30% Of Network Engineers Are Retiring. What Happens Next? (Anil Varanasi, Co-Founder & CEO of Meter)

14:57Anil Varanasi:My API is closed. Okay. But yeah, we moved to the United States when I was 12, he was 14. And especially in the early 2000s when we moved here, it was such an amazing time in America. And I still think it is. as an immigrant, I think always you end up loving the country. You move to way more than the people that live here. And we did have this childhood where I don't remember times where I thought I couldn't try something. I think that part is unusual. And sort of the phrase I think comes back to is like free-range kids, where you can sort of run around, do your thing, and try to build the world that you want.

15:40Anil Varanasi:And I think we sort of had that sort of childhood. As I get older, I realize how unique that is. But I think when you're a kid, you're just like trying to live your life.

15:48Sunil Varanasi:What my question really reveals as a preference is that I've had my first kid in the past year and a half. How old? 16 months.

15:56Anil Varanasi:Okay, I have a two-year-old.

15:57Sunil Varanasi:And you can't help but once that becomes part of your story, think about, okay, well, you know, what made this person this way, right? What were the things that contributed? And that level of freedom feels like a big one that comes up a lot, actually. Do you think about that with your children?

16:14Anil Varanasi:I have a tough time with this because when you're an academic, you end up also like trying to read, launch children's studies about this stuff.

16:21Sunil Varanasi:Yes. And apart from, you know, sort of the really bad cases of like abuse and malnourishment,

16:29Anil Varanasi:other stuff, if you remove those things on the margins, net-net parenting doesn't matter.

16:33Sunil Varanasi:Yeah, I know. No, this is the only sort of thing that seems to matter a tiny bit is having dinner at the same time or something. It's something incredibly trivial, right?

16:42Anil Varanasi:Other than that, parenting really doesn't matter that much. Yeah. So I think even as I think about the childhood I had, I don't think about it influencing directly what I do. I think about it influencing the happiness I had in life to then having the freedom to do it. So it's more, a little bit more fundamental than having a direct impact. I don't think of it as causal, but I think it's like an adjacent thing that's there that helped you be happier, be a certain way to then grow up a certain way. So even with this stuff, even as a parent now, I'm still not convinced parenting matters.

17:17Sunil Varanasi:It's also, it's both a terrifying and sort of somewhat convenient belief for parents, right? It frees you a bit, but also you think, oh gosh, we're like, well, what am I doing here? Could I really left myself off the hook that much?

17:29Anil Varanasi:I think the genetic choices have already been made a long time ago. Yes. That's the scary part.

17:34Sunil Varanasi:Yes. Did you feel like a real sense of culture shock moving from India to North Virginia? Those are very different places.

17:41Anil Varanasi:Possibly. You know, when I think of these types of questions, it's always hard not to ascribe how your mind is today to in reality to how your mind was a long time ago. And especially it's so hard to understand a child's mind, even if the child was you a long time ago.

17:58Sunil Varanasi:Yes.

17:58Anil Varanasi:So anything I answer with this, I probably should preface by saying is like, I'm probably making it up. I think maybe for like a month.

18:05Sunil Varanasi:Yeah. Kids can adapt, right? I think kids are kids.

18:08Anil Varanasi:I think kids anywhere want to do as little schoolwork as possible and want to hang out with their friends as much as possible.

18:16Sunil Varanasi:Yes.

18:17Anil Varanasi:And I think that's invariably true both in India and United States. Yeah, there you go. These are the universal constants.

18:23Sunil Varanasi:Your father was a very successful businessman, right? Was that what brought the family to the U.S.? Yeah. Did you have a lot of conversations about business around the table and sort of see how, you know, what his work was like and the challenges he was grappling with?

18:37Anil Varanasi:A hundred percent. That part, I'm still curious about learning because I think if your parents were astronauts, you probably think that's a normal job. Yes. And like, you know, sort of just sort of go. So I think that part has had a heavy influence for us. and I think understanding what a business is, understanding the fact that people start businesses. You know, if you didn't grow up in that way, I've heard a lot of my friends describe it in a way that it's other people that start businesses, not you or other people sort of go do what you want. But I think whatever your parents end up doing seems so blasé to you because all parents are boring.

19:16Anil Varanasi:Yes. By definition. So if a parent does it, it must be easy. Yeah, that's right. Right. Anyone can do this. Yeah. Yeah. It's like, you know, of course, dad, if you can do it. This guy, yeah. So I think that part actually plays a huge role. That's where like, I think if any parenting matters is just like, what do your kids actually watch you do? Sort of, you know, do as I say, not do as I do sort of thing, but the opposite of that. So I think that part's had a huge influence on us. A business or understanding a business, our business gets started, how it scales and what happens to the different tumultuous points of it, that part's never felt alien to us.

19:57Anil Varanasi:Yes. Nor has it ever felt like stress or scary. And I think that's a big gift in life.

20:04Sunil Varanasi:Where did the love of films come from? Clearly that's a huge part of Indian culture in a sort of... I think that's a big part of it. Yeah, unique way. Yeah. Yeah, something more too, I imagine.

20:14Anil Varanasi:Again, from my parents. My father used to help make some film in small ways and things like that. Where I grew up, especially in the 90s, it had the highest number of movie theaters per capita in the world. In Hyderabad? Yeah, in South India. Wow, no way. Yeah. No kidding. So it's like this, it's hard to explain.

20:37Sunil Varanasi:I was thinking not in North Virginia. No, no, no, no.

20:39Anil Varanasi:It's this fabric of culture. Fascinating. And, you know, if you think about American politics, where Reagan and Schwarzenegger are sort of anomalies, throughout the 80s, 90s, and 2000s, that was the norm.

