Michelle Zatlyn: Scaling Cloudflare to a $70B giant and building a better Internet
Download MP3Welcome to Inside the Network. I'm Sid Trivedi.
Ross Haleliuk:I am Ross Haleliuk.
Mahendra Ramsinghani:And I am Mahendra Ramsinghani. We have spent decades building, investing, and researching cybersecurity companies.
Sid Trivedi:On this podcast, we invite you to join us inside the network where we bring the best founders, operators, and investors building the future of cyber.
Ross Haleliuk:We will talk about the hard parts of the founder journey, launching companies, getting to product market fit, raising capital, and scaling to an exit.
Mahendra Ramsinghani:And, yes, we will also be talking about epic failures.
Sid Trivedi:But, Mahendra, we're here to make the founder journey easier.
Mahendra Ramsinghani:That is correct, Sid. But we cannot make it too much easier because startups are hard, and, of course, you already knew that. Alright, YouTube. Enough. Let's get
Ross Haleliuk:started with this week's episode.
Mahendra Ramsinghani:Our guest today is Michelle Zatlin, president and cofounder of Cloudflare, a global Internet security powerhouse boasting a market cap of $60,000,000,000. While getting an MBA from Harvard, Michelle teamed up with Matthew Prince and Lee Holloway to launch CloudFair. The three of them had an audacious vision. How can we build a better Internet? One that would keep the bad guys out.
Mahendra Ramsinghani:Today, as the company enters its sixteenth year of operations, it serves over 5,000,000 customers globally and generates $1,700,000,000 in annual revenues. Building Cloudflare and leading its go to market is not the only thing that keeps Michelle busy. She's a board member at Atlassian, a fierce advocate for women in tech. She's been named a young global leader by the World Economic Forum, and Forbes recognized her as one of the 50 self made women. In our conversation today, Michelle talks about the importance of grit and how it has helped her to build such an iconic company.
Mahendra Ramsinghani:More importantly, she talks about the art of accruing trust with her cofounders. Despite many differences across sixteen years, they are still together, working hard, having fun, and their vision is still the same. How can we build a better Internet? Now as we tackle AI's opportunities and challenges, Michelle shares some novel ways about how Cloudflare is on the forefront of innovations. After all, Michelle has not just read Clayton Christensen's all time great book.
Mahendra Ramsinghani:She actually took a class with the professor himself during her days at Harvard. This is a company that will never suffer from the innovator's dilemma, and Michelle will tell you why. Let's get started.
Sid Trivedi:Michelle, welcome to Inside the Network.
Michelle Zatlyn:Thanks so much for having me. I'm thrilled to be here.
Sid Trivedi:Well, we wanna talk about a whole bunch of things, and Cloudflare will absolutely be in that conversation. But before we get into to Cloudflare and the amazing journey you've had, we want to start by talking about your early influences and how you even got into becoming a founder. You grew up in a very small town, Saskatchewan in Canada, and hopefully I pronounced that correctly. How did that early environment and upbringing in a rural town really shape who you are as a leader today? And did any of those early years influence, you know, your drive to eventually start a tech company?
Michelle Zatlyn:Yes. Yeah. No. Thank you. Yes.
Michelle Zatlyn:I I grew up in Saskatchewan, Canada. It's a province, and it's a pretty small province, about a million people across the entire province. And the city I grew up in was about 30,000 people. And so you don't find that many tech entrepreneurs coming out of out of where I grew up, but that's okay. That's okay.
Michelle Zatlyn:And I think where you grow up definitely shapes who you are as a person. And so as I reflect back as my journey as a founder and and kind of the connections to my upbringing, I definitely see strong connections to the power of community and the power of hard work. Saskatchewan's a farming community and our agricultural community. It's very cold in the winters. And so this idea of really had to work hard there both in the physical sense of having farmland and just doing a lot of things for yourself, but also the power of community.
Michelle Zatlyn:And I think that's actually been amazing lessons as a founder where today founders have to be able to work hard. Sometimes that's maybe the only thing that differentiates you. And so this idea of hard work never scared me of that grit, which I love that word, but then how important people are and relationships are. And so I actually think, it wasn't obvious in the moment, but looking back, I actually think, Saskatchewan was a great great, test bed for for being an entrepreneur.
Sid Trivedi:And was tech in any part part of that upbringing? Was there ever any kind of computers and tech, or when did that influence get started?
Michelle Zatlyn:Yeah. You know, I loved video games. So I had a lot of video game consoles, and then at some point, I wanted to design video games. So I was doing that with the computers. And so so, yes, my, you know, my parents were were were super open about having you know, I played a lot of games growing up.
Michelle Zatlyn:How about that? And, you know, this is, I guess, power of of these programs. But even, you know, my mom put me in junior achievement after school when I was in, like, kind of junior high. And these programs are it wasn't a tech company that we built out of junior achievement, but it was this idea of taking an idea, working with others, making it come to life, having a business plan tied to it. And I think just getting access to that was helpful.
Michelle Zatlyn:Having said all of that, Sid, at that point in my life, I thought I was gonna be a doctor. So I, like, liked doing all that work and all the projects and building things and shipping things. I love the satisfaction. But in the back of my mind, I was gonna be a doctor. So that was, like, all just extra credit sort of stuff for me.
Michelle Zatlyn:I really ended up kinda discovering technology. I mean, I was in I went to university in Canada, so at McGill, and I was in college when, like, the whole tech boom was happening in Silicon Valley. It was and I remember we got lapped. That's when we were getting kinda computers at school, and my sister was doing her MBA out in Silicon Valley. She was at Stanford at the time.
Michelle Zatlyn:And so I kinda got a taste of it more through her being here and, of course, reading in the media. But I was I was going to university at the time, and then the field started to burgeon more. And so so I definitely not tied to my background, but it wasn't like I had no idea. But it just was kind of it was it was just kind of exposed, but didn't really think that that was the one.
Ross Haleliuk:Michelle, you you earned a chemistry degree at McGill. So, I'm going to assume that was still the time when you were thinking about becoming a doctor. But then eventually, you went into marketing, you went into product management, then you did an MBA at Harvard and ended up starting Cloudflare. I'm curious, did you always plan to start a company out of business school, or did you have other plans at the moment when you realize that you're probably not going to be a doctor?
Michelle Zatlyn:So I like telling the story because I think there's I've met so many founders over my life, and there's a bunch of folks who, like, know they wanna start a company. And I, like, love those people, and I'm I'm almost envious of those people who, like, have this plan. And it's like they will stop at no end unless it works. That was not me, Ross, as you just described, where I was more about open to the opportunity. And I think that there's a bunch of folks in that bucket too where it's, hey.
Michelle Zatlyn:Don't know exactly what I wanna do and I'm open to different sorts of opportunities that present themselves. So I was definitely in the open to opportunities that present itself. So I did collect a lot of experiences. And actually, think career should I think actually some of the richest careers are where you collect a lot of experiences. And so in this kinda open to different opportunities, I tried a lot of different things.
Michelle Zatlyn:I tried different types of companies. I tried different types of jobs. Some of the companies I joined were growing, like, growth companies, and that was fun. There's others that were losing market share. You learn a lot in those situations too.
Michelle Zatlyn:I tried different roles. And so I actually was really open to a lot of different opportunities. And so in each one, I was just saying, what can I learn from this? I knew it was it was not where I was gonna end my career, but I was like, k. I'm here for a couple years.
Michelle Zatlyn:What could I learn from it? And so two things. I wanted to be a doctor because I really wanted to help people, and I really wanted to be a doctor because I think the science, you're using a lot of brainpower to solve problems. Like, I love that. Why I ended up falling in love in technology is for the exact same reasons, actually.
Michelle Zatlyn:You work with really smart people. You work on really hard problems together, so I loved that. And then the the second thing is is I love helping people at scale, and it turns out technology can help people at scale. And so fast forward to I didn't think I was gonna start a company out of business school, but I was open to that opportunity. And when this opportunity presented itself to work with Matthew Prince and Lee Holloway of saying, hey.
Michelle Zatlyn:Could we create a service that actually stops malicious actors online, make it better for everyone? The literally, litmus test to myself is would I be proud to be part of this company? And I said, wow. If I can make the Internet a safer place, a better place for everybody, I absolutely would be proud to be part of that. And that's kinda how the I traded in my my lab coat for maybe some more digital laptops, but gosh, couldn't be happier.
Mahendra Ramsinghani:And, Michelle, speaking of, you know, what can I learn from these opportunities? You once admitted that you knew nothing about cybersecurity as you got started. Now that requires a lot of courage, and and especially speaking of courage and gender, you know, women also struggle with challenges where they don't express themselves that boldly. Take us back to that time. Tell us, you know, how you got up to speed and what kind of things you did to adapt to this new world of Cloudflare.
Michelle Zatlyn:Yeah. No. I think I did say that once, and I kinda regret saying it because it keeps coming up all the time. And I just thought it'd luck. It's not the perfect message.
Michelle Zatlyn:And so it's so I was definitely not an expert in this field. And and so maybe the lesson learned for folks listening is I think sometimes opportunities present themselves and people decide not to take them because they're like, oh, I don't know enough about it. And I maybe maybe the the the lesson learned is, well, you should really challenge that assumption. And I think what was interesting in my situation is when we started to work on Cloudflare, I was not an expert on the topic of the subject matter. I just wasn't.
Michelle Zatlyn:But Matthew and Lee, my two business partners knew a lot about it. And it turns out that I brought different skills to the table. And so and I brought different skills to the table, and then I was able to learn a lot about the subject matter expertise. And so, you know, over time, I ended up learning a lot more about it. And now I would say I am a world leading expert even though I didn't start as one.
Michelle Zatlyn:And I think that this is one of those things where sometimes I meet founders or people who really wanna start something, and they only look for ideas or problems to solve in spaces they already know a lot about. And I think that's totally makes sense. I also think it's okay if you surround yourself with people who know a lot about it and you bring something else to the table, that's an okay path too. And I think that's maybe the, something that doesn't get spoken enough about and that's really that's the real insight that I hope listeners take away. That's why I told that story to encourage others, like, if you don't know everything better, it's okay.
Michelle Zatlyn:Still go for it. And actually, you know, even if you're not a founder, I think about that even going to work at a company. Sometimes it's like go work for the place where you're you could be proud to be part of that team, where you're gonna learn a lot even if you're not an expert if you really want. And and I think that that takes courage, back to your word, but I'm not the only person in the world who's done that. And so what I often end up saying is that curiosity or your rate of learning actually ends up being the superpower.
Michelle Zatlyn:How fast can you learn? And, you know, I'm I'm sick of fifteen year well, Cloudflare is turning 15 years old this year. So I kinda have this hindsight of I was the founder and and these questions are bringing me back to those very early days. And now today, we have 4,500 people. You know, we we did 1,600,000,000.0 revenue last year.
Michelle Zatlyn:We're publicly traded. I have this huge job, and I kinda think about me today. And I think that the rate of what you learn actually is the biggest superpower. If I could choose, hey. Are you a really curious person with grit, but you don't know everything about the subject matter versus someone who knows a lot about the subject matter but doesn't have the grit and isn't curious?
Michelle Zatlyn:I would pick the first person every day of the week. And so I think that's one of those insights that sometimes people forget about.
Sid Trivedi:I wanna dig in a little bit more on the Cloudflare origin story. You already talked a little bit about this, but take us back to 02/2009. The the world's dealing with a major financial crisis. There's a big question on whether people will have jobs. And you cofound Cloudflare with with Matthew and and Lee Holloway, and Matthew is your classmate at HBS.
Sid Trivedi:How did the three of you come up with the idea for Cloudflare? Was there an initial problem? Was it Matthew's project on you know I I think he had a project called project Honeypot that he was working on with Lee Holloway. Was it a class project you're working on at HBS? What was the the inspiration for this this idea?
Michelle Zatlyn:Yeah. No. It's so interesting. There's lot of things back from 2009 when we did start to work on Cloudflare that are really similar to today. There was, like, a lot of uncertainty.
Michelle Zatlyn:There was a it had just been after the financial crisis of two thousand eight. So it's kind of a heavy time in the market. Was just a heavy time. It was just heavy. And there was also a big shift happening, maybe not quite as shift as the AI shift we're seeing right now, but there was a big shift of the rise of cloud computing and mobile.
Michelle Zatlyn:So, like, that was definitely happening at the same time. So what's interesting is what we saw in the moment was back to my business partners, Matthew and Lee, they had co created something called Project Honeypot that tracks spammers online, and they were really proud of it. Matthew and I were going to school together, and he was just so proud of this project. He was always talking about it. And so back to being curious, at some point, I was like, hey.
Michelle Zatlyn:Just tell me what is this? And we had this exchange of there was a a part of the market that had a lot of web spammers coming to steal resources from them, and there weren't good solutions. And, like, the big was, could we create a service that uses the threat intel data, the threat intelligence data that we had at a project honeypot to create a service that actually stops malicious actor? That was the And we went to work on it at a school project. And so it became very clear that there was a problem upfront.
Michelle Zatlyn:We went and talked to these small business owners and we'd get answers like web spammers make me believe in the death penalty. Now that's a pretty visceral reaction. If you don't know anything about the problem set, you give somebody a survey, you get that answer back, you're like, wow. There's a real problem here. So so it's very clear that there was a problem.
Michelle Zatlyn:And then the next set of kind of the conversation was like, are you doing to solve it? And if you were a small business, there were no good solutions. Everyone was doing it kind of a Band Aid solution. So this was kind of the insight of, hey. Could we come up with a technical solution to solve it?
Michelle Zatlyn:And if you're a big company, you had big teams, and you bought a lot of hardware box, but hardware boxes cost at least, call it, you know, $25,000 and above. And if you're a big company, that makes sense. But for a small business, they weren't gonna pay that. That's a lot of money. And so it was interesting in retrospect.
Michelle Zatlyn:It was such a great timing. And I think sometimes when there's these huge shifts in the market, it's such great timing for new innovation to happen. And because of the rise of cloud computing, we basically said, hey. Let's create a cloud based service that almost like becomes a digital bouncer and a personal trainer for the Internet where it's, hey. We will make it we will protect all of our community from the online attackers and we'll share data like a neighborhood watch and we'll make it stop in real time and at the same time make it spiffy for all your legitimate users.
Michelle Zatlyn:And there was no competition for the the segment of customers of small businesses. There's just there there was no competition because there was nothing that existed. But then over time, the idea was like, but over time, we can use the exact same solution to help solve enterprises problems in a cloud based way versus hardware. And so it was a shift of this rise of cloud computing of saying, hey. We could become this integrated platform that allows organizations to manage be like the connectivity cloud and manage anything they need to stop malicious attackers online, but make it better for all the legitimate visitors.
Michelle Zatlyn:Let's start with this one segment of customers and over time move up to service everybody on the Internet. And that was a huge audacious vision that honestly we've had since day one. And it was interesting as Matthew and I thought it was awesome. We and Lee was thought it was awesome too. We're like, let's go do it.
Michelle Zatlyn:And some people who would meet would be like, this is awesome. Let's go. And other people would meet and be like, you guys are crazy. And what's interesting is when you're a founder, you're like, which one is it? Am I crazy or is it awesome?
Michelle Zatlyn:And it's hard to know early on because early on, you know, there's highs and lows 15 times in a day. Lots of things are going wrong all the time. I think today, fifteen years later, I feel really good that I'm so glad we took the plunge and decided to do it even though it was an audacious goal from day one, but we weren't sure it was gonna work and neither was anyone around us. And almost those are almost always the best businesses, the ones where it's like, I'm not sure this is gonna work, but if it does work, you're gonna create something very valuable. Actually, that's a really good litmus test for if you wanna set out to do something big of, god, I don't know if it's gonna work, but if it does, this will be huge.
Michelle Zatlyn:That's a good place to be. It's scary, but a good place to be.
Sid Trivedi:And I love your point around during the difficult times, that's when great companies are created. And for our listeners, just for context, like, 2,009, you had Cloudflare was founded, Uber was founded, WhatsApp was founded, Nutanix was founded. I mean, it was a very, very interesting time to to to be in the startup space even though it was so difficult.
Michelle Zatlyn:Yeah. And you have to have conviction. Like, there it was you know, it's one of these things where you when when when everyone else is not doing it, you really have to have conviction. And for us, we were, like, really curious about solving this problem. We really thought we we were onto something, and we just we had this we were like, we have to see where this goes.
Michelle Zatlyn:And so even though everyone's like, you guys are crazy. Grazing money is hard. You're never like, it's so hard. You kinda are like, well, we had each other. Like, we already had three people.
Michelle Zatlyn:Let's just keep going. Like, that's progress. Right? And and then and so we just kinda said we we kept going. And so you really do need to have the conviction because there's so many reasons.
Michelle Zatlyn:There were so many outs presented to us. But I think that's why some of the best companies get started there because it's like you the people who stick with it can really create something valuable. Now there's also, I think, bias to that. So that SACS, there's a bunch of things that started that didn't go anywhere. But just, you know, just to give the listeners a sense of how hard it was, that year, we raised some money from Benrock, and we were, like, one of the only tech investments that they made the whole year.
Michelle Zatlyn:So it's just like money was was not widely available, and it just was a it was it was a hard time, but we had real conviction. We were like, we're gonna go see if we can make this happen. And and gosh. I sometimes I think back, like, what were we thinking? But so glad that we we we we just didn't we had we didn't know any better that we're like, we have to see.
Michelle Zatlyn:There's just something inside of us. And I think it's back to this word grit of, like, okay. I have to see where this goes.
Sid Trivedi:On that topic of the three of you, you, Matthew, and Lee, Matthew's said this very publicly multiple times, but he said, we wouldn't have built a company without Michelle. She actually kept the trains running and made sure that we were doing something. You described a little bit of that in the in an, you know, earlier part of the session, but just give us a sense for kind of how did you divide up roles between the three of you? What was what were you responsible for? What was Matthew responsible for?
Sid Trivedi:What was Lee responsible for?
Michelle Zatlyn:Yes. Yeah. And so it's interesting. Like, if the people who knew Matthew, Lee, and I were like, oh, I like, I it's very obvious what each of you would be doing. But to the outside, it's not obvious.
Michelle Zatlyn:So it's a really good question, actually. And so I like the idea of a Venn diagram. I think that, like, that is back to kind of my geeky science, my bit math that I at least love with math and science. It's like the Venn diagram, I can think, is a great description for a founding team of we all covered a lot of surface area, but we had overlap. I think overlap is important for shared vision, and we trusted each other.
Michelle Zatlyn:And so Matthew is incredibly still to this day, incredibly talented on the strategy side. I mean, he's technical. He's a great storyteller. He understands strategy, and he has and he has this insane business background. And so he's really good at the vision, the strategy, almost like the 100 foot thousand foot view.
Michelle Zatlyn:It's like we're going there. And again, we we are ambitious company. We want to build something iconic. And again, back to when you started, this is his audacious idea. He, like, just lived in that all the time and could paint the best picture around it.
Michelle Zatlyn:So he was extremely good at saying, here's where we're going. Lee was the technical architect. He was the one figuring out how like, technically, how you're gonna architect this and testing web servers. And at the time, for anyone in the audience who's kinda technical at the time, like, Apache was the web server that everyone used, but NGINX was just emerging. And at the time, his then wife spoke Russian, and she heard about it on the Russian forum boards.
Michelle Zatlyn:And so he's like, hey. I'm gonna try NGINX. And he's like, wow. This thing is performing 10,000 to one compared to patchy. We're like, no way.
Michelle Zatlyn:Anyway, these little things that like little series of smart decisions that helped us architectural decisions that helped us in the early days make a lot of progress. So Lee was a technical genius behind Cloudflare making, like building this vision that Matthew would set out. And then I was really good at at making all the other stuff happen internally. And so it's this idea of, like, vision, innovation, and execution coming together. And, again, on day one, I didn't have, back to this point of I wasn't a subject matter expertise.
Michelle Zatlyn:Matthew and Lee knew a lot about it, then other the the next five people we hired knew a lot about it. But I was really good at, like, almost like the glue that made it all come together and saying, okay. If we're going there, first of all, it was fun to debate the the big vision and be a thought partner on that. Okay. If we're gonna do that, here's all the things we need to do to make it happen and the order we should do it in.
Michelle Zatlyn:Turns out that actually is an important skill set early on, you know, and and how we're gonna do it. What's it gonna feel like? And so this is one of those things where you really diverse teams are a better place to work and drive the better business results. And I think it's one of these things where we just covered a lot of surface area. And then every day, I was learning a ton about the subject and how we're doing it and spending time with customers.
Michelle Zatlyn:And then pretty soon, you're like, oh, wow. I know a lot, and actually, I'm adding a lot of value on that side too. But that's how it started. And so that's how it started. So we really covered a lot of different areas.
Michelle Zatlyn:Today, in case you're curious, fast forward early like, fast forward today, I run all of the go to market teams. So I spend a ton of time with our customers, our customer facing teams, and then our people team. And, actually, those are the things that I love. I love the people I get to work with and what's it like working at Cloudflare every day and then our customers experience. And then Matthew runs all of the product engineering, finance, legal report up into him.
Michelle Zatlyn:So it's actually today makes it's a little bit easier to understand, but early on, that's how it worked. And and, again, if you knew all of us, the three of us, those of people in the world who know all three of us, they're like, yep. That totally makes sense. But externally, it wasn't that obvious. So it was it was we made a really good founding team.
Michelle Zatlyn:You know, one thing I'll just say one thing because this actually doesn't come up very often and again for the audience if you if you're starting a company, especially because we had such different skill sets And that is a strength a source of strength, but it's actually harder for the first year because you just see the world very differently. Like we and and it was one of these things where, again, you don't know you're onto something. Again, 10 times a day, you're like, are we crazy or are we onto something? And you're not sure. And I think that's common for most early stage startups of like, oh my god.
Michelle Zatlyn:This is amazing, and we're going out of business, you know, flip flopping many times a day. Again, the the highs and lows. So if you're in that moment, I remember that being normal. It wasn't fun, but normal. That's just what it is.
