In this episode of 20vc, host Harry Stebbings interviews Olivier Pomel, co-founder and CEO of Datadog, a company that has seen remarkable success with its IPO and is revered by Wall Street. Pomel shares insights on Datadog's journey, emphasizing the importance of customer-centricity, lean operations, and the challenges of raising initial funds. He discusses the evolution of Datadog's go-to-market strategy, the transition from a single to a multi-product company, and the intricacies of integrating acquisitions while maintaining a builder's mentality. Pomel also touches on the adaptability of humans, the significance of focusing on people during the pandemic, and the delicate balance between short-term performance and long-term growth as a public company CEO. Finally, he reflects on personal wealth post-IPO, the joy of seeing employees succeed financially, and the anticipation of continued growth for Datadog in the digital economy shift.
This is 20 vc with me, Harry Stebings and diving straight into the show.
Harry Stebbings is the host of the 20vc podcast and sets the tone for the episode.
Years have been as successful as data dogs. It's become a darling of Wall street and I'm so excited to welcome their cofounder and CEO. Stay quick side note, Olivier was one of the most humble and authentic guests I've had on the show.
Datadog's IPO stands out for its success, and Olivier Pomel's character contributed to a positive interaction on the show.
Prior to their incredibly successful ipo in 2019, Olivier raised over $147,000,000 for the company from index, iconic, Meritech, IA Ventures, Amplify and Openview, to name a few. Prior to founding days, dog Olivier was a vp with wireless generation for eight years, leading an engineering team of close to 100 of the best developers in New York.
Olivier Pomel's leadership and fundraising abilities were instrumental in Datadog's growth and success.
I'd also want to say a huge thank you on the schedule though. This was such a team effort, Jerry Newman, Sunil at Amplify, shardle at index dev at MongoDB and many more. I really do appreciate your help on the schedule.
The scheduling of the interview was a collaborative effort, and Harry acknowledges the contributions of several individuals.
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The hardest thing about any company is getting the very best talent. And that's where my friends at Terminal come in... But don't take my word for it. Take the word of gusto, chime, Ernin and hims all trusting Terminal with their remote teams.
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But without further ado, I'm now so excited to hand over to Olivier Pamel, co founder and CEO at Datadog.
Harry Stebbings transitions to the main segment of the podcast featuring Olivier Pomel.
You have now arrived at your destination... My pleasure. Thanks for having me.
Olivier Pomel confirms his readiness to begin the interview.
So our starting point was, there's got to be a better way. We've got to find a way to get Devonovs to talk to each other, work together, see the world the same way. And that was a starting point for Datadog. Got you.
The founding of Datadog was motivated by the need to enhance communication and cooperation between development and operations teams.
It was actually very hard to raise money for Datadog initially... And what this forced us to do was really to focus on the problem we're trying to solve, like focus on making sure it was a real problem. And I think that ended up being the roots of our customer centricity at Datadog.
The difficulty in raising funds early on compelled Datadog to concentrate on solving real customer problems, which laid the foundation for the company's customer-centric approach.
Well, you always doubt yourself in those moments. I think that's one of the reasons why it's good to have a co founder, because your laws are not completely aligned. So there's always someone to pull the other up in those.
Despite the difficulties faced, having a co-founder helped Olivier to maintain perseverance and focus during the early stages of Datadog.
So when you go back to that time when you looked at the market we're entering, which was, broadly speaking, monitoring, it was seen as being a very crowded market... And we don't think these are the people who are going to do that.
Investors were skeptical about Datadog's potential to stand out in a crowded market and doubted Olivier's ability to lead the company to success due to his lack of direct market experience.
I wouldn't change anything. I mean, failure to raise initially was what made us all those constraints are how we built the culture of the company, how we found certainty about what it is we're building and for whom we owe our success to that in a larger amount.
The initial failure to raise funds is seen by Olivier as a beneficial experience that contributed to the establishment of Datadog's company culture and success.
Yes, totally. And I think, again, this is because it's showing all the signs of success before there is actual success... And I think humility in the face of the problem and humility in the face of the customer, especially for b, two b businesses, is absolutely critical.
Olivier agrees with the sentiment that overvaluation and early hype can be misleading and that true success comes from solving real customer problems.
I think to a large extent, the simplicity of the products is driven by the user base you have for those products... So this choice to have a very broad customer base is then what actually informs what goes into the product, what gives us the right feedback loop and ends up with us producing a simple product.
The simplicity of Datadog's product is a result of the company's decision to cater to a wide range of customers, from individuals to large enterprises, which requires maintaining a balance between simplicity and complexity.
So impressed specifically with how you went from self serve to smashing, in their words, smashing multi million dollar enterprise deals.
Datadog's ability to scale from a self-serve model to securing large enterprise contracts was a standout achievement that garnered investor admiration.
"So we built the go to market to be very low friction, all bottom up."
This quote emphasizes the strategic choice to make Datadog's go-to-market approach accessible and easy for various types of customers to adopt, reflecting the seamless nature of their product offering.
"We found that there's actually a real continuum from individuals to SMB to enterprise."
Olivier Pomel highlights the observation that there is a fluid transition between customer segments, which informed their go-to-market strategy.
"We have a slightly differentiated go to market depending on, we have different teams that sell to you depending on the kind of customer you are."
This quote explains that Datadog has tailored its go-to-market teams to better address the specific needs of different customer segments.
"If you're going to spend more and more time with enterprise customers and give them more and more of a voice in your product, you need to make sure you counterbalance that with voices from the SMB and the low end as well."
Olivier Pomel advises that in scaling to enterprise customers, it's crucial to maintain simplicity and usability for all customer segments.
