Spenser Skates, Founder & CEO, Amplitude

20:45Spenser Skates:Yeah, we had a few hundred thousand downloads. So somebody who was not our friends was using it. That was cool. And we had a lot of excitement at demo day. I think what we saw was it was very hard to get users to stick around because they try it out once or twice. It'd be a cool tech demo. maybe a few would go on to use it, but you didn't get this group of very passionate users about it. And so one of the things we did was we, and this is what led to Amplitude later, is we built our own analytics because we wanted to understand, like there was this one particular question we had, which is how much does the accuracy of the voice recognition matter for the long-term retention of a user?

21:28Spenser Skates:Like if someone has a successful match event, does that mean they're much more likely to stick around long term. So we ended up spending all this time building this whole data analytics infrastructure to answer this. Turns out it matters tremendously. You're twice as likely to stick around if you have a successful match event than if you don't on your first try of using the app. But we realized that we could not get the quality high enough to where it would often fail the first time someone tried to use it because the quality of the technology was not high enough. And, And we were just using some unauthorized Google API.

22:05Spenser Skates:And so it's not like we could under improve what was behind the scenes on that. Like we could do some hacks on top of it, but we couldn't actually improve the core voice recognition. And we also talked to a number of other companies in the voice recognition space. And it was going to be hard to like, we didn't have the expertise in the underlying algorithms. We just had the user interface on top. And it was going to be hard to create something that was successful and had traction without being able to improve on the voice recognition itself. Was it actually impossible to build this on iPhone? Did you have to build it on Android because there was just no way Apple was going to tolerate any shadow APIs or anything like that?

22:48Spenser Skates:So it wasn't actually the shadow APIs. is it was on Android at the time, apps could run in the background. And so you could keep the microphone open, even if the app were closed, and still do other stuff on your phone. And then you could say text by voice, and then the thing would pop up, and you could send or receive text messages just by talking to your phone. And so Android phones had that capability. Apple still doesn't. Apple's very aggressive about not letting stuff run in the background. And so, yeah, that was the why. Okay. Interesting. So you, though, you guys built some software to analyze the data, your user behavior, right?

23:33Can you tell us sort of how the kernel of Amplitude got started while you were doing Sonalite?

23:39Spenser Skates:So it was so obvious to us that the way to build this product was to look at what your users were doing. It was like, yeah, see how they're using it, what they're using it for, what they like, what they don't like, where they're getting stuck, why they keep coming back. It was just so obvious to us the way you do this. Because we have internet connected products. It's not like the old days where you'd ship out a CD and you have no clue how someone's running your software on a desktop. It's like, you can actually see it in real time. And so obviously the way you make your product better is by looking at that.

24:09Spenser Skates:And so we tried a bunch of off the shelf things, Google Analytics, Flurry, others, and none of them could answer the question I had talked about earlier. So we're like, you know, like a bunch of two engineers with a bunch of hubris were like, of course, we'll, we'll build it ourselves. We started with a SQLite database and we moved to the, to these others over time as we scaled what we were trying to do. And we actually got some very good insight out of this. Like we found out that the, the, the accuracy of the first match was incredibly important. And so we could spend a bunch of time tuning that.

24:39Spenser Skates:Now, when we showed this to other members in our batch who had much more successful companies. Like I remember talking to the PlanGrid founders. I remember talking to the Gusto founders. I was like, you know, clearly you guys are probably going to be doing something more sophisticated because we don't have our stuff together. But, you know, you guys do as a company. But they were like, no, I have no idea how people are using our product. And I'm like, what? How are you improving it? And so anyway, that ended up, they were then like, well, that's really cool. Can I get this, you know, what you're using to build this too?

25:13Spenser Skates:And so that was the first signal that there was an opportunity there to, you know, turn that whole thing into a company. How far after the batch are these conversations happening? Like, so it's, you know, winter 12 is when you had demo day. And then like, what's the timeline? um i i this was both at the tail end of the batch and right after it i can't remember demo day must have been in march or april then and then um yeah we ended up deciding to wind down sunlight in in may and then we came on to deciding to do this full-time in june oh so it was pretty so this is all happening in 2012 like this is not yeah all once after another okay so you didn't go and you didn't take any money and go hire a team it's still just you and curtis you're still just figuring out and that's when you pivot basically.

26:01Spenser Skates:Totally, yeah. We had raised about 120K in angel funding. This was an addition to the 150 from Start Fund at the time. And then, it was so funny. I was convinced one of the angels actually invested in us because we wanted one of the lamest companies in the batch. No. Because I'm like, this makes no sense otherwise. This was Adam Draper actually. Oh. Yeah, Tim Draper's son. Why would he have invested in you thinking you're the lamest? I think his actual algorithm was to invest in the youngest founders in the batch, which included us. Because I just looked at all of his other investments and I'm like, man, all these companies don't seem like they have their stuff together and are going anywhere.

26:44It's a bias for young twins. That must be why. I think he saw your promise.

26:49Spenser Skates:To his credit, I think he was so early. He's sometimes too early to stuff, but you'd much rather it be that. in venture. That's so funny. I do remember you guys look pretty young. I mean, now, of course, there are the 18-year-olds going through YC. That's nuts. That is nuts. You think? One of the things that I was actually, in retrospect, I'm so appreciative is you've given those who are younger an alternative path from existing institutions, which just have not been kind to millennials or Gen Z, which I think is so amazing. The hard part about being young is that, okay, so there's this famous Harvard Business School study that looks at elements of world-class performance, and it says there's three big ones, deliberate practice over 10 ,000 hours, expert coaching, and then enthusiastic family support.

27:44Spenser Skates:And so you really need the second one, which is it's so much faster to learn something from someone else. It's like what Isaac Newton said. It's like, if I've seen further, it's because I've stood on the shoulders of giants. He wouldn't have been able to invent calculus if algebra hadn't been very fleshed out by that time. Same thing as a young 20-year-old. You need to be able to learn off of someone. And so one of the things I've just been so tremendously appreciative about Jessica, what you and Paul and Carolyn and YC has done as a whole is that it's provided a place where all these people can go and learn how to do that.

