In a world that’s full of data and analytics, it’s nice for companies of all industries and sizes to
simplify the things they do with that data as much as possible. Fortunately, there are startups like
RudderStack that are doing just that. RudderStack is a customer data platform that simplifies integrations
as much as possible. While relatively new to the market, RudderStack has already made great strides and is
scaling at an impressive rate.
RudderStack founder and CEO Soumyadeb Mitra recently sat down with startup coach Roland Siebelink on the
Midstage Startup Momentum Podcast. Soumyadeb shared many of the lessons he’s learned with RudderStack, as
well as insight from being the founder of two previous startups:
- The best way to address DIYers being one of your biggest competitors.
- Tangible ways that a founder can balance a startup’s priorities.
- How a founder who has no sales experience can hire leaders for the go-to-market.
- Why things can start to happen automatically when you find the right culture fit.
- How to build trust with both customers and employees.
- What allows a small startup to compete with a larger, more established company.
Roland Siebelink: Hello, and welcome to the Midstage Startup Momentum
Podcast. My name is Roland Siebelink, and I'm a startup coach, advisor, and
everything else you might need for your startup. And today I'm so excited
because I'm talking to Soumyadeb Mitra, who is the founder and CEO of the famous
company RudderStack. Hello, Soumyadeb. Thank you for joining the podcast.
Soumyadeb Mitra: Hi, Roland. Really appreciate you having me on the podcast.
Roland Siebelink: Absolutely. RudderStack's been making the rounds in
Silicon valley lately. So excited to have you on this podcast. Can you tell us
for those who haven't heard about your company yet, what does RudderStack do?
Who does it serve? And what difference does it make in the world for people?
Soumyadeb Mitra: RudderStack is a solution in this broad space called
customer data platform. To explain what a CDP or customer data platform is, I'll
give you a concrete example. Let's say you are a consumer company. You have a
mobile app and you have a website. And you want to collect data about your
customers. What are they doing in the app? What buttons they're clicking. What
pages they're going to in the app or on the website.
And why do you want to collect all the data? The number one use case is
marketing analytics. You want to send this to something like Google Analytics
and then build out dashboards and reports on and all your marketing. Then you
want to collect this data for product analytics. You want to send this data to
do something like Amplitude to do funnel analysis and drop-offs and so on. Then
you want to send this data to a marketing automation system like Braze. There
are multiple users, consumers of this data. And then as you grow, you want to
collect this data into a data warehouse where you're dumping it into big
queries. And then you build more advanced reports. You do machine learning and
Without a tool like RudderStack, what you have to do is build all these
integrations from your app to your five, 10 different destinations. RudderStack
simplifies that. Instead of you building those integrations, you just send it to
RudderStack and RudderStack can send it to wherever you want to send that data
to. Your engineers are happy. They don't have to go and build those
integrations. Downstream users are happy because the product team wants a new
destination to send the data. They want to move from Amplitude or they want to
try a new tool. They can just enable that in RudderStack and the data moves to
its new destination.
Those are the kinds of use cases we can enable through RudderStack. And then
there's an interesting category where warehouses themselves are becoming very
powerful. People are dumping all the data into the warehouse. They're building
rich machine learning models. And then they want to activate that data. You want
the computer to score, to make a recommendation, and you want to send that back
into a marketing system to send out emails. Again, that's the integration that
you have to build otherwise. But then you can do it with RudderStack. Think of
it as a tool that simplifies all of these customer data integrations.
Roland Siebelink: Okay, like a middleware between all those customer data
integrations. That's perfect. Who is the key competitor building this in-house?
All those custom integrations that you were mentioning?
Soumyadeb Mitra: Yeah. DIY, do it yourself. This is our number one biggest
competitor because engineers do it themselves. And that is where our open source
product comes in. We are also an open source company, so we tell our customers
if you are to do it yourself, just use the open source and build on top. Why do
you start from scratch? Beyond that, I think the biggest competitors in this
space are custom CDPs like Segment and mParticle and so on. But DIY is what we
see the most as we are scaling.
Roland Siebelink: Okay. I've had quite a few guests and also we are coaching
some companies that have this problem that DIY is the biggest competitor. Can
you delve a little bit into that? How did you come up with the idea of using
open source as a bridge to pull in those do it yourselfers to still expose them
Soumyadeb Mitra: Yeah, I think it boils down to what persona are you selling
to? We sell to the engineering personnel, the data engineers, the data
scientists, engineers, and developers. When you do that, any developer always
has this instinct: "I don't want to pay for SaaS software." You don't want to
buy some open source product. I have been a developer all my life. When I try to
solve any problem, the first thing I look for is "Is there an open source
solution for this?" And I'll download it, set it up, play with it, and be happy.
