What's 🔥 in Enterprise IT/VC #255

Gitlab - focus on community and don't go enterprise too early = 152% Net % Retention and S-1 Filing

Sep 18, 2021

What a huge week for product led growth, including developer first and open source! First we have Canva raising at a $40B valuation 😲 and now GitLab filing its S-1 to go public. Before I dive into both, I wanted to share a podcast I did with Blake Bartlett from OpenView on the PLG journey from Day One to later rounds.

If you're founder and wondering how we at boldstart partner with PLG and developer first founders from Day 1, 🎧 to this. We dive deep into product obsession, focus on users and the value of patience...

And if you're wondering how firms like OpenView evaluate PLG cos in the next rounds in companies like Calendly and Datadog, then this is the podcast for you! Also day one lessons learned from Superhuman, Snyk, Dooly and more!

🎙️👂 Listen on Spotify and show notes here.

Now on to Canva 🤯 (via Forbes):

Originally known as a tool for amateur designers or small businesses, Canva’s freemium software is used by more than 60 million monthly users. But more than 500,000 paying teams now use Canva, too, including companies like American Airlines, CBRE, Intel, Kimberly-Clark and Zoom, for everything from social media assets to sales and human resources presentations, or, in the case of Live Nation, assets for upcoming rock concerts.
Profitable, doubling growth and with hundreds of millions of revenue — why bother raising at all? One reason, says Perkins, is to keep doubling headcount, which reached 2,000 this year (Perkins says Canva received 180,000 job applications over the past 12 months). Another could be acquisitions, sources close to Canva add. Then there’s Perkins’ own lifelong mission for Canva, one for which she thinks it’s worth it to play it safe.

Next up is GitLab which is a MONUMENTAL IPO filing for 2 reasons - first it’s another best in class open source company like MongoDB, Confluent, and JFrog and second because it really is an explainer on what DevOps is to Wall Street, a back office IT infrastructure play which is finally seeing the light of day in the public. Of course, I expect more of these companies to go public in the future as there is no digital transformation with developers and DevOp.

So let’s look at some of the metrics 🤯

And here’s the product story - one platform vs. numerous point solutions and only named competitor in the S-1 is Github, owned by Microsoft. If you look at the Manage, Plan, Create, Secure…just imagine dozens of point solutions in each category that DevOps teams stitch together to operate. This is the default method but GitLab is showing that there is still a massive market for one platform to do it all.

What I ❤️ most is the S-1 primer on DevOps to the less sophisticated public equity buyers in the market.

We believe in an innovative world powered by software. To realize this vision, we pioneered The DevOps Platform, a fundamentally new approach to DevOps consisting of a single codebase and interface with a unified data model. The DevOps Platform allows everyone to contribute to build better software rapidly, efficiently, and securely.
Today, every industry, business, and function within a company is dependent on software. To remain competitive and survive, nearly all companies must digitally transform and become experts at building and delivering software.
GitLab is The DevOps Platform, a single application that brings together development, operations, IT, security, and business teams to deliver desired business outcomes. Having all teams on a single application with a single interface represents a step change in how organizations plan, build, secure, and deliver software.
The DevOps Platform accelerates our customers’ ability to create business value and innovate by reducing their software development cycle times from weeks to minutes. It removes the need for point tools and delivers enhanced operational efficiency by eliminating manual work, increasing productivity, and creating a culture of innovation and velocity. The DevOps Platform also embeds security earlier into the development process, improving our customers’ software security, quality, and overall compliance.

Winning the ❤️ and 🧠 of developers to win the enterprise…

We employ a land-and-expand sales model. Our customer journey typically begins with developers and then expands into senior executive buyers. We believe serving as this system of record for code and our high engagement with developers is a competitive advantage in realizing our single application vision as it creates interdependence and adoption across more stages of the DevOps lifecycle, such as Package, Secure, and Release. As more stages are addressed within a single application, the benefits of The DevOps Platform are enhanced.

New features always drives more usage.

Our monthly cadence of releasing new features iteratively also drives greater velocity of increased usage by existing users and increased adoption of The DevOps Platform by new users. As more users join within a single organization, those organizations standardize on The DevOps Platform and convert their plans into higher tiers with additional features, such as those within our Secure stage. The strength of our land-and-expand strategy is evidenced by our Dollar-Based Net Retention Rate. For fiscal 2020 and 2021, our Dollar-Based Net Retention Rate was 179% and 148%, respectively. As of July 31, 2020 and 2021, our Dollar-Based Net Retention Rate was 153% and 152%, respectively.

And here’s the value of the open source

Our open source approach is intended to increase our development velocity as the developer pool who contributes to our codebase is greater than the size of any single engineering organization. As of June 30, 2021, more than 3,000 individuals have contributed to The DevOps Platform and since April 30, 2019 community contributions have averaged more than 200 per month. Because people outside of our organization can read our code, users can contribute to identifying and solving issues, which accelerates the time we can release new software to market. This has also been a big contribution to enabling us to release a new version of our software for 118 months in a row and counting as of July 31, 2021.
We believe our open source approach helps us acquire, retain, and grow our paying customer base. They benefit from the advanced innovation that comes from distributed development, the documentation, best practices, and knowledge sharing across our community, as well as the engagement of making their own contributions back to our codebase.

And as I always say, focus on your North 🌠 which is your product and amazing developer experience. Here’s Gitlab’s Timeline: