How did Cloudflare get its first customers and servers?

In its early days, Cloudflare relied on word-of-mouth and a community appeal to get users for its beta product. They also famously acquired initial servers by asking their open-source community members to donate unused hardware.

What is the 'sharks vs. mosquitoes' analogy in business?

The analogy suggests that while 'sharks' (big, obvious threats or goals) get a lot of attention, 'mosquitoes' (small, numerous, often overlooked details) like hiring great people and solving customer problems are far more critical to a company's success.

Why is team composition crucial for co-founders?

Successful co-founder teams often have complementary skill sets, cover a wide range of responsibilities (developer, operator, storyteller), share the same vision, and fundamentally trust each other. Clear roles prevent conflict.

What's the importance of humility regarding company titles?

Adopting a 'company first' approach by downplaying or eliminating titles initially, as Cloudflare did, fosters humility and attracts individuals motivated by the mission rather than status, allowing titles to be earned over time.

How does diversity contribute to a startup's success?

Diversity in background, language, and experience enriches a product and provides a more unique perspective on the world. It helps a company avoid groupthink and assumptions, leading to more innovative solutions.

Is it better to be an expert or a novice in a new industry startup?

Being an adjacent expert or even a novice can be an advantage because it encourages questioning assumptions and avoids charging into industry norms (like bandwidth costs) that might be standard but not necessarily optimal.

How should startups approach fundraising and investor selection?

Prioritize investors who align with your long-term vision for the company, even if it means accepting a lower valuation. Trust and the quality of the board relationship are more important than just maximizing immediate stock value.

Key Moments

Michelle Zatlyn and Matthew Prince at Startup School SV 2014

Y Combinator

Science & Technology3 min read29 min video

Oct 14, 2014|10,360 views|96|4

SUS2014 Startup School SV 2014 Y Combinator YC Michelle Zatlyn Matthew Prince Startup School

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Key Moments

TL;DR

Cloudflare co-founders share startup lessons: build a strong team, focus on core problems, and choose investors wisely.

Key Insights

A strong founding team with complementary skills and shared trust is crucial for startup success.

Focus on solving fundamental, unglamorous problems for customers rather than just seeking press.

Momentum is a startup's greatest asset; prioritize making progress, even with an imperfect product.

Hiring decisions and company culture, including the use of titles, significantly impact team dynamics and talent acquisition.

Diversity in the founding team and broader organization leads to richer perspectives and innovation.

Choosing investors based on aligned vision and trust is more important than solely maximizing short-term valuation.

THE ORIGIN STORY AND CLOUDFLARE'S MISSION

Five years ago, Michelle Zatlyn and Matthew Prince found themselves in identical seats to the audience, embarking on the creation of Cloudflare. Their mission was to build a better internet, a goal they are actively pursuing by providing services that make websites load faster, protect them from cyberattacks, and ensure availability through load balancing. Today, Cloudflare boasts two million customers globally and serves as a 'Cisco as a service', demonstrating significant growth and impact.

THE IMPORTANCE OF COMPLEMENTARY CO-FOUNDERS

Cloudflare's success is attributed to a founding team with distinct yet complementary roles: one builds the product (Lee Holloway), one handles operations and execution (Michelle Zatlyn), and another tells the company's story and assembles resources (Matthew Prince). This division of labor, built on trust and a shared vision, is presented as essential. Conflicts often arise from unclear roles or a lack of fundamental trust, highlighting the need for co-founders to cover a wide range of skills without significant overlap, fostering a unified front.

PRIORITIZING PROGRESS OVER PERFECTION

Early in Cloudflare's journey, the team prioritized shipping a product, even when it was imperfect. Their initial beta release famously took down all ten test websites, a stark contrast to their value proposition. However, by iterating quickly and fixing problems based on user feedback, they gradually improved. This approach, and the remarkable retention of early customers (many of whom are still users), underscores the principle that momentum and continuous progress are paramount for startups, especially when competing against established players.

CULTIVATING A STRONG COMPANY CULTURE AND HIRING STRATEGY

Cloudflare emphasizes practical problem-solving and operational excellence over superficial accolades. The founders initially eschewed formal titles like 'Vice President' because they hadn't yet earned them through hiring and firing experience. This decision set a precedent for humility and attracted individuals driven by the work itself, not titles. The company actively seeks diverse talent, recognizing that different backgrounds and perspectives enrich problem-solving, product development, and the overall understanding of the global market.

THE STRATEGIC ADVANTAGE OF NAIVETE AND FOCUS

The founders suggest that a degree of naivete about an industry can be an advantage, preventing founders from being overly constrained by existing assumptions. Cloudflare benefited from not being experts in web infrastructure initially, allowing them to challenge industry norms, such as not charging for bandwidth in the same way competitors did. Pursuing large, impactful problems that require significant effort, rather than trivial ones, is key to making a real difference and attracting top talent motivated by challenging technical issues.

