Founded and Funded: Building an Open Source Business from Scratch with Eric Rudder and Joe Duffy of Pulumi

This week we are publishing a non-covid related podcast – recorded before Seattle was hit hard. We hope it provides some relief! We are also prepping some great podcasts that deal directly with how founders and people are managing through this time – and looking to the future. Stay tuned for those!

A few quarantine essentials: Non-perishable food items, toilet paper and the Founded and Funded podcast. Founded and Funded is back with Episode 5 of Season 2. In this Episode, Madrona managing director, S. Somasegar sits down with the founders of Pulumi, Eric Rudder and Joe Duffy.

During their time at Microsoft, Eric and Joe found the most joy in building something from nothing in the form of one-off products. Along their journeys, they paid very close attention industry inflection points which helped time the perfect jump. However, before they could take a bet on their idea, they had to take a bet on each other as co-founders.

Listen in on their conversation as they chat about the time they spent together working at Microsoft, the promise of open source technology, and their experience building a company that empowers both its employees and its customers. Looking for insight on how to time your leap into entrepreneurship? We have that too!

Full Transcript

Erika

Welcome to founded and funded. This is Erika Shaffer from Madrona Venture Group. Today we’re going to hear from Eric Rudder, and Joe Duffy, who are the founders of Pulumi. Pulumi helps developers create, deploy and manage modern cloud infrastructure. They speak with Soma, about their time at Microsoft, where they all worked together and knew each other and how they are applying what they learned there to startup life. This was recorded before the onset of the Covid-19 crisis. So it has a little bit of a light hearted tone. I hope you enjoy it. Listen on.

Soma

It’s really an exciting opportunity to get a chat with a couple of people that I’ve known for many, many years and I’ve had a chance to have the opportunity in the past. Religion to work together over the years. I’m Soma Somasegar, a managing director here at Madrona Venture Group. And let me have Eric and Joe introduce themselves.

Joe

My name is Joe Duffy, I’m founder and CEO of Pulumi. Me prior to this, I, you know, I was at Microsoft, where I got the privilege of working with so Maya and Eric, for many years, really fired up about developers making developers productive and really excited about what’s going on in the cloud. And that’s kind of why we started Pulumi. And I’m excited to be here and kind of tell tell the story of the journey.

Eric

And I’m Eric Rudder, founder and chairman of Pulumi. I’m equally excited. I think at Microsoft we used to say super excited. So I’m super excited to be here. And I think we’ll have some fun today.

Soma

Great. You guys have had a very successful career at Microsoft. You were there for sort of many, many years, couple of decades. And Joe, you’ve been there for 12-13 years of Microsoft very accomplished, very successful. What made you guys decide to say like, Hey, I’m going to sort of give up all that goodness and safety and get in get to be an entrepreneur and start the entrepreneurial journey with Pulumi

Joe

That story like, for me, I actually started my career. Actually, when I was in high school, I kind of started a little consulting business where I was helping companies get to the internet. And that gave me exposure to kind of some of the sales and marketing and customer relationship parts of a business, you really need to think about making a profit and making customers happy. And so I actually looked at starting a company before coming to Microsoft, and then the opportunity to come to Microsoft arose and I knew, hey, I’m gonna get to work with the best people in the industry. I’m gonna learn so much. I figured I’d say for three years and then go start a company. And every year I asked Is this the year and turns out 12 years passed quicker than I could realize seeing things at scale, seeing innovation at a company like Microsoft is just completely leagues beyond what you see typically, you know, in most companies, and frankly, I would have met some I would have met Eric if I if I didn’t do that. So, really, to me, I just wanted to get connected to the customer. You know, I felt like a big company is great. There’s lots of funding to do really innovative, new bold bets. But really the appeal for me of a business is it’s a meritocracy of business. The idea succeeds because people pay money because it, it delivers value to them. And so that that economics aspect to me was always fascinating. That’s been the biggest learning curve after leaving Microsoft as well as you know, hey, you’re thrown into business and customers and sales and marketing and finance. And that’s been, for me the best part of the journey so far.