Michelle Zatlyn:And there's been a lot of writing about it in the startup world. And so what was interesting is that first year where we were all committed to the idea, and there are certain things Lee cared about, like, getting the technical architecture, right, and obsessing over that and Matthew caring about the strategy and doing the right things and maybe, like, we gotta do all these things to make it all happen. There were like, that when it all aligned, it was awesome, but there was times where it didn't align. And so you really had to figure out, I don't understand why you care about that so much. And by the way, there's a thousand things to do and time to do a 100 of them.
Michelle Zatlyn:So it's not like you can sit down and have these conversations. And so I so while I think diversity is this huge strength of a founding team, it is also harder upfront. And so you have to kinda go through those cycles of those moments of uncomfortable where things are uncomfortable or tough. But if you get through that at the end, you're like, oh my god. I wouldn't go I I would have it no other way.
Michelle Zatlyn:There's no one else that I would go to that I'd that I'd start a company with because, wow, we got through all of that together. So And sometimes those uncomfortable moments is what bring people closer together both as founders, but even at companies. And I again, I think if you either are starting a company or you're working at a company or one of those uncomfortable moments, like, get through to the other side and then decide because it's almost in those moments that you learn the most about people. Even though you don't wanna be in the situation, it's almost like it's impossible to avoid them. So it's like, what can you learn?
Michelle Zatlyn:Do you get closer? I stuck it out, and now I have a different perspective than I did when I was in the tunnel. And so I think that's something that also doesn't get stuck spoken about a lot from about founding teams.
Mahendra Ramsinghani:You know, Michelle, as you talk about both what Matthew's role has been and continues to be as well as Lee's, what I find very fascinating is the way all of you have this mutual trust and respect for each other. I mean, here, Sid described how Matthew speaks about your role being sort of the glue. You speak about Matthew. I think this is also very rare of how the founding team has this immense amount of trust and loyalty and these deep bonds built with each other. Can you share a nugget or two on how can this muscle be built?
Michelle Zatlyn:Yes. Trying to think about what's a good how do you make that because, again, our situation will never happen again, but everyone has their own situation. What's some just good kinda lessons learned that might be practical? So I do think that there's these things in the moment where the Silicon Valley where we came to start Cloudflare, and we're a very global company today, is littered with stories of founders no longer speaking to each other, VCs and founders going to battle with each other, and boards and founders getting sideways with each other. And fifteen years in, I understand how every single one of those happen now because it's like in a stressful situation, someone looks the wrong direction in the board meeting and all of a sudden it spires off a thread that, like, sets into a set of, I don't know, situations that you were like, wait.
Michelle Zatlyn:Well, how did that happen? And so if you know, you know what I'm describing. And for those who haven't been there yet, once you're in it, you're like, okay. Now I understand what Michelle's saying. So anyhow, so it's so it's you just there you find yourself in situations you never thought you were gonna be in.
Michelle Zatlyn:And what you're gonna do in that situation, it's so easy to say ahead of time, but it's really actually hard when you're in the situation. There's, like, emotions involved and, like, when do you say something? When don't you say something? When do you when do you make it a big deal? When do you say, okay.
Michelle Zatlyn:Fine. I disagree and commit. Like, there's just, like, I'll like, there's tons around it. And so look. We were we're not perfect.
Michelle Zatlyn:So it's the bar is not perfection. I think one of the things that really worked really well for Matthew Lena is we really did have a shared vision of what we want Cloudflare to be, and we really felt like we were all in it together. That doesn't mean we didn't disagree. That didn't mean we didn't sometimes annoy each other, but we were like, we were all in it together. And there was no, god, if you do that again, I'm out of here.
Michelle Zatlyn:Like, there was never any of that. And, you know, I'm now married. And so I think it's kinda like marriages too, although I don't I don't know if marriage advice should get when I we need a whole another, section about that. It's just kinda like it's relationship. You treat people how you wanna be treated and that sometimes you're annoyed.
Michelle Zatlyn:Sometimes you have to let things roll off your back. Sometimes you gotta act like a like you're deaf. Like, there's lots of different things that you do to cope through it, but it for us, the north star was what's best for Cloudflare. And I think that that back to that's the best thing. And there have been tons of moments where in the moment, emotionally, might have been like, oh, I wanna say this or I get my words in.
Michelle Zatlyn:But then after the fact, you're like, actually, god, it just doesn't even matter in retrospect. Thank god I didn't say anything. So I think that that is I think maybe the ease like, in terms of instead of reliving our our moments, was just kinda like the lessons learned of what's in North Star? Do you trust each other? I've always trusted Matthew and Lee.
Michelle Zatlyn:And there's been many times we're back to, like, in that moment in the boardroom where someone looks at you a different way, like, we just we time and time again, we kinda made decisions that accrued trust didn't erode trust. And so when you are facing that decision, which you will, you'll feel like it's unfair. Sometimes you're put in a situation that you're like, this is so unfair that I have to even have an opinion on this. Make the decision that accrues trust towards your your business partners and your cofounders doesn't degrade trust because those are things that you like, regaining it if you you pick the degrade trust path is is basically, I think, a nonstarter. So I think that's maybe some of the lessons learned, Mahendra.
Michelle Zatlyn:I hear some I I I know the audience's audio, but I see some heads nodding. I I think there's probably some heads nodding on the other side of the audio.
Ross Haleliuk:Yeah. There most definitely will be. Let's go back, to the Cloudflare's early days. So in the Cloudflare's early days, there was a debate about whether the product was ready or not, and you basically told the team, just just ship it. Then Cloudflare ended up launching at TechCrunch Disrupt in in 2010, and and it won the competition.
Ross Haleliuk:You guys won, and sign ups took off immediately after that. Talk to us about that time. Talk to us about your decision to embrace the freemium model, which was very unusual for a security product, and also about, just how the this whole ship it strategy and the freemium approach, contributed to your initial early growth.
Michelle Zatlyn:Yes. Yeah. Well, so it's so interesting. The, like, just ship it mentality, like, a 100 Matthew Prince. Like, he's just, like, a masterclass at that.
Michelle Zatlyn:And so so lucky to have him as a business partner, as our CEO. And he really early on back in the very early days was, let's start getting customers using it and feedback. And I was more on the side of I was, not more. I was on the side of events of, oh, it's not ready yet, though. This is embarrassing.
Michelle Zatlyn:And and, again, it's back to the thousand places of the duke it out and debate it. It's like, No. Disagree and commit. Fine. Let's ship it and see.
Michelle Zatlyn:And when we shipped it and see, I disagreed and commit, but I was, like, embarrassed. I was so embarrassed, so embarrassed by what we were shipping. And it turns out Matthew was right. And the story I like to give is, or tell is we one of the things that the first version of the product didn't have was analytics. So we were shipping this thing, but it didn't really tell anybody what it was doing.
Michelle Zatlyn:So we were shipping a product that helped stop threats coming to our customers' websites and apps at the time, and we said we were gonna speed it up. And we were speeding it up, but we were one of the things that wasn't ready for this, you know, artificial deadline we'd put out there was the analytics weren't there. So I'm like, oh, so we're gonna give product our customers a product but not tell them what it's doing? I just thought that was really at the time, I was convinced that was a terrible idea. So this is again where, again, Matthew was right.
Michelle Zatlyn:I was wrong. We put it out there, and it turns out our initial customers are really technical. They had ways to measure it. So they were writing into us quickly overnight saying, oh my god. Thank you so much.
Michelle Zatlyn:I love being part of the beta. This was the first night my pager hasn't gone off in five years. I had a full night sleep. Or someone else sent us their server analytics from their server side saying, oh my god. I can see how much the caching is helping.