20:55Sunil Varanasi:Where you had this sort of pipeline of Bollywood to politics?

20:59Anil Varanasi:Yeah, film to politics throughout India. Wow. Especially South India. No kidding. So the cultural influences is fairly high. And there were many filmmakers, too, that I think were at that time some of the best in the world. How to think about color, how to think about blocking, how to think about staging things, how to think about sound, music, and how you mix that in. And I think it had like a very, very heavy influence on us.

21:26Sunil Varanasi:This is purely because I really wanted to ask about it. What is sort of the films that you come back to most often? The ones that, you know, I wouldn't want to say you have to pick a favorite, but the ones that you, yeah, maybe have a special place in your heart.

21:42Anil Varanasi:There's this cinematographer named PC Sriram. You know, I probably watched his work numerous times, maybe dozens, some of them. I still don't understand how he does what he does. why that that's so interesting because you believe i know that you believe that anything

21:59Sunil Varanasi:is you know can be solved right that's a sort of fundamental philosophy his mind is

22:04Anil Varanasi:it's incredible uh there's a video i'll send you you can put it in the show notes or something yeah on how he took uh characters and color and made it part of how film happens to how the wind blows to how the clothes blow away when a character is trying to get away from another character. Everything was so meticulous down to how the colors pop on the screen, what type of film was used. Wow. I think his stuff, really good. Obviously, like, Sachit Gatre, who made the Apu series and others, I think, remarkable. Mani Ratnam made a couple of movies, one about politics, and one sort of his own love letter to The Godfather, which in some areas is better than The Godfather, called Nyaka.

22:53Anil Varanasi:And so a bunch of these movies had a heavy influence on us.

22:55Sunil Varanasi:Wow, how interesting. You seem to spend a good amount of your childhood, teen years, making productions of your own. And when I think about that, I think of the home films I did. But you seem to have done it with a level of seriousness and intensity that seems at a very different level. What were you trying to create or what were you creating?

23:15Anil Varanasi:I think the problem with Sunil, my brother and I, is and my parents would describe it this way is somehow anything we try we just assume the only way to do it is quote whatever is the best version of that that's a good disease yeah so I think like we were trying to really like compete with anyone let's make the best film in the world yeah I think we're pretty unreasonable about that I love that I don't think we succeeded at all to be clear uh all the stuff we made i hope nobody except me and him sees ever have you re-watched it anytime recently accidentally accidentally when going through some old hard drive or some uh you know sort of glacier s3 thing you have and you're sifting through files to try to find something yes and then it's like one of those things where you try not to remember that you ever made it or were part of.

24:13Anil Varanasi:I don't need to see this.

24:14Sunil Varanasi:Yeah. Why did you not end up becoming a director, producer, a filmmaker in some capacity, given the clear love you have for it?

24:23Anil Varanasi:It was something we'd consider seriously.

24:25Sunil Varanasi:Yeah.

24:26Anil Varanasi:Very, very seriously. We sort of came to this conclusion that the stories we wanted to tell, we could do it when we were 80 or 92, because storytelling is storytelling and maybe the you know the setting would change or the environment would change or the variables would change but the story itself sort of if you believe the trope of there's like five to nine stories you can tell in the world we didn't think that would change at all sort of forever but what we wanted to do in technology felt like it had a half-life that if we didn't do what we're doing with meter then it we didn't think it was possible to do it 20 years from then 30 years from then so it was this real bargain of you know which path do you go on don't you think

25:16Sunil Varanasi:that to do the story that you would want to do at the level you would want to do it you would have to devote all of that time to it possibly possibly um but then you also look at great films even the

25:32Anil Varanasi:greatest films can be made in a couple of years but a great company takes a couple of decades

25:36Sunil Varanasi:yes that's true so maybe it'll happen uh maybe maybe it'll happen in in 20 years or something yeah i love that idea do you notice like parallels or symmetries between the two practices or am i looking for a pattern when one doesn't exist necessarily some good books about this um about

25:56Anil Varanasi:so much of building a company is a lot like assembling a great, you know, sort of a great crew for a film where, you know, you want to figure out who's the editor. You want to figure out what's the story and, you know, who's the director and the producer. And how do you actually bring culture together to go accomplish something? I do think there's some parallels, but maybe another thing that I've changed my mind on a little bit as I've gotten older, I think everything is hard. and sort of no matter what you do, it's like that.

26:30Sunil Varanasi:Yeah, that would be my thinking too. Like if you want to do the best film of all time, maybe you can do it in three years, but also maybe it takes you your whole life, right?

26:38Anil Varanasi:Sure, but I think building anything, like this microphone company, I'm sure there's people there obsessed for a long time on what's the filter, how do you actually capture the gain, what is wire, what's the firmware on it? It's probably the same obsession. Otherwise, it doesn't really happen. So I don't know if it's unique to company building and unique to filmmaking.

27:00Sunil Varanasi:It seemed like filmmaking, from what I read, sort of led you towards software in some way. Were you building software before you started to build things for...

27:09Anil Varanasi:Yeah, my brother was. So my brother wanted to build plugins for 3D animation music, and that's how he started programming. And that's how I learned programming from him. Okay, interesting.

27:22Sunil Varanasi:and also I saw on your GitHub maybe you were doing sort of different things with Pandora and RDO and things like that what were those experiments about?

27:29Anil Varanasi:I think it was just like an amazing time in the late 2000s early 2000s where you know you just try to build different projects and maybe some of that's coming back now with all the changes in models etc where everybody I knew was building stuff so I don't know if it was like unique to anything to us I think we're all just trying to figure out is like, cool, you have software, you now have infinite distribution, you can easily get code anywhere, APIs were becoming more periphery than everywhere. So I think we were just like part of that. I don't know if we were doing anything unique.

28:05Sunil Varanasi:You went to college at sort of your local school, George Mason University, which was nearby, but also feels like in some sense, probably spiritually the best possible school for you, given how interesting a collection of thinkers it has sort of aggregated. What did you learn from being there sort of at a more meta level beyond, you know, just the pure information?

28:28Anil Varanasi:I think you can, if you try, not, it's sort of, there's no limit to it, but you sort of maybe asymptotically get there. You can try to understand how the world works. And I think that's core to the George Mason ethos and particularly what Cowan has been able to build and that team and the influence they've had, even in Silicon Valley. I mean, I think so much of Silicon Valley's ideas in the last 20, 25 years, I can trace back to George Mason in so many ways. And I think that's actually, you know, I ended up going to college when I was young compared to other people. I was 16 when I got there. You tend to be a bit more impressionable when you're younger.

29:09Anil Varanasi:I always felt after spending a couple of years at George Mason is that you can try to understand how the world works. And it's not a fool's errand in any way.

29:21Sunil Varanasi:What was it like going to college that young? You know, when I've spoken to other people who maybe even go in there even younger than that in some senses, it can be a very isolating experience.

29:32Anil Varanasi:Going to college at like 16 or 17 is not that abnormal in India. I want to preface that too. I don't think I thought anything of it.

29:40Sunil Varanasi:Really? Yeah. You were able to fit in and it didn't feel like, hey, I'm not getting invited to the parties or whatever. I think it's fine.

29:46Anil Varanasi:Yeah. I think it was fine. I played a lot of sports and yeah, I don't think I thought of it much. If anything, I probably thought it was an advantage being young.

29:57Sunil Varanasi:What was your sport? Basketball. Okay. Always. That's cool. When did you and Sunil start to converge on the idea for your first business, which sort of is a prologue to Meter in some respects? Like, how did that sort of seed itself as an idea even? Because it's not a natural interest, I would imagine.

30:15Anil Varanasi:I think with us, you know, I've been trying to untangle this now, especially as our current business is growing on how Sunil and I think about things and then how to actually dissipate that information. And I don't know if this is true with other siblings, but there's no grand overture between us. We're sort of discussing things, discussing things, discussing things. It just feels natural to go do something. But it's never like a proclamation that from this day forward, we shall do this. It wasn't like that for us at all. And that's true of meter. That's true of before. That's true of making film.

30:49Anil Varanasi:That's true of anything. I think it's just a very natural progression of our discussions where there's some quote right answer.

30:56Sunil Varanasi:Just sort of bit by bit progresses and it's obvious.

31:00Anil Varanasi:Until he got married a few years ago, we also lived together.

31:07Sunil Varanasi:He wouldn't let you stay with him once he got married?

31:08Anil Varanasi:That was tough. I mean, they would have preferred it, I think. For them, I think I'm like their first kid. I don't know of many other people other than prisoners of shared a cell that have spent more time together than me and him.

31:21Sunil Varanasi:you're in for a life sentence. Yeah.

31:24Anil Varanasi:It's just, it's hard to describe when you have that type of a connection with someone.

31:29Sunil Varanasi:Yeah. Everything is probably just at such high fidelity to the conversation, right? There's like, you know, even a gesture might carry a lot of understanding to it. Yeah.

31:37Anil Varanasi:I could look at him a certain way and have an entire conversation.

31:41Sunil Varanasi:Yeah. I mean, also given the age gap between you, it's almost, I imagine in many ways, more like a twin relationship.

31:48Anil Varanasi:Yeah. A lot of the same friends. Then it turned out we had the same interests. Then it turned out we had the same values, though I think I just copied most of what he's done in life and called it my own. So then it's just like, you know, you don't really have a different path we're trying to go. Very similar.

32:05Sunil Varanasi:You described him earlier as one of the smartest people in the world, which I think is like both really lovely, but also a big statement. What makes him so intelligent? What makes him so special?

32:16Anil Varanasi:I have yet to understand how he learns things so fast. I'm fairly convinced I can put any new thing in front of him. Very few people can learn it faster than he can. And I can be in anything.

32:28Sunil Varanasi:What do you disagree about most with him? Are there certain... Just priorities. Priorities.

32:33Anil Varanasi:Not the long-term what we're trying to do. I think we also agree on what's important. We probably sometimes disagree on what's urgent. So if you look at this Eisenhower matrix of what's important, what's urgent, we're probably you know 99 % same on what's important but maybe only 90 % same on what's urgent so if any disagreements we have is just which part of it is urgent and especially in a business like ours where if you're talking about a vertically integrated business where you have urgency has a lot of bearing because that's where focus goes that's where capital goes that's where resources go.

33:10Anil Varanasi:That's where attention goes. So if any disagreements is always just on which part of it requires the urgency at this moment. But we've never had disagreement on what's important and what we're trying to do long term.

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34:04Sunil Varanasi:Your first business, it's interesting in many respects, it sounds like it was had some sort of shared DNA with meter, but it hasn't been something that is like widely covered. What was that business? What were the sort of parallels?

34:17Anil Varanasi:Yeah, not many parallels, I think. Oh, interesting. Okay. I think there's also this overfitting of businesses. I actually don't think you can learn from every business for your business. I think people would like to. Yes. Because it's a good story to tell and good way to like feel good. But I think there's only a few businesses you can learn from for your business. But Northern Virginia, especially Fairfax County and Loudoun County, where we grew up, something like 40 or 45 percent of every household has at least one income from the government. So it's sort of like a company town for the U.S. government.

