EP 98: Sanjit Biswas (CEO, Samsara) on Building to $20B: The CEO Behind One of The Fastest Growing Startups Ever

23:01So they want to integrate with that. Same thing if you're in food and beverage and you're delivering produce. It turns out there's specialized routing software that understands the crispness of lettuce and which order you deliver stuff in. It doesn't make sense for us to build that, so we integrate there. So that's the 20, and we're always looking for that kind of 80-20 split. We talked about getting FaceTime in the early days with customers was an important thing to product development. Did you end up productizing the process of getting feedback from customers? I had heard a story in the early days of Meraki.

23:34Maybe you built in some mechanism of customers getting in. We did feedback in there. So how did that actually play out with Samsara and maybe speak to how you productized it within Meraki as well? Yeah, so, well, at Meraki, there was a dashboard, which is what you use to manage your network. And the way we'd get feedback from IT managers is there was a little box in the corner that said, I wish this page would dot, dot, dot. And the user would just type in whatever they wanted. The most common wish was make me a sandwich, by the way. So we never quite got there, but it was - It's like Mickey Mouse getting votes for the presidential election.

24:05Yeah, exactly. But we got a lot of great feedback. And some of it was UI related. I wish this page would let me do this report. Some of this was related to just product functionality. And so we brought that same kind of idea with us to Samsara. And we have a feedback button, takes a screenshot of the full customer context. It tells us who they are. And it actually gets piped in the Slack channels directly to the product and engineering team. So the software developers working on the product can hear directly from customers. And that's actually something that scales with, you know, we have tens of thousands of customers, we have a growing number of R &D engineers.

24:38This is actually something you can scale up with the company over time. I've got to ask a question on the 80-20 rule of, was that a lesson learned from Meraki? Because I had heard in the early days, there was a bunch of one-off stuff related to networking that maybe you guys did. And I don't know if that was the lesson you learned is like, hey, we got to pick the core 80%. Yeah, you clearly did your research. So we built some kind of esoteric networking products. Again, our background was computer networking research, so we could kind of build anything. And in the very early days of Meraki, we were helping build big free Wi-Fi networks to cover cities.

25:15If you remember a city of San Francisco, there was a big initiative to do free Wi-Fi. That's like almost 20 years ago now. And to do that, you need a lot of kind of complicated software. How do you route packets for hundreds of users? How do you route it across the mesh network? All that stuff. So we were building that at Meraki. And because we knew how to write the software, but also build the hardware, we did some innovative things. Like we put three radios into a really small enclosure. We added solar panel support. We did a bunch of like kind of one-offy stuff. And as an engineer, it was a fun challenge.

25:48Like, can you do this, right? Nobody else has done this. Can you do this? From a business perspective, maybe not the best idea because it just took you deeper and deeper into these really niche markets. It turns out if you're a school or a retailer, you didn't need a solar panel access point with three radios on it. You needed something that was plug and play. It needed to be designed well, kind of blend into the ceiling, that kind of thing. And so it was taking us down into these weird rabbit holes. And at Meraki, we basically discovered you got to pull back, solve the common case, solve it across these industries.

26:20And that's going to make a much bigger impact. Interesting. Interesting. There's a balance in allocating capital from a product development standpoint between what's already in market, what's on the come, and then maybe aspirational moonshots or something. I don't know if that's the right framing. But how do you think about the split of how you want to invest your time on those three vectors? Yeah, I think time allocation and capital allocation are kind of the two of the biggest jobs, at least as a CEO. The way we think about it is we want to double down on things that are working. So as fun as it is to work on brand new products, you can't allocate 100 % of your capital and time towards them.

26:57We operate on what we call a 70-20-10 kind of split. 70 % of our investment dollars and basically the time of the team is going towards making our core products and our platform better. And that might be scalability. We tend to have larger and larger customers every year. So how do we satisfy the needs of someone who has 40 ,000 trucks on the road instead of 4 ,000 or 400? How do you provide custom reporting and APIs, all that kind of good stuff? That tends to be in the 70 % allocation. And the key there is if you have a big enough market opportunity, like we do, we're only a few percent penetrated.

27:32There's still, you know, 90 % of our market hasn't used Hemsara yet. And so you want to make sure you're building a great product for that core market. The 20 % that comes after that is the stuff that's on the immediate horizon. That would be not a moonshot, but functionality that you can see in your eye that that should make a big difference for the customer. Maybe they haven't even asked for it, but it should happen. So that requires a stretch and that's where the 20 % comes from. And then the 10 % is the longer term stuff that might not really produce material revenue for the next one to three years, but could actually be a really big deal a couple of years out.

28:04So it's almost like seed planting up. And how do you think about that 10 % of at what point to give it more oxygen versus just cut bait because you might be wasting time. Yeah, I think that's the decision. So if you're taking risks, that means you're trying a bunch of things, many of which won't work. If you knew they were going to work, they should probably be in the 20 % bucket, right? So the idea is to actually graduate from the 10 % to the 20 % bucket, make it something that we are going to ship and earn revenue from in the next one to three years. That process basically is around identifying product market fit.

28:35Do you have happy customers? Are you getting asked for more product? What's engagement look like? that sort of thing. Hey guys, this is Rashad. I work with Logan on the show and I wanted to take a quick break to tell you about Redpoint's other podcast, Unsupervised Learning. Unsupervised Learning is our AI podcast where we interview guests from companies like Perplexity, OpenAI, Adobe, and many others about the topical things that are happening in the very, very rapidly developing landscape of AI. So if you're interested in going deeper, check out the link in this description for our YouTube channel, but also wherever you get your podcasts.

29:08So back to the show. I've heard as you scaled as CEO, you focused on dropping responsibilities along the way. Were there things that you held on to longer than you should have in retrospect that stand out? Yeah, I need to drop even more responsibilities I'm reminded of. So there are a lot of things that are super fun about being a founder. One of them is being able to have that close connection between the customer and the product and being involved in all the nitty-gritty operations. That can actually become a bit of a problem if you let it go on too long because then you're actually involved in the product design meetings and you need to be involved in the bug meetings.

29:49You're in all those details, which means you're not involved in recruiting or in some cases talking to investors or kind of the broader functions. And so every year I basically go through this kind of self-eval reflection process of, well, where did my time go? Did it need to go there? and what should be different about the next year. And because the business is scaled every single year, it forces you to say, okay, I'm kind of overheating on this. So I would say product is an area that I'm still very involved in, but more on the roadmap and sort of the kind of strategic decisions as opposed to there was a time where I would see every check-in, like all the code being written.