Eric

I think my journey is probably similar to Joe in high school, I was actually a manager in a hardware store, Max matching swatches of sofa fabric to custom paint colors, and getting people the right size of lumber. So I guess you’d say both of us have helped people build things from a very early age, but I want to but at Microsoft, kind of on a lark, and as a great career, I got to do lots of different things there. I got to, you know, work on developer tools. I got to work on research, I got to run, you know, Business Development at the company. And it was a great experience great people always, at its core, Microsoft’s been a developer Led company in terms of its culture and audience and products, and kind of went through the typical, you know, kids out of the house empty nest thing you always look at, you know what I want to do with, you know, my next 20 years of career and it’s always a challenge to build something from nothing and get Microsoft, you know that I had the most fun and the most joy, literally building one Oh, products versus taking a product from 7o to 8o. Not that they’re, you know, aren’t the features that I’d like to add to PowerPoint for their next version. But it’s always more excited to establish a product or establish a category, you know, the opportunity was just too great. We kind of started the company. At a time when every application was becoming a cloud application, it was clear that a lot of the tooling was geared towards, you know, sort of the previous generation of products and we’re just starting to get towards, you know, modern container infrastructure, modern computing infrastructure, you know, multi cloud, you know, many cloud connecting data sources, and it was just clear we were at the right inflection point to go do something. I’m old enough I’ve watched the inflection points, but I’ve seen the inflection points from character to graphical. I saw the inflection point from client base to client server. I saw the inflection from client server to internet. You know, once the industry was closed on cloud native, I was like, Okay, this time, I’m going to lead from a different perspective rather than Microsoft and Joe and I just started hacking away in his basement, literally, as we call the winery, since Joe’s hobbies is making wine. So it’s a big wine barrel down there. And we just started working together and it’s been a great ride ever since.

Soma

You know, one of the things that entrepreneurs always say is like, Hey, there are a lot of critical positions that they ever make day in and day out. But one core fundamental decision that they have to make earlier on is who their co-founders are going to be. As much as you guys have had the opportunity to work together and get to know each other over the years. How did that decision or ordering the journey come along? Where you decided to take a bet on each other and say, like, Hey, we are going to together co-founder below me?

Joe

I think I you know, I worked with Eric throughout the years at several points. You know, I look back and a lot of my fondest memories Working at Microsoft Word these sort of 1o projects where we work together to build something from nothing. So I had seen that happen before I actually had that experience. And honestly, we did hang out in my basement for starting the company and see, Hey, can we can we build the thing? Can we figure this out? Can we figure out kind of how one plus one equals three? And I think that period really gave us the confidence. Not only was it the right partnership, but also the right opportunity at the right time. So actually, you know, just deciding, hey, we’re going to do this. And frankly, we’re both sort of ready to do it at the same time. That doesn’t happen very often. Right? It was almost like stars aligning that we were both ready to leave Microsoft, which frankly, is kind of a scary thing. You know, you’ve got an established career. You’ve got a network, you’ve got that financial safety, but both of us were at the point in our lives where we’re ready to say to take that leap.

Eric

Yeah, I think you know, for Microsoft, we just literally decided let’s work together and see how it goes. Let’s build something. We built little things that looked at Twitter streams and lit up light bulbs. Joe remembers that.

Joe

I do! During the Superbowl one year detecting who was talking about Beyoncé versus the actual game? Yeah.

Eric

We looked at, you know, doing some infrastructure products together, we looked at doing some Mar tech stack together. And I think Later, we’ll probably talk about how we got to the idea for Pulumi. But it wasn’t that the Pulumi idea was the first thing we just thought I was hated. We enjoy working with each other, and we would, you know, kind of start working in the morning, we literally would, you know, take a break for lunch and cook lunch together. Well, Joe and I are kind of into cooking, and I won’t claim them quite the shift Joe is, but it is a way to see you know, do we enjoy social time together because startup life is sometimes intense and sometimes many hours during the day. And so, you know, we enjoyed spending time with each other and were able to build the solutions we set out to build I think that’s the most important thing is you know, because it’s easy to just ideate and kick stuff around. But we were actually able to build stuff, get stuff done, you know, sort of encourage each other trust each other. And that was hopeful and we were able to take the leap.

Soma

How would you describe what Pulumi is?

Eric

Yeah, I think I’ve said before that all applications are cloud applications. And Pulumi really enables developers, DevOps, DevSecOps, to build better cloud applications faster. You know, when we got started, as I said, we were literally incubating something different. We were kind of working on a Mar tech solution. And we got to the point where we were like, okay, let’s kind of stand this up in the cloud. And let’s see what the state of the art is for provisioning something, giving our customers the power to run it on the cloud that they wanted or on prem. And we found that there wasn’t any tooling to do this. And so you know, the oft quoted Necessity is the mother of invention, really was the thing that got us going to fulfill the need, there was absolutely a need to probably about 30 companies before we actually founded Pulumi or wrote our first line of Pulumi code and there really wasn’t need Pulumi helps people provision, deploy, run, secure their infrastructure, we call it modern infrastructure, as code you Making sure that Devon DevOps can work together. It’s based on the idea of using real programming languages. So people don’t need to learn new specific dsls. They get to use their favorite editors, their favorite tools, their favorite integrations, their favorite package managers, their favorite versioning semantics. And we’re extending it to letting people write rules about policy, security, all these things that people kind of struggle with today, in terms of keeping up you know, Pulumi makes that easy for dev teams,

Joe

Honestly, our backgrounds caused us to take a pretty radically different approach to the space, I think all those years, really obsessing over developer productivity and making developers happy and bringing them joy and making them you know, giving them superpowers, right, that that that was our day job that got us up out of bed every morning, you know, for decades. We brought that same attention to detail that that kind of human care factor of Hey, we want, we want this to be not only productive, safe, secure, we actually want to bring joy to the idea of building cloud software. And so that that idea of really integrating the cloud development experience to the inner development loop is pretty novel. And you know, Pulumi is really, in, you know, a completely different approach than anybody else in the market today. It is open source as well. And that’s really important to us, we see a community and a community is really core to everything that we do with Columbia as well.

Soma

He just reference open source, Joe, you can’t like, you know, think about developers without thinking about open source today. And most companies that sort of do something or other with open source, A, then they start off with like my head, I’m going to observe an open source project, and the project becomes successful Can I think when I let me think about building a company around that, or the other way, which is like, no, hey, I’m building a company, I’m building a product, I’m building a service. And then sometime down the road, I decide that I want to take a piece of what I’m doing and make it open source for all the right reasons, but you guys decided earlier on almost from day one, to take a different approach. You said like a hair. We want to build a commercial entity here. And by the way, because we are focused on building something of huge value to developers, we want to think about our open source strategy. And let’s keep both in mind from day one. How did you guys come to that decision? And how was that journey for you?

Joe

Yeah, we knew from day one, it was really important that, you know, the core of the platform we’re building needs to be open source for a number of reasons. One, it encouraged contributions. It encourages, you know, people just want to understand how it works. It gives people confidence that we’re some part of the company to change, they still got the project, they know the project, they’ve got the source code for the project. It’s table stakes, right? For developers, that core technology they’re using, especially to author your own software needs to be open source. So we knew that going in. The question was, we didn’t want to end up in a situation we see other folks struggling with where they open sourced the business model. They didn’t think of how we’re going to make money. They really focused on community and nothing else, assuming that eventually they’d figure out the monetization strategy. And we see time and time again, it’s not easy. A lot of these companies don’t figure it out. And so we waited longer than we Had to open source until we had figured that out. And it’s interesting. There’s an interest in our Horowitz article that talks about the three waves of open source monetization strategy from taking into selling support as kind of wave one, wave two is really the open core model and wave three, it says, and this came out just a few months ago, but you know, we knew SAS was going to be big, and there was a natural alignment besides the open source technology. So what we did is actually said, Hey, we’re gonna open source, the whole platform, it’s all going to be there. We’re not holding anything back. The thing that we’ll charge for is the SAS. And this is, you know, an increasingly popular approach. It definitely comes with some challenges, but the benefit is from day one. We knew how the business would unfold. We knew how the community interacted with those revenue opportunities.

