 You know everybody this is Carlos and the founder and CEO at the product school And today I'm here with another founder and CEO. His name is Spencer skates founder and CEO at amplitude. Welcome to the show Carlos fantastic to be here. Hello everyone at product school huge fan of the community and what you are all doing for product managers It's always been Product management is so new as a function. It's always been hard to find great communities And so just love all the content and all the different folks that that are part of it and very very excited to come talk to you all today Thank you for that and you've been an og in the product Word as well. I know that you started your company in 2012 so that's what 11 12 14 years ago Yeah, when we first started amplitude in 2012, so 11 years ago I remember venture capitalists told us there was no market for Tools for product managers product managers were the smallest function in an organization lowest budget And no actual direct authority We've since proven them wrong with the success of amplitude and hopefully many more companies after us And so it's it's been fantastic to see the change in the industry and how important product management has become You prove them wrong and And I believe it's going to keep growing but I agree like when I started the company was a couple of years after you Same thing people would come to me say hey, you cannot teach product management You need to be a visionary you need to be born with this type of talent and clearly now We've seen the rise of the product function many more companies having chief product officer many CEOs Having a product background. I think that's only going to keep growing Absolutely, absolutely one of the things we talked about is the product manager is now the general manager of the business Growth through your digital product is the best way to grow your company and every single company out there understands that And product is is leading the way Spencer's I'm excited to start this conversation with you because it's an incredible journey that I think the other product leaders will be inspired by 2012 Early days you have an idea. What is that idea and how did it evolve? so the first thing we started with was this company called Sonalite and It was a voice recognition app and me and my co-founder Curtis had just graduated from MIT We had known each other there because we were friends. We looked in the same dorm We like playing video games together. We also competing competed in this coding competition called battle code and For those of you don't know battle code. It's MIT's largest programming competition. You have hundreds of teams with thousands of people competing together to create this artificial intelligence for a video game and They battle the AIs against each other. You see who the top ones that win are and We ended up winning it my junior year And one of the really interesting things about it was that there were so many people Who had done the coding competition who had gone on to start companies? So the founders Dropbox came out of it The founders eventually came out of it. There's a lot of other amazing companies that came out of that competition And so we said hey, maybe this is something that we can do too. So we tried out lots of different ideas The first real one that we we did that had any traction was this one called Sonalite Voice recognition and what it was it was a mobile app where you could send and receive text messages From your phone by talking to it and we had this really cool demo where I would take my phone I'd put it in my jacket pocket, and then I'd have a conversation with it I'd say hey, you know text Curtis and then it talked back to me and you know We go back and forth like that and it was this really amazing demo and we as a result of Our demo we actually had the most we got into y-combinator and then out of y-combinator at demo day We had the most press out of any single startup Coming out of that so we had something like 10 articles across tech crunch and venture beat and all these other publications We were called Siri on steroids. We're one of the hottest companies coming out of the batch The problem was that our users were not sticking around so they'd use the app They tried out for fun. We've got a few hundred thousand downloads but after a week or two they they drop out of it and We wanted to know and understand why that was and so we ended up building our own analytics in-house to to figure it out Long story short, we realized that the technology for voice recognition just was not there enough yet And so we needed to shut the app down We ended up starting Amplitude very shortly after this was June of the 2012 We added my third co-founder Jeffrey at the time and then we started growing and took off like a rocket ship like there Everyone wanted to understand the same insights. What causes users to engage what features people are using? Were they getting stuck in the process? There's all these questions about the user journey that they had that they weren't able to get out of their existing data tools and They came to us for it. So that was that was a kind of the bounding story. So from a TV from TV for Android pretty much in 2012 to what what is amplitude today? So we do we're digital analytics platform We have over 2,000 customers 250 million in revenue We've since taken the public company public back in 2021 We're the leader in digital analytics as part of it. We have analytics CVP experimentation and soon to be launched session replay So an all-in-one stack that allows you to understand what your user are doing engage with them And make better decisions And you've been the the basically the CEO throughout the entire journey. Yes. Yes, that's right I'm the founder CEO and then there's two co-founders one Curtis and the second one Jeffrey and the three of us are all hard-core engineering backgrounds and Scaled this company for the beginning. I ended up having to learn how to transition from a engineer to a Sales person and then a manager and large company executive. And so it's been quite the journey Yeah, well as and it's a journey as you said it's over 10 years to have an overnight success And I like the the story of like pivoting from something that had some traction