30:26More than 20%, probably. More than 20 % stuff. And I miss that tactical feel, but it's just not something that I could scale. Not sustainable. Not in my mind, yeah. Yeah, it's an interesting lesson. Were there transitions that you've made recently, post-IPO and things that, yeah, I guess stand out? Yeah, I would say the business has grown. When we went public, we were about half a billion in revenue. We just crossed a billion in ARR last year. We're now profitable. And so a lot of the focus in that post-IPO period was around financial discipline, getting more efficient. And this wasn't coming externally.

31:04We just wanted to get there and demonstrate we could do it. And we got there even faster than what we'd set out to do. So I was really proud of that. But at this point, we have a sustainable model and we just need to keep it scaling at this high level of growth. And that's where my focus is. So it's almost like just hitting refresh on what's the most important thing for me to focus on. So it wasn't that that's not important anymore. It's more that we figured out how to do it. So now we have to figure out how to keep scaling and how to keep adding products and markets. In terms of tracking where your time goes, do you have methods or is this more a broad brush, like zooming out of like where you spent time or are you actually tactically color coding things within your calendar?

31:43Yeah, I will print out my calendars and, you know, actually do a time allocation. We've figured out how to automate this because that's not the most scalable thing either. But once you get the hang of it, it actually happens pretty quickly and it's low overhead compared to how much time you have to allocate. So I kind of think of it just the way we think of FP &A. You want to have your plan versus actuals, essentially, in terms of what you were up to. Google Calendar does a decent job of allowing you to color code it or whoever's working with you to color code it. My biggest challenge is I get a lot of phone calls from folks at the company, customers, things like that.

32:16So I need to figure out a way to connect my phone into that. Oh, interesting. It's hard to know the batch or the ad hoc stuff that happens. Rehiring yourself as CEO along the way, I assume this ties into that concept of the responsibilities. But can you maybe speak about the concept of rehiring yourself and how you think about it? Yeah, if you think about it, as a founder CEO, you have the most change in your job, right? Because when you're small, like I remember at Samsara, even we were ordering furniture from Ikea and I would make sure it showed up and help make some of the desks, right? I no longer assemble our office furniture, but you do whatever it takes.

32:54That was a responsibility you shed in the early days. Yeah, exactly. But I'm actually glad we did it because it set the right tone. We're a very hands-on company. So the way that I think about it is as the organization's growing underneath you, you have to be hitting refresh. Otherwise, you're going to slow everything down, right? So the only way to do that is on a periodic basis. I do about once a year now. It's to go back and it's kind of doing like a 360 review of yourself and then figure out, well, what does the company need from me next? And you can write out the bullet points and then you check the time allocation.

33:23It sounds really simple. I think a lot of people, myself included, get caught up in the day-to-day and you get sort of whisked away in one direction or the other, and then you're over allocated or under allocated somehow. You never had ambitions to be a CEO, right? The roof net was, or Meraki was an evolution of roof net, and then you became a CEO and had a great success with Meraki. And now here you are again doing it. What did you learn about managing people along the way that perhaps is unintuitive to someone that is listening to this and is trying to figure out how to scale their managerial capabilities of a team?

34:03Yeah, a lot of learnings along the way, mostly by just learning by doing, right? So the background, as I mentioned earlier, I was a PhD student before either of these companies and actually got pretty close to finishing. So we're kind of like all but dissertation. So my plan had been to go into academia and teach and do research. Do your parents still ask you if you're gonna finish? They do. And what's funny is, I think MIT gave us 20 years to come back. Like I'm on leave technically. So that was 2006. I've got two more years. You've got two years. Yeah, exactly. But what was interesting for me was leading a research project and leading a small company is actually very similar because you're doing a lot of juggling.

34:42You're actually doing a lot of communicating, you know, to people working on the project, to others sort of in and around. So the similarities were there. Managing at scale and leading at scale is actually quite different. And so what I try to do is learn from the best, right? I watch a ton of YouTube videos. I listen to interviews. And I'm always trying to figure out, OK, what's the difference between we're about 3 ,000 employees now. What's the difference between 3 ,000 and 30 ,000? What are some creative ways that you can learn to operate at that scale? And it's a really fun challenge. And so if you're an engineer by nature, you kind of think of it as problem solving as opposed to I need to go read the stack of like Harvard MBA books or something like that.

35:19That's interesting. Yeah. Yeah. YouTube is a fantastic resource for it's amazing how close you can get to anyone in the world and hear their insights. Yeah. And you can kind of do it on a Sunday night or whenever you have some spare time. And I love the long form because it's not a newspaper interview where it's been cut down. It's actually them sharing their experience. Totally. Yeah. In the early days of Samsara, you would actually go two days on site every week. Is that right? Yeah. Every week. I assume that hasn't scaled. What are you doing? I guess it's an interesting principle. What are you doing to that end today?

35:54It's evolved. So in the early days, because we were gathering all this feedback, we were deploying product, it was really important to go on site. During the pandemic, actually, it was simply not possible to go on site because of protocols and that sort of thing. So I switched doing Zoom check-ins. And this would be with both existing customers who've been on the platform for a while, and then prospects, which is customer meetings. and that was really interesting because all of a sudden I could see a customer in California and someone in Ohio and then talk to you know an operation in London and so it was really amazing and I learned the importance of being able to get a much broader set of experiences in so not just California in other words but all over the world because we have customers all over so as a pandemic sort of wore off and you could travel again now what I do are travel weeks I've got one coming up next week I'll be on the road I think I'm in like seven cities in four days or something like that.

36:44But that's how I learn is by going and setting foot on site, spending time with the customer. In many cases, we're talking to the C-level execs, which is great. But I'll ask them, could I get a tour of the dispatch center or the safety managers group or that sort of thing? And you learn a lot about what goes on in the front lines from there. How many people was Meraki when it sold? Probably low 300s, I think. Oh, okay. And then you stayed, how big was it by the time you left Cisco, the business unit? It grew a lot. So Meraki, as part of Cisco, continued just, we were doubling revenue, actually a little faster.