34:51Anil Varanasi:Yes. So what we were doing wasn't anything gargantuanly impressive in any way at all. We were just answering RFPs for the government. And it was just for first the local, then county, then state, then federal. It was just a very normal, I wouldn't even call it in traditional parlance, a startup. As foolish as it sounds, it was just a business making money.

35:13Sunil Varanasi:It was just a, yeah, so boring. Okay, interesting. I actually, I mean, I fully agree with that idea that you can overfit these things. And, you know, every business is truly unique in some respect, right? What are the ones that, you know, if there are only a few businesses you can learn from, what are the few that you try and learn from for meter?

35:34Anil Varanasi:I think that there's some characteristics of things. And that depends on which part of the business you're trying to learn from. For example, if you look at something like sales, maybe you actually want to learn from a business where the product wasn't that good and they still were phenomenal at selling. So there's some kernel of sales that they've understood it to be. Maybe when you're looking at something like hardware, you want to learn from businesses that were capital constrained yet produced incredible hardware to understand how they did the supply chain, how they did management, how they did actually production and mass production.

36:14Anil Varanasi:And then in complex coordination, which is what we have to do, I think the old industrial America, Ford and all of those are actually great precursors. And I think there are also types of businesses nobody starts today. Nobody wants to take complex, disparate systems and make them into one company. Those sort of companies really don't get built anymore. So I think it also depends on the problem you're trying to learn about and what solution you're trying to come across. And I think every one of them, maybe if I try to articulate every part of our business, there are some characteristics I look for when I look for businesses to go learn from, but usually ends up being a non-axiom answer.

37:02Anil Varanasi:I think almost everything that's assumed as common knowledge or that's the way things are done, it's likely wrong.

37:16Sunil Varanasi:Yep. I think that's a good heuristic to have in general. Have you spent a bunch of time studying Ford or, I don't know, Toyota I know is a big inspiration for Elon from those I've spoken to. Maybe I'm taking a bit of a shot here in that respect, but I'm curious what you maybe have tried to take from them.

37:36Anil Varanasi:I think complex coordination. Whereas if you look at Ford, you wouldn't really say the body of the car was that different than other car companies at that time, the tires, the steering wheel, etc. Being able to take that entire supply chain and then figure out how to do the assembly line and actually produce and coordinate these 20, 30, 40, 50, 100 different things into one thing that a customer cares about. I think it's remarkable to be able to do that. They probably didn't call it vertical integration back then because it wasn't cool enough to call it that. But I think it's like a true form for some of these businesses.

38:18Sunil Varanasi:I think it must be in, maybe it's in Paki's piece, speaking of virtual integration, or perhaps it's in the Ashley Vance profile of Meter. But the sort of founding story is that, you know, you you sell your your company, your first company, and then you spend a bunch of time in Shenzhen studying all different pockets, including Japanese vending machine logistics and all these things. I'm so interested in the Japanese vending machine logistics piece of this. Why was that a fascination?

38:46Anil Varanasi:So part of what we do with our business today is historically how networking happens is you go to one of these legacy vendors and you say, I'd like to buy hardware. and they sell you hardware, and they're trying to make hardware every year with ever so imperceptible changes so they can sell you hardware every year. So that's their business. Our business model is entirely different. We don't sell hardware. We take on all the risk for the hardware instead of our customers, and we install our hardware for customers, and it's our responsibility to maintain it. But also, one of the sort of responsibilities and agreements we have with our customers is that as we build new hardware, we will upgrade all of them to the latest and greatest hardware.

39:32Anil Varanasi:And we sort of looked at the logical extrapolation of that, which is as meter becomes more successful, every time we build new hardware, the task is a bigger task to upgrade all of our customers.

39:48Sunil Varanasi:This is like something I was fascinated by your model. Okay. So I'm glad we're getting into it.

39:53Anil Varanasi:So then we started looking at are there other parallels in the world that are very similar and vending machines are like that because you have to figure out this complex coordination where you have product or inventory with you. But the only way you can continue to get paid is if you go to every physical site and refresh the inventory to be able to continue your business. And so we started looking at vending machines a lot and how that's happened. Have you been to Japan? Yeah, just once. Okay, so if you've been to Japan, you know somehow vending machines are just perfect. Yes, they really are.

40:29So that's why we started looking into how companies in Japan maintain this incredible supply chain and keep the inventory up of all the vending machines everywhere.

40:45Anil Varanasi:You know, you sort of are walking somewhere in a random street and there's a small vending machine. Even that's perfect. So how is that possible?

40:53Sunil Varanasi:Wow, that was such a deeper answer than I anticipated. I thought this would be, oh, I don't know. We found it so interesting. So you had even at a very early stage that model in your mind.

41:03Anil Varanasi:Almost nothing about what we wanted to do meter has changed since we started it.

41:06Sunil Varanasi:Wow, that's so interesting to me. I would have assumed that was much, much later down the line. Huh. One thing that seems like it did change was in, you know, as the story goes, you spent sort of a year working on the V0 story of Meter and then had this encounter at first round review, you'll have to remind me of where you met this networking person who basically told you, hey, everything you've been working on, we're about to release. Maybe you can remind me of that anecdote because I think it's such an interesting look.

41:36Anil Varanasi:Yeah, nothing to do with the startup world. I actually don't think Silicon Valley knows anything about networking anymore. So it's a whole separate topic. Oh, interesting. So this was some meetup down in Santa Clara. I think Intel and a bunch of people were, having. We had spent a year sort of writing a type of operating system. And for the operating system nerds out there, we were trying to use unikernels to write every part of the network on top of a hypervisor. Anyway, it was as bad as it sounds. We were writing this operating system. It was going okay. It wasn't going poorly. It would crash a lot.