28:23Spenser Skates:And so they know that they can get that expert coaching. Can we touch on one thing real quick? Because you mentioned family support is one of the three. Enthusiastic family support. And so I'm wondering, and this may be skipping ahead a little bit, but like at what point did your mom start bragging about you to the cousins? Like how long did it take before she was like, my son, Spencer? I actually don't know. I actually don't know. Like she's quite the character. She like, every story she tells, it's like it always ends with why she's the best. Like that's the punchline of the story. So you can just say that and you'll cut to the end.

29:03Spenser Skates:So I actually don't know. You know, I don't know. Yeah, I think, you know, probably midway through, like, you know, once we had raised a few rounds of funding and look legitimate. So let's pick up, though, because you're changing your idea. You say, gosh, it seems like we have some interest in this analytics tools that we've been using. What happened next? So that was June. We decided to go all in on that. And this time around, one of the mistakes we had made during Sonalite was we had not been close to the users of our product. And so we did user interview studies once in a while, but it's not like we were religious users and it's not like we spent lots of time with them.

29:44Spenser Skates:And that was a huge mistake. We just build, build, build. Because that's what you know how to do as an engineer. As an engineer, you see a problem, you can go fix it, you build a thing. That's what gives you joy. That's how you're wired. This whole talking to users thing, it's like, how do you even do that? How do you get into a good loop where you're getting feedback? And so we said, all right, we need to make sure we're not making the same mistake. And so before we build anything, let's just go talk to a lot of people. And so we talked to, we set a goal. We wanted to talk to 30 companies before starting anything on the analytics side just to see if there was enough there.

30:17Spenser Skates:So we did that. We spent a month doing that. And of those 30, I think we concluded probably about seven would actually use this if we built it. And we're like, you know what? That's good enough. Let's go for it. What's really ironic though is in retrospect, none of the seven ended up being long-term customers of Amplitude. None of them actually wanted to pay. And so it was about a year of just building and just begging anyone we knew to use the product in the early days. So we just give it to them for free. We'd hope they use it. And then the idea was sometime later we'd ask them for money. And that was the next year from June of 2012 to 2013.

30:54Spenser Skates:And then we met our first real customer. And I've told this story a bunch of times. But we went to this mobile slots casino gaming company. and this company called 12 Gids. And we went in, I gave the demo and we got to the end of it. And he asked me a question I'd never been asked before, which is, how much does this cost? And I'm like, what? Like, I thought I was gonna have to beg you to use this. But you're asking me how much does it cost? And so, you know, I was like, okay, what's the right answer on this? And I first thought$50 a month, but I remember Patrick McKenzie, Patio 11's advice about like, just ask for as much money as you can.

31:31Spenser Skates:And so I'm like, all right, what's the biggest number I can say So I came up with$1 ,000 a month. And his reaction was like, wow, that's so cheap. And I was like, oh, my God. In that moment, I was validated in everything I ever wanted to do, which is to get someone to buy software I'd built. I'm a real business person now. But, like, the difference between$50 ,000 and$1 ,000 ,000, that's big. Yeah, yeah, yeah, yeah. You had some real nerve there. Well, I just was following the advice. It was like, okay,$1 ,000 was the biggest number I could think. I was like, you know, I started at 50 and then I was like, you know what, let me double it to 100.

32:06Spenser Skates:And I'm like, you know, that's not big enough. Let me just put a zero in front of it and just see how they react. And to me,$1 ,000 a month was so much money at the time. But like to them, you know, they had bigger problems and it was nothing. And it was like, if this thing can solve it, like, yeah, easy, easy, no brainer transaction. And was he pleased? Did he start paying that? And was he like pleased with your service? Yeah, it was. That was the first real customer we had. And they started using it. They gave us tons of feedback. We'd go over to their offices regularly to see how we could make it better and to see how they used it.

32:38Spenser Skates:They would grow the amount of data they sent us. So we would charge even more. It grew to$2 ,000 and$3 ,000. And the reason he was actually so excited about it, I didn't realize this at the time, but the reason he was so excited about it was because he was a former product manager at Zynga. And Zynga at the time, they had this huge internal analytics system. It was something like Z Analytics. And they were so used to building their mobile and social games by looking at data. And it was so obvious that this was able to do it. Now that he had left to start his own company, he had nothing. He had no idea what was going on.

33:14Spenser Skates:And so he was willing to use something that was so nascent and embryonic and crappy and no track record from these young, I think we're 24-year-old founders at this point who didn't know anything, who hadn't sold software before in their life because he was so desperate for something to solve his problem. And that actually was the archetype for so many of our early customers. We started meeting a lot of people in the XZynga network who had gone on to other companies and they saw the value in what we were doing. And that was, they became a lot of our early customers and investors. That's fascinating because they used to have a robust system at proprietary at Zynga.

34:01And so they then left and wanted this. And you guys were the only ones doing it. What about all the, what about your competitors? They weren't offering what you did?

34:09Spenser Skates:Surprisingly, no. What I think the market had concluded at the time was that there wasn't money in the analytics, so you had to go build something else. So the main competitor at the time was this company called Flurry, and they had pivoted from an analytics platform into an ad network. And their analytics was kind of very shallow. So the questions I asked about like, okay, what predicts long-term retention, they weren't able to answer. And neither was Google or Adobe or kind of anyone else off the show, or Mixpanel or Kissmetrics or anyone else off the shelf at the time. And so we said, look, let's just exclusively focus on this problem and let's go deep and just let's build whatever they asked for.

