Andrew: Hey there, freedom fighters. My name is Andrew Warner, I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses and I’ve got an audience of, get this, actual entrepreneurs. No, not the wannabes who are listening to this on NPR when they kind of feel like dropping out of their lives and seeing what it’s like to be an entrepreneur. No, my audience is actual real entrepreneurs, ambitious upstarts, as I’ve said for years.
So most of us are in tech and this is not going to shock us. When we go to websites and apps and web apps that we like and we create an account, it’s actually not the company itself often that creates that login experience for us and manages it. Often, it’s a company called Auth0 that creates it and make sure that it’s safe, secure, and easy to use.
I didn’t know much about this company. I’ve been using their forms for a long time. I had no idea they did it. I’m actually looking at one right now, and I don’t see their name anywhere. They are the company behind the companies that you use. I invited the founder on here to talk about how he came up with this idea, how he got customers, what makes this business grow. His name is Eugenio Pace. He is the founder of Auth0. They are a universal authentication and authorization platform for developers of web, mobile, and legacy applications. Let’s find out what this tool that helps the tools that we use grow is doing as a business.
We can do that thanks to two phenomenal sponsors. The first is the company that will help you hire great developers is called Toptal and the second will help you hire great designers is called DesignCrowd. This is the first time, by the way, Eugenio that I’m wearing earphones in these interviews. I’m actually monitoring my audio from the mic. It’s a little distracting, but if this is what’s going to help me improve my audio quality, I’m up for it. Good to see you here.
Eugenio: It’s great to be here. Thank you, Andrew.
Andrew: I want to start off with revenue to just give people a sense of how big the company is. What’s your revenue right now?
Eugenio: We don’t disclose revenue, but we can tell you that we’ve been doubling our revenue every year and more for the last five years.
Andrew: Here’s what I have in my notes. Over a million in revenue.
Eugenio: Yes, that’s accurate.
Andrew: But you are significantly more than that. You’re just giving me like a small number. You are significantly more than that. Can you say how many like accounts have been created on your platform on Auth0?
Eugenio: I can tell you how, you know, other metrics of the company. I can give you a hint of, you know, how big we are. So we are 400 employees in 36 different countries. We are a remote friendly company. We hire for talent. We don’t hire for ZIP code or location, and sometimes we hire for more time zone, but we have offices in Seattle. We have an office in London, in Sydney, in Tokyo, and in Buenos Aires, Argentina.
Andrew: Your home country?
Eugenio: My . . . yes. I was born in Argentina many, many years ago, but I moved about 15 years ago. I moved to the States. I live in Seattle, in Washington State. I used to work for Microsoft. That was the reason.
Andrew: And you guys have about a hundred million dollars in funding. Is that right?
Eugenio: Yes. We raised a $110 million over five years.
Andrew: No wonder when I say over a million in revenue, I saw like a little smile on your face. Like Andrew . . . it’s like, yeah, Andrew, we’ve made our first dollar. Can you say if it’s over $50 million?
Eugenio: I would say that it’s, you know, closer to that number.
Andrew: Closer to that number, then the $1 million that we have here.
Andrew: Argentina when you were born was a dictatorship. I got to get into business, but what was life like living in that environment back in the ’70s?
Eugenio: You know, sometimes I look at my children, I have two boys, and when I think about the things that I was doing at their age, I cannot imagine that. You know, it’s like a completely different world. So I was born in 1970 to be precise. And, you know, the military dictatorship ended in 1983. So I was 13 years old when it finished. And in between, there was a war between Argentinians and there was a war with the UK for two islands in the South Atlantic.
It was really tough. You know, I was young, but I didn’t realize, I guess my parents did a pretty good job in providing like a safe environment for me. But, you know, I grew up like, to give you an example of what it looked like, you know, the best place for me to ride my bicycle was in the place where the president lived. And at that time it was a general. And so, the reason it was great to ride my bicycle there is because all the streets were closed and you couldn’t go with your car in there. So it was all for me to ride my bike.