Michelle Zatlyn:Look at all this load you've taken off my server in just a few hours. So it was almost like our product didn't have analytics, but our our customers did, and I had totally missed that. It seems obvious now. I'm embarrassed that I'm telling this story, but these are things that weren't obvious in the moment. And so it's one of these things where it was actually a great lesson learned of actually getting it out there.
Michelle Zatlyn:And sure, would have it worked for financial institutions? Absolutely not. But they weren't the ones that we are looking for in the early days. And so it was one of these things that we let people self select in that wanna be part of the early product feedback and help shape the product road map. And so this idea of innovation, going fast, finding the right early adopters to help shape the product and get feedback, and then you can add in all the features after and kind of work your way up to folks who need it more fully featured to complete is a really great strategy.
Michelle Zatlyn:And so I was again, there's lots of parts of the story you forget, but this early on memory and so there's really two things of, like, picking a launch date or a date that you can't move actually is super motivating for a team because you're just like, you're gonna ship it. Otherwise, you just wait and wait and wait and wait. And so today, how that gets manifested in Cloudflare is we have these innovation weeks where we say, hey. This week, we're gonna do innovation week. And so our product and engineering team kinda say, okay.
Michelle Zatlyn:We gotta we have what are we shipping for innovation week? And, like, the innovation week dates aren't moving. They're set. So it's like, what? You're either in the innovation date week or you're not.
Michelle Zatlyn:Your thing is in or out. And it it really becomes, okay. What do we need to do to get done? What do we have to get done to be in for the dates? And it becomes this, like, nothing motivates a team like a deadline you can't move.
Michelle Zatlyn:And so I think, like, that's just because otherwise, the human tendency I find is to be wait, wait, wait, wait, wait until it's got enough. So we've kind of flipped it, say, here's the date you're either in or out. And and then we have several of these dates. And so it's been it was a good lesson learned early on, Ross, but a hard one, but a good lesson learned that I'm happy. So that's that's on the innovation side.
Michelle Zatlyn:And to to this day, we care about innovation, getting stuff done, small incremental improvements, getting it onto the hands. Because today, we have over 5,000,000 customers using Cloudflare. Like, we just have a lot. And so even on day one, if they don't all adopt something, if you get 1% of that, that's still a lot of people using it. And so it's like, how do you if our mission is to help build a better Internet, even if you're making it better for some small percentage, it's still a lot because Internet's a big place.
Michelle Zatlyn:There's a lot of people using it. And so we're constantly saying, get it out there, get some people using it, and then work our way up. And I think that's been a great secret to our success. I think the free customer is a whole other business strategy, we can talk about that next. But for us, I think Clay Christensen was an amazing professor for us at Harvard Business School, and he has a really famous book called the innovator's dilemma.
Michelle Zatlyn:If you are thinking about starting a company and you have not read this book, you should read it. It's really, really good. It's how how do you go compete with somebody who's already in the market? How do you carve out your space in a market? Even if you're a technical founder, I think you should read it even faster than someone who's not a technical founder.
Michelle Zatlyn:It's just like the business side we found very helpful. And so the whole point of Cloudflare was how do you open up the market? And opening up the market meant how do we go serve a part of the market that had no good alternatives at the moment? And at the moment, nobody was helping small businesses. We started there.
Michelle Zatlyn:And, again, over time, the small businesses didn't have big budgets or technical folks. We had to have the right price point. Free sounded like a good one. We needed a bunch of traffic to do things to build out our network and a lot of other things, and it became this business strategy reason of why we do it. Fast forward, we went public six years ago.
Michelle Zatlyn:And if you read our s one, we have a whole section of our s one of why do we why do we serve everyone, which is another way of saying why do we have a free service? And there's actually six amazing, like, strong business strategy reasons as why we have a free plan, and it really helped us build the company in a way that was capital efficient and smart in my opinion. And I would a 100% go back and do that again if I could if I was starting Cloudflare from scratch. And so those are those are kinda the answers to two of your questions.
Mahendra Ramsinghani:You know, that's a fantastic, you know, journey that you've been on. And now as you head up, go to market, Michelle, obviously, you started with the freemium package, and now you've moved up the stack in terms of enterprise. Now many startups struggle with these transitions or sometimes just fall apart. What were some lessons that you learned? What are some tactics that you used as you sort of moved up the enterprise?
Mahendra Ramsinghani:I'm sure today Wall Street has, you know, relationship with Cloudflare. And and how do you make sure that those are being sold well?
Michelle Zatlyn:Yes. Well, okay. So I'd ask if you're asking if you're a founder in this situation, I like, what I always like to I always find it really helpful to talk to those founders ahead of me. And I remember a few years ago, I was at, getting an an a nice I'm a Canadian, and I was getting a nice Canadian entrepreneurship award, and Stuart Butterfield was there. And and he, at the time, Slack was further ahead than Cloudflare.
Michelle Zatlyn:And and I remember him telling me I went to every time I meet somebody ahead of of me in the journey, I'm like, go and ask them the thousand questions and learn a ton from that. And I remember Stuart the time said something that really was exactly what I need to hear at the moment was like, we do it. His point he said was paraphrased. What I remember him saying was something like, oh my gosh, like and Slack was like the hot company at the time, like very hot at the time. It was before the Salesforce acquisition.
Michelle Zatlyn:Like, they're just it was a very hot company. And they were growing like a weed. The numbers were crazy. And he's just like, we are terrible at so many things. And I just was like, but you're winning and you're like you're the hot company.
Michelle Zatlyn:He's like, we are terrible at so many things. And so another way to think about that is you only have to get a few things right. And so to your point about what if you're a founder and listening to Mahendra's question around, hey. I've tried to go up market and it didn't work. We'll try again.
Michelle Zatlyn:Like, and again and again and again and again. Like, that's all part of it. And of course, try and do it smarter and better the next time and what did you learn? But, like, it's there's lots of things. I was talking to someone early at Salesforce and again, this person told me at the time about, oh, his exact what he shared to me at the time was Salesforce tried three times to go up into the enterprise before they got it right.
Michelle Zatlyn:I was like, really? Like, today, would definitely think of them as an enterprise company, but you kind of forget. You forget about these things in the moment. And so and and there's lots of other folks you meet through the days that you hear these stories. And so so number one is, are you actually solving a problem in the market for your customers?
Michelle Zatlyn:And that's why I love talking to customers because if they're like, you are making my life better and here's all the ways, it gives you the confidence to go try again of like, okay. It's worth all the hassle to go try it again and the hard work. And, oh god, why do we do it that way? Okay. Next way, let's do it this way.
Michelle Zatlyn:Oh, it worked a little bit better and whatnot. And then knowing other people didn't get it right all the first time either, it's kinda okay. And so I think that there's listening to customers being obsessed about, like, are you actually solving a problem for them? If you actually are solving problems, you can go you have more swings at the bat to figure out all these other things that maybe didn't work out the first time and just know that you're not the only company that didn't work out the first time. And I think sometimes we forget that part.
Michelle Zatlyn:So I think those are some of the things that I have taken away. And so as I think about expanding the types of customers we expand globally, I mean, I'm so proud that we are. We are a very global company, and we work with lots of we work with the largest organizations in the world today, governments. I love that as well as small businesses and developers. I think it's so cool.
Michelle Zatlyn:Like, I think it's really amazing. And anytime something isn't working, what we've really have developed at Clever, and again, this is as a family, you really have to develop it. This just doesn't happen, is to be a place where people said this didn't work. Okay. Why didn't it work?
