 Good morning. It's like coming out in a rock concert. I know it So I'm so thrilled to be here today with Jay I first met Jay seven years ago shortly after he started Confluent and Went to it went to go see him at his office with a colleague that was at the time This small room in the back of a dentist's office in Mountain View with a bunch of folding tables and folding chairs and everybody working on code and and building the beginnings of Confluent and Started very similar to how many of you are starting your journeys and just seven years later Confluent is a global business with thousands of customers around the world offices all over the world a very nice office just a few blocks away from that dentist office and The only thing that Jay has had to pay for it is he has a lot less hair than he used to have seven years ago But on a more serious note Jay has built an open-source technology that has changed the world and built one of the most Successful enterprise technology companies in the last ten years So thank you for letting us at Sequoia have the opportunity to be your partner and thank you for having the chance to work with me one of the things that is is Not what well known is this was my first board seat and the first company that took a chance on me to let me join Their board and so thank you for giving me that chance to be your business partner and to work with you Which has meant so much to me in my career. So thank you. Thank you Matt. It's been an awesome journey So let's start by Taking taking everybody back to the beginning, you know as the host mentioned the foundation and the early ideas for Confluent came from an Open-source project you created while at LinkedIn You know, what was the problem that you were trying to solve then that started all of this? Yeah, I was working as Data engineer and you know, this is kind of the early days of social networking and big kind of ads You know at scale web systems And so a lot of the work was kind of from scratch and it was building technology to manage data in different ways And one of the things we realized was most of what we had was technology to store data It was like a place where data could go to sit, you know, and you could look up It's a bit at the right time But ultimately, you know a big system like LinkedIn was all about how data flowed between and how we would trigger the Right actions and do the right things at the right time. It was kind of a very dynamic, you know, living thing And there wasn't really good infrastructure for that. And so, you know, it's I guess whenever you approach a new problem You kind of assume somebody has solved it and at first you're just looking through what's there and expecting that you're just Using it wrong or you don't understand And then eventually realize no like this this hasn't really been solved in a good way and in the way that would be possible now And, you know, that was the origin of the open-source technology You know what was really solving that problem? How do we get all the right data to all the right applications? How do we act on it in real time instead of, you know, putting it in some Hadoop cluster and running some batch process at the end of the day that that was kind of what motivated us to do this and and you release this open-source technology and Pretty soon this was the backbone of some of the most successful companies like Netflix and Spotify and uber that were being created. What was it that gave you the the the push to Quit your job and go start confluent the company after seeing the success of the open-source out in the world Yeah, well it it wasn't quite like that overnight like the the initial open-source We thought was gonna be a big deal and we've done other open-source projects, which were popular But it was initially released to resounding silence Nobody really understood what we were trying to do Yeah, and yet we thought it could be like a really big deal and so, you know The first few years was really just trying to get people to understand the ideas around streaming and try and get that out There and we felt like hey There's there should be this huge opportunity for it and it took us a while to really figure out how to explain it and then as that happened yeah, it started to get adoption in tech and You know nonetheless, we felt like hey if we're if we're really going to take this all the way like there's no way We're going to be able to do that, you know working from the basement of a social network You know there needs to be some product around it that'll make it easy to consume and you know Some company that can really kind of invest in it and drive it and you know that that was the origin of confluent You know it was a little questionable at the time in some ways Like there wasn't a lot of enthusiasm for open-source companies at the time There was a lot less enthusiasm for kind of the data infrastructure layer as as a place to build a company But we felt like hey there there is a lot of value here And there's something that could be you know very powerful for companies And that that was what motivated us to kind of take the take the plunge as it was and You know it actually really was a you know really helped I think just being fully focused on this and being out there in a way to meet with customers Made us move so much faster in in anything you know that we could have done just working in open source amazing and You went through this transition where you were an engineer for your most of your career to being a CEO and founder What was that transition like and what was what was the things you needed to learn and navigate as you went from? Engineer to CEO. Yeah. Yeah, it was it was honestly pretty brutal to start out with You know, it's a very different jobs You know, I think especially that step Into being a CEO you you immediately realize. Hey, you're your peer set kind of includes like Steve Jobs I went from being you know at least I thought a very good engineer where I had kind of built skills in each area I could you know write good code and I could talk about it and I could design systems and You know, I went from that to being you know effectively the you know a very Inexperienced CEO of a three-person company and it was very hard right because you're suddenly pitching an idea that it's hard to explain Yeah, you know a lot of what you're doing is now really more of sales, you know You're selling the company. You're selling the vision. You're you know trying to hire employees You're trying to bring in customers and you don't have much to go off of your in you know a small dentist office Your revenue is zero Your product is as yet unreleased It turns out that your many friends who you assumed would immediately join are a little skeptical of the new company And so so yeah, it was actually quite quite difficult and you know really a different skill set to learn And you know, I had I'd almost forgotten what that was like to be so bad at something But the good news is I do think if you're gonna take on a CEO role I do think starting the company is the easiest way because logistically a three-person company is not that complicated And so then you just kind of have to at least grow with the job as as the business and the company, you know Itself grows and that's like a little bit more each day. Yeah, and and that makes it I think you know at least Approachable yeah, which by the way everybody from a Sequoia perspective is amazing if you think about it as a human to go from Writing software to running an organization with thousands of people and thousands of customers The the growth that you've had as a founder has been incredible as and something that very few people can do and some Something we look for in the founders. We back is this mentality this outlier mentality people that see the world a little differently people that have a have a chip on their shoulder to go do something different and and will fight relentlessly to solve that problem and grow with these challenges of Transforming yourself to be able to lead a large organization and go after these problems as you have done Having been through the founder journey, what are the key attributes that you think make for a very strong founder? Yeah, I mean it's a cliche, but I do think it's the dogged persistence I was just kind of not giving up on things you know when they're difficult and you know kind of continuing on and You know, I think that's probably more important than being you know Smart or having particularly deep insights all of that stuff helps but I do think the main thing is just you know kind of keep rowing and You know see if you can get there and I think that becomes important, you know increasingly important in any kind of more difficult time where You know, which I think every company has some of those. Yeah, and you know without that I think it's just hard to stick with it. Yeah. No, I mean great really is what it's all about and In these many outliers also have like early beginning outlier stories and you yourself have some of those I'm going all the way back to when you were in high school Like there were things about you that stood out like dropped out of high school as I understand like tell us a little bit About your youth and like the journey like that. I am what created Jay. Well, okay I was a very idealistic Teenager and I felt that it was just very inefficient in school That you didn't learn much each day and I thought okay I could I could just teach myself everything I need to learn in school and then I would have all the extra time to do something else, right and You know, so I left after one year of high school and actually with a whole group of friends We basically were like, okay, we're just gonna teach ourselves turns out. That's not the best idea in the world It's actually much harder to teach yourself everything you would learn in in high school yourself some subjects English a little easier Chemistry a little bit harder to just do out of a book But but it was at least an original path and you definitely see other things in life if you if you have the extra time So so it was a different experience. Yeah, well, thank you for coming here all the way to Europe to be with us and today How important has Europe been to Kafka and to Confluent and what are some of the early successes that you had here? Yeah, it's incredibly important. So so actually some of our earliest employees We're here even before we had a sales team. We had, you know, some folks on the engineering team I've been really impressed with the startup scene here You know, I've I spent this week visiting our customers and there's just incredible things happening and the energy is You know, I think in many ways At the same level as Silicon Valley, but the feel of it is actually more fun and I don't I you know, I couldn't say why that is but you know, I think it's a really cool thing to see and really creative new companies coming around and you know, that was one of the reasons I wanted to come out here. We have a Confluent for startups program that we Know straight that's right that we just announced and you know, it's it's really targeted at these early companies If they're getting started in the data streaming world This is a way for them to kind of get going on the cheap Which is what you need when you're a startup and you know our motivation from that was we were just seeing this kind of global rise of these small tech companies and you know, especially right now, there's a lot of pressure on Efficiency, there's you know, a little bit less money in the system than there used to be and so looking for a way to do things Faster and cheaper and easier is definitely on everybody's minds And you know, we felt it was a good time to kind of focus on those early companies Yeah, that's what Carlos