Andrew: And still, two doors down from your house, a bomb went off, right?
Eugenio: Where are you from? Yes.
Andrew: The thing that gets me is, you have said that that environment, being in Argentina, growing up there made you an entrepreneur, helped you be more entrepreneurial. I’m wondering how.
Eugenio: Well, you learn to be resilient, and I’m not sure if it’s just the situation that the country was in there, but it’s a, you know, Argentina was a place with scarcity. Not a lot of resources. There was no like easy, you know, looking back, there was no capital or the resources to learn. It was like a more restricted in many, many ways. So one of the skills that you learn is to find your way around. When you really like something or really want something, you learned that obstacles are just things that are there to test how much you want those things, not to prevent from getting those.
Andrew: So losing a customer is not the end. Having somebody say no to you is not the end. Oh, and by the way, you have reached out to so many people when Auth0 was just getting started to get clients. I think most people would have been way too wussy to have done as much as you did. But let me build up to it by first asking you about Microsoft. What were you doing at Microsoft for about 10 years?
Eugenio: So I joined Microsoft in the field. I was a consultant. So Microsoft had an organization called Microsoft Consulting Services. It was essentially a professional services arm. So when I joined Microsoft Argentina in 2000. I survived the Y2K. And when everything was still up and running, I changed my job. I was working in a bank before that. I joined Microsoft in consulting and stayed there for a couple of years, and then one of my projects took me here to Redmond. I was doing a project with in the UK, in Spain and in Central America and the U.S. and one of those, you know, one of those trips, the team that I was working with offered me a job, and so I joined for originally for three years and I was a program manager in the engineering team. I was in the developer division, so always working in things related to developers, always around making developers productive.
Andrew: And one of those tools was going to take on a piece of Amazon. What was that?
Eugenio: It was Microsoft Azure. So Microsoft Azure, which eventually became Microsoft Azure was Microsoft’s cloud computing offering, and my project, of course I was one of many, many hundreds of professionals working in that space, but my project was about identifying anything that will prevent developers from adopting these new paradigm. So when you’re building software that is not running in your premises, but it’s managed by a third party, there’s many, you know, friction points.
Andrew: Like what? What are some of the friction points before we get to the one that you discovered that led you to Auth0? What are some of the ones?
Eugenio: Wasn’t the number one. That’s the . . . That was a very first [program 00:08:11]
Andrew: Let’s build to it. Give me just a sense of some of the obstacles and then we’ll get into the biggest one.
Eugenio: Well, you know, it really depends on the level of obstruction that you’re coding against. So we take a dependency to core infrastructure. Well, you know, that’s going be easier because the common denominator is, you know, your servers. You don’t have a server anymore, you have a virtual machine that it’s somewhere else, but it might not have the exact characteristics of the machines that you were used to.
But another perfect example of a developer centric, you know, view of those obstacles is built-in limitations of cloud. Like latency and bandwidth and being aware of, you know, the fact that you’re always going across a network, a network that happens to be internet. There’s no like private connections. There’s no dedicated lines. And so when you build software, that it was all meant to be in low latency environments, you know, now you put it in the cloud and it’s going to be slow. You’re going to be have pages that will take forever to load, to build [chatty 00:09:20] applications. If your application have dependencies with the internal resources and now you’re going to a website, hosted in the cloud that it comes back to your own data center, it’s performance and experience.
Andrew: You know what, this is kind of a small example, but I lived in Argentina when we started Mixergy. I couldn’t get access to random things, like I couldn’t use PayPal randomly or I couldn’t buy a book on Amazon. Most books you could buy anywhere, but there’s some book I wanted to buy. I couldn’t buy it. So I would just go and fire up a server on Amazon’s computers, log in through the browser to Amazon or PayPal or whatever I needed. That was in the U.S, so finally they said, “Okay, you’re good.” I’d get what I wanted. Then I close it down, walk away, but it was a little bit frustrating even though I’m just typing on Amazon.com to not have the keys instantly hit and show up on my screen, to not be able to hit enter and instantly show up. Small issue. That’s a type of thing you’re talking about, but those are smaller compared to the number one obstacle that people who are trying to build on Microsoft’s cloud came up against, which was?