Soma

Now that it’s been what, two and a half years since we made that decision, are you still feeling great about the decision? Any learnings that you want to share the process?

Eric

Yeah, I think we I think we feel better about the decision every day. I think the other thing Just to build on Joe’s answer, like, we’re also living the lifestyle, right. So as we were bootstrapping our company, we’re benefitting tremendously from open source, right. So we’re a multi platform multi language company. And quite frankly, we could not have done it without leveraging open source contributions of many. So, you know, we often talk about, you know, standing on the shoulders of giants, and we definitely benefited from keep the people who came before us. And it just seemed like the right thing to do, right is to, you know, to contribute back fixes rather than fork and, you know, give credit where credit is due. And that was the great thing for us. The other thing we wanted to do was make sure that we added value as a company immediately to people who were using the open source and so we decided to provision a service and more probably a free service. So even if you’re just using illuminate casually from the open source distro, you could connect it to the Pulumi service for free and continue to give back to the community and to kind of nurture them along and for To discover, you know, what was unique about the commercial part of polygamy is no question. It’s a it’s a tough boundary between deciding what’s in the, you know, the free version and what’s in the premium version. And we’re absolutely tried to build a business and the maturity thing, but we made a fundamental decision that know the core value proposition of Pulumi is going to be open source, we were going to continue to support the community, encourage community contributions and be good members of the open source community in the large and that’s been a great founding decision. Honestly.

Joe

I’d say the one other just lesson learned to add was, I think it is really important to be clear upfront with your community, that here’s what we’re doing, and here’s why we’re doing it. And you know, I remember the day we launched the commercial edition of ourselves and in the community Slack, we had heart emojis and you know, celebration emojis and like the community actually is rooting for you provided you are open and honest about what you’re trying to do and why you’re doing it and the community wants you to have a system business because they enjoy the open source project you’re building. And they want that to be funded for many, many years to come. And so you’ll actually find if you’re open about where that boundary is and why people are super supportive,

Soma

Joe, you enter sort of one of the earlier problems of open source of Microsoft. And one of the big decisions that we made many years ago, Microsoft rose to open source dotnet framework. Tell me a little bit about that.

Joe

You know, I was in the windows organization and one of the goals was to modernize the engineering systems and try to work a little bit more like open source technologies, being able to use components in the open source, one of the challenges of proprietary sources, you’re always reinventing the wheel, you’re always creating solutions to problems that people have already solved and, and so we’re looking at ways to embrace that inside internally and actually share across the company as well have this notion of we used to call it internal open source which was unlock collaboration across all of Microsoft. So no matter where you are, you can contribute whether it’s a bug fix or feature recommendation or whether you’re just trying to apply you know, security standards across Company try to unlock that. So I had that coming into Dev. And someone asked me to start this project. And to be honest, I was flabbergasted that we were going to do that and super excited to start. And the thing that was amazing was more of a cultural transformation within the company than it was even a technology one, I remember, my team’s PC renewal was coming up. So people had to get new laptops, and I kind of said, Hey, 50% of the people in the team are gonna get Mac books, they have to give up their windows laptops. And I can’t tell you the number of people that came to me said, Wow, did you know almost everything we work on? If you have a Mac Book? is it relevant to you? And that most people doing development these days use Mac books. That means most of what we’re working on doesn’t apply to most developers. And so it was just like, really rejuvenated the team. There’s a Renaissance and, and I see now just years later, the impact that had on the entire culture across all of Microsoft was just super transformative. So is the human part actually, it turned out to be the best part of that, that whole journey.