34:53Spenser Skates:And that, you know, started Amplitude's Ascent, you know, where it was actually very straightforward. It was like, you go talk to these customers, you ask them, what will they pay for? If you build it, you go build that thing, they'll pay for it. And you just do that again and again and again. And then, you know, that's been the whole growth of the company from zero to 200 million is just doing that better and deeper than anyone else. And that's the great thing about B2B is analytics was kind of a perfect problem for us in retrospect. like because we did the battle code thing we were kind of algorithms distributed systems computer science nerds and so we and it in contrast to voice recognition with analytics is precise and you can get like an exact answer and it's just a question of how do you get that answer more efficiently and so we were able to do that in a way that none of no one else we saw out there was and so we just kind of ended up it wasn't about like we had one magic feature it was just you just build the next thing and the next thing and the next thing that your customers ask for.

35:54Spencer, did you guys have to raise, like you obviously, someone wanted to pay you, you were going to generate revenue, but did you raise money before that happened to build a team or anything?

36:05Spenser Skates:We did, which you could argue whether it was the right thing to do. So we raised a$2 million seed round in 2013, and it took us about nine months to raise that thing. It was brutal and rough because most people had the exact same conclusion. You guys, did in YC, which is like, yeah, analytics. I don't want to invest in this. But Spencer and Curtis seem interesting. And so we managed to scrape it together from like 20 different angels. I remember the first VC, this company called Maris, this firm called Maris Capital. And this guy, Peter Singh, unfortunately, he passed away a bunch of years ago.

36:40Spenser Skates:So we hyped up Battlecode as this amazing thing. And we're all the smartest and best. And it's just some college competition. But we hyped this up that we're all the best founders and most amazing engineers come out of. And we hyped that up to him. And so he's like, all right, all right, I'll put money into you guys. So, you know, we ended up, you know, we got from Data Collective and Matt Aco and SV Angel and a bunch of other folks. And we managed to scrape together a seed round after way too long fundraising. And then we added a third co-founder around that time, Jeffrey Wang. and then started hiring out an early team.

37:18Spenser Skates:And then I switched full-time from the engineering side because Jeffrey had joined and Curtis could partner with someone else to work on the product to just going out, talking to customers and selling them. When did you change the name? I don't even remember. So we, sometime in 2013. Okay. And I just reached out to, like, I came up with a list of 500 different domains, that one word domains that I thought would be good. And I wrote a Python script to just automatically email the owners of those domains with a bid, just being like, hey, I'll pay you$5 ,000 for your domain. And amplitude.com was the best one that came back out of that group.

37:58It is a great name.

37:59Spenser Skates:Yeah, it is. Like one word, it's clear. It's got the start of alphabet positioning. It's related to charts and graphs. You know, it has like a wave, you know, ride the wave sort of thing. So I love it. So you've moved into like, is it fair to say like high resolution analytics for people? Yes. Yes. That's a great way to put it. Okay. So you have that. You shift into sales. Is sales, does it come easy to you or did you, did it seem unnatural? I'm very curious how you and sales got along at first. There were parts of it that I think I understood and got, and there were parts of it that I did not.

38:43Spenser Skates:So I hired this coach named Mitch Morendo, who had done, he was like an ex, he was a sales leader at a number of companies, and he was just going around helping out engineers learn the craft of sales. and it turns out sales is as deep and complex and important to the problem to a business's success as the engineering and I had seen at that point you know this was a few years into the company I'd seen so many companies where these brilliant engineers had created these incredible products but because they weren't willing to go learn this they never got success and so they'd lose against much worse products and much worse companies because of that.

39:25Spenser Skates:And I'm like, all right, whatever this thing is, I got to go learn it. Now you naturally learn how to be a salesperson as part of being a company builder. You're always selling your company, you're recruiting people, you're selling yourself to YC, to investors, to your batch mates. And I go back to one thing Paul has always said, which is like, just have a good product. And then you will then be convicted that a customer using that will be better off for it and that authenticity will come through. And that's most of it, honestly, in terms of just sharing your passion for whatever you're doing with someone.

39:58Spenser Skates:And I've been very, very passionate about analytics and so that just naturally comes through. Now, there are other parts of the process which are more scientific, which I had no clue about. So as an example, one thing, I thought you just show up to a meeting, give the demo and be like, you wanna buy the thing. Turns out very, very different from a process standpoint. point. Instead, you want to see, okay, what is the customer trying to solve and what's their pain? And does that match up against what you do? And so Mitch would always, I'd have a weekly meeting with him and he'd be like, we talk about the customers I talked to.

40:29Spenser Skates:I'd be like, I talked to this customer and demoed our cool product. I talked to this customer, I demoed our cool product. He's like, first, you got the totally wrong. You're talking about yourself, not the customer. Second, you got to tell me what the business pain is. And I'd be like, well, they want some dashboards to replace SQL. And he's like, Spencer, that's not a business pain. And so after enough weeks of just having this question of what's the pain beaten into me, I would then start to ask why in these customer conversations. All right, you want these dashboards. Why is that? How is that impacting your business?

40:57Spenser Skates:Why is this so important? Who in your business cares? What happens if this doesn't? And you start to really understand who they are as people and what they're trying to do. And then that made it much easier to very naturally sell. Because then you're not talking about yourself, you're talking about, oh, okay, cool. Well, if we do this for you, it can solve the fact that you have all these data analysts writing SQL all the time and nobody on your executive team knows what's going on or it solves this problem where your product team has no idea if the features they're launching are going to be successful.

41:26Spenser Skates:It very naturally feeds into, okay, it's your story and here's how I can help your story. Anyway, so I learned that. I learned a whole bunch of other things. I learned to, one of the very specific things is timeline, so you want to say, okay, great. like when you're going from zero to one, you're basically going to sell your product as cheap as it takes for someone to buy it like now. So you'd be like, okay, well, like, how do you make a decision? How can you make a decision on this in the next week? And you name a day and then you also say, all right, well, what price would it, it's like, well, the price is too high.