Eugenio: Identity management authentication [inaudible 00:10:27]
Andrew: Why? Give me an example of how that would come up. Why would identity management be such an issue for Microsoft potential customers and existing customers?
Eugenio: Well, to begin with, because the traditional architecture in the Microsoft world was to have Active Directory. So all applications were built around Active Directory. All Microsoft products, the development stack, all of that was heavily centered around AD.
Andrew: I have to admit, I don’t know what that is. Can you give me an example, with like what was the potential customer that my audience of software entrepreneurs would identify with that then had a trouble with identity management?
Eugenio: So any company with, any business really using Microsoft products, so if you’re a bank or if you’re a insurance company, virtually any company that was running an IT shop would have . . . if it was Microsoft of course, they will be running Active Directory. Active directory is in essence a database of usernames and or credentials, so username and passwords. AD, Active Directory is precisely that, it’s a directory of users. Microsoft gave you everything to connect all the systems to Active Directory. Everything was centered around [inaudible 00:11:43] .
Andrew: So I created my own project management software to sell to end users. I wouldn’t have to keep track of all the users who are using it. I would just use Microsoft desktop software AD.
Andrew: Got it .
Eugenio: And you would just use AD was just, you know, permanently connected and very intimately connected with Windows. So if you were building Windows-based software, you know, further all those things will be taken care of.
Andrew: Oh, okay. Got it. And I could focus on the checklist. I could focus on project progress, etc. And so you were noticing that people had this issue, let me ask you this then. Why didn’t you say, “Hey, listen, Microsoft, I got our killer new feature. We want more people to use this.” You’ve tasked me with finding more ways to get people to use this. Here’s our big obstacle. Let’s add this on.
Eugenio: Yes. So the first step in that journey was actually to write a book about the problem. So I wrote one book that was published by Microsoft, that was called “A Guide to Claims-Based Identity and Access Management.” And it was a book about like, you know, maybe half an inch in width.
Andrew: I have to say I’m looking at the cover for this. This definitely looks like not a general consumer base book cover. This looks like a research paper with a nice cover on it.
Eugenio: Very much so.
Andrew: One of your books is selling. It’s so rare. It’s selling for $821 on Amazon. I looked it up. So you wrote a book on this. Microsoft published it, “Claims-based identity.” You said, “Okay, we’re going to teach people, we are going to solve it that way.”
Eugenio: Yes. And so that’s what we started. We said, “Let’s publish a guidance. Let’s publish all the patterns.” It was published by a team that I was part of. It was called Patterns and Practices. What we did is capture these, you know, common, you know, blessed designs, if you will. And so, that book was this size and it covered important patterns for websites for, you know, different use cases and different scenarios.
A year later I went back to my boss at that time and say like, “Look, you know, we keep uncovering things in this space. There’s even more patterns. There’s even more things that we need to do.” And so we . . . I got the funding to do . . . to write the second edition of the same book. And this time was like double the size. And that was the epiphany, because I figured, well, you know, we can keep writing about the problem expecting developers to translate our words, our diagrams, our findings into run-time into, into actual code. How about we just, you know, build a service that does it, and people will not have to become experts on anything in this. They can become experts if they want to.
Andrew: Did you go to Microsoft and say, “Hey, you guys should do this?”
Eugenio: No. I . . .
Andrew: No? You said, “I think I’ve got this.”
Eugenio: I think I got this. I knew Microsoft. I was there for a long time, and I knew how it worked and I imagined that it will take a long time to, you know, launch something like this. And so, I saw my . . . I saw a faster path to making this available to everyone, you know, if I did this on my own. I also have to confess, I always wanted to build a company. And so, you know, I saw the opportunity and we did it.
Andrew: Okay. And then there are two fantastic stories that I can’t wait to bring up. One, you did something with your wife that I don’t think anybody that I’ve interviewed has ever done with their wife. And number two, this crazy story, not crazy but this thing that happened that you actually have on tape, that I want to bring up.
