20VC How You Can Learn To Be A Great Business Leader & Why All Successful Business Must Be Loved or Needed with Moisey Uretsky, Founder @ Digital Ocean

In this episode of the 20 minutes VC, host Harry Stebbings interviews Moisey Uretsky, co-founder and Chief Product Officer of DigitalOcean, a leading cloud computing platform. Uretsky shares his entrepreneurial journey, from starting a web hosting company with his brother to founding DigitalOcean, which now serves over 700,000 developers. He emphasizes the importance of culture and learning from past mistakes, highlighting how reading business books and understanding the market were crucial to DigitalOcean's success. Uretsky also discusses the balance between products that are needed and loved, using DigitalOcean as an example of a company that found a gap in the market by creating a product that developers enjoy using. He reflects on the challenges of scaling a company culture and the personal evolution founders undergo as their company grows. The episode also includes mentions of sponsors Wealthfront and Angel Loop, and a nod to the role of investors like Andreessen Horowitz in DigitalOcean's fundraising journey.

• Host Harry Stebbings introduces the podcast "20 minutes VC" and himself.
• Moisey Uretsky, co-founder and Chief Product Officer at DigitalOcean, is the guest.
• DigitalOcean is highlighted as a rapidly growing cloud computing platform with significant developer engagement and substantial funding.
• Moisey's background includes studying mathematics and founding a big data startup before DigitalOcean.
• Thanks are given to individuals from Techstars for the introduction to Moisey.
• Wealthfront and Angel Loop are acknowledged as sponsors of the podcast.

We are back at the 20 minutes VC with your host Harry Stebbings, and you can add me on Snapchat at H Debbings to see life behind the scenes at the 20 minutes VC. However, to the show today and joining me today, we have a founder of one of the world's fastest growing startups.

The quote introduces the podcast and the host, Harry Stebbings, setting the stage for the interview with Moisey Uretsky.

Moisey is the cofounder and chief product officer at Digitalocean, the second largest and fastest growing cloud computing platform, with more than 700,000 developers having deployed more than 20 million cloud servers.

This quote provides background information on Moisey Uretsky and DigitalOcean, highlighting the company's scale and growth.

• Moisey Uretsky shares his journey from dropping out of college to starting DigitalOcean.
• He and his brother initially ran a web hosting company for about eight years.
• Moisey then attempted to create a hedge fund analytics company, which was unsuccessful.
• The experience of past failures and reading business literature contributed to the successful approach to DigitalOcean.
• The founding of DigitalOcean was influenced by identifying what competitors did right and what his team did wrong in the past.
• Emotional aspects and learning from mistakes played a significant role in shaping their business strategy.

Basically dropped out of college because I was working as a system administrator. Started doing that during the summer because I was bored.

Moisey recounts his early career decision, which led to him dropping out of college and eventually starting his own company.

And the basic premise was we had spent close to a decade doing everything wrong. We didn't have any business experience.

This quote emphasizes the learning process that Moisey went through by making mistakes and lacking business experience initially.

So somewhere about five years into our first company, as our dad constantly kept yelling at us that we're a bunch of fucking morons.

Moisey reflects on the tough love from his father that eventually led to a change in mindset and the pursuit of business education.

• Moisey discusses the importance of positioning and asking the right business questions.
• He explains that business complexity arises from finding answers to these questions rather than knowing what the questions are.
• DigitalOcean's unique position was identified by addressing the clunkiness and lack of elegance in existing cloud providers.
• The challenge was to create a service that was intuitive for both experienced sysadmins and those less knowledgeable.

There's nothing extremely complicated about business. It's really just a set of questions, and the complexity comes in when you have to answer those questions.

The quote simplifies the essence of business to asking and answering the right questions.

So what's your unique position? How are you going to get to the market? How are you going to be differentiated from your competitors?

These questions posed by Moisey represent the critical considerations for any business looking to establish a unique market position.

• Moisey firmly believes that business leadership skills can be learned.
• He references a quote from the movie "Good Will Hunting" to illustrate that education can be self-acquired affordably.
• He draws a parallel between self-education and the expensive route of attending a prestigious business school.

I would say absolutely. I mean, I think one of the movies that had a pretty dramatic impact on my life is, I mean, obviously, you know, Matt Damon was a math major, or math interested. I was a math major, which is a horrible career.