42:00Spenser Skates:It's like, okay, well, what price do we need to make it happen today, you know, today or tomorrow or this week? And then they'd say, be like, cool, we can do it. And you just go because like the getting the reps in and just getting customers who are paying something, you don't really care about optimizing the price till later. So anyway, you learn all these things about the art and science of sales. I think the biggest thing I'd say, the biggest mistake I see engineers making is they think they will pick up a book to learn this thing. And while there's some fine books and fine frameworks out there, there is nothing that beats one doing it and two getting expert coaching on doing it.

42:34Spenser Skates:It's like if you tried to learn how to play soccer by reading a book. It's like, you're not like, do play soccer and then get coaching once in a while to like direct you about how you can get to the next level. It's the same thing in sales. Pearls of wisdom right here. Yes. No, it's so useful because it's so true. Like nothing is better than just doing it and learning from someone who's very good at it. And also making a bunch of mistakes and learning from those. Totally, yeah. The rule I have is you want to, like, learning from someone else is 10 times faster than learning yourself. Now, there's some things you're going to have to learn yourself.

43:11Spenser Skates:Nobody is going to teach you better about your customers than you know directly. But how to run a sales process, that has been done millions of times out there. And so there are people you can bootstrap off of their learning and grow so much more quickly. Before I met Mitch, I was like, I didn't know what I was doing. And so I was wasting a lot of time with customers who didn't have pain and were never going to pay us money. And instead, what I should have been focused on is like the reality is just go find other customers who do want to pay and then follow their scent and then chase that down.

43:45Spenser Skates:And so I wish, you know, so I wish I had started that learning process earlier. year. But it's funny, these skills, they scale up too. The sales skills scales up. You look at Sam Altman and what he's done with OpenAI, and he's the world's greatest salesman. It's the exact same thing. It is a core skill for any entrepreneur to learn, and there's a playbook on how to do it. And getting coaching and advice from others is much, much faster than trying to figure it out all yourself. So you're growing, you're doing really well. I kind of want to hear about going public. Me too. The direct listing. Yes.

44:26Spenser Skates:Yes. Yes. So, so many things for us to talk about in that. I know. The best advice I actually heard was that the listing itself is the wedding and it's much more important to focus on the long-term marriage. So build the successful company. Don't worry about the event itself. So there's a lot of mystique. Public markets are one of the great systems of capitalism. And so there's a lot of mystique about it. But one of the things I've come to appreciate is public market investors give you a lot of latitude to define your business however you want. There's certain things you're required to report that's expected to report.

45:05Spenser Skates:You need to report your quarterly financials that the SEC and other other groups require review. But outside of that, you can kind of define, here's what I'm trying to do with my business and why. And here's where we're going. And all the great CEOs have done this and don't get too wound up on getting pushed around by the institutions and systems that exist in public markets. So I'll talk about the listing and I'll talk about what happened after the listing. Even though I got that advice and even though I knew it, I still was a little too focused on the wedding and the listing itself versus the company afterwards.

45:41Spenser Skates:Like I remember there was a set of executives at that time that I should have changed out and I knew were not the right long-term fit, but I did not because I'm like, I don't want to disturb the boat before we go out. But that was actually the best time to change them out from a position of strength. And yeah, you have to answer questions, but you're going to have to answer questions about whatever you do and if you let it drag out more, it'll become more of a problem and more of an issue and it'll blow up in your face even further. You have to run the business the right way to make the thing succeed, not to pretty it up for public markets.

46:12Spenser Skates:And so the one thing I will say on the listing itself, on wedding planning itself, that I strongly advise companies going public is do a direct listing. For the love of God, do a direct listing. So I came, I was in finance for a year before I came out. And one of the things you learn in finance is it's very, very transactional dog-eat-dog world. And everyone's always looking to make a dollar off of anything. Traditional IPO processes are the biggest arbitrage, existing arbitrage opportunity in all of finance. And they're taking advantage of CEOs and management teams that are going through this process for the first time.

46:52Spenser Skates:When the reality is they are leaving tens or hundreds of millions of dollars and giving it away for free to public market investors. because people want their stock price to go up or people want a good news article about themselves or they're just too afraid to buck the trend. A direct listing, what a direct listing does instead is it opens your stock the same way every single other stock opens every day, which is with an auction process. So you have a number of buyers, you have a number of sellers, and wherever they meet in the middle, that's the price. And so you know you're getting a market-based price.

47:25Spenser Skates:It could be high, it could be low, but at least you know it's fulfilled by supply and demand in the market. Whereas a traditional listing process has you artificially pick out a price. And it's like the difference between centrally planned prices versus market-driven prices. And so inevitably, bankers, what they want to do is they want to, their real clients are their public market investors because they're going to do multiple transactions with these guys, whereas you're only going to go public once. And so they will, I remember I heard on one listing, a banker threatened to withhold the listing and stop the process because the public company wanted to push, or the soon-to-be public company wanted to push the price too high.

48:07Spenser Skates:And it's like, I'm the, like the company's the one paying the bankers millions or tens of millions of dollars in some cases. And you're telling me like, you're not going to do it because, okay, well, you're supposed to be a fiduciary to me. Like what the fuck? So anyway, so it's the whole thing is a giant racket. There's this one professor from the University of Florida, Jay Ritter, who studied this thing ad nauseum. So look up any of his data if you don't trust my word. And there's lots of people in the system like Bill Gurley and others who have talked quite extensively about this. But that's my number one thing.

48:43Spenser Skates:Just have the courage to do it. And there's been enough companies that have done it by now. It's not a big deal because then you're not giving away equity for free. You want to give equity to people who have earned it, who have worked hard for your company, not to public market investors. So that's my one wedding and planning advice. So you obviously came to this with your own, you knew because you worked in finance. Yes. But how much pushback did you get from other people around you? Believe it or not, the biggest pushback was internal on our board. So public market investors, they actually don't care because it's been standard enough.