37:20So thousands of people. Yeah, it got to about 1 ,500 or maybe a little more than that. I'd have to really think about it. So 3 ,000 today, 1 ,500 at Meraki. So 4 ,500, you've probably hired some number, 6 ,000 or whatever it is. So a lot of hiring that you've done and a lot of different reps of interviews, I'm sure, in asking questions. Philosophically, do you gravitate towards people that spike in certain dimensions and augmenting maybe shortcomings or questions about them? Or do you tend to gravitate more to well-roundedness and high floors of what individuals can do? Yeah. There have been, again, this is something that I learned kind of by trial and error.

38:07there have been people that interview really well, but perform poorly. And so what I try to do is actually understand that case the most. Like if someone interviews poorly, you're not hiring them. So it's actually not so bad. If someone interviews really well, has a great looking resume, but then shows up and doesn't gain traction, the question is why? Because clearly they were good enough to get your attention. They're good enough to get through the process. And often that's a question of fit, right? So maybe they were good at their previous company, but maybe their previous company was 100 ,000 employees.

38:34And so the job was very different than the job in a much smaller organization. So what I look for is that kind of spike. I look for someone who can both understand the big picture, understand what the company is trying to do, but also get into the details when needed. We call it core sampling at Samsara. It's this idea that even your leaders, they have technical knowledge, even in sales or marketing or wherever, where they can get into the details. and that's a really great way of just checking that are we doing the right things and if we're not like fixing it right um i found that many execs that i've hired over the years where it didn't work out didn't have that kind of capability or weren't trained that way and so it's a big shift on the other hand there are many other people we've hired from great companies that have scaled that still have that sort of core ability is there something you can ask in an interview that tries to tease out if someone has that competency to scale or drill down and actually do the job in the full manner that it requires?

39:32I found that it's about the details. So I will ask them about, like if they're a sales rep, for example, you can ask someone about a big win they're proud of. And sometimes people will talk about the customer they sold or how big the deal was. Sometimes they'll tell you about how they got in the door, right? They'll say, I talked to so-and-so and they'll use full names. They'll give you like sort of crystal clear detail. And it's almost like you're there and it's almost like they're reliving it. That, to me, tells me that they were involved. Even if they weren't doing every single step, they were aware of it.

40:01Same thing in engineering. And this applies even to, I remember when I interviewed a person who's now a SVP of software engineering. He was able to give me details about the codecs and things like that. And it's not necessary for an SVP-level job, but it just shows they care. Yeah, you can't bullshit that level of specificity. Right. And you're not making it up. Yeah, exactly. Platitudes or hollow. there's a balance of when you get to a company of 3 ,000 people, there's a tension that inevitably exists of hiring people to fill individual roles while also keeping the bar high and not settling for the people you're seeing.

40:41How do you think about that trade-off and making decisions to actually bring people in or hire? Yeah. Well, I think that's really key is keeping the high bar because there is an urgency bias. Everyone needs that role filled and you kind of need it filled yesterday. It's more of you all have to have an appreciation that if we hire the wrong fit, we're not going to achieve our goals or objectives. And it actually becomes painful for everyone involved, right? Like the individual, the team, like everyone kind of suffers a little bit. So sometimes it has to be learned by experience. And then sometimes it's you can set up the process such that they're like third party checks.

41:16I think Amazon calls these bar raisers, right? Folks that aren't necessarily even in that immediate hiring vicinity that are just there to maintain the standard and kind of be a bit of an audit. We do something similar and it works really well for us. And actually, again, kind of sets the tone of we're going to be disciplined about this because we're building for the long term. We're not just trying to like fill the hiring number for this quarter. We're trying to build a real company here that's going to endure. You've got to have high quality of talent for that. And so that bar raiser, is there one task with any senior hire or how does that actually play out?

41:49Yeah, we call them talent calibrators at Samsara. And what we've done is essentially go and look at folks' track records of people that have been hiring managers. How have they done over time in terms of their accept and reject rates and things like that? But also, did the people they hired go on to have really great performance ratings? If they did, that's someone we want. They have good talent tastes, in other words. Not everyone has that ability. It's a really impressive skill. And so we will ask them to be on the final round of interview panels. And our interviews are basically principles-based.

42:24So in terms of how we operate, we're trying to check for that. And this is one of those checks towards the end of the panel. So they're not overwhelmed by the front of the funnel, but they are kind of like a final check. And the idea is people respect the opinion of, hey, they're a good taste of talent, right? um when samsara moved to a flexible workplace when did when did that happen it was a pandemic got it yeah um talent pool obviously went up quite a bit uh how did you approach operationalizing that yeah change it sounds like you're forced into it but i assume it unlocked a big pool of of talent and people you could hire from as well so maybe talk through that that's exactly right Right.

43:06And I think this is now considered like an unpopular stance because everyone said, come on back in. The pendulum swings back and forth. The pendulum swings. It's too hard to keep track of. For us, it was, again, the pandemic that basically got us to flip. We were a very much in-person, like five days a week kind of culture. And I think about 80 % of our headcount was here in the San Francisco Bay Area. So it was very much a centralized culture. So really big shift for us to adopt flexible work. We were in that camp of like, oh, this is only a couple of weeks and then we'll kind of go back to the office.

43:37You know, a couple of weeks turn into a couple of months and you say, well, we have to get really good at this. But to your point, the unlock for us was the talent team. We were now able to hire AI talent up in Seattle. We never had a Seattle office. There were a ton of people who worked for Amazon and Microsoft who had, you know, the ability, but didn't want to move, right? Now we can go back and hire them. And we found dozens of great engineers up there. Same thing, there were salespeople out in New York City and Austin, Texas and other places. So we started seeing these pretty awesome hotspots of talent.

44:07And as we leaned into it, we said, this is great from a raw talent perspective. Now, how do we engage them and onboard them? And so that's where we had to start coming up with ways of, well, how do we want to actually communicate and bring people along? So it's this continuous journey. I think we're trying different tactics, but it's working really well for us. And most of the company now was hired in flexible mode. So the majority, like we flipped, you know, we were talking about 80-20s. Now 80 % of our workforce is outside the Bay Area. There's a keeper rule or framework that you've used for hiring that if that person left now, how would I feel about it?

44:43Do you have any other principles that you use to continually evaluate if people are succeeding in an individual role? Yeah, there's a few. The keeper test for me is actually just a good way of sanity checking because it tends to be the people we hire are good people. Like you like spending time with them and so on. But if the business is scaling, the company is scaling, what they need to do in their role might change drastically. Right. And so if they were good at the role two years ago, they may not be good two years from now. So this is, again, a sort of hitting refresh sort of ability of, do you think that, yeah, if they left, would you do something to go out of your way to hang on to them.