our sales leader for Europe is jumping out of his chair. Yeah, yeah Carlos that I think a little move here to get you started out Confluent for startups program. That's right and You know, we talk we talk we talk a lot of sequoia about crucible moments Yeah, and these moments in our journey when There's a really difficult decision to be made when sacrifices need to be made and they can be really arc bending for the whole company and as I look back on the journey of Confluent one of those crucible moments was the decision to shift to the cloud Yeah, and it was a hard left shift that yet. Yeah took the company on to go to the cloud Ed and for everybody's benefit the business was just crushing it with this on-prem self-managed offering and Jay took the whole company and a massive transformation to make cloud first. Tell us a little bit about that How you made that decision how you worked through that leading the company through this big change different constituents like sales and engineering moving different directions trying to get everybody going to Transform the company. Yeah, it was you know the the First piece of advice they give you in a startup is don't try and do a second product in an early company And that turns out to be very good advice Unless you really have to and so for us we knew early on we would have to you know Operate in all the environments our customers had that's just the way our technology works. It has to be there with your applications And so we kind of debated if we wanted to do a software offering or a cloud offering And there were pros and cons to both But we started with a software offering and we quickly realized we were going to need to have a managed service And we'd come out of the business of kind of running these big data systems at scale So we knew that was where You know that was going to be the best way of delivering this but it was really a pretty Significant undertaking and so we started building our cloud offering and early on you know It just was not good enough and we really were a kind of a fork in the road with do you pull back from that and just focus on the thing that's working or do you just kind of Push on through and try and you know make it work And you know is a very difficult one because we understood we were going to have a whole new set of competitors You know in the public cloud including you know the cloud providers themselves that have services So it was going to be a very difficult undertaking and it was kind of a bet the company You know initiative to focus everyone on it But I think that kind of thing ends up being very good for companies You know I think the best companies actually have some kind of difficult trials you have to go through and This was definitely that for us where it was you know first on the engineering side You know really bringing a global cloud service up to scale and you know the kind of operational Capabilities then on the go-to-market side really rebuilding around kind of a more sass go-to-market You know each of these was these big transformations in a company that was you know quite young and immature in its own way And a lot of pain to get that working well But but I think ultimately was very important for where we wanted to be and you know I do think once you've done a few of these You know very hard marches through a difficult problem You're well set up with whatever comes next You know as you march into the next hard challenge at least then the team feels like they can do difficult things together And get through it and that gives I think a little more resilience to the people in the company Then if it's just kind of purely up into the right and easy sledding the whole way yeah, and and The move turned out to be genius even though it was really hard to go through it totally changed the company opened the Envelope of customers that you could work with yeah Yeah, it's always great when the crucial moment when you come through it, and you've chosen the right path Which is that's right Yeah, yeah, it was it was some years of very hard work But that ended up being you know really the the bulk of the new business coming in and of course in many ways The the future of the company and for our customers where their new applications are going exactly We're we're in a time now where lots of companies are going through crucible moments There's layoffs happening people are cutting spending. We have a very different macro condition Interest rates are rising. We have a war going on What are some of the steps that you're taking right now to help adapt to this environment a confluent? Yeah Yeah, I think the most important thing is just to realize the magnitude of the shift in the environment and what it means The tendency I think is to always go off You know norms that were set in the past and when there's some kind of very significant adjustment You need to really look forward and think okay. What is the talent market gonna look like? What is going to be expected of me in the future with a set of expectations? It actually doesn't look like the past and so that that was an interesting thing for us We went through this you know as a public company, which you know is much I think much more painful than as a private company because of course You know the whole market is shifting around you and your employees are watching the stock price day to day And so you know it's it's definitely a tricky one But I think this is kind of coming you know through the private markets as well And so it's a sizable adjustment towards efficiency and profitability I think you know virtually every stage and I think it is gonna change how we build companies You know we put effort into this internally, you know We had always had you know kind of a pretty disciplined framework for growth and profitability But even on that path we we you know really looked hard at all the areas where we were investing