Power to the Product

Salesforce Ventures

August 11, 2021

Across the cloud ecosystem, product leaders are constantly considering what customers need now and in the future. But how exactly do companies harness user insights to build top-tier products? From GTM strategies to weaving in feedback to drive product innovation, Ali Ghodsi, CEO of Databricks, Amit Bendov, CEO of Gong.io, and Neha Narkhede, Co-Founder of Confluent, break down how they build customer evangelists and continue to refine and adjust product strategy to drive sustained growth.

Speakers

Ali Ghodsi, CEO of Databricks, Amit Bendov, CEO of Gong.io, and Neha Narkhede, Co-founder of Confluent

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Transcript

Ali Ghodsi: Hi. I’m Ali Ghodsi, co-founder and CEO of Databricks.

Amit Bendov: Hi. I’m Amit Bendov, co-founder and CEO of Gong.io.

Neha Narkede: Hi. I’m Neha Narkede, co-founder, former CTO and board member of Confluent.

Ali Ghodsi: Hey, everyone. Super excited to be here and have a conversation with you, Neha and Amit. Thanks for being part of Cloud100. I’m really curious to hear more about your thoughts around strategy and innovation and the products that you all have helped build. But before we start, I’m curious, what book has had the biggest impact on your approach to leadership?

Amit Bendov: For me, it’s “Mindset” where Carol Dweck discusses the power of having a growth mindset or a fixed one in really all walks of life. And it really resonated with me as it aligned very closely with the values I grew up with, which helped me take the leap to start Confluent and also actually to overcome my fear of the open waters, to learn scuba diving. But really as a leader, it has helped me think about motivation and influence people to overcome obstacles and really keep growing.

Ali Ghodsi: Oh, that’s fascinating. I think that’s also Satya Nadella’s favorite book and he made everybody at Microsoft read it. So that’s awesome. I really like that book, I have to say. And Amit, what about you? Do you have a favorite book that really influenced your leadership style?

Amit Bendov: It’s tough. There is a ton. I read hundreds of books earlier in my career, but if I have to pick one, it’s probably The Warren Buffett Way. It’s not necessarily a particular book. There are quite a few, but I think it was eye opening for me at first that you can run an empire with just five people, like Berkshire Hathaway, with just sort of a small company. It shows the power of delegation and having sound structures and culture underneath, and there’s many municipals, like don’t do anything you don’t want to read about in the headlines tomorrow, and how you run a business. I think it’s incredible. Super influential for me.

Ali Ghodsi: So, Amit, I’m actually super curious. Speaking of leadership approach, you’ve talked a lot about listening and the importance of that, even on product strategy. So I’m curious if you could tell us a little bit more about that.

Amit Bendov: Yeah. It is important to listen. A common mistake that people do is assume that they know. And I think humility is key to innovation. Just come with an open mind. Don’t assume that you know. Don’t come up with premature ideas. It’s listening to the customers, listening to sometimes what’s not being said and to implicit needs versus explicit desires. We talk with customers. We also happen to record the conversation with users. So then we can come back with data. It doesn’t have to be words. It could be numbers and research. But we always go to a customer’s needs, whether they’re explicit or implicit.

Ali Ghodsi: That’s interesting. So at Gong, you actually listen to customer conversations, right? How does Gong work a little bit? Could you tell us a little bit about that? I find it super fascinating.

Amit Bendov: Gong is a system to really understand what’s happening with customers, or they’re like customers or users. It taps into conversations. Could be like emails, Zoom calls, phone calls, any channel. It uses natural language understanding to mine insights at a scale. So if you want to know like competitors, people will talk about that feature or some other features or the new product launching successfully. Before Gong, you’d have to go interview salespeople or some customers. Now, you can know almost in a second day if a product launch is being successful and how customers feel about your product.

Ali Ghodsi: I see. And are you using AI to do this? Or how do you actually listen to the conversations?

Amit Bendov: Well, it is AI. So to understand what questions people are asking, what their sentiment about a certain product or a certain competitor, what’s working with the sales process, how is our customer success experience reflecting the way the customer responded. So it does understand quite a bit. It’s almost like magic. Obviously, you could do the basic stuff, like listen to keywords — so product names, competitor names — but it comes with higher order things, like what are the action items, what’s the engagement like on conversations. In a way, it’s very easy to understand.