Michelle Zatlyn:What's not working? What are we gonna do about it? And actually, if you can be a place where your team can surface this isn't working, okay. Why isn't it working? What's the plan to address it?
Michelle Zatlyn:If you can admit that something's not working, you can always build a new plan to address it. And and I think that that was not something that was obvious to us when we started Cloudflare. But as we scaled Cloudflare, that's actually maybe one of the best lessons I've learned. And having board members who are okay with that, who are like, oh, yeah. Great to know that didn't work.
Michelle Zatlyn:Glad that you have a new plan to try again because if you we we know it's not working and you're trying it a different way, chances are you're gonna be more successful that time versus hiding it. And I think, like, you asking yourself as a leader of a company or working at the company, is your company a place where you can bring things that aren't working? And then it's like, okay. What are we gonna do about it versus a place where it gets hidden? Again, I would rather be at a place where those things can get surfaced.
Michelle Zatlyn:Sometimes it's like, okay. It's not working, not important right now. Let's just leave it because, again, there's always more things to do than time to do it. But some of those things like, gosh. Thank god you're saying that.
Michelle Zatlyn:We gotta fix that right now. What are we gonna do about it? Get the right team together and do it. So those are some of my insights that I would share.
Mahendra Ramsinghani:I think it's a classic definition on grit.
Michelle Zatlyn:I love that word. Back to grit. I think it's a good word. I know it was it had a moment. It's kinda disappeared, but I think we should bring it back.
Sid Trivedi:We wanna talk a little bit you know, we we talked a lot about Cloudflare's origin story. Let's talk about Cloudflare today, you know, as a global company. Today, Cloudflare is the third most valuable cybersecurity company, just shy of 70,000,000,000 in market cap. So you're in a very different stage today fifteen years on. One of the biggest conversations in technology is around AI and how it's gonna impact the future.
Sid Trivedi:And on July 1, so beginning of this month, Cloudflare announced a one click feature, which allows its customers to block known AI web crawlers by default. And it basically also allows them this opportunity to pay per crawl to these, you know, AI web crawlers. I'm curious, like, what prompted that? How do you see Cloudflare's role in important issues like this, the the issue between balancing innovation with content creator rights?
Michelle Zatlyn:Yes. Yeah. No. AI. Well, I'm impressed we've gone this long without the word AI coming up.
Michelle Zatlyn:So AI is reshaping everything. I mean, it is as big as the invention of the Internet. Although, I think sometimes we our generation doesn't exactly know what that means. So they what I like to is it's as big as the invention of electricity. You know, most of us weren't alive when that happened, but it's like, oh, I could imagine it kinda started as this kinda spark.
Michelle Zatlyn:And now you think about, well, on a daily basis, what does electricity do for us? And I honestly think it's a great analogy for AI. It is it's a significant huge change, and we're early, early, early on. So it's, you know, ten, twenty years from now, it's gonna be vastly different, and and it's definitely not going away. So it's just like a big moment.
Michelle Zatlyn:And so anytime there is a big moment, it just creates huge opportunity as well as it's gonna cause hardship too. And so there's gonna be challenges tied to these big shifts, but there's huge opportunity. So I I am I'm, I know there's a lot of excitement and hype around it, but I think it's warranted. It won't all work out, but it is a big deal. It's here to stay.
Michelle Zatlyn:So so that's just on the AI front. On the on the on what we did on July 1, it's tied to that, but slightly different. And so what's interesting is the web has been changing. So the Internet's been around for thirty years. The web's been around, and we've really, like, as a society, really used it for the last twenty, twenty five.
Michelle Zatlyn:Like, it's become and it's become more important to our day to day lives. And if you think about kinda how the business model of the web has worked the last twenty years, this was, hey. Google, company called Google, went and searched invented crawl, and they would say, we would go to Google to find stuff, and then they would send traffic to the content providers. And so, basically, Google helped people find things on the web, and this idea of content creators could create things and get traffic, and there was kind of an exchange of the business model. What's happening with AI and the crawlers is that now more of that information is happening right in the moment.
Michelle Zatlyn:It's they're not actually sending the traffic back to the content creators. Well, it's kind of a problem. And maybe you don't feel like that's a problem today, but if you keep playing it out back to a strategy perspective, it's like, well, why would anyone wanna ever create content if they're not getting paid for or getting traffic for eyeballs if it just stays within someone else? It's like, doesn't make sense. And so it's if you look at some of the data, it's really crazy where, like, at first, basically, like, ten years ago, for every time Google used to crawl someone's website, they would send a visitor.
Michelle Zatlyn:They would refer a visitor back to that site. So it's kinda two crawls to get a visitor. That's a pretty good trade. You're like, that makes sense. Today, it's about 18 times they come crawl your site and then they send somebody back to your site.
Michelle Zatlyn:If you look at the AI crawlers, like, and again, whether it's Anthropic or OpenAI, and again, I love these services. I use them all the time too. Something like OpenAI is crawling your site 1,500 times, and the the data's coming back out in ChatGPT, and maybe they refer a visitor back once for those 1,500. I get it. OpenAI service is amazing.
Michelle Zatlyn:ChatGPT is amazing. It's awesome. But it's hard to see why the content creators would still create content. And then that puts the web at risk. Right?
Michelle Zatlyn:Like, that just puts the fundamental. And so and if Cloudflare's mission is to help build a better Internet, I was like, is there something here? And so fast forward, what we said is, hey. Look. It should be fine.
Michelle Zatlyn:The crawlers go crawl as long as the content creators want it. So more of a permission based approach versus versus by default. And so that's really what changed overnight. That if you're a Cloudflare customer, you can say, yes. I permit these AI crawlers to come to my site and take the content because I want to be in the models or no, don't.
Michelle Zatlyn:And if I if you do, I want to get paid for it. And so almost like a business model tied to it. So it's early days. I believe this is really important for the next thirty years of the web to exist, and and I think it aligns the interest of the content creators with the AI crawlers, with consumers. And there's gotta be a new business model saying, well, if you're building really valuable content and I'm using it for my models and people are using it in my product to get it, yes, you should get some share back for creating that.
Michelle Zatlyn:And so we were just in a place to both to give the visibility of both the threats that come to your site, but it's also, hey. Now here's the invisibility of the AI crawlers coming to your site and then deciding, do you permit them to come? And if you don't permit them and if you do permit them to come, do you wanna get paid for that in some way and helping create this new business model? So it's early innings. It's amazing to be part of the conversation and to be able to talk to both the AI companies and the content providers.
Michelle Zatlyn:But I do think it's really important that all these sides come together because we've learned a lot the first thirty years of the Internet, and we're it's not going away. It's only becoming more important in the world of AI. And so I do think there needs to be a new business model for the next thirty years or at least ten years so that we can keep a lot of the greatness of the web that we believe in while having these new services and products, flourish too. And so that's a little bit more of the strategy beyond that, and that that needs to be its own podcast with Matthew at some point. This is just, again, back to the strategy, the vision.
Michelle Zatlyn:He he's got so much to say on this topic.
Ross Haleliuk:Talking about the future and preparing for the future. Since Cloudflare's IPO in in 2019, the company has scaled massively. It it now has data centers in over 300 cities, more than, 4,500 employees, and almost 5,000,000 customers of each, like, I believe over over 200,000 paying customers. How have you approached scaling the organization and the leadership team, and how are you thinking about it looking at the next ten years for Cloud flare?
Michelle Zatlyn:Yeah. Well, yes. This is one of the lessons learned. People are everything. Everything.