42:10Anil Varanasi:It didn't work as well as we wanted it to work. And that was about a year, year and a half of our work. We randomly went to this meetup down in South Bay, Santa Clara in the Bay Area. And some guy was writing this open source project that was part of Intel. And they had hundreds of people working on this, on how to do this one part that was the unlock better than how Sunil and I were thinking about it. And it was one of the most painful times of our lives because we literally scraped everything we did for about 18 months. Oh my gosh.

42:41Sunil Varanasi:I think there must be many founders who experienced some version of that. Maybe it wasn't 18 months. Maybe it was three months. Looking back at that moment, did you feel the urge to quit?

42:55Anil Varanasi:That I've never had. I don't know that feeling at all. I don't know what that means. Come on. I honestly never, ever felt that.

43:05Sunil Varanasi:You've never felt like this isn't worth it or I should do something else?

43:09Anil Varanasi:No, I studied this for so long before deciding to start it. Did I?

43:13Sunil Varanasi:It was like, whatever happens, this is the thing.

43:16Anil Varanasi:Yeah, this is what we wanted to do. Like, why would I not have the courage of my own convictions? I don't understand that ever.

43:22Sunil Varanasi:Isn't there such a thing as you might find information that you didn't discover?

43:26Anil Varanasi:Not when you start a company that you, at the outset, want to do it for decades. We had spent years prior to starting Meter, to deciding to start Meter. And it was years worth of these conversations between Sunil and I. And in our minds, it was always crystal clear. That's why the pricing's never changed. What we build's never changed. How we want to do the vertical integrals never changed. How we want to do deliveries never changed. The business models never changed. That arc has been very, very true. But nonetheless, it was very painful at that time. Incredibly painful at that time.

44:06Sunil Varanasi:But it's really interesting because I think that says something about the way that you and Sunil clearly build, right? Like you almost de-risked it in your minds through conversation and research over a huge time before deciding, okay, this is actually worth our time.

44:21Anil Varanasi:And the whole de-risking was just between the two of us. I don't think we ever even really like look for permission from others.

44:29Sunil Varanasi:That's also very interesting because clearly some part of your brain maybe realized, I don't know, if we open this to other people, it's going to be more noise than signal.

44:38Anil Varanasi:I don't know, possibly. We did try to ask people at some of these legacy companies, like, why aren't you doing this? Because I think at the outset, when you have an idea about something, even before you realize you want to do it, maybe one of the first things you end up feeling is you just want it to exist. so I remember having conversations with folks at these legacy companies saying like why aren't you guys doing this et cetera et cetera but I think once we probably heard that they had no interest and then our conviction started growing I think after that we yeah I take it as input for sure when somebody says something especially people I respect and people that understand our industry and understand how to build businesses and all that it's definitely an input but even if somebody were an order magnitude more intelligent than I am let's assume that's true.

45:29Anil Varanasi:I have spent two to three orders of magnitude more time thinking about it. So I don't know if I trust somebody else's opinion.

45:37Sunil Varanasi:I fully ascribe to that. I think we give too much credence to advice from authority figures and many other such characters in our lives.

45:49Anil Varanasi:I think the irony of that is as you get older and you get to meet your heroes and they become your friends, there's nothing behind the veil.

45:58Sunil Varanasi:Yeah. You're like, oh, this is just a normal person too, right? What was the, I don't want to say miscalculation because that's not maybe fair, or the view of the world that was slightly off that meant you thought, hey, for the first 18 months, this is really important for us to do. But there was some difference in the calibration of the vision versus the world.

46:18Anil Varanasi:The vision was the right vision, I think. But man, computer science is fickle. I just didn't think we arrived at the right solution for the problem. The problem was right, what we wanted to do, where we should build it. But we just didn't arrive at the right answer. And I am immensely grateful that somebody else did, because then it helped us just stop. Yeah, it saved you some time. Yeah.

46:41Sunil Varanasi:I think you've said maybe in another interview that you think that companies roughly have a thousand hard days in their life, and you just happen to have a thousand at the start because you started, and then COVID really hits. Clearly, it sounds like you didn't think about quitting because that was out of the question, but what was that experience like? It was really brutal. Really brutal.

47:05Anil Varanasi:Yeah. I think you start a company because you want to make progress on something. You want to sort of surround yourself with people that you respect and you enjoy working with and learn from, and you want to make progress as a business. None of that was happening during COVID. It was really hard. And as a matter of focus to your original question, we were only selling to offices when we were a dozen people. That was the place to start because you can go boil the ocean. And ironically, we started selling to customers fall of 2019. and by March 1st of 2020, our entire TAM went to zero. Yeah, tough.

47:48Sunil Varanasi:And that's when you start thinking, how do we serve e-commerce stores and the associated infrastructure?

47:55Anil Varanasi:We always knew we would do those later on.

47:56Sunil Varanasi:Yep.

47:57Anil Varanasi:But you don't get data from CPI and other things much ex-post. So we actually didn't know how much growth was happening. The way we got sucked in is meeting customers that wanted our product and service that were in these other segments. It was always a plan we would go do all segments. As a matter of focus, we started with offices. But then during COVID, customers came and asked for it. Then we ended up doing it. We were like, okay. But I don't think we knew the data at that point. E-commerce was going from sort of 12 % of the economy to 24%. I don't think we knew that. Maybe implicitly we felt it as consumers ourselves because we're like ordering things online or whatever like instead of going anywhere.

48:40Anil Varanasi:But it was more like customer driven.

48:42Sunil Varanasi:You know, I think these near death moments or existential moments for a company always end up producing some kind of new muscle that gets built. Clearly that was, you know, also serving different types of customers. But even at a, you know, maybe more fundamental level, what do you think it changed about some part of the nature of meter or the way that the team operates or some of that skeleton almost?