45:24So that's really worked well. I find myself having to do that sometimes. And it's really tough because you really gain trust and connection with people. The other thing that we do is we look for those spikes, right? So there's a spike when they're interviewing, which is a kind of attention to detail. But then there's the step change. So especially in exec roles, did the company materially change your benefit? Maybe six months after they started, or 12 months after they started, can we point to something that they did? And that might be a new program. It might be a new product. There's lots of different ways to manifest.

45:58If you can't point to that, it's like, what is the impact that they're having? They could be a great person to work with, but if they're not driving change in the organization and helping upgrade the company, they're probably not adding the value that you think they are. On the fundraising side, you've been fortunate enough to work with some legendary venture capitalist. You had Doug Lione from Sequoia, Meraki, Mark Andreessen. Yeah, a little known guy. Yeah, people might have heard of him. And then Hamant from General Catalyst was an investor as well. How did you land with these individuals? What were your motivations in picking different board members besides no personality and very timid people across the board?

46:39Well, kind of rewinding the clock back to It must have been 2006, like when we started working with Doug at Sequoia. Back then, we were a company that was bootstrapped. So Meraki, we could talk about Meraki for an hour, but we came out of grad school. We were in Boston. We had no access to capital. We had no money of our own. There were not a lot of angels back then. And so the way we got the company off the ground was essentially by selling product and getting those early customers. By the time we came out to California and started scaling the business, we got to about a million dollars in revenue with no outside money.

47:15And that got the attention of a few venture capitalists. And so we actually had leverage in our negotiation of who would we want to work with. And, you know, I think for us, it was Sequoia, very well-known firm, obviously very much top tier and well-known at that point. But we didn't know how to choose between partners. So we were like, well, who runs the place? and uh doug was uh i think you know doug and mike were the mds at that point and um that was sort of tongue-in-cheek because we knew there were a bunch of different partners but we actually said what what this guy what doug knew was sales what we knew is technology so we didn't need a technologist to join us we needed someone who could help us grow the business so it was very complimentary and it was a bit of a culture shock i remember the first couple of meetings because we again came from academia.

48:03We wanted to talk about the algorithms and all that stuff. And it just like was not of interest to Doug. And we learned a lot from him over the next couple of years about that. Yeah. I share a board with Doug and I know his style in some of those board meetings. Yeah. And we came to really appreciate it. And the thing that both Doug and Mark and even Hamant, they all have this in common because they're so busy, because they have so much going on, they're very direct and they'll just tell you what they're thinking. There's not a lot of kind of playing games. High signal. High signal, super high signal.

48:36And it's not that they're always right, but, and they don't need to be right, but they'll just tell you what they're thinking. And, you know, I've really come to appreciate it. Yeah. And so, so then with Samsara and Mark, how did, how did that come to be? And I assume having had the success you had, you had options of who you're going to work with. And so how'd you, how'd you end up landing there? Yeah, so similar process. We were starting Samsara in 2015. Andres Norwitz didn't exist when, or I think they maybe did in a seed stage kind of sense when we were growing Meraki. So we never really had a chance to interact with Mark or Ben.

49:11So as we were raising capital for this company, we actually met a bunch of different firms. And some of these were relationships we had. Some of them were, again, new firms. And there was about, again, fit, like who was going to be right for us. what i really liked about mark was his kind of strategic lens on everything like he's just he's like a pattern matcher deep thinker and is able to kind of sense really uh minute amounts of signal and see the trend before it happens um and so anyway we kind of got to know them uh at the firm we hit it off and uh kind of went from there so so uh samsara is now 20 billion dollar business in the public markets meraki 1.2 you sort of those were the three i I mean, some firms came in later into Samsara as well, but General Catalyst, Andreessen, and Sequoia, those were kind of the three firms you principally worked with on the journey?

50:01Yeah, that's right. Interesting. Meraki, you referenced it, but it was kind of lightning in a bottle in terms of finding, you started out with this technology and it was an outgrowth of your PhD project. And then how did the transition actually come to be that you decided to commercialize it, turn it into a business. Can you take me through those early days? Yeah. It's funny that now it seems like lightning in a bottle. At the time, we were just trying to figure out how we make this thing work, how we make it happen. The sort of quick backstory, you mentioned the RoofNet project. So John and I were building this network called RoofNet as part of our PhD research.

50:40And the very creative name was because we were installing antennas on roofs, so building a network. And we essentially blanketed Cambridge with free Wi-Fi. And this is, I don't know what, like almost 20 years ago, right, that we were doing this. So Wi-Fi was a brand new technology. We felt like that was going to be the future of how networks were built. And so what we want to do is take that technology, put it in a box, and we figured out how to take our research prototype, shrink it from a$3 ,000 per node, you know, setup that was pretty big, down to a single circuit board and get the cost down into the$50 range.

51:16So that's what we started with. On the commercialization part, we didn't know the right way to commercialize it. And so we tried a bunch of things and we basically put it on our website and it started to sell. So what was interesting about Meraki is there was pull. And I wouldn't say it was product-led growth, but it was more hobbyist type people who were trying this stuff out. And in that first year of selling that, I said, we got to about a million dollars, these customers took the products to the far reaches of the world. We had a customer in like Southern Chile, like a village in Southern Chile, and they connected their whole town and their school.

51:52We had another customer in an island called Neturu, which we had to go look up. It's like one of the smallest countries recognized by the UN. So that was like their connectivity. And that was really interesting because we got essentially exposure to a global market within the first year. That was the power of the internet. And we wouldn't have known how to do that. And then from there, we were able to iterate. So the way we found the business was actually through this kind of trial and error process. I think if you talk to Doug at Sequoia, he would call those first couple of years really our walk in the woods because we kept getting pulled in all these interesting directions.

52:25And again, being academics, we were drawn to the novelty of these things. And so we did those projects. We were working with Google on Wi-Fi here in San Francisco. We came up with an ad-supported Wi-Fi model. So we were doing all kinds of stuff. And the crucible moment for us was actually the 2008 financial crisis. So 2008, 2009, we basically realized we couldn't be doing these science projects all the time because the funding for those was drying up. We had doubled revenue every single year, by the way. So it wasn't that there was a problem with our P &L. It was more of like, this can't last very long.