Michelle Zatlyn:I mean, it it's it is people matter so much when you're building a company. Now there's somebody on this call list, though. There's definitely less listen listener thinking, well, I'm gonna build a company without employees, and and that is definitely possible too. That is absolutely possible too. But then you matter and then maybe you have a couple of cofounders and you're still people.
Michelle Zatlyn:So it turns out like the people are everything even in an agentic world. People there's something behind the agents, and so people still matter. And there's such a big difference between great and good. And I I, you know, I I just it's the same in anything. There's just some things in life where, like, this is just an an amazing hire and a good hire.
Michelle Zatlyn:And and then and then there's the bad. But, you know, bad, you just can't tolerate in a high growth company. But the as we've scaled as having the right people both at the company and the leadership roles, when that is when when that is in flow or working or vibing, I guess the word right now would be when when that is in vibe, you can do anything. You real like, you feel like you can do anything. And and when it's not inflow or not vibing, it just sucks up all your energy.
Michelle Zatlyn:And I think that it's it's something that, you know, I read a lot of the again, I I've I've scaled my business, and I've I've read so much. I've listened to so many podcasts. Hate to learn from those ahead of you, and this is like one piece of advice that always comes back. You know, like, my god. I've heard this so many times.
Michelle Zatlyn:Well, it's still in vogue because it's just so true. Like, you have to have the right leadership team and the right folks on the team who can set up to get stuff done because at the end of day, that's like what companies are. And so I think that matters a lot. And so just some some, I don't know, maybe lessons learned that some of my scar tissue that I can save from others is I do think that with a leadership team, they go through different you know, you you go through different versions of your leadership team, natural normal course of business. That's it's just they're all that's a natural normal course of business.
Michelle Zatlyn:You don't think of that when you start a company, but it is. The people you start the journey with aren't the people you're gonna end it with. And so really it's about how are you gonna manage it? So I think first one, being aware of it. Just being like realizing natural normal course of business, okay to have different levels of leadership teams or versions of leadership teams.
Michelle Zatlyn:And when your current version maybe isn't working anymore, how are you gonna deal with And I think being a place where I look at somebody like a Shopify where they talk about these three years tour of duties, where it gives them an opportunity to go back and say, hey. Are we signing up for another three years? Are you signing up for another three years? Actually, it's a really smart way to have, like, make it a conversation and make it a two way conversation and maybe a bit more human way to handle different versions of leadership teams and folks, within a company. So I actually think what Shopify did is a really interesting model that might work for some folks knowing that it's a natural normal course of business.
Michelle Zatlyn:And maybe it's these things where you're like, how do you thoughtfully make sure you have the right leaders at, like, at your company? And when it's time to say goodbye, how you're gonna do it? And and and again, there's lots of different flavors of it. You're gonna have to decide what you want for your company. And I think when you find a version that works, it's not it's never really fun saying goodbye to folks that you've worked with for a long time, but it does make everyone feel better about it.
Michelle Zatlyn:And then they leave and they end up being champions, and they're like, I'm forever a champion. I'm so proud that I played a role in that part of the company. And I think that that's great. And there's so many companies that have that legacy. And and I think at Cloudflare, we really strive to be in that bucket of just saying, hey.
Michelle Zatlyn:You you thank you for all your contributions. We wouldn't be where we are without you. Can't wait to see what you go do next, and you want them to go do amazing things. Right? You want a diaspora.
Michelle Zatlyn:That's amazing. And so I think that's something that's definitely come out. And then the second thing is just early on when you're a start up, you have to just get stuff done. Like, otherwise, you just don't exist as a business. But what's interesting is you scale and get bigger, you actually lose that muscle.
Michelle Zatlyn:And it's often because you bring in folks who have really great resumes, and you're just like, these people are amazing, and they're amazing at planning, and they put these project plans together and models that are, like, beautiful. You're like, these are incredible. But sometimes, not always, sometimes those people actually can't get things done. They just like build the plan. I'm like, okay.
Michelle Zatlyn:Did we do it? Oh, we haven't done it yet. Well, okay. I love that you have a big beautiful plan, but it actually has not made the business better today or made it better for our customers. Like, let's get going.
Michelle Zatlyn:And so, you know, I wasn't in that meeting and I don't know the story, you know, there's that infamous story about Elon Musk saying, like, get the shovel and start digging this afternoon. I kinda get it. Sometimes I'm in a meeting. I'm like, oh, I don't like, let's just get going. Let's just get going, and we'll learn more along the way.
Michelle Zatlyn:Because when you build a plan, there's all these assumptions, and it's just hard to predict the future. It's just almost very hard. You can have a direction, but you just don't know how everything's gonna play out. But when you're in the moment, you have more information, you're learning, and you can decide how to deal with these things that come up versus on paper. And so the second thing I would just say is a company's ability to get stuff done is in is is what sets great companies apart from good companies, and that doesn't just happen.
Michelle Zatlyn:Most things go to status quo where it's like no action, not getting stuff done. And so as a early stage company, you have to be able to get stuff done. Otherwise, you don't exist as a business. But as you transition to a business, keeping the sense of urgency, momentum, getting stuff done, shipping things, those are the ones that the the scale companies do really well versus the ones who I think end up languishing. And and that, the the, my experience is that takes a lot of energy to get a company to do that.
Michelle Zatlyn:But if you get that going, it just feels so good because then you attract people who wanna be doers and get stuff done and, like, find ways around the obstacles that come up versus the folks who are just talkers and advisers. And so so I love being a company of builders and doers, and and those are the people who do best at Cloudflare.
Sid Trivedi:We're getting towards the end of our conversation. In the last quarter, we wanna really talk about reflections and advice for founders. And, obviously, this is the fifteenth year of Cloudflare since its founding. And we've talked mostly about all the success, all the things that worked out and everything, you know, went well. And what many founders, particularly founders who are starting off, realize is there's all these ups and downs in building companies, and I'm sure that Cloudflare had lots of difficult moments.
Sid Trivedi:Could you give us a story, just one story, you know, where where something critical wasn't working out, and you really sat down and you said, this might be it. We might not make it. And how did the three of you go about overcoming that problem?
Michelle Zatlyn:It was so there's so many times that were hard and in the not fun category or might not like, the stressful the the stress of trying to build something. And I'll just tell a story where, you know, I'm very shiny and positive and happy right now. And, of course, that's part of my job is to tell these stories that are energetic and make someone feel like, if she could do it, so can I? And I'd rather be that person that just sits here and tells you all the hard things about it. But maybe maybe I should try that sometime.
Michelle Zatlyn:But I remember it was early on. It was four years into Cloudflare and somebody a professor from Harvard Business School was in San Francisco. We'd organized dinner. And again, we were we were so early. Like, I think we had a 150 people at Cloudflare at the time and we had raised money.
Michelle Zatlyn:And so things were going well, but I went to this dinner. I sat down at the dinner. I was not the happy shiny Michelle that I am right now, and I was like, I don't understand why anyone starts a company. This is just so hard. Like, I should definitely be working somewhere else.
Michelle Zatlyn:I'd be, like, less stressed and making way more money because four years into Cloud Vartoya, I was not making very much money. And I just was kinda beaten up. I was just tired. I was tired and lonely. And and I and now I understand why early stage founders are often depressed because it's just hard.
Michelle Zatlyn:And, again, it was four years in, three, four years in. And so I was at this dinner, and I thought I was being vulnerable in the moment. And, you know, you can't be vulnerable to to your team. And and maybe Matthew, Lee, and I had that relationship. But, you know, on a daily basis, you wanna bring that to work.
