 From Sand Hill Road in the heart of Silicon Valley, it's theCUBE, presenting the People First Network, insights from entrepreneurs and tech leaders. Hello everyone, I'm John Furrier with theCUBE. We are here in Sand Hill Road at Mayfield's office here, talking about entrepreneurship, People First. This is our co-created program with Mayfield. I'm John Furrier, host with Mitchell Hachimoto who's the co-founder and co-CDO HashiCorp. Great to see you. theCUBE alumni, you're back on theCUBE. Thanks for joining me today. Yeah, thanks so much. I was here so long ago, like five or six years ago. So we've been really psyched about the program that Mayfield's supposed to be called People First. It's celebrating their 50th anniversary as a venture capital firm, which is historic in the sense that it's kind of still a young industry. Think about it. And love to have entrepreneurs come on because you've been very successful. We talked years ago, I think first year you were formed and cloud certainly has happened. Open source continues to pump more value. I mean, you get things out there coming out of Googles and ridiculously amazing. The goodness in open source is certainly driving a lot of great software development. You're a big part of that. So thanks for joining. So I got to ask you, you guys are growing right now. You have your venture backed. You got a unique culture. Explain HashiCorp, because you guys have a unique business. You're in open source, you're in cloud. You have a distributed workforce. Take a minute to explain what you guys are doing. Yeah, so we are trying to build, or have been building sort of infrastructure software in the future. We've been saying that since we were founded and what's been interesting is the future has changed quite a bit in the past six years. So there's been cloud, that was the big thing when we founded and then containers and now schedulers and Kubernetes and things like that. And while we're doing that, we're also sort of building what I think is sort of the company of the future, which is over 90% of our workforce is fully distributed. Basically, unless there's legal reasons not to be distributed, we are distributed. We're in multiple countries. We're in over 40 states. We, all of our process is built remote first. So everything happens, Slack, all our meetings are Zoom. Even our all hands, we present behind a camera and things like that. So I think that's all very unique, but only for now. I think that's a big question. How do you do the all hands, that's interesting. Do you have a camera to a Zoom or is it a camera live streaming? How do you do the all hands? Yeah, so we set up sort of an AV setup in our office because we have a few of the executives in the office that often are presenting on the all hands. And we set up a camera feed so that whether you actually decide to go into the office or whether you're at home, we want that experience to be authentic to both sides. We don't want a great in room experience and then one corner camera that makes it really hard to hear and stuff like that. So yeah, you have to walk up to the camera and be part of the Zoom to really be part of the all hands. So people feel present and connected. Right, exactly. And we force questions to come through Slack. There's no in person questions. We have to ask on Slack so everyone could see them and things like that. That's awesome. Talk about the journey as you start. You have a co-founder because of an interesting relationship. How did this all get started? What was the beginning genesis of HashiCorp like and take us through some of the early days? Sure, so I'm very lucky. I have a co-founder who before the company were best friends and after the company or during the company were still best friends. Rich, it isn't always the case. But in terms of Hosh Group itself, we were super lucky because we went to the University of Washington up in Seattle. And this was in sort of the mid 2000s. And this is a good time to be up there because cloud was starting to emerge and we were sort of equidistant geographically across the lake, if you will, to Amazon, Google, and Microsoft. And so we were getting early access to what they thought was sort of the cloud of the time and it was rapidly changing. We're getting access to servers with APIs and all this stuff. And being a university without a lot of funding, my job there was sort of to help us utilize all these resources. And so in the mid 2000s, Armand and I were already realizing, we're on the same team. Armand and I were already realizing that this is not a solved problem by any means. I mean, this is a new problem. And that, eventually, years later, became the genesis. And what was the problem that you saw immediately? It was sort of like multi-cloud resource management, deployment, security. It's funny because it's over 10 years later and it is the problem that enterprises are hitting right now. I mean, thinking about the early days of Amazon, I still have these memory flashbacks of EC2, long URLs. It's like, OK, now how do I redirect my web service to this? So it was easy to stand up on EC2 instance, put a little S3 to it. Then it's like, OK, now what? Yeah, we're at the right scale. I'll put this in there. So again, a little early, kind of build your own, kind of a junkyard. You build the car out of some spare parts. Then it had to mature really fast. Yeah, we're at the day zero stage then and now we're firmly in day two. And so what was the next step is can you peg the journey for us? Because obviously it grew up really fast and then it really kind of hit a tipping point around 2010, 11, 12, 13, it kind of grew like a weed. Yep, yeah, so around that time frame you just painted 2012 as when enterprises started adopting it. And I think a lot of that was single-cloud focused. It was very much like, this is our first cloud so we're going to land PureLan Amazon or something and focus on that. And we're at the point now about six years later, 2018, where the maturity around operating the cloud is sort of well understood and companies are now starting to sort of use what's best for the job and also realize that there's multiple clouds and we're keeping our private data centers. And also there's new things coming on the scene above clouds, sort of higher level like Kubernetes and how we're