52:59You know, people won't be deploying free Wi-Fi in fishing villages in Chile if there's a financial crisis. And that's actually exactly what happened. That kind of fell off a cliff. The way we figured out the real commercial strategy was in 2009, when we took the technology and started selling it to the enterprise. So we actually had to raise prices from, I think our initial products were like between $50 and$200. The enterprise products were about$1 ,000 a device and up. And that was a big shift for us. But once we figured that out, it unlocked the rest of the business because now we could really reinvest.

53:35Like we weren't scrapping together little tiny margins. We had a real gross margin. And that let us go hire way more engineers and scale sales and do a bunch of other things. interesting contrast to the early days of samsara how purposeful in the market and determining like what you know the end market was going to be versus yeah i'm hoping we learned something yeah it seems it seems like you took a different approach to it and and on the sales side so so you ramped into an outbound was an outbound enterprise sale along the way there yeah so meraki was uh a channels business because computer networking especially enterprise networking sold through value of resellers.

54:11And that was an ecosystem that had been established by Cisco over like two or three decades. So we were really fortunate there was an existing channel we could sell into them and they had relationships with end customers. So that accelerated growth. When we started Samsara, we went looking for the reseller channel because we said they must be just like networking. And we discovered that there isn't a networking like VAR channel to this customer. So we developed basically direct Salesforce. It's worked really well for us. And how much of your team is now in some sales-related function? Roughly speaking, half our company is go-to-market.

54:45That's what I remember. Yeah, a lot of those are direct quota-carrying sales reps. Which is a long way from just putting it on the website. Yes, the polar opposite. What have you learned about the enterprise sales motion or what were some of the counterintuitive lessons of building a company that has a ton of quota-carrying sales reps out there? Yeah, so many. I think as an engineer and a technology person, you tend to think, oh, I can just find stuff online. I'll discover it. I'll buy it with my credit card. I don't want to talk to anyone. That sounds painful. Our buyer, on the other hand, they're an operations buyer.

55:17They're a business person. They're trying to solve problems. They need someone to talk to who can demo a product for them and be more consultative, like actually explain ROI, and this is what you should expect, and this is what's worked for other people. So it's not a pure technical sale. It's actually a business problem they need solved. And actually, a lot of our customers have told me over the last couple of years, Huge reason they went with Samsara is because of that sales experience. They said, you all really showed us what the product can do, but actually help us solve problems. And then you keep that up even after the sale.

55:46That means we're a technology partner. That's actually what our go-to-market team is all about, as opposed to just like, you know, dial for dollars or something like that. That makes it much more purposeful because you say, well, these folks are basically consultants to the customer and they are selling the product. They have quotas and, you know, they're trying to make their numbers. but the way they do that is by solving problems for the customer so that was a big breakthrough for me um and then the other thing is just that sales is simple right like you don't want to over complicate it it needs to be repeatable if you're selling into a big market opportunity with a product not a service so um for us we're a product company it needs to be roughly the same product being sold to every customer you can only do that if it's super repeatable so anyway those are maybe the biggest insights.

56:31In hiring sales leadership, you brought people over from Meraki that had been more maybe used to the channel driven sales. Was that, I mean, it seems like it worked out. You've had people that have ramped with you for a really long time. Was there learning that motion for sales leadership? Was it mostly similar or was it a big change of going in direct versus direct? It was a gear shift, but I would say the sales folks that joined us from Meraki, they were just really talented and they were smart. And so what they wanted to know was, do we have a repeatable recipe? And that's really what we spent the first couple of years doing is I would actually cold call along with pretty much everyone at the company to learn what is that repeatable motion.

57:17And once we had that down, the sales leaders were able to come in, they joined us maybe a year or two later. They stayed at Meraki until they said, wow, these folks are really onto something again. And then they said, okay, well, there's no channel. That's okay. How does it work? How do I put calories in and get opportunities out? In the early days of Meraki, I'd heard stories of you actually like installing on the roof of potential customers. Was that, in retrospect, was that the doing things that don't scale kind of adage of, I don't know, Y Combinator and Airbnb and all of that. And it was actually an effective means of seeding the market?

57:56Or was that to keep your own sanity as you guys were trying to find product market fit in some use cases? Yeah, you know, I think it was more practical than anything else. At that point in time, we didn't have a huge team. So we didn't have like even sales engineers, right? We're kind of a rarity for us. So we would just essentially fill in the gaps and do the installs. You learn a lot by going hands-on. And so we still do it at Samsara. I actually installed some of our products on cement mixers a couple of months ago. And it was funny because I don't think they knew it was the CEO of the company.

58:32They just thought it was like a tech. And I think they were really surprised. But in that process, I got to know the folks on that site. I got to see all the other paperwork that they have going on in their world. And it was just a really good reminder of what it's like on that front line. The opportunity. How many products do you guys have today? We have like four or five product families. These are the applications. They're licensed a little bit differently. Does that number stay there? Do you end up with dozens in your vision? We're building a bunch more products right now. And the idea is to have these all sit on the same platform.

59:05So the data that flows between the applications is really pretty powerful. And that's context. It's customer context, like location and all the kind of data histories, the AI models. So for us, it's about standing up more and more applications on the platform. I heard Doug Leone say that he had once told you to blow$5 million. He did, yeah. What was the, I don't know if that was meant tongue in cheek or if it was actually a serious requests that you go below$5 million. But do you remember the story of that and what the purpose behind it was other than Sequoia trying to invest more money or something?

59:42I don't think it was that. I actually think it was Doug pushing us to go do outbound marketing. And this is something that must have been in 2011. I can't remember exactly which year, but I do remember the board meeting. And again, we'd just come out of the global financial crisis. Meraki was built with, I think we burned less than$40 million of capital, maybe even less than that, maybe 20, I can't remember. But we were very frugal because we just survived what felt like the beginnings of potentially the Great Depression, right? Like we were really quite cost conscious. And so I think what Doug sensed was that we weren't hitting the gas as hard as we could because we were always trying to make sure that there was an immediate return, you know, in terms of how we were building and how we were selling.