Soma

It’s been what not to go into fields also since we started Pulumi Every day is a sort of a new day as an entrepreneur, what are some of the key learnings that you guys have had as part of the Pulumi journey in the last couple of years that you think other entrepreneurs would love to hear from your experiences?

Joe

So one for me is change is the one constant, my job changes month over month, you know, we’re a little bit further along now. So it’s, I would say things have settled a little bit, the roles and responsibilities settle a little bit as you as you hire people into functions. But in the early days, you’re doing a little bit of finance, a little bit of product, a little bit of coding, and frankly, I was coding very well into the journey, even when we had customers and doing marketing. And, I mean, you have to wear a lot of hats. And you have to be comfortable with the idea that how you spend your time next month is going to be very different than how you spend time this month.

Eric

For me it was probably I was fortunate to meet Colin Powell, one of his favorite sayings is a positive attitude is a force multiplier. When you talk about good days and bad days or you know some things go your way and some things don’t. It’s tough when things don’t, right. You’re young company. No one’s ever heard of you. You know, it’s hard to open a bank account, it’s hard to raise capital, it’s hard to get an internet connection at the right speed, it’s hard to find a real estate place to work at a reasonable rate. It’s hard to hire versus big companies yet, you know, that core belief in that, you know, hey, there really is a market need for what we’re doing. We believe in it. We believe in the product, we believe in the community. You know, we believe in the opportunity, that enthusiasm is infectious. There’s times you just need to suspend disbelief, and go forward and take that leap. You know, and I get to, you know, lots of credit for, you know, having that blind faith and, and, you know, leading us forward, I think that’s the thing that you can never underestimate in terms of just staying positive. And just reflecting on these, you know, one or two things may not have gone well, but look at all that we have accomplished. Both Joe and I by personality are not the greatest in the world at stopping and celebrating what we’ve accomplished in the week. I think both of us are much more likely in our status reports to write the low light section before we write the highlight section and yet don’t minimize what you accomplish in terms of getting good You’re just this decision to take the leap to lead the company to start your own thing to build the first version, you know, the, all these famous quotes about, oh, you should be ashamed of your first version or you know, they’re all true. And yet just having the belief overall, we’re going to do it, we’re going to succeed, people build off that people feed off that your customers feed off that your partner’s feed off that your employees feed off that it’s a super important thing to do. And I take away that learning I think I’ve internalized by doing a startup.

Joe

But we were talking about one plus one equals three kind of thing. I mean, that is something that Eric does have to remind me about. And so I’m super happy he does because it’s really important. You know, you have these people that believe in the vision, they believe in the company and things aren’t always rosy. But you have to figure out a way to celebrate those successes, no matter how small to keep people kind of pointing in the right direction and feeling inspired feeling like yeah, last week, we had a few setbacks, but you know what, we’re gonna, we’re going to do this thing and I still believe and that it’s tough as a founder because you’re, you’re definitely shouldering a lot of these burdens. Like the final financing you want to share, because employees want to know kind of, if things aren’t going well, you don’t want to hide that from people, but you have to frame it in an appropriate way. And that’s definitely a challenge. But it’s very important.

Soma

If I’m looking at it from the lens of you know, hey, I would love to learn from any mistakes that Joe and Eric have made other things that you wish you had done differently.