Moisey shares his belief in the potential to self-educate and become a successful business leader, inspired by a movie quote.

And he says, so basically, I get the same education you got for a dollar and 50 in late fees at a local library.

This quote from "Good Will Hunting" cited by Moisey suggests that the knowledge needed for success can be accessed through self-initiative and is not exclusive to expensive institutions.

• Moisey Uretsky emphasizes the importance of real-world experience in applying theoretical knowledge.
• Learning from past mistakes is crucial for understanding and implementing lessons from educational materials.
• Experience helps in identifying relevant parts of a lesson and avoiding past errors.

"And that's where the ten years of doing it wrong became critical, because then when you're reading the book, you know which parts to really pick out, which parts to really listen to because you have the experience of doing it wrong."

This quote highlights the value of past failures in enhancing the learning process from theoretical sources such as books. Experience facilitates better understanding and application of learned concepts.

• Moisey Uretsky discusses the importance of businesses being either needed or loved, and the potential for success when a company's offerings intersect both.
• He uses examples like Apple, Zara, H&M, and Chipotle to illustrate the concept of products and services that are both needed and loved.
• The rarity of finding market opportunities that combine need and love is acknowledged.

"Everybody in the modern day world needs a cell phone. They made a product that is absolutely loved, and all of a sudden it takes off."

This quote explains Apple's success with the iPhone by identifying the product as both a necessity and a beloved item, demonstrating the powerful combination of need and love in the market.

• Moisey Uretsky reflects on the challenge of scaling the concept of love within a company as it grows.
• He believes that DigitalOcean sits at the intersection of being a needed and loved product.
• The transformation from founders' beliefs to a company culture that permeates the business is essential for scaling.
• The ongoing challenge is to maintain and recreate the foundational values as the company expands.

"How do you have people think in a way that drives the same kind of value that was originally created, but constantly recreate that process so that you can push out that next thing or the next product or the next service or react to the market forces."

This quote emphasizes the difficulty in maintaining a company's core values and culture, particularly love, as it scales and diversifies its workforce and offerings.

• Moisey Uretsky suggests that it's beneficial to focus on company culture from the outset, although it may be challenging without prior experience.
• He shares the limitations of understanding company culture in New York's tech scene a decade ago, contrasting it with the present where the process is better understood.
• The conversation hints at the evolution of the tech industry and its impact on company culture development.

"I mean, I think ultimately you're better off attacking it from day one. I think that it's kind of hard to know how to attack it from day one without having some experience."

This quote advises that addressing company culture early on is advantageous, but acknowledges the difficulty in doing so effectively without previous experience.

• Company culture is not just about written statements but must be embodied by people.
• Culture manifests in the smallest decisions, not just the big ones.
• It's critical for new employees to understand and reflect the company culture.
• Details are more important than the big picture because they form the foundation of the company.

"And the only thing that he wanted to talk about was culture. And I was so surprised that somebody with this huge technical background is going to spend all of their time not even talking about the code, but just talking about, tell me about your culture."

This quote highlights the unexpected focus on company culture from a technically minded individual, emphasizing its importance over technical aspects.

"The culture is already there. Usually, you have the founders or other sea level executives, but it's really in the details that things begin to fall apart."

This quote suggests that while the culture is present at the top levels of a company, it's the attention to detail at all levels that maintains the integrity of the culture.

"It's the details that are much more critical than the actual big picture, because everyone's worried about the big picture."

The speaker emphasizes that while many focus on the overarching goals and visions, it's the small, everyday actions that truly define and uphold a company's culture.

• Early VC rejections were based on the idea being in a crowded space with strong competitors like Amazon.
• The importance of showing revenue and product-market fit to attract VC interest.
• Personal relationships and understanding of the business by VCs are key to successful partnerships.
• The journey from seed round to later funding rounds involves different investor expectations and company growth stages.

"When you compare rounds, it's interesting. We did get certainly a lot of those quizzical kind of looks of how are you different love and your product, and you're in a crowded space, and your largest competitor is Amazon that likes to crush everybody."

This quote reflects the skepticism faced by the company when seeking investment, due to competition and market saturation.