When it comes to running things in production, that's when I don't want to do
that. I'd rather pay for software, and open source enables you to do that. You
can download, play with it, and be happy. And then once you decide that now you
want to run this in production, then you can go for the cloud offering, which
can take care of all the reliability and high availability and so on. Open
source, for us, is a vehicle market for developers.
Roland Siebelink: Soumyadeb, can you talk a little bit about the history of
RudderStack? How did you come into being as a company? Who did you found it
with? And what did the early stage look like?
Soumyadeb Mitra: Yeah. It started, the company, in 2019. This is my third
company. I've always been an entrepreneur all my life. When it comes to the
third company, you have a network of people who can help you with funding and
Today, we are almost a team of 70 people. It's funny, today I was looking at our
first board deck from a year and half where we had five people and five
customers. And today, we have scaled much bigger than that.
Roland Siebelink: That's a huge growth in just a little bit more than 18
months, I think you said. That's awesome. Most of the people that you hired,
what functions did you hire them for specifically?
Soumyadeb Mitra: The current team strength, 70% is engineering because what
we're building is very engineering heavy, and is technically hard. Initially, it
was 90% engineering. I had just one sales guy. Over time we expanded the team.
Now we have marketing and product and sales, of course, and design and
partnership and all the other functions, operations and people operations and so
Roland Siebelink: Okay. Very good. Typically, startups that raise a Series A
are starting to really focus on their go-to-market motion. And it's good to hear
that you've hired some functions to take that into account. How would you say
you balance the efforts of priorities that you search for RudderStack now
between more product/engineering priorities versus more go-to-market priorities.
Soumyadeb Mitra: Finally, everything is important. You have to wait on the
product. You have to keep building the product. The real priority manifests
itself in two ways. One is to look at budgets and how do you allocate your mind
share? My own time, how do I spend between marketing and growth and sales versus
product engineering? My mind share is easy. I have always been a product guy and
engineering guy, so a lot of my time goes to product/engineering. I wish I could
do more, but I spend a lot of time there.
And then for other functions, you hire leaders. I'm not an expert in sales and
marketing. You have people come in and they can manage those parts of the
business. And then you have a management style where you give people their
objectives and let them go and run. There is no need to micromanage; they're
smart. They'll go and do their best. That lets me focus on product and
engineering. And then I have to do things which only I can do like fundraise.
The other part of the question is how do you allocate the budget. By no means
have we perfected that because engineering is a big part. Engineering is where
you spend a lot of money. At the same time, the other functions, the marketing
and sales, the good thing about those functions is those scale with revenue.
When your revenue is scaling, you keep investing in that. If it's not scaling,
then you don't need that. It's not so hard to figure out what is the right
balance. But again, I'm by no means an expert. We are still figuring out and
hopefully have a bit of a solution next year.
Roland Siebelink: What do you look for in hiring those people that can bring
in some of those skill sets that you may not feel you have for yourself? How -
at such an early stage - are you able to bring in people that you can trust with
such an important part of the business?
Soumyadeb Mitra: I think hiring is hard, for multiple reasons. Number one is
the market is intense. A lot of startups, they're all trying to recruit the best
people and so on. Secondly, how much can you judge in an interview? If you have
a team of experts, then you can still judge. I have a sales leader, let's say.
Then he can go and hire other sales people because he knows sales very well. But
when you are doing the fire hiring, I have to interview and I have no idea about
sales. How do I interview?
How do you hedge against that? Number one, you try to form a network of advisors
who can recommend candidates. This is a good guy. Hiring from a network is a
very strong level. Secondly, if you cannot do that, then at least during the
interview process, involve people like your investors, your advisors, have them
interview. Maybe they can find a data point that you cannot.
Roland Siebelink: Since you've grown so fast, people talk a lot about the
growing pains of a scaling company. I'm sure RudderStack has experienced some of
these too. Where would you say you've had to develop the most attention in
getting all these people to land well, be bought into what you're trying to
build and ultimately become productive for RudderStack?