49:05Anil Varanasi:The other thing I was very resistant on in the beginning is I was adamant that we should only sell to customers in the Bay Area in the beginning for a long time because I had it in my mind that we should go visit every customer. We should sort of shake every customer's hand and grow with them. The other muscle that happened because of this is we started deploying in all sorts of places in the country because e-commerce, warehouses, other things were everywhere. In some places, COVID was strict. In some places, it wasn't. and some people were going in offices or not. But flying from Bay Area to these other places was still very restrictive.

49:43Anil Varanasi:We ended up building this muscle where we could deploy networks anywhere, whereas my original was I was stopping the company from doing anything outside the Bay Area, just as a matter of focus and other things. And it turns out, you know, my brother and a bunch of colleagues were right, and I was entirely wrong about that.

49:59Sunil Varanasi:You talk a lot about building a company and building hardware with sort of almost the splendor of a cathedral. I think you like that analogy, which really speaks to me. I love when we try and think of these parts of our world with equivalent reverence and care. What are the parts of the meter product that you think, to the right eye, this shows true craft, true beauty, the right amount of splendor?

50:28Anil Varanasi:To the right eye, I think there's about a dozen things like that at meter. And that's what keeps the job really fun. across hardware, software, operating systems, APIs, how we do deployments, how we handle ISPs, how we take all this data and train models to how we scale the business, what we do in the channel, a bunch of these things. Genuinely, it's such a fun job.

50:59Sunil Varanasi:Is there one or two that you think, that when you come across them in the product every time, you sort of think, we did this well, or this feels especially good to me?

51:09Anil Varanasi:I hope none of my colleagues listen.

51:11Sunil Varanasi:Why? Because you would be singling out someone for praise?

51:14Anil Varanasi:No, no, no. Because I don't think I've ever said some part of meter is good. Ah, okay.

51:19Sunil Varanasi:Just because we're never finished. The cathedral's never done.

51:22Anil Varanasi:No, no, sometimes I just never felt it. Because the moment we're done building it, almost all of us know it can be better. on every part. I see. But I think everything from how we do design to how we do our software to even hardware. We announced a bunch of new hardware in the fall and there are parts of it that I think are good.

51:49Sunil Varanasi:And that's as much praise as we can.

51:52Anil Varanasi:No, it's just not true. Like it's just, we still have, I think there's a lot we should do. And I know instantly, you know, a couple hours after even getting off the stage when we announced this hardware, almost all of our hardware team too is like we'll do it even better yeah uh but i i think that's the

52:10Sunil Varanasi:whole fun i i understand that impulse i don't think i can you know the the nice thing of when i publish an article is i don't have to re-engage with it because if i do i go back and i think oh wow what was i thinking this is a nightmare yeah um and editing a text document's a lot easier than changing hardware so that is true we we talked a little bit about this part of meters model but i I think it bears sort of digging into a little bit more, which is, well, you talked about the idea that you constantly are refreshing the hardware as you scale it up. But also when you bring in a new customer, you buy out their existing equipment from other manufacturers.

52:43Sunil Varanasi:How does that make sense? Why is that? How did you come up with that philosophy? Because it seems to go against what one would think is a good business practice.

52:52Anil Varanasi:For sure. I think there's three types of new things that a business can do to make a footing in the market. And 95 % of companies, I think, end up doing the first two, which is you want to come up with something genuinely new, something new technology or new widget, something. But if we're talking in tech company parlance, it's building a new technology. That's the predominant way companies we know go to market, right? They're building a new technology. They want to bring that technology to the world. The second way to do something new is changing how you deliver the product. So the best example of this is something like Adobe, right?

53:37Anil Varanasi:Adobe started off with literally giving you an entire hard drive. Yes. then going to multiple CDs for you to be able to download the hardware from the disk to your hard drive. Then they went to where you can just download this. Then instead of just downloading it, it's hosted online. Yeah. And many iterations in the middle too. I skipped a few. But each time delivery changes, you can also have new companies. whereas if you use again software as a parlance from buying something where somebody comes and installs it to you going to the store and buying it to you downloading it to you then using the hosted version every time there's a new delivery there's a new company generally as well when delivery changes yes so those are the two predominant ways companies especially tech companies go to market is either they are changing with technology or they're changing with the delivery to differentiate themselves from other offerings.

54:50Anil Varanasi:And some companies end up doing both. But there's a third way that Sunil and I thought a lot about along with these two, which is we believe with Meter we should do new technology. We believe we should do new delivery networking, which is vertically integrating things, which nobody had done before. but it was very important to us we also go about doing a new business model as well. And business model innovation is I think heavily underappreciated and underrated because it doesn't feel as tangible but I think it's possibly just as important as delivery and technology as well. So for us the business model aspect was very important on every part of that continuum on what we're going to do with the business model.

55:36Anil Varanasi:How are we going to charge? How are we going to continuously provide value? Then to your question as well, which is how are we going to displace existing things to start providing value? So you want to actually have answers for all of that continuum too. So then we went and looked at what is the high-priced item that consumers change very frequently? Do you know the answer to this? Phones? Cars. Cars, yeah. Terrible guess. But cars have a trading mechanism. You can literally go take a car. Wow, so interesting. Any car you have to any dealership and say, I'd like to give you this car. Yes. That came from some other vendor that I've been using.

56:27Anil Varanasi:Will you please take it and give me a new car? That's fascinating to think about. that that's actually a sales motion that's been part of things for a long time. So we went and looked at a lot of where it came from for car dealerships, for cars, and why that was happening. And it was sort of this advent of as cars became more reliable, there was less changing of cars because people were like, my car works, why would I go do this? And that's where trade-ins came in in the car industry. And so that part of the business model was also very important for us to go try and figure out.