"But if you're not, then I would not do it this way. So for us, it's always, whether it was our seed round or a, or whatever b round, it was always, hey, we're digitalocean."

Moisey Uretsky describes their approach to fundraising, which was unconventional but ultimately successful, highlighting the importance of revenue in their presentations to VCs.

"And then he wanted to obviously do the due diligence and make sure that we weren't selling a dollar for eighty cents."

This quote shows the due diligence process VCs undertake to ensure the financial viability and sustainability of the company they are considering investing in.

• Personal relationships with VCs are crucial.
• Understanding the business and market is important for VCs to add value.
• Compatibility with investors on a personal and professional level is key for mentorship and guidance.
• The founders valued operational experience, partnerships, and developer-centric experience from their investors.

"It really was about the personal relationship with that individual, how well they understood the business, how well they understood the market, how much they kind of believed in what we were doing."

Moisey Uretsky stresses the importance of personal connections and shared understanding between the company founders and potential investors.

"He was the CEO of Zensource, so he definitely knows our space. He knows the developer, he's been an operator himself, so he understands the founder journey."

The speaker appreciates the operational experience of their chosen investor, Peter Levine, and his ability to empathize with the founder's experience and business challenges.

"And he's just somebody that, on a personal level, like personality wise, we could really get along with and just really see as somebody that can help us drive the business."

This quote underscores the significance of having an investor whose personality aligns with the company's founders, fostering a productive and supportive working relationship.

• Understanding market fit and how to challenge larger competitors is crucial.
• Structuring company strategies around this understanding is key to success.

The secret to beat out those big incumbent companies. Everything else kind of structures into that. That's the one that you need to really understand where you fit into the market and how to attack a big player.

This quote emphasizes the importance of knowing one's position in the market and devising strategies to effectively compete with larger, established companies.

• Prior relationships shape dynamics during company operations.
• Positive relationships tend to remain positive, problematic ones may worsen.
• Family bonds can offer trust but also introduce complex emotional dynamics.

Any relationship that you have prior to founding a company, whether it's brother, husband and wife, best friends, whatever that relationship looks like before the company, it will look like that during the company. Except it's like pouring fuel on the fire.

The quote highlights that pre-existing relationships will be amplified within the context of a business, for better or worse.

• Jerry Colonna is a significant mentor and CEO coach to Moisey Uretsky.
• Mentorship came about due to challenges in working with a co-founder.
• Mentors can offer guidance and support through personal and professional growth.

The biggest mentor in many ways is probably Jerry Colono. So he's like our CEO coach.

This quote identifies Jerry Colonna as a key mentor figure, providing coaching and support.

• Tom Tunguz's blog is favored for its concise, data-driven content.
• Industry-focused blogs and newsletters are valuable for staying informed and inspired.

Favorite blog or newsletter. Tom Tonguns. I love his blog.

Moisey Uretsky expresses a preference for Tom Tunguz's blog, highlighting its analytical approach and SaaS focus.

• Personal relationship with the company evolves and can be unpredictable.
• Success can lead to uncertainty about future roles and contributions.
• Navigating personal growth within a company's evolution is a significant challenge.

I think the biggest unexpected challenge is one that continues, is how your personal relationship to the company and your role continues to evolve and change.

The quote discusses the ongoing challenge of adapting one's personal relationship and role within a growing company.

• Long-term thinking is essential for company growth.
• Emphasis on building company culture to ensure product and service quality.
• Comparison with other successful companies that have had long-term growth.

I definitely see digitalocean in the next ten years becoming one of those great companies because the market is definitely large enough.

Moisey Uretsky outlines a vision for DigitalOcean's growth over the next decade, focusing on building a strong company culture and market presence.

• Personal future can be more challenging to predict than business trajectory.
• Happiness and personal satisfaction are subjective and difficult to measure.
• Personal life may be deprioritized in favor of business demands.

I really have no idea what's going to happen in the next five years.

This quote conveys a sense of uncertainty about personal future despite having a clearer business outlook.

• Wealthfront is presented as an accessible financial advisor.
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The quote is part of an advertisement for Wealthfront, highlighting an offer for new users.

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• Facilitates communication and data sharing, benefiting both parties.
• Promotion includes a free two-month trial for companies.

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This quote is part of an advertisement for Angel Loop, detailing the cost and services offered on the platform.