Ali Ghodsi: That’s awesome. I wonder what it would say if it listened to this conversation. So the data is actually super important for that then, I guess. I’m curious, Neha. I mean, you started a company that’s focused on data and data movement and data in motion. Can you tell us a little bit about Confluent and how it started?

Neha Narkede: Yeah. Absolutely. At Confluent, our mission is to empower organizations, like all the way from Goldman Sachs, Intel, Capital One, to put their data in motion and harness value from their data in real-time to create new products, new customer experiences. And we started this journey by creating a really popular open-source project called Apache Kafka and then later transitioning to providing both a cloud product and an enterprise software offering to essentially help organizations unlock their data and put that in motion.

Ali Ghodsi: With Kafka and now lots of competing sort of efforts around that, you basically created the category. Did you know that you were creating a category when you were at LinkedIn? Or is that just something that happened? Other people who are starting companies and they want to create the categories just like you did, what can they learn from you?

Neha Narkede: Yeah. I think the reality is when we started, we observed that existing data infrastructures just do not support a continuous real-time flow of data. And we traced that back to a fundamental architectural flaw in how systems worked. And actually creating something like Kafka wasn’t really the first step on that journey. The first step was to hack together existing systems to see if we could just make them work. And when we realized it was more of an architectural flaw, that is when we took a step back and really envisioned this world where the whole foundation of how data would move and be captured in a company would change. And we envisioned that as essentially Kafka, that could fundamentally rethink of data as something that moves rather than something that rests and then occasionally moves around. And I think fundamental to category creation has been capturing the love and the mind share of the user, in our case developers. And that along with creating a category-defining product, I think goes hand in hand in really doing that, and not to mention that it is a 10-year journey.

Ali Ghodsi: So in some sense, just focus on your user persona, the developers and the problem you wanted to solve that there weren’t anything good out there and just solve that really, really well, and then you then happen to also create a category along the way.

Neha Narkede: Part of telling the story, which is equally important in category creation.

Ali Ghodsi: So Amit, I’m curious. In the CRM space, there is like this 800-pound gorilla, Salesforce. Super successful company, been around…Huge. How do you carve out space for yourself in sort of among the companies in that space?

Amit Bendov: We created a new space. It does not replace CRM. It works like the CRM. So CRM was built for the leadership team, based on customer-facing people and sales, customer success, support, filling in data and forms. Gong, the first application focused on the customer-facing people. They absolutely love it, because it just does everything automatically. Gong just taps into conversation and then it can mine information from there without people having to fill in forms. And it does a lot for them. It gives them memory and it gives them insights on how they can be better with customers. And our net promoter score is almost always in 70, which is insane for an enterprise product. It’s a consumer-grade NPS. It’s higher than the iPhone in 2008. So by focusing on that persona in addition to leadership, that really helped us drive new growth. It’s a new kind of system that doesn’t take away from anything else.

Ali Ghodsi: So you have awesome products and you focused on the problem and the end user and telling that story, but we also have to sell the software. So I’m curious. Since Atlassian came on the market in the early 2000s, I couldn’t hear the end of it: “Hey. They didn’t need any salespeople. It was product-led growth, the product-led everything. And you don’t need to rely so much on market and sales.” And I’m curious about that interplay and what you guys think about it. So maybe, Neha, you can go first.

Neha Narkede: Yeah. I think with our cloud product and community downloads, Confluent has a very strong self served option model. Many prospects are in their earlier adoption stage before we ever engage the sales team. But a product that lends itself naturally to self-served option is a good fit for building a product-led growth business. Open-source software has been a good example of that as we’ve seen from the success of Spark Databricks and Kafka Confluent, but also another notable one has been self serve freemium offerings that allow you to swipe a credit card and just experience the product, like Snowflake Atlassian. But I think what’s less talked about is the art of layering on a sales sort of touchpoint, then enterprise go to market motion on top of the ground swelling, that a product-led go to market motion creates. And I think that’s a critical step on the path to building a multi-billion dollar company, which is really not only to build a bottoms up adoption model, but to layer on the right involvement of customer success and enterprise sales to really maximize the value from the offering.