going to manage all of this. And so we like to describe it as sort of the mindset is like the cloud operating model. It's like you can't operate your resources in the cloud the same way you do on-prem. And people are starting to get that. That's like automation, very like people-focused workflows, things like that. And companies are getting that. And so now the challenge is this heterogeneous environment. So the top conversation in our office and everyone loves when I bring this, I want to get your definition and opinion. It's Kubernetes. Kubernetes is, you know, a lot of people love it. I've been having Kubernetes dreams these days because there's so much Kubernetes conversation happening. You got Kubernetes, you got the notion of service messages right around the corner. Stateful applications, that problem's really hard to work on. This has been around for a while. What's the importance of Kubernetes? What's the impact in your opinion, expert opinion? Why is Kubernetes important? And what's the impact of Kubernetes? Yeah, I think the more abstract thing that's important is the scheduler idea. And Kubernetes sort of builds on that. And really it's the idea of like, let's move away from looking at the individual machine and let's start moving higher level to just assuming resources are there. It's sort of like when you write the transition of when you're writing software from having to know how much memory you had let's just assume it's infinite and put whatever in there and it's, you know, someone else's problem. And we're sort of moving into that data center. It's like let's just assume we always have compute and storage and network and let's just deploy. And what freedom does that give you? And I think that's really what schedulers give you. And also when you sort of take away huge operability challenges of placing the application and giving that to a computer to put it in the right spot you can now deploy so many more applications because So you're freed up. You're freed up in a lot of ways. It introduces a lot of new challenges but that's a good problem. You want new challenges. You want to solve the old one. What are some of the new challenges that you see emerging that keep the evolution going? I think service mesh is a great example we could jump into which is that the challenge of, we like to describe service mesh as three fundamental problems which is discoverability, configurability and secure connectivity. If you have two services, that is not a problem because you could hard code the IPs, you could hard code the configuration and you could just hard code TLS certificates to make it work. When you have thousands of services that are coming and going and people are trying new services all time that has to all be automated. So the idea of service mesh is automating that and making it invisible, automatic, free and that's a new problem. And that's a huge concept. Huge. This is a scalable, scale out, huge concept and super important. Yes, yeah. This changes the game at many levels. What would you see that changing? What would some of the folks who are just now understanding service mesh what does it change downstream or down the road for enterprises and for businesses? I think the biggest change is a mind shift change from sort of perimeter or host-based security to identity and service-based security. So traditional sort of networking and security is very IP space focused is like this rack talk to this rack or no and things like that. And that has to all go away because that's restricting the placement that's not allowing apps to go anywhere. We have to move towards this service can or can't talk to this service, don't care where it is or anything and sort of move from a perimeter to just the perimeter being the app itself. So we have to sort of firewall and protect right at the app layer. And that's hard to transition that that's tooling change with education change, that's team change. I want to ask you, I can talk about this forever cloud automation is I think one of the most important thing that's only going to make AI more powerful and the data behind it and this new data merges. But I got to ask you about some of the new blood coming into the marketplace because traditionally if you think about service meshes oh it's just an awful problem to solve the software. But you actually got to have networking chops. You got to have to have a computer science or computer engineering. A new skill sets developing really fast in this new, I don't want to maybe call it under the hood. I don't know what to call it but maybe it's an engineering mindset where people, there's a huge demand for skills in automating. That's not your classic application developer. There's this great role for that and there's tons of apps being built but I'm talking about a new kind of operator. What's your take on this new skill, this new opportunity for people to learn and develop a career? Yeah, I think the real way to look at it, I like to look at it, is the difference between doing something once and creating a process to do something. And there's two different tasks, right? It's like when you get promoted for the first time from to manager, it's like the big challenge is learning how to teach others process and enforcing consistent process versus actually doing it yourself. And I think that's the difference between someone who's used to slinging, let's go back to even server automation, someone who's used to just manually clicking or slinging bash scripts to do one off task. You could be a wizard at that but then try to do that repeatedly, safely 9,000 times out of 9,000 times and now that's a resiliency challenge. That's sort of understanding failure modes. It's very different and I think that's the biggest skill set to adopt is I always push anybody in their job to just how do you not do your job? How do you move on to the next part? How do you eliminate your job? Yeah, basically. I always like the way you think about it. Yeah, what's the process? Is it possible right now? And if it's not possible, what's sort of blocking that? So I want to ask you a question. I love this. We can move on to some of the business sides in a second but I want to get your thoughts because I've been having conversations lately with cloud folks and engineers and developers around