57:02Sunil Varanasi:That is so interesting. I would never have made that parallel. Why is the business model innovation so underappreciated in your view? And why is it so important? Like, what does it unlock for you that if you had just tried to keep a more traditional model, wouldn't be possible?

57:22Anil Varanasi:Yeah, man, I think I could go on for like an hour, hour and a half, just about this. It's something has to do with like the closest theory of the firm. which is, do you build or do you buy? And the reasons you should end up building or you should end up buying is where the transaction costs the lowest, which is, is it cheaper to transact internally to build it?

57:50Sunil Varanasi:Yep.

57:50Anil Varanasi:Or is it cheaper externally to go build it?

57:52Sunil Varanasi:Yep.

57:53Anil Varanasi:And that's sort of the rough bargain with infrastructure as well, constantly, which is should we build it or should we buy a product and service that does it for us? Yes. And this is true of every infrastructure product from databases to even electricity and power. As companies get larger, they decide if they want to do it or they should have other people do it. Anything, any infrastructure, it's the same question over and over again. Should we build or should we buy? So in general, attacking how products are sold and what those transaction costs are are very important. So if you look at networking, it's one of the largest industries in all of technology.

58:36Anil Varanasi:Along with computing, it's the reason Silicon Valley became Silicon Valley. Cisco was sort of the NVIDIA of its time. It was the largest company in the world. Yeah, easy to forget that. But most of networking is sold through what's called a channel. So there's resellers and integrators, all of these. and how the legacy companies have done it is when a new company has come in, they incentivize the channel so that it's hard for a new company to take off. So you should recognize that from a business model perspective. Then you should also look at sort of this Bezos thing of your margin is my opportunity.

59:19Anil Varanasi:Legacy hardware companies want to make hardware for as cheaply as possible, to sell it for as much as possible because the gap is their margin. Yes. So you also want to do something exactly opposite of that. Then once you have a bunch of these ingredients of how do you think about trade-in, how do you think about margin, and how do you think about the opportunity, for us it was also important is what is it that we're trying to do actually in the world? For example, if you looked at the sky in Manhattan 100 years ago, and let's say you were standing in front of Times Square, And you looked up. You couldn't even see the sky because there were wires everywhere.

59:58Anil Varanasi:What was happening mostly is if somebody wanted a telephone line, they would call up Mabel or something like that, and they would literally pull a telephone line to you. And then if you wanted electricity, you asked the power company, and they would literally pull a line to you. That's why it was just wires everywhere. And roughly two to three decades into those technologies where there were a bunch of parallels between those two, people realized, why would I go into a building without a telephone and electricity in there by default? That's how utilities got started. And then if you look at a building today, it has electricity, it has water, it has telephone lines, et cetera, et cetera.

1:00:38Anil Varanasi:And there's power meters, water meters. That's why we're even called meter, because we're trying to build this thing into a utility, and we're roughly two to three decades into people using the internet. So there's a lot of, you know, sort of narrative parallels too. So for us, it was also important to work backwards from what is it that we're trying to do? We want to build a utility. We believe the internet is one of the greatest forces of good ever made. And we want that to be part of every single building from a small location that's like a retail location of a thousand square feet all the way to a large data center.

1:01:13Anil Varanasi:It should be like a utility. So then we felt the business model should reflect that too, which is how weird would it be if the power company said, every time you moved in, you owe me a million dollars to putting in a transformer.

1:01:25Sunil Varanasi:I feel like that was a really fascinating history lesson and a really interesting insight into how you think about this. Looking at the future and this world where networking is more of a utility, you've talked about the goal of having fully autonomous networks in a couple years. What does that mean? What does that look like to you?

1:01:45Anil Varanasi:Yeah. I think one of the great things about Silicon Valley is that we can be myopic, and all the resources and capital can go into one thing. I think that's also a downside of Silicon Valley sometimes, as we tend to be a bit myopic. Today, so much time, energy, and capital is going into augmenting software engineers. And I think you and I could name hundreds of companies trying to do this. after software engineers, the second highest number of jobs in technology is network engineers. But something like 30 % of all network engineers are retiring by the end of this decade without replacement. And I'm not talking about net new ones we need because the number of data, devices, applications is growing.

1:02:29Anil Varanasi:I'm just talking about replacement rate. So if we imagine everything we're doing in technology to continue on this sort of S-curve or wherever we are on that S-curve, at some point it's just an exponential. The core things that are needed are compute and networking. There's no scenario in which the number of data, devices, and applications in the world goes down.

1:02:54Sunil Varanasi:Agreed.

1:02:55Anil Varanasi:Nor is there any scenario in which the rate of growth slows down either. One of the core bets we've had with Meter is that we all will use internet more than we currently do. So if you put a bunch of these things together, which is computing is really important, networking is really important, the growth will continue. Nobody else is studying this at all. And everything in the world is packets. Autonomous networks is like the only way to solve this.

1:03:26Sunil Varanasi:As we sort of reach the last few minutes here, I want to spend a little bit of time briefly talking about, you know, a little bit of how you run the company into your mind as a founder. One piece of that that I think about is you seem to be an incredible talent spotter in like a very diverse range of fields to the extent that you also helped, you know, Dwarkesh Patel sort of get off the ground a bit as a podcaster. But there are many examples of people who you seem to find early in their career and bet on them in some capacity or bring them into your network in some sense. When you think about doing that at the company level, what is it that you're looking for?

1:04:08Sunil Varanasi:Are there signals that you've learned to sort of hone in on that other people maybe ignore or certain profiles that you end up gravitating towards because of this mission?