49:16Spenser Skates:And yeah, there are some who will whine and cry about the good old days where they got to rip companies off. But most of them have moved past that. 95 % of them have moved past that and will just buy companies wherever it is. The bankers, they also don't care. You have to find the right ones that will do it. But we went with Morgan Stanley and they're on the bleeding edge of this. So they're good with it. Analysts also don't care. There's some tweaks to the process you have to do, but they're minor and it just doesn't matter. Believe it or not, it was actually fear from our existing board of directors.

49:43Spenser Skates:And we have a very strong, great board of directors. At the time, we had Eric Vishria from Benchmark, you know, and they're like one of the top VCs. We had Pat Grady from Sequoia. You know, it's not people that are going to be pushed around. But in spite of that, they were still like, well, maybe we should consider like a regular list. And I'm like, no way am I signing up for that. Like, no way. So I'm like, all right, look, to entertain you guys, I'll go through this process of evaluating this. But the conclusion is going to be we're going to do a direct listing. So I'm just telling you now. So.

50:13Spenser Skates:Wow. Good for you. I know. I'm so impressed. In retrospect, I should have focused on upgrading my management team and the business. But, you know, that was one I just from being in the finance world, I was just very tired of getting companies that had gotten so ripped off on this thing. Yeah. I'm actually surprised how many underwritten offerings there still are. Like, it'll change. It'll change. It's a very fear based thing. It's like, well, I don't have the confidence. So I need, you know, all these fake systems to support me. Now, let me talk quickly about my biggest mistake. So my biggest mistake was not focusing on changing the business and the team in the way it needed to be changed.

50:52Spenser Skates:And I had to do that after listing, which needed to be done one way or another, but was even more painful. One of the mistakes I made, I knew our stock was high. I didn't know how high, but I knew we were in a hot, overheated market at the time. Like SaaS was the best thing since sliced bread back in 2021. And I remember I wanted to communicate that to public markets in an appropriate way. You know, I'd be like, ah, stuff is high right now. You know, something like that. I remember my investor relations and PR people were absolutely terrified of me saying anything like that. They're like, no, you have to pump up your stock.

51:27Spenser Skates:You have to do it. And I'm like, well, I think it legitimately is high now. We should signal that in some way so that people don't get burned. And they're like, no, no, no, no, we can't do that. That's not the best practice. And I'm like, all right, you guys are the experts. So I'll listen to you. Massive, massive mistake in retrospect, because we came off, we're now off about 90 % from all-time highs. A lot of people lost a lot of money on public market amplitude. You know, I wish I had signaled that earlier so that the volatility would not have been as drastic. And so people would know. And I'm the one still here at the company.

51:58Spenser Skates:None of those people are here at the company anymore. I'm the one still here having to live this thing and run with this thing. And I wish I had done that to signal so, you know, it wouldn't have gotten so crazy. and so it would have helped my credibility and all these other things too. And so that was a huge mistake. Now, there are ways to do that. To be clear, you don't want to go out and be like, oh, stock's too high, you should sell. You don't panic everyone. But there are smart ways to do it. Sam Holtman did this recently on the AI side. He had some dinner with journalists a few months ago where he was like, yeah, there's going to be a bunch of people who lose money on this AI thing and stuff is kind of heated up right now.

52:29Spenser Skates:So there are ways to signal and communicate this thing. But that was one of my biggest mistakes, one of my biggest regret in terms of communicating with the public markets. I feel like that's a Spencer Skates founder mode moment. Founder mode moment. Yeah, yeah, I know. I totally agree. Brian Chesky was always saying like, everyone's telling you what to do. And by the way, they're not with the company anymore. And you're left holding the bag with their bad decisions that they forced you to do. I remember my head of IR at that point, like when our stock came off in early 2022, he immediately quit.

53:00Spenser Skates:And I'm like, what the fuck, man? I don't need you here to sell this when the stock is high. I need you to sell my stock when it's low. He's like, well, the story's changed. And I'm like, anyway, my own fault. You're the CEO. So buck stops with you. So ultimately, so I just, it, you know, it is what it's, it's one of these trial by fire, you know, the way to learn the lesson is, is through pain. I will say in defense of like, there is, again, there is a reason you hire experience and you hire these executives and you hire these advisors because they have learned this thing. But you, at the same time, you have to remember you are the one that owns the success at the end of the day.

53:43Spenser Skates:You cannot delegate that or outsource it to someone else. And so you should incorporate that feedback as a data point in your judgment, but don't substitute it for the judgment itself. Yeah, exactly. That's perfect advice. Paul told me something interesting that I had no idea. before you went public, you simulated being public? Oh, yeah, yeah, yeah. This was actually really, thank goodness we did. This was actually, I wanted to harden up the Amplitude team to feel what it was like being a public company. And so what I would do at every all hands, so we had all hands every week, I would share like a fake update on the stock price.

54:24Spenser Skates:What I did was I thought about, what is the worst possible thing to happen to a company? Well, probably that you have a huge run up and people get really excited and then it comes off like really down and hard and even worse than where you started. Yeah. So I simulated that. So I give an update being like, hey, we went out at this valuation, which was our last round. Hey, we doubled our valuation. How do you feel about that? Hey, we just went down. How do you feel about that? And then I remember I talked to I remember talking to some public company CFOs at the time. And this one had this one story, which is like they were like picking up their mail in their apartment building.

54:58Spenser Skates:And like one of their neighbors who they never even talked to came up to them and be like, oh, yeah, your stock has some chop in it, doesn't it? And it's just like, who the fuck are you? So I told that story and I'm like, yeah, you're walking your dog and, you know, your neighbor comes by and starts to comment on how badly your stock is doing. How do you feel on that? Because, you know, you want to make it real for them. And so that was very, very important. Now, as it turns out, we very unfortunately had that exact same trajectory when we went out. We went out, we had this massive run up. And so people got all excited and being like, OK, we're going to go take over the world.

55:31Spenser Skates:And then we had this giant rundown. And then it went further down. And it was just absolutely brutal. And so it was very important to instill that mentality into the company about how to understand. Because in the short term, we do not control such things. We only control the success of the company in the long term. And if we do that, the stock and everything else will reflect that. So it was actually, thank goodness we did that. I recommend CEOs doing that. And thank goodness we did it. I remember I got pushed back internally at the time because they're like, whoa, you don't want to freak people out about the stock price.

56:00Spenser Skates:I'm like, no. If they're going to get freaked out about a fake stock price, why are they here? This is training for the real thing, guys. That was one of the few things I do think we did right to create the right expectation in the organization. So you've been a public company CEO for roughly four years? Yeah, four years. Yeah, yeah. And I'm sure you don't have any regrets because it's probably – Right. But like – I mean, I wish I had focused more on the marriage instead of the wedding, as they say. That was my biggest one. But I'm happy we went out public. I'm so happy with Amplitude. I'm long-term bullish on what it is we're doing.

56:38Spenser Skates:And I'm committed to this thing for the long term. And I say that only because, you know, there are some examples, peers at YC, who have decided not to go public. They're huge companies, but they're just like, yeah, the public company thing, not for me. And I just, I wonder, it sounds like you don't have any of that. Like it was the right decision. You're very happy with the way things are going. Yeah, you have to understand the game. It's not, so I do think you have a little bit of an obligation to the employees, investors, and other shareholders to eventually get them liquidity through public markets.

57:09Spenser Skates:Now there's secondaries and you can argue whether those are good or not, but it forces a bunch of discipline on the company that you may not get through other ways. Now, you have to be very careful because, again, you have a lot of wedding planners who will try to overly plan your wedding when you own the marriage. So just remember who's in charge of what at the end of the day. So I say a few things. One is that public markets give you a lot of latitude to define your business and what you're doing with it. The one reason not to go public is if you have a lot of uncertainty over the next few years on your revenue.

57:40Spenser Skates:If you have a lot of uncertainty, that is a good reason not to go public. But if you meet that bar and you're, say, a few hundred million plus in revenue, then there's, in my mind, not really a reason to do it. It gives you a bunch of tools you wouldn't have otherwise. Like, we've been able to acquire a bunch of, like, four different companies in the last year because we have a liquid stock. We're also able to attract different types of talent. It also gives us kind of a credibility of long-term staying power boost with the ecosystem. system, so with our customers, with analysts, whenever someone's evaluating us versus our competitors because we're the only guy that's public.

58:17Spenser Skates:And then the process itself, yes, there is some bureaucracy and some overhead. So it costs us probably a million and a half a year just to run all the things we do, but they're not bad practices like auditing your company that you probably should be doing anyway and preparing financials. And then the earnings calls themselves, Like instead of, you know, in private markets, it's the same thing. You're used to pitching your, you know, raising around every two years or whatever it is. This is a little different. You got to do this every quarter, but it's less intense. So it's like, it's just, it's the same muscle, except just done in a little bit of a different construction.

58:52Spenser Skates:And so the one downside I will say that I don't like about it is because you have a liquid stock, we're a high beta company. And that moves up and down freaking all the time for no reason. most of the time for nothing to do with anything we've done. So, you know, macro is good or bad. You know, there's new tariffs in place. You know, this person won the election versus this other one. Fed announced an interest rate cut. All sorts of stuff that's, you know, unrelated to your execution. And that can be frustrating. Or I don't care, actually, personally. Because I've been in financial markets before, like, I understand what this is.

59:28Spenser Skates:And like, we're just very long term on it and price can fluctuate how it wants. But it does make it a little harder to plan. And then I think executives who are very compensation oriented can index very highly on that, which drives their moods up and downs, which can be a little frustrating. And they know my feeling on it, which is like, guys, we're going to be in this for the long term and focus on the stuff we can control. But it still inevitably seeps out from time to time. I would get so frustrated if I had employees always, you know, checking the stock price day to day, I'd be like, just forget it.

1:00:03Relax. You know, it's a long term thing here.

1:00:07Spenser Skates:It's hard. It's it's if they could, if somehow the volatile, I understand it's important for public markets, like you trade, and there's a price and it's market clearing price. And that's what it is. Like, you know, I'm not emotional about it. But I think, because other people in the organization do get emotional, you end up having to respond to that. So it's frustrating, but it's what it is. This is a Gary Tan phrase. You got to catch their feelings. Yeah, yeah, exactly. So Gary. I love it. Before we started the podcast, we were having a quick conversation and you said something that I wrote down because I want you to talk about it.

1:00:40You said, you know, as you become more successful and now that you're a public company, like it would it's easy to be more want to be more private and conservative about what you say. Conservative. Conservative, yeah. And you are like, I strive to be unfiltered and direct as I grow. And can you talk about that?

1:00:59Spenser Skates:This is a holdover from what I think of as 1950s corporate America, who has kind of set the tone for what does an executive look like. And so because of that, you know, and that's carried all the way through tech and into Silicon Valley and the latest generation of larger private companies. And there's a certain like persona you have to have where you're in control and you have everything on the time. You know, you don't have opinions that offend anyone. You don't say anything that might get you into trouble. You don't pass strong judgments about the right way to do something because you want to get along with everyone.

1:01:37Spenser Skates:Because you're the one, you know, you're the king, you know, in the kingdom. And you want to make sure, you know, everyone in the kingdom is taken care of and everything else. And so that's the very 1950s corporate. There's a particular corporate speak that just drives people up the wall, which is like, you know, what are you even saying? Like, you know, I mean, you guys do a really good job of beating this out of people in YC. in terms of how to be concise and direct and clear on what it is you're saying. And so that's the way a lot of the ecosystem is nutritionally trained. And so a lot of founders, when they go public or they become larger, they think they have to adopt the same way.