two words, replicating and reproducing. They're kind of two different concepts. Reproducing is doing the same thing over again. Make that spaghetti sauce, do it again. But then I write it down, is there a recipe? Or I could just hand you the recipe and say you make it yourself or automating it. So I think replicating also has scale. Reproducing requires the same components. Do you see DevOps evolving to a point where do it once and it's replicated or is there some reproduction involved reproducing things? Where is that, where do you see the tech happening? I think inevitably you're sort of doing both but my sort of dream world where I think it'll be still but I think it's sooner than we expect but I think sort of like 10 years from now as a safe sort of stage is sort of like every, doesn't matter if you're a Fortune 500 or a new company, sort of the way infrastructure server management goes is you just start with one server. I like to call it the stem cell server. You just start with one server, you say what you want and you just let it go and it's going to either replicate or reproduce. It's either creating something new or it's like creating more copies of itself but it'll turn into any sort of scale, Facebook level scale that you would want in theory. And I think that that's sort of my long fence post, guiding fence post that I always think about the problem. Talk about the culture of your company, you guys have a new CEO, you have a partner you've been best friends with so. I don't think it's that new, the CEO. Okay, he's been around for a while. A couple years. A couple years, so you've been a co-founder dynamic. Did you guys look at you and say, hey, we got to bring a CEO in so people like to have one of the founders be the CEO. Talk about that dynamic because that's a struggle for a lot of entrepreneurs to have the self-awareness and or the need to do that. Yeah, so Armand and I made the decision to look for a CEO if possible, I think three and a half or four years ago. It took us almost two years to find Dave. And our motivation was really, there's a few things. One was something our investors told us, which is, you know, long-term, you want to do for the company, what like, you want to give the company the biggest value you can. And like, what do you bring to the company? And for us as founders, our skill set was product vision, engineering, sort of industry strategy, things like that. And it wasn't executive management, financing, building, you know, various teams like sales marketing, building out the corporate structure, that wasn't us. And so we looked at it and thought, we could learn it probably, but we would make mistakes and it would be hard. It's just not our passion, it's not what we want to do. Or we could try to find, someone who aligns with their culture and gets our vision, gets open source, things like that, bring them in and sort of scale to a way where we're giving our startup the best chance it has, which means we give it the value we do, which is engineering and product vision. And the new person coming in gives it that sort of corporate maturity and that's exactly what Dave did. That's awesome, and it's always hard to do that because you know, you got to have real maturity to make that happen, congratulations. Thanks, yeah. You know, a lot of us have that problem. And then one of my starters was like, I need a new CEO of the Ventures, we're guys, we're pushing it on you, but it's a challenge, you know, you got to think about, you know, then we'd have a business model back then, but it's a different story, but that's always a tough one. Now let's talk about the culture around where you started from and where you are now because a lot of the stories around entrepreneurship is team, culture, you know, how you're going to set up your future of work, which you guys have a good structure. Iterating and figuring out where the tailwind is. Are you at the spot where you thought you'd be at a few years ago when we first met? How has it evolved? Were there a little bit of zigs and zags you had to make, and what was that like? Can you share some of the journey color commentary with us? Sure, I mean, as a company size, we're nowhere near where I thought it would be. I think Armand and I came into it expecting failure, most likely, and so anything beyond that was just surprised. So that's great. I think the place we are where we thought we'd be is sort of the company culture and stuff, and that's something we've been very fiercely protective of, and we define our culture sort of as we publish it. We call the principle of Hosh Corp, which sort of revolve around kindness, honesty, humility, things like that, so it's who would we want to work with, and let's put words to it because we don't want it to be this nebulous thing, and so we've held to that really strongly. We're over 300 people now, and something Armand says, which I totally agree with, is I come into work, come into work, go to my remote office, but I come into work, and I'm excited to work with everyone at Hosh Corp, which is, in past jobs we've had, we'd come into work, and we're excited to work with two out of 10 people, and that's not a good ratio to have, and I think that's what I'm most proud of from the culture side, that the ways we've done that is like at the principles, we also have something called the TAO, which has been incredibly successful for us both internally and externally, which is how we view product development and design, and that helps sort of align the type of engineer who could get behind our vision and put some words to our vision, so it's not, again, nebulous, whatever the founders think. So they have expectations of what it's going to be like from a coding standpoint, contribution? Yeah, from how do you, I like to describe it as how do you build product and how do you handle people? We have the two sides totally published and we're pretty explicit about it. That's awesome. Talk about the role of open source and lots of changing, and you're seeing a lot of things like the Linux Foundation's CNCF massively commercializes, tons of money coming in there, but Linux Foundation has done a good job of keeping that pretty pure. Success on entrepreneurship and open source go hand in hand now, it's almost, it's really the perfect storm for creators. But