and just tried to get Very real about you know could this be done? You know better faster cheaper is there a way to be more efficient in this area? I think that was a very healthy thing for us It wasn't like we hadn't done that before but that that extra level of inspection Really helped us and I do think it gets you You know license to be clear about what the priorities actually are and what really matters and what has to happen And where you have to invest and what can wait, you know What are the things we can take on next year, which is probably something we should all be doing anyway? In in running a company but the the environment really gives that extra push to do that well And I think it's an incredibly important thing Yeah, Doug Doug was here on stage yesterday, and he was talking about how you know The playbook of the last ten years is not going to work for the next decade Yeah, and moments like this are actually very positive because they force us to think more Scrap to be scrappier and are thinking to think lean to think efficiently And the result is we build better companies and result result And so it's actually never been a better time in that sense in that the guide rails of this market environment Will force you to build something that will be more enduring over the long long term And so it's exciting to see us doing those things at Confluent. Yeah, I totally agree One of the things that we both love one of our shared passions is poker Yeah, and you you know just talking about leadership You've often given lots of analogies around leadership to poker and one of the quotes that you've you've shared is The goal for a poker player is to make good moves Sometimes when you play well you still actually lose the game because you just got bad cards. Yeah Tell us more. Yeah. Yeah, this was something You know that struck me especially early in my journey I was you know coming out of a world of being an engineer where in many ways You know, it's a little bit more like chess like there's a right answer to most of the problems If you think hard enough you can come up with the best solution a little more research and analysis is usually the right answer And then in running a company most things are not like that You have these big messy kind of often impossible seeming problems where it seems unlikely that you'll succeed but you need to kind of pick the best path and You know, it's actually kind of daunting to go after something like that and one of the things I felt was you know, what I need to do is concentrate on You know playing the game well and that doesn't actually Necessarily mean that the outcome will be good, but that's the part I control and that means, you know The things I am doing day-to-day if I do that well and if I feel like I have a good trajectory Then that's you know, that is the best I can do and if that You know, the hope is of course that will turn out spectacularly. Well, it might not But it's so easy to be worried about this larger thing that you're responsible for that You actually stop playing the game well and making good moves You're too tied up in you know the final outcome and I actually found that was very liberating for me And that made me just focus on okay, you know the parts of my job. How do I do this better? How do I do it more effectively the things we're doing day-to-day? How do we accelerate those you know and you know making sure that does line up to some good outcome But knowing that in the end I can't really control much of that bigger outcome. I can't control what my competitors do I can't control what the larger market reaction will be to my product You know, I can control just the things that we do and only so much of even that right and so that was interesting for me to Be able to think about and kind of shift Into a mentality where that was my focus and I thought it was ultimately helped me be just a lot happier in doing my job Yeah, because you can let go of some of the things that are outside of your control You may hope for the best, but of course, you know that there are things that you can't control day-to-day Yeah, I mean it helps a lot when you're both look lucky and good Yeah, but really at the end of the day all you control is being good. That's right And my focus is being and hopefully the luck comes around eventually Exactly then the luck will finally hit you one way one of my friends says is quote unlucky in Vegas lucky in life Right, and so if you're unlucky eventually the luck will come your way and get in the right moment in time in your life Yeah, so this this conference is filled with literally thousands of people who are looking at or trying to or part of Building a company to change the world many or have started companies that with an ambition to change the world in some way Or many are considering doing so You know as a parting words, what would be your advice? To the founder looking to start their business today on on what they should what they should do in building their company Yeah, yeah, I would say go for it. I mean the I it's a daunting time in the world I think that's always true in some respects, you know I I think at least for me My feeling was it was it was kind of an incredible journey and so into the entrepreneurial journey I felt like hey even if this all fails I Felt like I would have grown from having done it, you know, I got to do a whole set of things I wouldn't have experienced else otherwise and so, you know, I I think kind of enjoying that that journey for what it is You know makes it more fun along the way It kind of makes some of the trials and tribulations more enjoyable and so yeah, you know my my advice is You know kind of aim big and go for the thing that you would really want to be the outcome And you know, I guess the the cards kind of fall where they do but But that's what makes it exciting Awesome Thank you Jay. Thank you Matt Thanks all