use this data to make decisions.
And the statistics that people use to make decisions with data haven't really changed in the last hundred years.
And what we've actually discovered, when we look at how our customers use statistics to make a call on an a B test, for example, we found that their behavior really doesn't match what these statistics were originally designed for.
Statistics were designed for agriculture and medical trials in the early 20th century.
And things are so different now.
They don't match a world in which you can get a tremendous amount of data at any point for not a lot of money.
And what you end up getting are people with that are making incorrect decisions that have much higher error rates than they're aware of because they're not using statistics the way they were originally designed to be used.
And so we actually just launched a new iteration of our product called Stats Engine, which has redesigned the statistical approach to making decisions with big data.
And we think this is something that the entire industry needs to do.
We're excited about it.
Omer (40:50.080)
Good stuff.
All right, Pete, it's now time for our lightning round.
I'm going to ask you a series of questions, and I'd like you to answer them as quickly as you can.
Pete Koomen (40:58.050)
Absolutely.
All right.
Omer (40:59.090)
What's the best piece of business advice that you ever received?
Pete Koomen (41:02.130)
Dick Koslow runs a management training class at Twitter, and he has a quote which I really love, and it's that the hardest part of management, what it all boils down to, is making sure that everyone understands what you understand.
Omer (41:12.770)
Nice.
What book would you recommend to our audience, and why?
Pete Koomen (41:16.210)
The Hard Thing About Hard Things by Ben Horowitz.
He's just super smart.
He's been through a lot, and it's just.
It's a great book.
It's gripping and there's a lot of valuable lessons.
Omer (41:25.990)
I agree.
Great book.
What's one attribute or characteristic in your mind of a successful entrepreneur?
Pete Koomen (41:30.950)
Peter Fenton.
He's an amazing investor.
He's on our board.
He has a saying that the great entrepreneurs are learn it alls rather than know it alls.
And I just continue to see this in people who are successful.
It's humility and an unlimited aptitude for learning.
Omer (41:46.390)
What's your favorite personal productivity tool or habit.
Pete Koomen (41:50.470)
Even when shit hits the fan at the hardest moments, Keep time for exercising or meditating or whatever it is that you do to help keep your mind clear.
It just makes things infinitely easier.
Omer (42:01.830)
If you had to start over tomorrow, what type of business would you go and build?
Pete Koomen (42:07.030)
I don't think this is a useful question to ask.
I'll quote Travis Kalanick in this.
You just ask a happily married man who his next wife is going to be.
Omer (42:19.210)
Okay, we'll move on.
What's an interesting or fun fact about you that most people don't know?
Pete Koomen (42:24.650)
Both my parents are immigrants.
Actually, the same is true for dan.
I have three citizenships, U.S. canadian and Dutch.
Wow.
Omer (42:34.010)
Do you speak Dutch?
Pete Koomen (42:35.530)
I just speak a little bit.
It was my first language, but that faded away, I think, once I started kindergarten.
Omer (42:41.930)
Interesting.
And finally, what is one of your most important passions outside of your work?
Pete Koomen (42:46.520)
I love rock climbing.
I love alpine climbing.
It's a way to push myself to my physical and kind of mental and emotional limits in a very controlled way.
I just, I think it's a wonderful, wonderful sport.
Omer (42:58.360)
Awesome.
Pete, I want to thank you for joining me today and sharing your experiences and insights with our audience.
And thank you for letting us get to know you a little better personally as well.
Now, if folks want to find out more about Optimizely, they can go to optimizely.com I'll include a link in the show notes as well.
And if they want to get in touch with you, what's the best way for them to do that?
Pete Koomen (43:18.050)
Just send me a note at Pete at optimizely or my Twitter handle is at Kuman.
My last name.
K O O M E N. Awesome, Pete.
Omer (43:25.890)
Thanks again.
I really appreciate you making the time to do this.
Pete Koomen (43:28.370)
Hey, thank you, Omer.
Omer (43:29.650)
Take.