Joe

Yeah, so one that stands out is a mistake that I frequently make that Eric frequently corrects me. Which is, there’s this notion, especially if you’re building a venture backed business, that you need to be a quote, hyperscale company, right? You have to, it has to be up into the right all the time, you can never fall short of 10xing the growth or, you know, crazy, crazy growth metrics. And it’s really easy to get caught up and looking at survivorship bias of, well, this this great company over here, lift to you know, grew, you know, 10X year over year for the first three years, you know, so if we don’t do that we’re a failure. I think the real key thing is to be intentional and focus on what matters. There’s a lot of value Any metrics that people kind of get caught up in and really having that slow, steady growth and being responsible about how you’re funding that growth, so that you actually do measure return on investment. Like, if you’re not 10xing your growth, it’s easy to think that money will solve the problem, right? hire more people do more PR do more expensive events. And the reality is until you have that solid foundation, trying to scale too quickly, just it’s not gonna work. And it’s a quick way to run out of money, frankly.

Eric

Get annoyed, I’d say the so we talked about like Joe and I working together in his basement for awhile we probably worked on and off in your basement and my dining room table for what for about six months, I’d say we should have worked together for about two months. We talked about you know, taking the leap and how tough it is to take the leap. The opportunities out there are tremendous Do it Do I wish we got started four months earlier only when I think about it, which is only every day, you know, because you look at these growth modes and they’re all compounding right. And so if we had, you know, an extra four months in our pocket, you think about all the employees you could have hired, you know, A lot of these things are timing based and you know, the opportunities. We missed a few people, they decided to either re up their current companies or go to other startups or start their own companies. I think we knew early on that the opportunity was big, even if we weren’t sure exactly how we were going to pursue it. Like we knew early on that we were able to work together, in part because we had a shared work history. I think we were lucky, we had friends from the outside sort of encouraging us to take the leap.

Soma

You know, as entrepreneurs, when you think about success of the company, in this case, success blew me. There’s all these sort of what I call financial and customer metrics that you can talk about. But for you guys, personally, how would you define success for you, Joe, for you, Eric?

Joe

when we started the company, we knew we wanted to build a business, right? We want to build a great company, we want to build a business that, you know, could become profitable. The point of businesses, you know, you fund the business eventually actually makes money. Right. And I think that, to me is the outcome that we’re seeking is we want to build a sustainable long term business. You know, we could have, especially a lot of tech companies can build the company and with the intent of selling it or having a quick exit, or you can optimize for different things. And for me, that’s the most satisfying outcome is happy customers happy end users sustainable business, because then, you know, we can branch out into other adjacencies that are in this fast growing phase, you know, cloud is here to stay this, this transition that’s changing, the whole industry is just getting started. I really want us to have a business that can be here now solve some problems, but solve those problems in five years and 10 years that are going to just be even bigger than they are today.

Eric

Yeah, I mean, it’s kind of a big question, right. Even before we get started, we’re actually talking about Clay Christensen just passing away and he’s actually got a great essay in Harvard Business Review on sort of how do you define success, who some of them are business metrics, some of them are personal metrics, you know, being a great family member. And then his last one is how do I stay out of jail which is really you know, an ethical consideration. I think in the on the business side, we wanted to build Something of enduring value that really made a contribution right to the industry in terms of helping people write cloud applications, when you look at, you know, still the opportunity out there for the cloud applications that are going to be deployed that are going to change our life and fundamental ways we can be a small part of that. That’s a tremendous contribution. You know, we wanted to create a company with a culture that people enjoyed working out, people felt that their work was rewarded. People felt that they were respected that one of the benefits of starting your own company is you get to start and create your own culture. And I think that’s a that was a tremendous opportunity. Get to pick the people that you hire, what rules you employ. I think we firmly believe in the no assholes rule. You know, these are people that you’re gonna be spending lots of time with on a regular basis. I think we’re off to a great start with Pulumi. We’ve got a great core of folks, we’ve got a great core of community, a great set of customers a great set of values. And you know, the opportunity before us is tremendous. I think that’s the personal front. That’s one set of stuff I can assure you will stay out of jail. And then the other business side, it really is, you know, creating a great company that creates great products and fosters a great environment for employees.