1:00:29Did you do that? Was marketing where it went or? Yes, but I don't think we got quite to$5 million. But message received. Message received. And we started trying a bunch of interesting things. And just this is a sort of funny aside. You know, we'd never done any advertising. We never did the billboard on 101 or any of that kind of stuff. But because this is, again, in this sort of shadow of the financial crisis, ads were pretty cheap. And we discovered that you could go get ads at the San Francisco airport. that you see at the terminal. And it was relatively inexpensive, like$30 ,000 campaign. So we tried it for like a month.

1:01:02We wanted like, let's see what happens. And then we saw the ads would stay up for a couple of months because they didn't have enough advertisers. They didn't want to show empty billboards. So we actually were able to stretch our dollars massively by just trying things. And so anyway, that's always been a lesson is sometimes you just need to try it. You don't know until you do. Experiments around it. Yeah. When you sold Meraki, you wrote a long letter to employees about the inputs and the process that went into it. I guess reading a little bit back to you, but this was an unexpected event for Meraki.

1:01:30When we started out six years ago, we were three guys at MIT wondering where our bootstrap venture would take us over the next few years. Then you go on to say, when Cisco approached us with an acquisition offer, our initial reaction was politely say, no thanks. But when we took our time to think through the implications, first we decided to break it down into two major components. And so you went about being a public company and studying what that would require versus this. I guess what in writing that, What were you trying to convey to the team? How did you go about thinking? I'm sure it's happened.

1:02:00I don't know of any examples off the top of my head of a CEO sending a note like that to the company. And so what was the inspiration and the purpose? Well, it's funny. I haven't read that note in many years, and I still remember writing it. So you took me back to like, I was like writing that on my phone, I think. Where were you? We were here in San Francisco. And a little bit of the context here, this was a deal that happened very quickly. and it was because the conditions were right for all the reasons that you just brought up. So I think we met Cisco in October, maybe around October 20th, if I remember correctly.

1:02:31And then we announced the deal the following month around right before Thanksgiving, it was like November 19th or 20th. And then the deal actually closed December 20th. So it was like very, very fast timeline wise. So we were basically scheduled to announce it to the company. and somehow the blog post on the Cisco blog site went live a day early. And these things happen. But that got picked up by some people on Twitter, which then made its way onto maybe TechCrunch or one of the blogs back then. And we were like, whoa, this is not how we want our team to find out about this thing. So anyway, that's actually, it was the most scale way for me to get a note out to everybody because we were 300 plus people.

1:03:14But we actually spent that Sunday afternoon calling everyone. So the three of us, myself, John, and Hans, who's our third founder, we just kind of split up the list of employees. And we just called every single person. And at first, people were surprised if they hadn't read about it. Or if they had, they were glad that we were explaining what was up. They'd all seen the email. But then they actually, A, understood where we were coming from. And B, were really excited about the future. So I think it set the whole thing off in the right direction. It was kind of serendipity. I think our real plan had been the next morning we do like an all hands and kind of do it on stage.

1:03:48But I think the email actually gave people an opportunity to process. So that's the backstory behind that. You and John studied together at MIT. How did you get looped in with Hans originally? I'm trying to remember. I remember we met Hans like the first year of grad school. He was a couple of years older than us. He had gone to MIT for his undergrad. I was an undergrad at Stanford. And I actually knew his sister sort of through social circles. And oddly enough, I think Hans was out here in the Bay Area, maybe working at VMware. And he would go do CS classes on the side. I'm not even sure why.

1:04:23And we had ended up in the same CS class in California. And so I had familiarity with them when I moved to Boston and we reconnected. So kind of a small world phenomenon, if you will. And this was like 2002 or 2003, many years before we started Meraki. So we just kind of became friends. We've done a podcast with Philip from Verkata. And it's amazing. Hans is now the exec chairman of Verkata. And it seems to spend, exec chairman can mean a bunch of different things. But it seems that he's a very active exec chairman. I get the feeling they split up a lot of responsibility of doing the traditional CEO responsibilities between the two of them.

1:05:03uh it's amazing i guess the the three of you have splintered to start two very impressive fast growing integrated hardware software businesses uh that seem to be doing really well it's impressive no and avarcat is an impressive business and that's an entirely different space like security but i think this idea of building products in the integrated way is really powerful and profound and it's not limited to just these two companies i think a lot of people can do it yeah no it's fascinating um you you all use artificial intelligence or especially your your cameras and detection around that what's your perspective i guess you as we alluded to earlier you were doing it before it was cool and and talking about inference five years ago or six years ago or whatever it was um what's your perspective on the types of opportunity that ai presents for samsara going forward yeah um well i think you know one of the key unlocks to great ai is great data and so So we're fortunate that we have all of this great, pretty structured data about operations.

1:06:06And now we're thinking about not just AI-based vision inference at the edge, which is what the dash camera products are able to do, but thinking about LLMs, right? Like, okay, we have all of this great data to train over. Can we predict what's going to happen next or what should happen next? Can we look at what the computer thought should happen versus what actually happened, point out the anomaly, and help a customer? can you fill out a form automatically with as much stuff as the computer knows before someone else has to type it in manually. So there are all these really practical use cases that we're finding generative AI and all these brand new AI models can be used for.

1:06:44And it's all enabled by the data. As you reflect on the Meraki journey and Samsara, I assume will be your last company, but I guess don't presuppose anything. But as you look at building this company for the long term, Are there things, obviously how you went about discovering the market opportunity was different, but are there things you reflect on from the Meraki journey that you did particularly different in Samsara that you reflect and want to impart to future founders that are kind of thinking about mistakes and avoiding them? I think of it less as avoiding mistakes and more about working on the right challenges and focusing on it.

1:07:28We talked a bit about a few different things, but if you think about sales, you could have gotten paralyzed saying, I've never built a direct sales motion before. Or you could just pick up the phone and try it, right? And so I think having that beginner's mind of just trying things, same thing with the market. Like we'd never seen commercial tracking before or worked in a warehouse. We just kind of got out there. That's something that not a lot of second-time founders are willing to try because they have experienced success and they're kind of like arm's length about things. Every startup is hard.

1:07:56And I just think as long as you remember that, you'll just dive right in. If you try to do a startup in easy mode, you're probably not going to succeed. You all know the odds of making it through the funnel are pretty low. So you have to stack the deck as much as possible. So that was probably the biggest learning is don't let the Meraki win. Kind of taint the way that you approach the second one. And if anything, use it for pattern matching recognition. Once we had product market fit at Samsara, we knew what it looked and felt like. We didn't have to ask anyone. We didn't have to wait for a board meeting.

1:08:29We just went for it. And we've been able to do that over and over. And that, I think, has been the benefit of the experience is the pattern matching ability. From an accidental entrepreneur to a multi-time entrepreneur with two big successes at your back, did you at any point think about doing anything else, going to finish the dissertation or whatever it was at MIT, going back? or was once you got this bug, was it an insatiable thing that you wanted to pursue? No, it was much more, uh, we did think about doing other things. So, uh, you know, we talked about the Meraki timeline. We left Meraki at the very beginning of 2015.

1:09:09And I think up until that point, we hadn't really taken vacations. Like we were just like kind of all in and pretty intense. So the first kind of order of business was take some time off. Um, uh, my wife and I, we just had our first kids. We had a baby at home. I think John's, they were expecting their first kid. So it was sort of like, okay, let's just take a breather. And I actually did think about going back and finishing the PhD. And we wrote an academic research paper based on some of the data from Meraki. And amazingly, it got into the top conference. What was funny about it, though, is we wrote that paper, we submitted it, and it takes a long time to get peer reviews and all that stuff.

1:09:47And we found out about the acceptance like after we'd left, or maybe right around that time. And it had been like many months. And that for me was a reminder of like, whoa, the feedback loops in academic research are really long compared to, you know, when you're selling products, right? You kind of know immediately. So anyway, I thought about going back to academia. I don't know, developed some kind of esoteric hobbies where I was like tracking satellites out of my backyard and doing all kinds of things. And then I realized I missed building products. I missed working with great teams and just kind of being out there.

1:10:20So that was my journey. My co-founder, John, he went and played video games for a long time because it was like waking up from a deep sleep or cryogenic stasis. He just went through eight years of video games and, I don't know, three months. And then also it was like, we got to go build some things. So yeah, for us, it was more of a desire to get back to building products. I'm sure you get asked to mentor or give advice to founders, I guess, as you look at founders that have been successful, both people maybe you look up to as well as people that you look at and think that they have really high potential.

1:10:58Are there commonalities or through lines or consistencies that you see in the most successful ones that you enjoy working with or anything that stands out? Yeah, I think founders come in all different varieties and everybody is a different person, obviously. A couple of the things I've seen that are really unique with great founders is their ability to think about the big picture and like a decades-long strategy and then get into the details, right? It's really remarkable. And then the persistence, like it takes a lot of grit to do this. And that's something that as we were thinking about starting the second company, we knew that there was a high activation energy because it's a big commit, right?

1:11:39You're going to, you know, if it works, it takes a decade to see it through. And then you want to keep going, right? We're in a mode where we see, we've got like two decades of roadmap ahead of us. Like we want to do a lot. That takes a lot of bandwidth, takes a lot of sort of mental focus. And I've seen just great founders have that, right? So then anyway, that's a characteristic. And then I think just some passion. Like you have to be really into doing this because it's not the easiest job. It's like, you know, way easier jobs out there. It's a super fun job, but you have to be into it. Yeah.

1:12:11I heard that hardcover books were your indulgence post-success of Meraki. Is that, how did that come to be? And I too have a mini bookshelves of hardcover books that I, my wife doesn't love how they're stacking up in our apartment right now. But I'm curious, has that always been something that you've appreciated? No, it was actually, it was, I mentioned we were grad students. So when we were in grad school, we had no money and we were living in Cambridge and there were all these bookstores, right? Cause it's like a super intellectual town and there would be, there's the Harvard bookstore has like a used section.

1:12:52And so that was my go-to is I would go and like, you know, buy a used book for$4 or something. And so it felt like the biggest luxury after we'd gotten our exit at Meraki to like on Amazon, like, you know, you get into buying paperback books on Amazon or whatever, but then you see like the$27 one and you're like, that's ridiculous. And like, that felt like something, well, like, I guess we can do this now. That's the splurge. That was the splurge. And, um, you know, it's, it's small things like that, but it actually, it still feels like a luxury. It's totally ridiculous, but it still feels pretty amazing that you can do that.

1:13:26Yeah. It's, it's, um, it's an interesting, uh, tangible item that has such, uh, substance to it, but it's also feel, I feel like your kids aren't going to be spoiled because of the, their dad having hardcover books around, right? It feels like, it feels like a reasonable splurge. They'll probably have no books. Cause they're like, I grew surrounded by books. I can't stand those things. That's right. Exactly. You will have traumatized them a little too much. Now, one of the things I guess, as you think about building Samsara for the long haul, what are things that you maybe do differently? We talked about the 70-20-10.

1:14:05I assume thinking about the 10 would be one thing. But are there other things that sort of stand out in building a company to endure? Yeah, absolutely. So I think with Meraki, that company also wasn't built to exit in the acquisition sort of sense. It was something that happened for practical reasons because what we realized as we got to scale, we got to about$100 million in revenue scale. We realized there was a market giant ahead of us. It was Cisco, they were 800 pound gorilla. They had all these channel partners and it was going to be a slog and there was probably a glass ceiling there. And so, you know, that's why that acquisition made sense.

1:14:42We've never had that feeling at Samsara because our market, it's a really big one. You know, you've got operations companies all over the world, but there's no single company that's the dominant market player. So with this company, we've always believed we're going to build and build and build. With that in mind, it means that there's no specific horizon where it's like, we're just trying to build to that point and just needs to stay together that long and that can fall apart. This is, we're going to have to live with our decisions into the future, whether it's technology platform or who we hire or company culture.

1:15:12And that has made all of us on the management team much more deliberate. And we kind of sit on our hands before we make a really big decision. We do experiments, but before we really commit to something, we want to make sure that we can see it all the way through. As you're building this company to endure and thinking about the longevity of the business and the different milestones that you hit along the way? Are there ones you look back on that are particularly gratifying? Because I assume it wasn't built to be sold. It wasn't built to go public. It wasn't built to get to 100 million in ARR, nor a billion in ARR, right?

1:15:52Are there ones that stand out that maybe are counterintuitive? I'm sure the IPO, Was the IPO virtual or was it? No, we were in person. So I'm sure that probably stands out as a fun milestone. But anything that's counterintuitive, because one of the things that we talk about a lot when talking to founders is like enjoying the process and enjoying the milestones along the way because it's insatiable, the different hills you can climb. And there will always be another hill. There will always be someone else to look to. And so as you reflect on the process and the beauty of the journey, Are there things that sort of stand out to you that were particularly impactful?