THE CRITICAL ROLE OF INVESTOR RELATIONSHIPS AND VISION ALIGNMENT

Selecting investors is a strategic decision that goes beyond just valuation. Cloudflare emphasizes finding investors whose vision aligns with the company's long-term goals, such as improving the internet. They even chose a lower valuation to bring a specific, valuable individual onto their advisory board. The founders stress the importance of trusting investors implicitly, to the point where they would readily call them during a crisis. All investors are not equal; a deep connection and shared perspective are vital for navigating the inevitable ups and downs of building a large company.

EMBRACING THE STARTUP ROLLER COASTER AND LONG-TERM VISION

Building a successful startup is a long-term endeavor, with exits averaging eight years. The journey is characterized by extreme highs and lows, often within the same day, making resilience and a strong support system essential. Cloudflare's founders attribute their ability to navigate these fluctuations to their trust in co-founders, employees, and especially their carefully chosen investors. This trust allows them to make difficult decisions, focus on significant impact, and build a company that truly matters, rather than chasing short-term gains.

Mentioned in This Episode

●Software & Apps

●Companies

●Organizations

●People Referenced

Building a Successful Startup: Key Takeaways

Practical takeaways from this episode

Do This

Focus on the 'mosquitoes' – the critical, unsexy details that ensure success.

Build a diverse team with complementary skill sets and fundamental trust.

Prioritize momentum by building scrappily and iterating quickly on your product.

Choose co-founders you trust deeply, even if you don't know them well initially.

Embrace your adjacent expertise; don't be afraid to operate outside your core industry.

Pick big, meaningful ideas that can make a real dent in the world.

Look for individuals with high ego but no vanity.

Surround yourself with great people: co-founders, employees, and especially investors.

Align visions with investors; choose those who prioritize long-term goals over short-term gains.

Don't get too hung up on IPOs or exit timelines; focus on the immediate journey and impact.

Avoid This

Don't rely on a single 'silver bullet' for success.

Avoid co-founders you fight with constantly over roles; find complementary partners.

Don't be afraid to ship a product even when it's not perfect; iterate based on feedback.

Don't worry about glamorous press initially; focus on hiring great people and solving customer problems.

Don't prioritize flashy titles over substance; focus on impact and earning recognition.

Avoid hiring only experts from adjacent industries; sometimes naivete is an advantage.

Don't pursue ideas that are too small; aim for problems that truly matter.

Don't be afraid to run 'hot' – aim for high page views per employee and tackle hard problems.

Don't choose investors based solely on high valuations; their vision and integrity matter more.

Don't hesitate to walk away from investors who don't align with your company's long-term vision.

Common Questions

Cloudflare's core mission is to build a better internet by making web properties load faster and protecting them from cyber attacks, ensuring they remain available and perform optimally.

Topics

Technology & Innovation Business & Entrepreneurship Company Culture Product Development Team-building Growth Strategy Startup Founding Career & Skills Co-founder Dynamics Entrepreneurship Advice

Mentioned in this video

Companies

Y Combinator

Mentioned as a customer of Cloudflare and in the context of Startup School.

Google

Michelle Zatlyn previously worked for Google.

Toshiba

Michelle Zatlyn previously worked for Toshiba in a role related to biochemistry and chemistry.

Cloudflare

A company focused on building a better internet, providing services that make web properties load faster and protect them from cyber attacks.

Cisco

Used as a benchmark for Cloudflare's 'Cisco as a service' value proposition, highlighting its significant market capitalization.

Facebook

Mentioned as the previous employer of Gish Patay and in the context of Mark Zuckerberg's approach to company titles suggesting a step-down in roles.

Sun Microsystems

Mentioned as a type of company whose employees investors suggested Cloudflare should hire for web infrastructure experience.

Juniper

Mentioned as a type of company whose employees investors suggested Cloudflare should hire for web infrastructure experience.

Apple

Mentioned in the context of building an iPhone app as a comparison for the scale of effort required for a large idea like Cloudflare.

Locations

Mentioned that the government of the UK is a customer of Cloudflare.

Palo Alto

The location of Cloudflare's first office, where they emailed potential donors for servers.

Hong Kong

Mentioned as a place where Cloudflare's work has helped protect democracy.

Organizations

Aami

Mentioned as a type of company whose employees investors suggested Cloudflare should hire for web infrastructure experience.

People

Lee Holloway

Co-founder of Cloudflare, described as the one who builds the product, often chained to his desk coding.

Mark Zuckerberg

Associated with a school of thought on company titles suggesting employees take a step down upon joining Facebook.

Matthew Prince

Co-founder of Cloudflare, whose role is described as assembling IKEA furniture and telling the company's story.

Michelle Zatlyn

Co-founder of Cloudflare, responsible for making things run on time, hiring, and ensuring people get along; also described as having ego but no vanity.

Mark Andreessen

Associated with one school of thought on company titles, suggesting titles are the cheapest variable to adjust for employee motivation.

Gish Patay

A recruited individual from Facebook who was considered for a Vice President of Technical Operations role at Cloudflare.

Software & Apps

Project Honey

An open-source project co-founders Matthew Prince and Lee Holloway had previously started, which later helped them acquire initial servers for Cloudflare.

AWS

Mentioned as not being as prevalent in the early days of Cloudflare, impacting their ability to acquire servers.