1:02:14Spenser Skates:Now, what I think we've seen is that there is actually a real hunger for strong points of view in an ecosystem. I mean, the founder mode with Brian Chesky was a phenomenal example of that, where he really was passionate about how to run Airbnb. And I mean, Elon's another kind of really wild example of it too, where people actually respect and gravitate to strong points of view. And there might be people who strongly agree with you. And there's also going to be people who strongly disagree with you. And so I think in traditional corporate America comms training, the goal is to reduce the second group as much as possible.

1:02:51Spenser Skates:Now, as it turns out, if you try to have a point of view where nobody will disagree with you, you're not going to say anything and nobody's going to talk about you. And so there's actually a lot of potential energy stored up with just having a point of view somewhere. And some people disagree and that's okay. And so like, as an example of that, like I've gotten really into Twitter of all places over the last few months where I've just been very opinionated about a bunch of different things, obviously, you know, mostly focused on amplitude, but some outside of it as well. And I think people respect and resonate with that.

1:03:23Spenser Skates:And so I think there is a change. Right now, there's an opportunity because the default is to be so tight. Now, there are some things you do have to be careful about saying. I mean, for sure, strong stuff about politics, better. Actually, I put a political post on Twitter this past weekend. Did you pay for it? No, there were strong opinions. It's funny. I have this new metric. So whenever I say something very opinionated and someone on Twitter doesn't like it, they will post an image of Amplitude stock price and reply to me being like, oh, yeah. God, trolls. And so I have a new metric, which is like, okay, is someone posting that number of mentions of Amplitude stock price and reply to my comments on Twitter?

1:04:10Spenser Skates:That's actually a good thing. That's a positive metric. A good heuristic is like if tons of people are trying to burn me. You said something worthwhile. You know you said something worthwhile. You know, Spencer, I actually just this morning saw you say something that resonated with me that I thought most CEOs might not go there, but you did. You were talking about how running a big, successful company was all-consuming, and you did have to give some things up. And, like, one of the things was you built your life to accommodate this company. For example, you lost touch with a lot of friends. and though that made you sad, you were okay with it because you were that committed to your company.

1:04:50And you just sort of explained it and it resonated with me because that's kind of how I felt when I was still at Y Combinator. Like I gave up a lot of things for Y Combinator. Ultimately, I wasn't okay with that and I made changes. But it was just interesting that you said it because I was thinking, gosh, he's being real with people here.

1:05:09Spenser Skates:Yeah, that was with Jubin. I'm surprised that I shared that. But I, you know, so I'll give you the academic side of it and then we'll talk about the personal side. So back to the elements. So I studied startups and just world-class performance. And I was like, okay, because I want to be great at something. And it comes back to, okay, deliberate practice, 10 ,000 hours. So most people are actually willing to do that. That's, you know, you spend five years in a job, 40 hours a week, you'll get to that 10 ,000 hours. Expert coaching, you know, so you go to institutions and experts and other people that can help you, you know, and peers and other people can come better.

1:05:42Spenser Skates:I'm better. But the one that nobody talks about is the last one, which is enthusiastic family support. And what that meant was like, I had been in relationships before and there was always a tension between the relationship and the company and whatever I was interested in my life, like whether that be school or company or whatever else. And so I just got to this point where I realized like, okay, Hey, most relationships are just not going to fit into me building a company and I have to be okay with that. And that's hard. That's extraordinarily hard. And then I was, right when I was least expecting it, my now wife, Anne, found me and was actually very persistent.

1:06:23Spenser Skates:And I told her right early on, I'm like, look, I just, most relationship has not worked for this exact reason. And so if we're in this, my one thing, flexible on a lot of stuff, but my one thing is this is my kind of life's work and mission. I have to be all in on this. And you have to be part of that. And it's going to take up a lot of space in my life and our joint lives. And she was totally cool with it. And not only was she totally cool with it, she was like, OK, hey, here's the life we can create together. And here's what it looks like. And she's gone on to become a very successful venture capitalist and invested in the whatnot founders who are also a wonderful YC company and just started her own firm last year.

1:07:04Spenser Skates:And we see our kind of careers as compounding each other's. And we work together on stuff. And it's amazing. But the family is, even at the family level, we are all so oriented around amplitude and what we're doing. And it takes up a lot of space in our collective lives. And so there's a lot of people who are willing to work hard. I think there's actually this quote I remember by Caesar. It's like there's a lot of men who are willing to die for a cause, but the true heroism is being willing to suffer in silence for a long period of time. And so I got so obsessed. It sounds sounds so awful when you say it, but I got so obsessed with like, how do you build a successful company?

1:07:47Spenser Skates:I'm like, I will take every single advantage I can possibly have and reorient my entire life, including my families around this thing. And that's the very extreme trait. Now, is that good or bad? You know, it comes with its own trades, like the friends thing I mentioned. But, you know, like when I think like one, I think one, I'm kind of naturally this way where I'll get really deep and into things no matter what. And so might as well put it to something worthwhile for humanity. And then two, to be able to be part of something greater than yourself, you know, that to me is like a different level of living life.

1:08:20Spenser Skates:And it comes with intense sacrifices and trade-offs and all these things. And, you know, anyone who's done anything worthwhile will tell you the exact same thing. But yeah, I'm very willing to sign up for it. It takes guts to say that, actually. It really does. People really want to spin this myth that they're doing it all and having it all. There's no compromises or sacrifices. So to just be like, yeah, yeah, this is the way it is. And this is the way I've worked my life out. It's very bold. I found it so refreshing. Yeah, because no one's everyone wants to say, oh, it's easy. And like, I just I don't know if that's true.

1:08:57Spenser Skates:I agree with you guys. I think one of the kind of cultural norms that we've accepted in the U.S. in order to support parents and particularly mothers is that, hey, you can kind of do both and it's not a big deal and, you know, you shouldn't be docked for your career, which I strongly agree with in terms of that's how we should operate. But being on the other side of it, it's like, look, there's very real tradeoffs. I think I said this last time, but Ruth Bader Ginsburg, I think, summed this up quite well, which is you can have it all, but you can't have it all at once. And so what trade are you willing to make when in life?