Soma

If you think about like the next, say, three years, or five years or even 10 years, what aspirations do is follow me.

Joe

I mean, for me, I think of every developer on the planet, being empowered to use the best of what the cloud has to offer to build more innovative software and for their company for, for whatever they’re doing, but really just supercharging their ability to innovate using all these great cloud capabilities that today, frankly, are off limits for many of them. So to me three years, five years, however long it takes to get to that level of scale. You know, every developer when they think I’m building an application, they think, Hey, Pulumi is the way to do that, because it’s the best way to build this application and achieve the intended outcome. And I think honestly, as more people become developers, you’ll see more hobbyists becoming developers, frankly, folks that are growing up now. You know, a lot more of them are learning how to program very early. And so they’re gonna be a lot more developers, the developer segment is continuing to grow. folks that don’t consider themselves developers today will uplevel their skills and learn how to write code and become developers. And so really sort of tapping into that, I think is the opportunity for us.

Eric

Yeah, I think when I walk into one of our customers shops, I want to see every cloud engineer in that environment with Pulumi open and running on their desktop, helping them get their job done faster, helping them build better applications, really helping our customers be more productive.

Soma

You had the choice to design, the company Pulumi wherever you want, and you chose to build it in Seattle. How do you see Seattle as an emerging as a technology as a, you know, innovation as a startup ecosystem? Both over the years and more important in the future?

Eric

Yeah, I mean, I think we chose Seattle mostly for the weather.

Eric

I think we’re on day 45 now of straight rain.

Joe

Great for productivity by the way, you don’t, you don’t have the sun distracting you calling you outside.

Eric

You know, the thing about Pulumi is I think we recognize the opportunity very early on for cloud applications in particular, you know, we sort of touch on cloud infrastructure in many ways. And Seattle is a is an incredible community of cloud talent. I mean, obviously, all the big three cloud giants have strong, you know, representations here, in addition to the other tech companies, you know, sales are a great place to live. It’s a great quality of life. I think that’s what brought us here in the first place. The community is, you know, continuing to grow in its maturity, like, you know, it’s the, you know, it’s one of these things in the industry, where you sort of overestimate what will happen in one year, and underestimate what will happen in three years or five years. When you look back on the tech community 510 years ago, you might argue is a little bit sleepy, it’s vibrant. Now, you know, we’re literally taping this in a tech incubator. There’s bunches of interesting companies that we meet every day, whether it meetups or you know in our own headquarters coaching on how to use Pulumi the talent pool is great, the people is great, the culture is great. And at the same time, I think it was important when we started Pulumi me to embrace sort of the modern work style. And so we do have employees that work remotely. So even though our headquarters is here, we’re very much a modern internet style company, you know, employees in California, Utah and New York, we’ve employees now abroad, and Amsterdam London bath. And so part of it is embracing the worldwide culture, even though Seattle is kind of our home and hub. And I think we’ve really managed to get the best of the local community and the worldwide community and kind of fusing those things together. But we love being in Seattle, we love the talent and people in Seattle at the university anchor is fantastic. The big company tech anchors is fantastic. It’s kind of a built-in captive audience for us it for customers that are easy to see, and for building the community of plumbing users as well.

Soma

I really enjoyed this conversation. Thank you both for sharing your thoughts and experiences in this podcast. See you again.

Joe

Thanks Soma.

Eric

Thanks a lot.

Erika

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Kicking off Madrona Engineering Community Meetups with a Side of DevOps

If there is one topic that is on every engineering leader’s mind, regardless of the size of the company, it is how to ship more code more often and how to run that code reliably and efficiently. So, it was a no-brainer that we chose to kick off the first of our Madrona Engineering Community (MEC) meetups with an event on DevOps and Agile practices.

MEC meetups foster ongoing knowledge sharing and networking among engineering leaders across the Madrona portfolio. Our members are VPs of Engineering and CTOs across our portfolio companies.