But maybe not enough consider considering the other opportunity that you saw as you were visiting the first product And I wonder who was wearing that product hat in the early days. I Ended up being on the front lines of product when you're really really small as it as a company we didn't really need a product management function and In a lot of ways we all were product managers one of the things that we did was Spending half our collective time as a founding team talking with customers I think that's one of the things especially engineering centric founding teams don't do enough Which is talking to to their customers with that's to understand what they need to understand what their problems are Whether that's to sell to them Making sure to spend your time on that after we had a Jeffrey I switched full time from Building the product to just talking to customers all the time and then kind of bringing back feedback to the team And the basis of that we'd say hey, you know, what do we need to do to get the next customer? Well, we got to build x y and z and That was effectively our product management in the early days and we just find more and more opportunities It was it was a very manual effort at first was kind of winning one customer at a time I could name you all the first ten customers that we had at amplitude from super lucky casino Which was a slots game to keep safe photo sharing app to The hunt which was like this social media platform to Hey labs, so I you know to Ardeo to Quiz up if any of you remember quiz up, so it's just I spent a lot of time trying to figure out Okay, what is it we need to build who's who's the next incremental customer? And what it is what is it that we need to build to go ahead? Let's think about about those type of customers and how your customer base has evolved second imagine as a founder at the very beginning You're trying to get a customer right and then and then figure out as you go This is the core organization on the product matures use of thinking more about segments and I ideal customer profile How's that evolution being for you? Yeah, really early days Are actually first ideal customer was an ex Zynga product manager I think out of our first-hand customers about four or five came from the same community where they had been product managers at Zynga they were used to having really in-depth tools to understand the customer journey and Since we think they didn't have anything so they were willing to try out something that solved their problem of getting inside of the users Even something that was kind of this really crappy early-stage startup that didn't really have any users didn't have a brand Didn't have the fully built up product But they were willing to bet on it because they have not been so bad from there it We realized that all product managers within the technology industry needed this One of our first customers that was larger. There was two actually one was into it And the other was Atlassian and they both had product teams there that were hungry and desperate for these sort of insights And then so we started focusing up market over time larger organizations that had this problem and then now in the last year or two We started to broaden from product managers so that we don't just serve them. We also serve marketers We're serving some line of business folks on the sales and customer success side We're serving certain growth team serving data science team really everyone in the organization who touches the digital experience Needs access to this kind of data And and that makes sense It's consistent with what I've seen in the industry where data needs to be democratized And of course, there are certain people who are closer to eat product teams are one of those At the end of the day, there's more value when others can ask question directly and get insights without having to go Through specific teams One of the challenges I see with analytics specifically is that there is a free alternative, right? So I wonder how it was for you to start showing the value of your product and making customers pay when There were other alternatives such as, you know, google analytics that were obviously not as powerful But in a way we're giving some sort of data for free Well, so this is where I think people misunderstand the analytics market because There's hundreds of tools that all do a base level of analytics that can report on your daily active users That can report on what the most popular pages are they report on what geographies Your customers are from but when you start to get to questions about the user journey So where are people getting stuck? What causes them to come back? What features are they really engaging with? That's where all these free tools break down I'd say One of the most famous examples in the early days was facebook had this very famous study Where they found the best predictor of long-term engagement was how many friends were added So if you added seven or more friends, then you were 85% chance to retain after two months whereas if you added less than seven friends it was less than half that And that was a really powerful insight that they had that allowed them to Grow and become the most successful social network out there beyond my space and everyone else And we said hey every single company is going to need that level of insight And if you think about how much that is worth it's existential companies it's they uh It's it's that is the core thing that allows them to have product market fit better that better customer experience And so they are willing to pay for it. Just like those Exxsinga product managers were willing to pay in the early days of amplitude The other thing I'd say is the landscape's changed over time. And so we've actually been very aggressive with Allowing people to get started for free or pay very very little So just two events on that the first is that we're the first company in the event analytics space to give away 10 million events for free And so if you come to our Product you could get up to 10 million tracked events And that was a huge huge deal because before that you had only had the ability to Track a few hundred thousand events, which if you do any analytics you realize is not very much at all The other part of it is we just launched our new plus plan Which is a self-serve plan that you don't have to talk to a salesperson or pay a huge amount of money It starts at 49 dollars a month that allows you to get access to a lot of the advanced features And then you can scale from there And so whether you start off on the free side on the amplitude whether you start off a little paid side or whether Your larger company and you want that customized service from the start We have kind of offerings for wherever you start in this space I think that's one of the advantages or or build of building for builders In a way a lot of product matter you're building a product that a lot of product managers use in a lot of the experiments or things that Pioneered now have a label and they they are used for other organizations in other situations. For example Product-led growth now we all have a better understanding of that But you're talking about having a free trial and not just a free trial But like different tiers that would encourage people To actually use a product and not have certain and have like generous limits to experience value before they interact with a member of the sales team and That is powerful. The other example you mentioned like the a ha moment for facebook to identify Okay, we get to a certain number of friends then we can with certain With with certain likelihood. We know this person is going to have a decent number of engagement I've seen companies call that a ha moment or a company called north star Like how do you think about identifying? What is it that type of metric that product managers need to focus on in order to to increase adoption and not just acquisition? Yes, and so this comes back to your core product market fit So what is it that users value in your product? And so understanding what's predictive of very long-term success I want to give you a really the facebook example is a famous one, but I want to give you another example That happened to us in the early days where we unlocked this ha moment for a company So one of the companies we worked with early on was named calm. It was a meditation app So are you familiar with calm at all carlos? I'm not gasping there. Oh fantastic. Awesome. All right. Well, it sounds like they've they've worked been very successful with you That's that's fantastic So one of the things that calm did in the early days, so they bought amplitude And they were trying to figure out what was it that kept users engaged long-term And they had a whole bunch of hypotheses around how to run someone through a meditation and the length of it type of it Before I tell you the answer carlos, do you have any guesses as to what the top predictor of long-term engagement within the common location was? I don't know, but I can tell you what I hope it's not which is spamming the user with push notifications Totally totally too many companies do that. So what they actually found was the best predictor of long-term engagement was actually Setting a daily reminder to meditate at the same time And if you set a daily reminder to meditate at the same time Your retention was three times higher than if you had it And what was interesting was that it was an activity that only a few percent of their users did So it's only about three or four percent of their user base did it But if they did do it, it was they were highly engaged Now the difference from what you said in terms of spamming them with push notifications Is the user would actually decide to sign up for these daily notifications to say hey Remind me to to do a meditation at the right time And so what they did was they brought that to the front of the app They helped you customize What sort of daily routine you want to be on with calm? And that ended up Having the customer base go from a few percent of their customers having a daily reminder to Over 50 percent and their retention skyrocketed and their growth skyrocketed They became apples app of the year in 2018. They're now the most successful meditation Company out there. They've been a fantastic amplitude customer And the real insight that they did was was actually related to what you said Which is it's not so much about just spamming people with notifications It's get the user to sign up to build a habit with with your meditation app And that's the real part of the product market fit. It's not walking you through the meditation That is the only part of the value. It's reminding you to do it at the right time Was a huge part of their product market fit and they figured that out before anyone else in the space And have gone on to build a very successful company as part of And and so that sort of insight about what is it that leads to engagement? Where is the core of the value of your product for your users? That's where data is just so incredibly powerful And we're in the really early days And if you're a product person that can leverage that you're going to have the superpower over everyone else I love that and it's giving me also The examples that I know from the from the past airbnb I also was part of an accelerator in my previous startup was 500 startups and the one of the founders of airbnb was the man was a mentor and He shared that their aha moment was the number of For the for the people that posed houses on airbnb. It was the number of reviews And nine reviews was their aha moment or magic number. They were obsessed with helping the first nine Guests to post a good review because after that they were getting like They were achieving a local maximum But like that nine was the magic number The another thing that I learned from airbnb as well as from Google was that a lot of these local stores Hirstal loans or restaurants Needed help with quality photos And when airbnb and google started sending professional photographers to those establishments for free just to help them take better pictures that would increase the In this case the the conversion the revenue for those businesses So I think using analytics not just to to pull data but to pull insights and get to that aha moment It's really a differentiator Completely completely. Yeah, you know airbnb. It's such a design-led company You don't think about them looking at data for for product insights But it's actually been a huge part of the culture from day one