Soumyadeb Mitra: One thing I did not touch upon in the previous comment was
this idea of culture fit. Now that I'm scaling the company, I do realize the
value of culture fit. The culture fit is having fundamental agreement on some
common set of values. How to treat customers. How do you treat other fellow
employees? What do you value? And what is your management style?
Once you have culture fit amongst the core set of employees, then everything
happens automatically. For example, we got very lucky with finding people. I had
a great culture fit initially. Initially, it was my own idea of what is a good
fit. And now the team has scaled, they went ahead and hired people with whom
they had good fit, which was naturally aligned with how I thought about the
business. Culture plays a very, very important role in forming a cohesive team.
I'm learning this way. Of course, sometimes you'll have people who are not a
culture fit. You have to manage that. You have to either set expectations or let
them go because they will not be successful in an environment like that anyway.
Roland Siebelink: Yes. What would you say is specific or maybe even
interesting or rare about the RudderStack culture? What makes it different?
Soumyadeb Mitra: It's funny. We recently went through this exercise of
writing it down. So far, it was very much in our minds, but now we wrote it
down. And I think the top thing was customer first. Every company talks about
being customer first. I have never worked in large companies, so I don't know
what customer first means.
But except my first job was in this company called Data Domain. And Data domain
was Frank Slootman, who is now a big shot. He is the CEO of Snowflake. That was
his first company. And there I saw him being really obsessed about customers. In
support calls, even after we went public, Frank often used to join those calls
because there were some concerns of the customer. The culture that he built was
really impressive. And hopefully, that's what I'm trying to replicate at
RudderStack. For example, I have a ton of calls, but there's one call that I
attend every day is our customer support call, where we are looking through
customer issues. And we are trying to create that culture, that customer issues
are the most important ones.
Beyond that, I think one thing we value a lot is trust. Trust is important for
us for a couple of reasons. Firstly, we are a data pipeline company. Our
customers really need to trust us that they're not losing data. Let's say there
was an error, we lost some data. And he tcustomer never got to know about it.
They are sending billions of events to us. The only way to win trust is to
inform the customer, even if they never found out about it. That is one part of
The other part of trust is within the org, don't have micromanagement, don't
have expense policies. Just trust your employees to do the right thing for the
company and make them accountable to hold on to that trust. Trust is something I
value a lot and. Empathy is one thing, it's very important. We are a group of
people who should enjoy working with each other. High-performance is important.
You have to give feedback. You have to let people go who are not really up to
your standard, but do it with empathy. Empathy is something I really care about.
Making money, all that stuff is secondary. We want to have fun doing what we are
doing. Having a culture of empathy is important.
We tell the team, diversity is also extremely important. We want to create an
environment where people don't have to fit in. You don't have to change yourself
to fit into the environment. You should be able to be yourself the way you are.
That's what else I care a lot about. I don't even know what a typical CEO means,
but we are geeks. Geeks often did not fit in normal environments. We don't want
to create a culture where people have to change to fit in. And so these are
things we care about.
Roland Siebelink: What's your vision for RudderStack? How big do you guys
see it become to the degree you can share some numbers? That would be
interesting, of course. But I'm particularly looking at the audience of this
podcast are mostly earlier stage founders, people who are still working towards
product-market fit or are just about reaching that. I want to inspire them with
how big some of the founders think and how they see their vision and break it
down into manageable goals over time.
Soumyadeb Mitra: In terms of the current state, I don't think I should be
sharing the revenue numbers publicly. But it's about a couple of million
dollars. We have a couple of thousand customers across the paid and free tier.
We are definitely beyond the product-market-fit stage. Now it's all about
figuring out how you scale the business. Take the revenue number and triple the
revenue next year. It's just hard when we need to scale the team and so on.
The vision, any founder wants to take the company public. Hopefully, we will be
there. What really excites me is the market. Segment, our biggest competitor,
recently got acquired by Twilio. But then their revenues were in the area of a
hundred million dollars or more. And the market is enormous. If not a 100 times,
it is 10 to 20 times more than that. That's the opportunity for us to go and
scale. But again, it's all about execution now. The market is there for us to go
and mess up.
Roland Siebelink: Okay. Yeah, I like that. Move fast and break things, as
some other company used to say. You mentioned Segment, how do you feel like -
still a relatively small startup like RudderStack - can compete effectively
against a much bigger company. That’s had a lot of fame for its own and a lot of
good characteristics and a leader in the field?