Ali Ghodsi: Yeah. That makes a lot of sense. And I’m curious. Gong must have an opinion on this, because maybe we should all just be using Gong and we can automate away a lot of that sales process.

Amit Bendov: Well, I think the product growth is fantastic. Not every product lends itself to this. So the thing is in how complex it is to understand. A complex financial software is hard to buy, but something like a Kafka or a Databricks or Atlassian is fantastic. And our goal isn’t to replace salespeople, but just take away all the stuff that they hate doing, like filling in forms, opening their managers, committing their forecast and all the stuff that nobody loves but they’re forced to do every day.

Ali Ghodsi: But certainly the cost of sales and sales and marketing must reduce if you use Gong, no?

Amit Bendov: Yeah. Absolutely. First with product-led growth and with Gong, you could probably cut it by half. You take away half of what people do, which is not interacting with customers, it’s just the hateful stuff, that’s a huge saving. You ramp up time, increase quotas. The nice thing is it’s easy to solve. Those are some of the stress points of that profession that may be notorious. There are movies about that cutthroat environment. All of that is not really necessary. You can make these fun.

Ali Ghodsi: Databricks was the same for what it’s worth. When we started, we had Apache Spark, the open-source project, and it had just gone viral and there were so many downloads, millions of people worldwide. And we started selling to small, medium enterprises, or small and medium businesses mid-market, but eventually to really move up and get those much bigger deals for the company and get the revenue growing significant, double, triple digit, millions, you kind of have to have an enterprise sales force. That’s what we learned, because enterprises buy in a certain way. They have a procurement department. Lots of people need to approve the budget. So eventually, it turned out that’s really to unlock that usage in the big enterprises, we had to layer on sales and marketing, but you still need great product. And the more you product-led, the easier it’s going to be for people to sign up and try it off and trial it. So you kind of have to do both.

Amit Bendov: 100%. I got to ask you, if you don’t mind. 28 billion? I mean, that’s insane. It’s almost over 100 times from when you started. Teach me. How did you do that? What drove that innovation?

Ali Ghodsi: Short answer is luck. But if you want to really go back, I think we took a few bets and those bets were kind of out there. I think you all did the same. That’s how you created the categories. And we bet on the cloud. Wasn’t obvious in 2012. We bet on AI. AI wasn’t known at the time. People thought of AI as robotics. And machine learning wasn’t widely used. And we bet on open-source. And those bets weren’t obvious. And most people told us, “Ah, that’s not going to go anywhere.” And it turns out those were the right bets. And eventually the market came there. I think that’s the way you build a great business. If you’re doing what everybody thinks is obvious and it’s the right thing to do, then what prevents the really big guys that you’re competing with to do the same? And then you can’t grow.

So we kind of got five, six, seven years to build a cloud product, figure out ML, figure out open source monetization when everybody else was like, “Those are small markets. They don’t matter.” And by the time we were kind of ready and the market came there, we had that head start. So it wasn’t that easy to catch up for the really big companies. So I think taking some bold secular bets and hopefully being right about them and that’s where some element of luck comes in.

Amit Bendov: Yeah. You’re being modest. This isn’t luck. This is smart. Incredible. Incredible, inspiring story.

Neha Narkede: I agree. So on a completely different topic, all our ways of working have been upended by the events of 2020, but some businesses have navigated that transition really successfully. I’m curious to learn from you guys. Amit, to begin with you: What technologies or tools or cultural transition did you have to put in place to ensure that a consistent spirit of product innovation was promoted while working remotely?

Amit Bendov: Well, I mean, that’s a great question. Obviously, like a lot of companies, Zoom and Slack, it’s kind of like a table stack. We just communicate, communicate, communicate. So we want to make sure that everybody’s connected. It was stressful at the beginning and still there are parts that aren’t fun. I mean, we’re doing very well as a business and I’m sure most of you are, but it was stressful. It’s just crazy times where we have new hires out of college that not only didn’t meet anybody, never worked at an office, don’t even know what an office looks like. Maybe from TV. So we use Zoom and Slack to communicate frequently with everybody. We use this little thing, Donut, that gives people out random coffee, which is great. And from a product, obviously, we drink our own beer. So we use Gong a lot to communicate, both with customers and with users. That really kept everybody connected. So people can immediately. If someone has a challenging conversation in there, they’re in Florida, and someone from California within three hours can chime in and help and win as a team together. So that really helps keep everybody together. But that’s us.