both the insight around Professional photographers and that if you get professional photography, you're much likely more likely to get the place booked as well as the reviews It's been huge huge unlocks for their company and it's led to their success You know, what's interesting about the photos one is that that's You know, you might think okay. Yeah, like get professional photographers But that actually translates to their website when you go to airbnb It's just a beautiful you see all these great pictures of homes and potential locations and trips that you could go on And it's dominated by the visual photo element of it and that really stems believe it or not from this original data insight And so it's pretty crazy to see how the design and the value And the understanding of a product and how it serves users can come from that original insights Let's talk about Going up market. I know it's an important milestone for mainstream for many companies They try to get scale and the classic product situation when they are dealing with a big client that wants a feature That it's in that In the product yet and the salesperson comes to product team and say well We need to build this because if we build it we're going to close the deal But it's kind of unclear how many other customers Need it and if you start multiplying these by the number of conversations between sales people and large clients Then it ends up becoming a mess. So I'm curious to know how you thought about Going up market and preparing your product for enterprise while maintaining a core that can be a report post for multiple clients Yeah, so at the end of the day, we didn't build anything that We thought other customers weren't going to use so we knew we had this We wanted to build the most advanced and Broadest reaching analytics platform out there and If something aligned with that and it was just a question of when to build it Then we could absolutely build it and sign up for clients But if something didn't align to that and it wasn't in the world of analytics Then we said hey, you know, we're going to put it off or we're going to say no And so I remember there were companies that wanted us to do push notifications Or email marketing campaigns or things like advertising attribution And what we realized was those were not within the core of analytics. So we're not going to do them However, they were companies that wanted deeper functionality on segmentation or one of our first enterprise customers ibm I remember talking to them and I asked them. Hey, what is your favorite feature and amplitude? And I expected them to say a retention chart or some sort of analysis that they currently do before But the the feature that they said that was most important to them was actually shareable links And that blew my mind because I'm like shareable links That's like a kind of silly little easy feature where you can just link someone else to a dashboard Is that really big of a deal? But the the thing that they had was they had over 100 Product managers across the organization using it And so being able to create a chart and send it out to that group was a really big deal And so that unlocked the idea or hey, we need to allow it to make it easier for people to collaborate within the product and Create dashboards and create templates for other teams to share And that became a core part of our enterprise of market like our enterprise functionality and led to us winning large deals into it PayPal at square and lots and lots and lots, you know, and then eventually in traditional companies like nbc and walmart so lots and lots and lots of Enterprise customers, but it started with that request from ibm that said can you build out Much more of the sharing and collaboration functionality. So I think the mistake I see product people Way more often than not making the mistake of not listening to customers And not building for them like the algorithm I kind of I had in my head was how many customers are asking for it I would just ask in every product review what customers are going to use this because I found that Sometimes you can easily lose track of that whereas if you set that as a north star and you say, okay How many customers do you expect to use that and then you're going to rank everything by By that metric then you are it's hard to go wrong. It's hard to go wrong if you're just following What the customers are asking for at the end of the day And and so I think if if you're clearly articulate a vision and it's within the bounds of that vision Then reprioritizing stuff in your product roadmap on the basis of what customers are asking for It happens all the time Yeah, and what about these other dimensions such as an engineering effort that we take to actually make that Available and also revenue implications. I am following the example you share If we are going to allow other members of the organization to have access to that Dashboard does that mean that we are going to give them an unlimited user plan So they will benefit from that without having to pay extra or like How are you combining these different variables to make sure that you are making a decision that is scalable So in the first variable engineering effort that absolutely should be part of it It's not just how many customers are in impact. So I glossed that over a little bit It's really the amount of impact over the amount of effort So the ratio between those two things you can think of that as the ROI on a particular engineering effort and you kind of just rank everything from that and that's what you build um and You know, it's hard to go wrong if you focus on on that ratio on the uh scalability of users Driving more value and more users and more collaboration. That's a fantastic thing for amplitude because that makes a stick here that Creates more value for the IBM and for other customers. And so it's it's a great It's it's a fantastic thing overall our pricing model actually does it Is it based on the number of people you have using the platform? We allow you to use unlimited users on the platform because like we don't want any Limitations there and want to allow you to grow with the value We actually charge based on how many users we're tracking monthly for you. So we call it monthly track users um if if