As far as first events go, we started off with a bang! We had a packed house with over fifty of our engineering leaders attending as our panel of experienced speakers dove into the current and future for DevOps. Our panel was:

  • Tom Casey, SVP Engineering at DocuSign
  • John Ludeman, SVP Engineering at Skytap
  • Adam Johnson, Founder/CEO of IOPipe
  • Moderator, Joe Duffy (Founder/CEO of Pulumi

The make up of the panel was by design — to cover companies at different scale. DocuSign, for example, serves hundreds of millions of users and more than 1.5 million documents per day. Skytap is a mid-stage company that has seen its usage quadruple over the last two years, deploying up to 45,000 VMs and serving up to 2 petabytes of storage a day. IOPipe, in contrast, is in the early days of building its product with a distributed team churning out multiple releases every day! The DevOps goals and plans of each of these companies are different, which led to an interesting discussion under the expert probing of our masterful moderator Joe Duffy.

DevOps = ownership + accountability

While Joe did his best to instigate the speakers in taking opposing positions, he had no luck when it came to how they thought of DevOps. To each, DevOps was about aligning engineering teams with creating customer value and achieving business goals. The key, as each speaker emphasized, was to give developers end-to-end ownership (and the accountability that comes with it). Developers must be able to see the value they are delivering to the customers, or not. And, they must be provided with all the tools and processes, and more importantly, the organization and cultural support needed to succeed.

DevOps ≠ shipping more features

In the fog of war, there is often a tendency to add every feature request to the scrum. Shipping, however, is not a good measure of success. Adoption, utilization, learning, and direct revenue are much better measures of value creation. When it comes to DevOps, reemphasizing value creation and not just features shipped is important. DocuSign, for instance, made driving adoption (of their product) a company wide priority because, direct revenue is typically a trailing indicator of feature value. To keep everyone focused, they evaluated every shipped feature in light of adoption. It mostly worked for them.

DevOps is always a work in progress

No matter how small or big the company is, DevOps is never done. John from Skytap, for example, shared how, after operating for a few years, they realized that their organizational structure was getting in the way of shipping code quickly and efficiently. So, they reorganized and refocused the engineering teams to make sure that they stayed agile as the business scaled rapidly. Tom from DocuSign shared a similar experience, done at a greater scale in a more gradual manner. And, they both fully expect to redo their DevOps process and organization multiple times as their businesses continue to grow quickly.

No “no-ops” unless you also believe in unicorns

In this day and age of serverless, the topic of “no-ops” inevitably came up. To much of Joe’s delight, it elicited some strong reaction from the speakers. Long story short, the verdict was that no-ops does not work at scale. Every SaaS company, once it reaches a certain scale, needs specialized ops to ensure it can deliver the best user experience without blowing up its cost budget. DocuSign has “devs who op,” and every company could do with more of them. Similarly, the topic of SRE did not find a lot of love from the panel. The view was that, for most SaaS applications, it is impossible — or, at least not advisable — to insulate the developers from running the application.

Telemetry trumps testing

The other interesting insight that emerged from the discussion was that, no matter how much one invests in testing, telemetry is indispensable and if anything, more important. Skytap, for example, believes investing more in application telemetry than in running exhaustive regression tests. Similarly, DocuSign puts some of its best devs on telemetry. The emphasis on telemetry helps to speed up release cadence and detect unforeseen bugs.

Looking forward …

While most modern companies have adopted DevOps to a certain degree, most also struggle with several issues. First, balancing agile development with predictability (a must to run a business) is always hard. Hence, every engineering leader clamors for effective planning tools. The other issue is how to measure engineering productivity. Lines of code written or number of bugs fixed could be great vanity metrics, but they do not serve the real purpose. Finally, as we get ready for applications running on multiple clouds, we do not yet fully know the new challenges that will bring to DevOps.

Maybe, that’s where we will pick up at the next MEC meetup!