Michelle Zatlyn:You're there trying to solve problems. But I was at this dinner, and it was off the record dinner. And and I remember someone at that dinner who worked at a successful company was like said to me, Michelle, you can't say that. Like, you are literally a successful startup. You can't go around saying that.
Michelle Zatlyn:And I was like, well, that's how I feel. And so I and and so I'm telling that story a little bit right now because I think entrepreneurship has this amazing halo around it where it's so amazing to be it's almost, like, shiny to like, sexy to be a founder, and it's like you get treated so well and you hear all these amazing stories, and and it is amazing. It is the greatest responsibility and privilege I've ever had of doing and I love my job today. But, like, in the moment, three and a half years in, I did not think that. Like, I just didn't feel like that all the time at all.
Michelle Zatlyn:And and, you know, it's not okay to say that mostly because who do you say it to? If you're if you have a spouse or a girlfriend, boyfriend, they don't wanna hear about that. They just wanna hang out with you. You're already working a gazillion hours. They don't wanna hear you complaining about work when you come home.
Michelle Zatlyn:You can't say to your team. You can't say to your board. I mean, that's I mean, their job is to make sure that there's a that there's not a going concern. So being like, oh god. What am I doing?
Michelle Zatlyn:Like, that's that's like red bells to your board. And so who are you talking to now about it? Right? It's just hard. You can't say it to investors because who's gonna invest in you if you're like, oh god.
Michelle Zatlyn:This is just awful. And so so you kinda end up bottling it up. And while this is not a psychology thing, it's like, I don't think that's good either. So you gotta come up with some coping mechanisms and kinda keep going and find the good. Anyhow.
Michelle Zatlyn:So anyhow, so I sit here today loving what I do, but there were so many moments that were hard and not even a moment where I'm like, I'm like, I'm gonna go to business. There's just moments where I'm like, it just was hard three and a half years, four years long. Like, it was just like a lot of sacrifice, a lot of commitment. And while you and you're in it, it's hard to get out of it. Like, you just like, at that point, you're not walking away.
Michelle Zatlyn:You're in it. You So gotta just keep going. Now on the other side of that, thank god that I didn't walk away. Like, I'm having the time of my life, and I love it. And I feel like it's been the greatest thing that I've ever been able to do.
Michelle Zatlyn:And I think today, someone was telling me I went out for with some girlfriends the other night, and she was like, oh, yeah. Type two fun. I was like, what's that? So, well, type one fun is when you're having fun in the moment, and type two fun is, like, in the moment, it's hard, but after the fact, you're glad you do it. I'm like, start running a company successful or not is a little bit more like type two fun.
Michelle Zatlyn:And even the ones that don't work out, I think and again, most companies don't work out. Even ones that don't, I think most people are glad that they did it because they learned a lot and met people, and you almost stretch and expand in ways that you never thought were possible. You never quite go back to the same shape again. And so I think it's a lot of type two fun in startups. We had a lot of hard moments of losing your largest customer.
Michelle Zatlyn:You you're making a key hire, and early on, it's all about getting key hires, and they accept it. And then they don't show up to work when they renege, like, the eleventh hour. Like, the day before their start, you've already told your board and your employees, and you're just like, what? And you thought, like, they were gonna be this thing you really needed at the moment, like, the your lifeline you really needed and then, like, all a like, my god. Where are we?
Michelle Zatlyn:Gotta restart. Or we we got served a national security letter when we had 30 people by the US government and part of it was to hand over customer data that we really pushed back against. And part of the national security letter is you can tell people about it. So we were 30 people. Like, we were not equipped to deal with that.
Michelle Zatlyn:Today, sure, we had the networks, but, like, most people thought we weren't gonna exist as a company at 30 people. We were nobody's. Like, it was just like, what? And we had to go navigate this really scary thing. And, thankfully, the EFF partnered with us, and that ended up being a positive ruling on our side.
Michelle Zatlyn:But, gosh, that took that in the moment, it felt like we were going out of business. And and, again, and it's these are things that you have to wear on your shoulders as a founder. And I think I am so lucky that I had cofounders that we were able to go through those together. Matthew and I have often said I could not imagine doing this by myself. I although I know lots of founders do too.
Michelle Zatlyn:So hats off to the solo founders because, really, it's amazing. At the same time, having cofounders that you don't trust or don't wanna be with in those situations, I think, really do break up the relationship because they are very stressful. They really push you to the max. And I think I think maybe the lesson learned is even though we are a huge success story, we had those moments. And I don't wanna say find the joy in the heart in those moments because that's maybe a little bit too cheesy, but it's like you do learn a lot.
Michelle Zatlyn:And if not you, someone else has to make that decision. And some professional operator you hire isn't gonna make a better decision than you in that situation because you care. And so just like lean in, do the best you can, go forward, and keep going. And if you add up do enough of the right things, it forgives the things that you get wrong. And so it's a little bit back to Stuart Butterfield.
Michelle Zatlyn:You just gotta get a few things right to build a successful company.
Ross Haleliuk:Michelle, Cloudflare sees the whole of the Internet. Given that kind of visibility that almost probably no other company has, from your vantage point, what are some of the emerging opportunities or problems in cybersecurity, Internet infrastructure, or even beyond tech? Like, what is changing, and how is the future shaping up that you are excited about and you would encourage aspiring entrepreneurs to tackle?
Michelle Zatlyn:Well, I I know people and developers are not done inventing the future. So customers' problems don't if you go talk to a company, they have so many problems left to be solved. And if you go talk to the entrepreneurs, there are so many things they wanna build. And now with AI, all the new tools and how to do it, it's like, again, it's a it's a little bit of a noisy time because it's hard to know what's here and what's not gonna stay here, but it's an exciting time. And so I do think that there's a lot of problems left to be solved.
Michelle Zatlyn:On the cybersecurity front, unfortunately, there's still tons of threats. I mean, an AI is only gonna help accelerate that, and so you need really great modern day defenses that that almost like fight AI with AI defenses, and Cloudflare is doing part of that. But it's cybersecurity is a massive field. There's so many other parts of that of that of that ecosystem that an entrepreneur was looking for a problem to solve today would be able to come up with and be like, oh, I'm gonna go do that. And so so I think that there's, the the the future is not quite here yet.
Michelle Zatlyn:So that creates opportunities for the builders and the dreamers as I do spend a lot of time talking to our customers and you go talk to them and they're all looking for better ways to do things with less that will that they can scale with and be flexible for the next decade. And so I can't wait to see what we all create as the future and and, you know, I think that that's one of the reasons why I love this industry is you gotta stay curious. You gotta you gotta keep learning because it keeps changing every single couple years.
Mahendra Ramsinghani:Thank you, Michelle, from the bottom of our hearts. You could have saved lives as a doctor, but instead, you're now protecting 5,000,000 customers globally from the bad guys. And even as AI starts to reshape the landscape, you are helping protect the content creators from the modern day crawlers. Your fifteen year journey is nothing short of phenomenal, and it's inspiring founders everywhere. We do hope that some founder somewhere in this world is listening to your story and getting ready to start her own company.
Mahendra Ramsinghani:Thank you, Michelle.
Ross Haleliuk:Thank you for joining us Inside the Network. If you like this episode, please leave us a review and share it with others. If you really, really liked
Mahendra Ramsinghani:it and you have some feedback for us, wrap it on a bottle of Yamazaki and send it to me first.
Sid Trivedi:No. Don't do that. Mahendra gets too many gifts already. Please reach out by email or LinkedIn.