1:16:30This is kind of like my memory is real for Samsara, but there are definitely some milestone moments like that. I'll give you some on the sales side and some on the product side. On the sales side, in the early days of the company, we were out involved in every single deal, right? And this is a founder led sales, right? Like you're trying to make sure you've got the right product, but you're figuring out pricing and doing all that kind of stuff. It's pretty fun when you start seeing the first deals close that you didn't even know about until you see the virtual bell is what we call it. It's like a Salesforce notification.

1:17:00And they weren't necessarily huge, but you're like, wow, this means that it worked, right? Like the whole system that we set up worked. And that was early. And then along the way, this company grew very, very quickly. we went from doing 10k to 50k deals to our first million dollar plus deals within the first year and a half or two years which is like a big undertaking for any company because you have to deliver for that customer you have to scale the platform and and do all that stuff and i remember we had a big uh energy utility who was one of our first customers they actually prepaid uh their contract uh because you know it's just how they were set up and all that kind of stuff but it was a huge responsibility.

1:17:40So it was a big milestone that we got, I think it was a$15 million deal, a very young company at that time. But it put the responsibility on us, we had to deliver. So I was really proud that the company, the entire company, engineering, sales, everybody stepped up support to make that customer successful. And they've expanded with us a ton, they've added a bunch of products, they've told a lot of their peers in the industry about Samsara. But that's a milestone moment for us was the first really big enterprise customer who's always sort of before you're ready for it, right? That's what it means to be first.

1:18:14So anyway, those are a couple on the sales side. On the product side, I still remember we worked on the AI distracted driving models. John and I worked on it over like a winter holiday. and this is one of those things where it's like again ai inference back in 2018 was like pretty new stuff the models barely ran and it it helped me connect back to those sort of grad school roots of like hacking on reading we actually like read papers about it uh wrote up some code tried it and we got it to the point where it worked but then being able to connect the dots of like this can help detect distracted driving was an aha um and it was nice to know we still had it like that we could still connect those dots that fast.

1:18:59And we got that product feature out really, really quickly after that. So that was another sort of like pivotal moment for us as a company that then, you know, safety is now our number one product line, which is pretty exciting. It's, you know, way up there in terms of revenue. So that was one. And then the most recent one, and this is a product that we're going to release in June. So it hasn't been announced, but it was an idea that actually came from our team. And this is, again, the sort of not involved thing where it bubbled up from the inside. It's a really exciting idea. And we're going to launch at the customer conference, but the engineering teams kind of prototyped it.

1:19:35They ran with it. And the first time we saw it was when we got a demo in our senior team meeting, that felt really good because it's the opposite of having to drive, read the paper and drive the idea through. This was, these folks came up with a better idea than we would have had and then executed on it, saw it through, validated with customers. And then at the point we saw it was pretty clear it was going to work. So anyway, that may be a totally different end. Super helpful. It makes me think of, I mean, you have to be one of, if not the fastest companies to a billion in recurring revenue, certainly doing it in the capital efficiency you've done along the way.

1:20:11In growing that fast, as someone that sits on boards and observes sometimes hyper growth, you always sit in fear that growing that quickly is going to lead to things breaking along the way. Were there things that in looking back on the journey, you feel like you particularly got right that kept it from breaking along the way from a cultural standpoint, from an operational standpoint, anything that stands out? Yeah, well, so I share that same concern and fear. And it never ends because we as a company are growing headcount to keep up with all this demand. All these new people, they don't know the samsara culture yet, right?

1:20:48They're learning it along the way. And so you need to make sure you don't dilute the culture. And one of the things that we've worked on over the last couple of years is really articulating what are those cultural values and what are those operating principles? Like, how do we work? And so this idea of sampling the customer experience, it's really important to how we work. Not all companies operate that way, especially in sort of more abstract enterprise software. But for us, we're solving real world problems. So we try to really make sure everyone knows that, not just in sales or engineering, but Even our finance teams, they have an appreciation for what the customer is experiencing from us.

1:21:24Something like that is something that has to be taught and has to be taught a couple of times. It's not just an onboarding on the slide for two seconds. We actually talk about it a lot. We talk about it at town halls and that kind of thing. So figuring out how to get everyone to run off the same mental code base is a big challenge. And that's what setting culture is. So that's, I think, the solution for this kind of anxiety that comes with scale. And then keeping that quality bar high on the hiring front, we'd rather hire for quality over quantity. And we will miss our hiring plan if we feel like we're lowering the bar somehow.

1:21:59Piece of conventional Silicon Valley wisdom that you agree with or disagree with. Something that's maybe a counterintuitive operational philosophy. Anything come to mind? No, so I think maybe the most counterintuitive thing we did was to pick the market segment we did. So I have a feeling a lot of the reasons we got term sheets in the Series A was because John and I had seen success abroad. I think there was some real skepticism where you're going to sell what to who? And I think that sometimes you have to be truly kind of contrarian in that sense and try to do something that not everyone agrees with you on.

1:22:37Would you recommend people seek markets more than product market fit? Well, I don't think those are exclusive. You can kind of start with the market first. Finding product market fit, if you have no idea what you're doing, can take a long time. The bottoms up approach, I guess, versus the top down. Start landing on industry and determining the product that meets the industry's needs versus the opposite approach. It worked for us. I think the reason it worked... Both ways worked for you. Both ways worked. I think the reason the second way worked where we started market first was because it was so underserved.

1:23:09There were problems lying around all over the place. Probably still are given the new products you guys are launching. Yeah, exactly. And the customers were more than willing to tell us about it, right? Even when we were talking about learning about how fleets operate, I remember one of the fleet managers showed me the big printout map on their wall. And I was like, so how do you plan around? They're like, well, maybe from here to, this is crazy. So it's a target rich environment when it's an underserved market. Interesting. Interesting. Thank you for doing this. Yeah, thanks for having me. This was awesome.

1:23:37This was fun.

1:23:40Thank you for listening to this episode of The Logan Bartlett Show with co-founder and CEO of Samsara, Sanjit Biswas. If you enjoyed this episode, I'd really appreciate it if you shared with anyone else that you think might find it interesting. If you could also subscribe on whatever platform you're listening on, we really appreciate it. You'll hear another fascinating conversation next week right here on The Logan Bartlett Show. Thank you.

1:24:05Thank you.