you look in our pricing plan and it's a That allows us to scale because it's like that's the sort of impact we're having on your customer base And so the more we have customers with hundreds of users We have customers with thousands of monthly actives on amplitude And we want to make that as broad as possible Yep, and I that's that's what I believe it's it's the way to go in the future for Companies that really want to get scales instead of capping the number of Employees that have access to the product is how can you give as much value to as many people as fast as possible? And then figure out other ways to incentivize revenue But like the leading with product and adding value first is something that that is forefront Absolutely. Absolutely. You want to be able to give value right out of that? One of the things another thing is on the pricing front is the more value you can give up front That allows you to get the leverage in the sales conversation to say hey, you know, we want to We want to be able to charge for part of that value that we're delivering to you Spencer, let's talk about the future You I hear you talk a little bit about You're thinking about expanding your your platform and a lot of these a lot of successful companies started with a feature Turned into a product turning to a platform eventually turning to an ecosystem. So what does that look like for you? Absolutely, so we started out in analytics and that's what we're known for is being the leader in product analytics But we've launched a number of other products over the last few years So we've launched alongside of our analytics platform. We've launched experimentation and ab testing We've launched cdp and we and we're uh, we're in early access for session replay And so between those three plus analytics that forms the core stack data stack For the next gen product manager So and the key thing is you can navigate between them so you can Use the analytics to better target what cohorts of users are exposed to what variants or ab tests in your experiments you can Federate the data to multiple endpoints and say hey, I want to send a push notification of this group with our cdp offering You can view the sessions and and look at what people are doing as the result of From from different cohorts of users. Hey, this user dropped out of the funnel at the last step What do they do instead and you can replay there's that session in real time And so these all kind of interact with each other to form the core of the modern data stack And so what's been really exciting is we've seen a lot of adoption of that. I think historically Even when we launched experiment in 2021 We hadn't seen many customers use it But now over 10 of our customers use experiment a lot of our newest customers will use all Four products right out of the gate, which has been really exciting And so I think for us it's how do we take the warrior way from managing the tooling and infrastructure So you can focus on getting the insights and just building great product And so we're really excited about Being the first company to market to introduce an offering on on all four of those and we'll continue adding to that over time This wouldn't be a good interview if I don't ask you about ai specifically How you are thinking about introducing ai to your product strategy We've had ai is a core part of amplitude from the beginning Managing huge volumes of data is a really hard Human manual understanding problem where you have to categorize your events you have to instrument them you have to Interpret them you have to generate insights out of them. You have to turn that insight into action And so we've already launched a number of ai-centric features I'll talk about two here one is automatic suggestions to your data taxonomy. So automatically suggesting Changes to your events names one of the hardest problems as you track more data and more events is that You start to get hundreds or in some cases thousands of different variable names And it's hard to keep track of what's what and so we have automated suggestions to help clean up and manage that data taxonomy The other big one that we've launched is ask amplitude where you can literally create a chart by typing an answer Through a chat bot so very very excited about both of those I think the long-term potential of ai is absolutely enormous for the space For us we think about you remember those insights I talked about for facebook and for com and for others Is how can you automate the generation of those insights to help? To help companies achieve that product market fit. Well, it's it's it's actually not that hard to do And if you do it you could actually take that and modify the product proactively And so we see this future world where instead of having to manually Look at insights and try to figure out by messing around with charts The platform is pushing insights to you as a product manager And just telling you hey here are the most interesting things that you should know Here's how this new release is doing Here's what the here's where people are dropping out of the funnel. Hey, I noticed a bug Hey, I noticed your customers are really engaging kindly with this feature and you should look more into that So how can we correctively suggest things? For you to take a look at versus you having to figure that out yourself Oh, thank you I was saying that it's been great to have you on the show and learn more about your own journey As well as how you're thinking about the future which is looking very bright Thank you so much for your time tensor. Well, carlos. It's been fantastic talking with you It's been great knowing you since you started out product school. It's been amazing to see it become one of the leading communities for product management We've always been excited to be a part of it here at amplitude and hope we can continue the partnership for the long term For all of you viewers We really really appreciate all of you You know come sign up for amplitude our thing is We want to be useful to you first and foremost and if we aren't that's our fault give us the feedback So sign up for a free plan And get started with us easily so that you can get these same insights on what great data looks like as well Looking forward to continuing the conversation