there's a playbook, there's a way that's changed. Share your vision of how you think open source is today and where it needs to maintain and what could be changed for the better. Yeah, I think, so open source today is pretty much a default expected, accepted sort of pattern, which is really nice. It gives you community, so you could groundswell everyone, anyone could adopt your software without having to go through a sales person or something like that, which is really important. Anyone can contribute and make their mark on the software. It's a great way to sort of get career started. I think it brings a level of transparency to software that is, you know, you could hide behind closed source. It's like we like to tell our customers, it's like if you don't believe us, not only try it, but go look at how it works and it worked, we're telling you the truth. And I think that's really important. I think there's still a lot of challenges around how do companies sort of build successful businesses around it? I mean, I think we're doing all right and things like that, but there's still low number of data points. You know, always the challenge is, I want to get your reaction on this, is that as companies get involved, the classic reaction was, oh, we've got the big companies now in this open source project, it's going to be land grabbed, they're going to put their fingers in there, need better governance, things fracture, where ideally it's an upstream project where everyone contributes for the better good and then people pull it downstream. I mean, that's the basic ethos of open source. That's the main, that's the playbook that we want, right? Do you believe that's the ideal scenario? I think that, yeah, I think shared ownership is really important, but I also think that sort of unified vision is equally important. So, that's a healthy tension to me, which is that you have a huge community that wants to pull the project in different directions and I think if you don't, if you have a governance that's totally fair, what ends up happening in my opinion is you end up getting camels instead of horses, right? Like you start pulling in all these different directions, you sort of need a slightly unfair governance model, so there is somebody that says, this is the direction we're going. And that person needs to be someone that's trusted by the community. And Linux was very successful with that too, I mean. Right, and I think Linux is an example of a project that reaches a point where that's, the vision is obvious and clear and it reaches a point where, Linux could step down for a bit and take a break and it still runs fine and it's, but it's a- In the early days you need to be on dictator to say look, we gotta do this. Right, Linux is a 25, 30 year old project versus some of these CNCF projects that are two or three years old and I think that's where you absolutely need strong leadership. Well we'll see, we'll look at the contribution, we'll look at that. We've obviously followed that pretty heavily and appreciate the Kubernetes commentaries. We think that's super important too. Obviously containers, it's pretty much voted, it's open now. Yeah, so yeah. We know that. Okay, so I got to ask you the final question. As an entrepreneur, access to capital, super important. How did you guys go about it? How did you raise money? How should people raise money today? Obviously you're an entrepreneur in the ecosystem, you're out in the front lines building a company. How did you guys access to capital? How should people figure this out? Yeah, I mean you just, you gotta tell people why, you know it's a marketing problem in a way but you gotta tell people why what you're working on matters because it's so obvious to you as a founder. That's easy, it's about how do you articulate that and tell people why it's important and not just to you but to the market and how it's going to help people. And we did that and I think our biggest challenge was we had to do that across six or seven products which is we had a lot of pressure to like why don't you just do one thing but it was because for us what was important was not just what the product did but the greater vision behind why are we doing six things. And that we just, you know, you say that and you find people who believe it and they help you. And as you guys, a great example of you're on a big wave with cloud and open source, how should entrepreneurs and what do you guys do to do this? Maybe it's more of advice or anecdotal observation. As you have the dynamics with investors, advisors, service providers, how do you get the most out of them and how do you manage that board dynamic because when you have an emerging market there's a danger saying we got to lock in a business model. So an open source helps you get a little bit more freedom there because you're open source but that's always a danger and as an entrepreneur you got to balance that. Okay, we got to move the needle but let's not overdrive too hard. How should entrepreneurs handle that and take advantage of their investors and boards and how should they manage them or work with them? Yeah, I think on one side you need sort of like multiple pillars and on one pillar you need a strong vision. So you need what won't you sacrifice on? Sort of what's the fence post in the distance and maybe the journey there is slightly different but you know what you're sort of heading towards. So that always grounds you. I think the second thing is sort of a level pragmatism. Like you need to have that vision but you need to meet your customers where they are and so you need to figure out what you need to give them today but still head towards that vision and when you have those two things you have a board that is on board with both of those things. You have the founders that are dedicated to that and you have employees as well and everything sort of moves in the right direction. You got to lay that out. You have to be pretty explicit about it, yeah. All right, well congratulations on all your success and looking forward to following up and seeing you guys are doing thanks for coming and sharing your thoughts today. Thank you. Appreciate it. I'm John Furrier here at Mayfield for the 50th anniversary. Part of our People First Network coverage. I'm John Furrier, thanks for watching.