1:09:33Spenser Skates:And so that's always kind of stuck with me. And I'm enjoying it. And I'm okay with these trades, but they're very, very real trades. I've lost touch with a lot of friends, and there's still some friends, like one of my friends from MIT, David Chen, he still makes time regularly reach out to me and he's so kind and I'm so appreciative of his friendship and I just feel bad because I can't reciprocate quite at the same level that he does. You know and there's friends which literally our friendship is just sending each other posts on Twitter all day long and like I haven't actually seen them in a few years.

1:10:01Spenser Skates:This is one of the tricks I do to myself in the early days. I would imagine someone in a much life worse situation. So I would go back a generation I would think you know there were people who got drafted to go fight Vietnam okay and that life compared to what I, not that is, this is nothing. This is nothing. I'm still get paid. I still get recognized. I still am able to maintain a great lifestyle. You know, yeah, it's a lot of hard work and there's sacrifice in it, but compared to that, it's nothing. Or like I'd compare it to like, hey, if I went to be a monk or a hermit and, you know, like took the path of, you know, Franciscan monk or like, you know, the Buddhists where you give up all worldly possessions and you just like, you know, live a very mean, like, yeah, like compared to that, This is great.

1:10:44Spenser Skates:Well said. I think this is a great place to end. I want to close out with this one thought, which is like, I think my observation, a lot of founder, I was very lucky that I spent a lot of time in introspection before starting to think about what life I wanted to live. And, you know, it comes with its very real tradeoffs. And it's not for everyone, but it's you don't have to be smart or you don't have to be like, you know, more talented or whatever. It's just the real question is, in my mind, is how do you set up your... Interesting. I think more people should talk about that. Yes, yes. Because I don't think that there are these super open conversations.

1:11:23Behind closed doors there are, but I don't think there's public conversations on this subject. I think people try to really hide the truth. So I love that you're saying that.

1:11:33Spenser Skates:No, of course, Jessica. I just, I want to, you know, hopefully my story, you know, not to say I'm a model, but, can at least give others a data point. I think we've learned a lot from you today. It's been awesome. This has been such a fun conversation. Yes. Thank you. Sorry, I want to give one more appreciation. You know, the best source for these stories, when I was first starting, because what you want to do is you want to gather a lot of data points on what it's like to be entrepreneur, is Founders at Work. And I still have a whole set of copies on my desk. It was just like, you get 30 very real stories about the very early days of great companies and what it was like.

1:12:12Spenser Skates:And like that was gold because that like allowed me to like, you read these business books and they have these frameworks for you and whatever. And honestly, they're mostly garbage. But to get those primary data points, source data points and what it was actually like to be a founder, that is more invaluable than anything else. So I just, Jessica and Carolyn, thank you for having this podcast and telling founder stories and everything else because that's what will equip the next generation. Oh, Spencer, you're the best. Thank you. No, we really thank you so much. Nice to still feel like my book's relevant and, you know, was useful to you in your journey.

1:12:50Spenser Skates:To this day, I will say the YC community has been the one point of stability throughout the 13 years of building this company. And I'm so deeply or 14 years since being in startups. I'm so deeply, deeply appreciative for that because the ethos is like even with with venture capitalists that are very supportive, you know, they're still kind of in the thing with you versus being this outside thing that that that's just going to be unconditionally supportive. And that that really does mean a lot. That's the whole point of community building. Like that is it right there. And we're so glad you're part of the community.

1:13:27Spenser Skates:No, I feel very lucky that you guys have always been so kind. Aw. So thank you for coming on the show. We loved catching up and hearing the Amplitude story. It's going to be a fabulous episode. Thank you, Spencer. Thank you, Jessica. Thank you, Carolyn. Really appreciate you guys. Thank you for letting me tell part of my story. Love it. All right. We'll see you soon. Awesome. Bye. oh spencer skates that was so much fun talking to him i love how we bookended that episode with you getting verklempt because he's so sweet he's so sweet he's so complimentary compliments so he's so nice yeah i mean that was so much fun and actually i learned a lot because even though i've known him forever i don't think i really remember all the ins and outs of amplitude's journey.

1:14:17Oh, yeah, of course. And that woman was a while ago. He's been at it for a long time. And, you know, I was thinking a little bit when he was talking towards the end about, you know, just being really honest and transparent. We sort of, because we just talked to Justin recently, and Justin's very much like that about his personal life. And, you know, and that's really refreshing where people just aren't like hiding behind any like, you know, trying to be like Mr. or Mrs. Perfect. And I just really, it's a little bit of a theme, I think maybe we have this season. And I really like it. How about when he was talking about the sales process and all he learned?

1:14:52All I could think about was Peter Reinhart's experience with the New Jersey guy being like, so why are we here? Why are we here? How awkward it was. Well, I was just going to say, that's another theme. Probably if you look back at all of our recordings of founders, engineers learning sales is definitely something that has to happen. And, you know, everyone approaches it a different way. But I think the way Spencer talked about it was super helpful. And he obviously really absorbed those lessons and became clearly a great salesperson, which amazing. It is amazing because this ties into my last comment that I want to make, which is one of my favorite moments of this episode when he's like, yeah, I didn't want to go to MIT.

1:15:38I mean, it was just a bunch of nerds. And I'm not like that. I want to be like, Spencer. are you sure but but i'm thinking like imagine spencer like 18 years old right do you know what i mean yeah he was a huge nerd playing the video game i don't even remember which one it was oh my god and his mom worrying about you're just gonna play video games all day rightfully worrying yeah i know i love that that was so great he's a great i'm so glad we got him on the show because that was just a great conversation and I really really like talking to him it's gonna be a winning episode it is all right see you Levy see you on the next one bye