Neha Narkede: Yeah. I completely agree. And not just teams, but we also learned that enterprise sales can be done over Zoom as well, which is something that nobody ever thought was ever possible. But now we all know we could cut down on some travel budgets.

Ali Ghodsi: Yeah. I think good hygiene. Those are things we should all be doing, but now we have to do them well. As you said, Zoom, Slack, but I think meeting hygiene, which means make sure that the meetings have a good agenda, make sure you have good summaries, make sure that you have good written communication in the company, so that people that are on different phones or at home or couldn’t attend the meeting can read up on stuff and it’s clear. So I think those are things that everyone should do anyway, but I think it becomes more necessary as you go into this work-from-home environment. But I’ll tell you this. This is our first week back in the office here. And I step out and I talk to a lot of the engineers who just, as you said, for the first time in their life, they’re coming into an office, and I kind of get this AB test between how things have been in the last year and a half and meeting people in-person. It’s pretty amazing, I have to say. I forgot how powerful it is to just stop by someone’s desk and say, “Hey. Who are you? Oh, awesome. Welcome to the company. What do you work on?” And they’re super excited to tell you. I think that was really missing in the last year and a half. So I look forward to that. But I do think it’s going to be a hybrid world, where we’re going to have some work from home, some in the office. And we frankly don’t know. We’ll learn as we go into this next sort of episode.

Amit Bendov: Neha, what do you think?

Neha Narkede: I think we’re entering in a hybrid world and I really am excited about that. But while some parts of getting access to global talent is really exciting, other parts of being able to meet people face-to-face and really connect with them is really essential. And I think this hybrid world is the new path forward.

Amit Bendov: Absolutely. I love that you’re in the office. I’m envious, Ali. Just 40 people. It’s incredible.

Ali Ghodsi: Yeah. And I think you could see the energy also from them as well. So I think this is something that I think we’re going to relearn how important that was. And I think we probably over-rotated a little bit.

People thought, “I don’t need an office,” and people, “I can hire anyone anywhere and this is going to be amazing.” But I think there are also a lot of advantages to the office. So it’s going to be some kind of hybrid that we learn. This has been an awesome conversation. I just want to sort of wrap up and ask you each, if you look ahead, when it comes to product innovation, what technology topic do you think more people should know about that would further your company’s mission?

Amit Bendov: If you look at Google versus Yahoo, Yahoo was a human-created system. People would put the top 12 pizza joints in San Francisco and Google said, “Forget it. We’re going to index the world’s information automatically.” It’s something 100 times more powerful and nobody needs to do anything. Gong is doing the same thing over CRM. It’s a new system. It is an autonomous application that uses AI to kind of capture the information from the aether without anybody having to lift a finger. There are other applications that are actually more like Yahoo’s, with a curated system, in healthcare, in HR, in other areas. And we believe this is a next generation of computing and applications.

Ali Ghodsi: That’s awesome. And Neha, what about you?

Neha Narkede: Yeah. I think, no surprise there. It is data in motion. At least two companies here focus on different parts of that equation. But yeah, Apache Kafka is used by 70% of the Fortune 500, but many are still understanding the impact of data in motion to their businesses. So there’s such a large opportunity ahead of all of us here, because organizations that can powerfully harness their data, whether it’s analytical, contextual, intelligent, moment by moment will be the ones that create innovations of the future. So I really think that technologies like Kafka, Spark, Confluent, Databricks and many more are really just a starting point and there’s such an exciting path ahead of us to truly innovate the core infrastructure that companies build around.

Ali Ghodsi: I feel, for me, if it was something I would say, data and AI and combining data with artificial intelligence or machine learning in enterprises, that way they can sort of build the future and disrupt whole industries that they’re in. I think I’m excited about that. And I think people are only realizing that we’re just scratching the surface of that and it’s going to have a huge, massive impact on everything around us.

So I’m excited about that. So this has been an awesome conversation. Thank you so much for all joining us here at Cloud100.

Neha Narkede: Thank you. Thank you, Ali, for leading us.

Amit Bendov: It’s a real pleasure. I had a blast.

Neha Narkede: Likewise.

Ali Ghodsi: Thank you.