"The thing I learned about running the company was that in times like this, you have to take care of the humans first and then everything else follows."
This quote underlines the importance of prioritizing employee welfare during crises, which has a positive impact on the company's overall performance.
"Almost overnight, we had to pivot that to being completely remote."
Olivier Pomel describes how the pandemic necessitated a swift change in how they conducted events and customer interactions.
"We're looking for people who can say, hey, let's go and look at what's actually happening on the field, talk to the customer, look at the details of the processes and what's working or not working, and let's design the next version of it and solve it and measure it and see if it's going to work better and improve it."
Olivier Pomel emphasizes the importance of adaptability and continuous learning in executive leaders, which aligns with Datadog's culture of innovation and improvement.
"I think the one thing you want in those cases is the word uses equanimity."
This quote reflects the belief that maintaining composure and balance is crucial for leadership during challenging times.
"You actually have to show real interest and you have to engage with the details, because otherwise people stop telling you things."
Olivier Pomel stresses the need for leaders to be actively involved and knowledgeable about their team's work to foster an environment of trust and safety.
"We didn't build it to be a monitoring product initially. That's what we wanted to get success."
This quote indicates that Datadog's vision extended beyond being a single-product company, setting the stage for future growth and product development.
"That first product, that infrastructure monitoring, is the perfect place to land because it gives you a very large surface of contact with your customers environment." "When we started seeing APM and logs really take off, that's when we decided to take the company public."
The quotes explain why infrastructure monitoring was the initial focus for Datadog and how the success of subsequent products like APM and log management indicated the right time to go public.
"You start with the customer. Always there has to be a real problem from the customer." "Seeing customers solve the problems with us tells us that, one, the problems are real and two, that customers see us as being part of the solution."
The quotes highlight the importance of customer-driven product development and how customer usage patterns can inform new product decisions.
"When you start new products, you're going to be wrong." "It's hard in a culture where you're successful, it's hard for people to put themselves in a situation where, where they're going to be wrong."
These quotes discuss the psychological and cultural challenges that a company faces when it expands from a single successful product to multiple products, emphasizing the need to accept and learn from failures.
"The most important thing is what happens after you actually sign an acquisition." "We're looking for companies that actually want to build and want to spend another three or four years rebuilding and taking the company to its full potential."
These quotes explain Datadog's approach to acquisitions, focusing on the importance of integration and the acquired company's willingness to continue growing post-acquisition.
"If it's not working, you should figure out what your options are." "I've seen many examples of companies that got very successful after two, three, four, or five years of difficult beginnings."
The quotes offer advice for founders experiencing burnout, suggesting they reassess their situation and the potential of their venture before making decisions about their future.
"We want to invest as much as we can without breaking the business." "Find the right balance between short term and long term."
These quotes discuss Datadog's philosophy on balancing growth with profitability, emphasizing the importance of sustainable expansion that does not jeopardize the business.
"We've never done more than double the size of the engineering team in one year." "You need to have another organization that's focused on scaling the organization."
The quotes outline Datadog's measured approach to scaling its team and the necessity of investing in recruitment and organizational infrastructure to support growth.
"We were past 50 people when we had our first head of people." "I think we should have hired that person earlier."
These quotes reflect on the timing of hiring a head of people, with the lesson learned that it should be done earlier in a company's growth trajectory.
"The truth is usually in the details of your business." "That's what gives you the ground truth that should inform what you should try and do next."
The quotes emphasize the importance of looking into the specific details of one's own business rather than relying on generalized advice from business books or other sources.
"It's not a finish line, it's a starting line." "When you take the company public, you're committing to a long time of a certain amount of growth."
These quotes clarify that an IPO is the beginning of a new phase of growth and responsibility for a company, not the culmination of its efforts.
"Interestingly enough, I do spend a bit less time talking to investors now because it's more choreographed." "Part of my job is to make sure we have the right of those public investors and that they understand our story really well and that they have the right expectations when it comes to us."
The quote highlights the change in investor engagement and the importance of managing public investor relations as a public market CEO.
"You focus on the long term and everything else will follow."
This quote emphasizes the strategy of prioritizing long-term goals over short-term market reactions to ensure sustainable company growth.
"But the thing that I realized throughout the process was that it's not really about the day of the IPO."
This quote reflects the insight that the IPO event itself is less critical than the ongoing relationships and interactions with investors that follow.
"What I'll say is, as a starter, money is not the big driver for me."
The quote indicates that personal wealth is not Pomel's primary motivation, focusing instead on the success and satisfaction derived from his employees' financial achievements.
"I think curiosity and drive, these are good things. You want them to have that and empathy and you don't want them to lose that because of their situation."
The quote emphasizes the desire to cultivate positive traits like curiosity and empathy in children, beyond the context of their wealth.
"I think the one thing it does change is you have to be even more disciplined about time management because when you get young children, your time is not yours anymore."
This quote highlights the adjustments to time management that parenthood necessitates for maintaining professional and personal responsibilities.
"Well, really to balance short term and long term on a day to day basis. It's really hard to do that."
The quote underscores the ongoing challenge of aligning immediate actions with strategic long-term planning in a leadership role.
"Curiosity, empathy, I think these are the keys to happiness."
The quote reflects the belief in the importance of curiosity and empathy as foundational traits for personal and professional development.
"I think the people that I appreciate the most are the one who have really find great understanding of the business to give me really pointed feedback based on what they see as opposed to no generalities again."
This quote highlights the importance of mentors who offer specific, actionable advice grounded in a thorough understanding of the business.
"Like we think we're so early in what's a very large market and a shift to digital economy and to the cloud that's only happening once or twice a century."
The quote conveys optimism about Datadog's position and potential in a rapidly evolving technological landscape.