1:04:18Anil Varanasi:Some things that I've learned that seem true in my head, especially in the last couple of years, is I don't think we as a business are able to change people. If we are, we should be in that business because that's way more valuable in the world than almost anything if you can change people. So fundamentally, I think people that care about their work have made a choice that their work is one of the most important things in their lives. And it's okay for other people to not believe that to be true. Yeah. and somehow have figured out what they want to do in a way that's true to them, that's usually what I'm trying to look for.

1:05:00Anil Varanasi:I'm actually trying to understand why is this person doing what they're doing and do they care about what they're doing?

1:05:07Sunil Varanasi:I mean, that feels like a sneakily deep piece of that. I suspect there's a lot that goes into figuring that out with fidelity. It's hard. Yeah, fidelity.

1:05:17Anil Varanasi:Interviewing rarely works. Yeah. I think the question is, if you could spend 20 hours asking about someone versus 20 hours talking to someone, which should you choose? And the fact that we don't have a clear answer to that, interviewing is okay. I could be tired. I could be hungry. My daughter could have been up late last night. Yeah. It's just impossible. Yeah. So I, you know, interviewing is one of the hardest things.

1:05:49Sunil Varanasi:There was some study that suggested that actually the most effective interviewing technique is like actually the most boring ones. Like don't try and come up with these sort of convoluted experiments because you need something that's just as replicable as possible and consistent as possible. Yes. Which is really disappointing in a way because you want to think there's a magic question that can unlock someone. I wish. I haven't found it. Yes. Yeah. Well, we started with one of your blog posts and maybe as we wrap up, I really loved this post of things we don't understand that you keep a list of.

1:06:26Sunil Varanasi:And, you know, you have things like how planes fly and what is happening inside of fire. Which of the five or so on that list annoys you the most that you don't have an answer to? I think sleep. Sleep. Remind me what the sleep one is. Why humans need sleep. Why we need sleep. It's a third of our day. I can imagine why that one frustrates you. Yeah.

1:06:53Anil Varanasi:I think it'd be so cool to think about as all these great things happen in science and in technology and other things. At least we first, you know, sort of unravel of why is it that we need sleep? But it's clearly natural that we need sleep. But what is it? What's happening? Where is that coming from?

1:07:14Sunil Varanasi:And clearly we're doing important processing during it.

1:07:17Anil Varanasi:100%. It's clearly important.

1:07:19Sunil Varanasi:Yes. But I'd like to maybe, I know a lot of people are working on this.

1:07:26Anil Varanasi:I've talked to a bunch of people that are trying to figure this out.

1:07:28Sunil Varanasi:Well, final sort of wrap-up questions that I like to end podcasts with. If you had unlimited resources and no operational constraints, what is an experiment you would like to run?

1:07:39Anil Varanasi:How draconian can I be?

1:07:40Sunil Varanasi:Oh, as draconians, you're like, no one will be harmed in the thought experiment. So, you know, be brutal if you'd wish.

1:07:46Anil Varanasi:I think it would be interesting not to have school the first 15 years of your life.

1:07:54Sunil Varanasi:Ooh, this is a really good answer. I like this answer. Okay, why?

1:07:58Anil Varanasi:I'm not sure if education works.

1:08:01Sunil Varanasi:You think it's deleterious in some sense?

1:08:03Anil Varanasi:Yeah.

1:08:04Sunil Varanasi:You wouldn't want to teach literally nothing?

1:08:07Anil Varanasi:I don't know. But I'd like to at least start with that question, which is, should there be organized school the first 15 years? I don't know the mechanics of it yet, and I've written about it a little bit on how I would sort of go about it. But I generally can't seem to understand how every place in the world has roughly come to the same answer about early childhood education.

1:08:34Sunil Varanasi:Yes.

1:08:35Anil Varanasi:That seems crazy to me.

1:08:37Sunil Varanasi:That does seem a bit crazy. I mean, in a way, this is maybe stretching a bit, but sort of the Waldorf system of schooling is maybe the closest we have to that of. And I have to say, there are a lot of great people who seem to come out of the Waldorf system. So there's something to it. Yeah.

1:08:53Anil Varanasi:But it'd be interesting to see if, you know, first 15 years of your life, you don't go to organized school.

1:08:59Sunil Varanasi:I like that. This is a good one. Final question. If you could give a book to everyone on earth to read and know that they'd understand it, is there a book you'd want to give to people?

1:09:09Anil Varanasi:It would almost certainly have to be a meta book. So the impacts of it are far downstream on second order and third order. And I also want it to be a book that's easily repeatable between people. So it becomes sort of mimetic in some ways. So I guess it can't be, quote, like complicated in any way.

1:09:30Sunil Varanasi:But in this scenario, you know people will understand it. So find that hard to believe. That is fair.

1:09:36Anil Varanasi:Maybe I'm like prisoner of the current last couple of years. But I think James Carr's Find Out Infinite Games comes to mind. A great choice.

1:09:47Sunil Varanasi:I love that book.

1:09:48Anil Varanasi:I think if we all end up playing infinite games, that'd be interesting to see. And if everybody deeply understood what infinite games were, and that's the way the world operated, it'd be interesting to see across science, politics, technology, education, other things, what are the results of playing infinite games?

1:10:06Sunil Varanasi:I think that's the perfect place to end.

1:10:08Anil Varanasi:Cool. Thank you.

1:10:09Sunil Varanasi:Thank you so much. Thanks for doing this. That's it. Thank you for listening to this episode of The Generalist Podcast. Please subscribe on Apple Podcasts, Spotify, or your preferred podcast app. Ratings and reviews help others discover these discussions, so if you enjoyed the conversation, I'd be grateful if you could take a moment to leave one. For all past episodes and more, visit us at thegeneralist.substack.com. See you next time as we continue to explore the future.

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