Soumyadeb Mitra: This is always hard. I think you need to have some unique
product differentiation that some people really care about. It was our warehouse
first architecture, which has implications on both the kinds of use cases you
can build and also the costs you have to pay for a solution. Because of these
unique differences, you find some initial customers who really care about you.
And then your product catches up. You build those features and the product
eventually becomes as good if not better than your competition. I think we are
in a good spot. We often win head-on deals with our competition because the
product has caught up.
In terms of why am I excited. Segment recently got acquired. I'm a big fan of
Segment. It does a phenomenal job of creating a new market, pitching the world
that they need to do it this way, and then eventually getting acquired. I think
they just got acquired too soon. They could have kept going. But it's great for
us that they got acquired. And now after it gets acquired, then the management
changes, then it goes in a different direction, and that is already happening. I
don't want to get into those specifics, but most acquisitions go in a different
direction, which leaves the market open for us. I could not have asked for a
better scaling. They taught the world that this is an important problem. All the
marketing was done by them. We just have to go and capture the market and do it
Roland Siebelink: Excellent. It's like they've created the category for you
to then launch more effective products in.
Soumyadeb Mitra: I don't know who said this but you don't want to be the
first company in a market, in a space. You want to be the last company of the
space. Facebook is the last social network, not the first one and Google is the
last search engine. Hopefully, we'll be the last customer data infrastructure.
Roland Siebelink: I like that very much. What would you say - you already
mentioned some of the luck you've had, Segment being acquired and other parts -
has there also been some areas if you want to share with our audience that have
been harder than you thought, that have maybe been disappointments and what did
you do to overcome those?
Soumyadeb Mitra: That's a good question. I have to think through that. One
thing we should have done better is hire faster. I think sometimes I was not as
aggressive in hiring. For example, expanding the team, expanding the sales team,
expanding the marketing team. Because you have that mindset of conserving cash.
Before you have product-market fit, you're trying to conserve cash. But then you
suddenly realize you have a product-market fit. You are just in a less
aggressive mode for a longer time than it was required. Because cash is cheap,
time is not. That is one learning I have.
Roland Siebelink: I like that saying, cash is cheap, time is not. That's
something a lot of startups can learn from.
Soumyadeb Mitra: Exactly. Particularly in this market. Your time is the most
precious thing for execution, capturing the market. And I don't think we ever
were off too much. Of course, we could have done things slightly faster.
Roland Siebelink: Well, you still have been growing tremendously. That's a
Last question, what would be some advice you would give to founders coming
behind you? People who are just reaching product-market fit or are not quite
there yet. What are some of the learnings that you could impart on them as new
founders that they could learn from?
Soumyadeb Mitra: I'll go back to that thing. The only thing that matters is
the market. Get to that answer as fast as you can. Some validations of the
market size. I see a lot of really smart people working on really, really clever
ideas, but really obscure ideas. As opposed to, there are so many problems which
have billion-dollar markets but nobody wants to work in them. Finding that
market is absolutely important.
And that's one thing, both in the previous startups, we did not do fast enough.
You hear the Airbnb story that you persist on it for years and years and finally
it really works. But others say don't do that. Airbnb is an outlier. Try to get
to an answer whether there is a market or not as soon as possible. And if not,
move to a new idea. You have only so much seed money to figure out
Roland Siebelink: As you say, not only do you have only so much seed money,
but also maybe even more importantly, only so much time until you lose courage
and lose the energy to be driving this.
Perfect. Okay. How can listeners to this podcast help you with RudderStack?
Where do you want them to go? What do you want them to download? Who do you want
Soumyadeb Mitra: There are multiple ways that they can help us. First, we're
hiring. Anyone looking for an engineering or product or sales or design or dev.
We are hiring across the board. Other than that, if this is a pain point they
care about, if they heard of Segment, even if they don't understand the product
and they're looking for a solution, they are welcome to try our free trial. We
are going to launch a very generous trial here also. Please try our product and
more than anything, the feedback is also extremely important for us.
Roland Siebelink: Excellent. Okay. And you're still in this stage where, as
you mentioned, you're so customer-focused that your role personally, listening
into the feedback and making sure people get a conversation going.
That's awesome. Very cool. Well, thank you so much, Soumaydeb Mitra, for joining
us here in the Midstage Startup Momentum Podcast. This has been an amazing
interview and we really thank you for your time.
Soumyadeb Mitra: Thanks, Roland, for having me. I really enjoyed the
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