But first I’ve got to tell everyone about a company called DesignCrowd. I thought I ran their last ad, but it looks like I’ve got a few more. Guys, these guys are not reupping their ads with me for next year. I think I’ve let them down probably, because they don’t charge that much and I do. So if I charge a lot, they have to get a lot of customers to . . . I didn’t get them enough customers. But here’s the thing with DesignCrowd. You’re going to love this. Are you a designer by the way?
Andrew: Me neither. It kind of makes me uncomfortable even to think about how to articulate what I want for my design. So what DesignCrowd does is they said, “You know what? We’re going for non-designers. Let’s make it super simple, just two fields.” Make it simple. By the time they’ve answered those two fields, we’ve gotten them in the process and it’s so easy that they articulate to us what they want, and then don’t worry about it, guys. Yes, they do ask a few more questions. If you want to go in there and add more depth with you, don’t worry about it. We’re going to send this out to a crowd of designers, and I did that.
I needed a logo for people who are certified by one of our educational programs. I said, “Here’s what I like, here’s what I don’t like.” I took what some of our students that they like and don’t like. I sent it out, boom. I end up with dozens and dozens of designs from people all over the world. And I gave him feedback And then they adjusted, and then I get it flooded more designs. I gave him feedback, I got more and I ended up paying for and picking only the one that I loved. And I gave that to our graduates and now I see they put it on their websites. They go to events, they put it on their slides.
One of them, Stephen Braden has that on all his email going out, because he’s proud of it and I’m proud of it because it looks so good. If you are not a designer and you need beautiful design, go to designcrowd.com/mixergy. It looks like they do have a couple more ads with me before the end of the year. They didn’t re-up for next year. I will go down dying saying that this service is the best design choice I’ve ever made. It is so good. designcrowd.com/mixergy, they’ll give you a big discount when you use that URL. designcrowd.com/mixergy is also where you will see my design and my beautiful photo. See my design. Get one for yourself. I love them.
And by the way, if you don’t charge enough how . . . some of my sponsors we have to sit them down and say, “Charge more, do good work.”
The first thing that you did was you . . . or one of the first things, you went to a entrepreneur wannabe group in Seattle. Do you remember this? And what did you do there?
Eugenio: Well, I was like thinking about building a company, to my wife credit. That was my wife’s idea.
Andrew: She said, “Go to this group”?
Eugenio: She said you don’t know anything about building companies. You’re a great engineer, but, you know, why don’t you go and join this . . . You know, I found this thing and they teach you how to do things. You know, they teach you how to create a company, how to start up. And so I did, and I went and it was really a good program. It was intense. There was a lot of new things. It was a little bit of like a, you know, like those TV shows that you’re like kicked off after a while.
Andrew: Really? Okay.
Eugenio: That was like a reality thing. Not exactly, but you were supposed to do things with a cadence and you were supposed to present, and you were supposed to, you know, achieve certain milestones by certain dates, and you will be essentially selected in or out on each of those. Filtering out fewer and fewer people until the very few that made it to the end, they would essentially get like seed funds or something to get started. And by then the idea was you would have, you know, a good pitch deck, you would have a business plan, you would have a good understanding of your customer base, your value proposition, not necessarily running code, but something more or less, more structured. Right?
Andrew: And then what happened when you presented? They loved it?
Eugenio: You have the audio, right? So the . . . I didn’t resign. I didn’t quit. That was one of the things that I learned in Argentina, is like never quitting. But I was kicked out of course, naturally.
Andrew: Because of what? And by the way they recorded this for you. They actually did this in front of other people? And they were . . .
Eugenio: You were supposed to present with other people that were, you know, or other like peers to me, like they were doing the same thing. And so you presented to mentors and advisors, and a couple of people that were, you know, already either successful entrepreneurs or they were like entrepreneurs that exited their business, etc. Industry, there were also companies there, anyway.
So there was like a judge, you know, this pile of judges. And so they will tape you and so you would get the feedback afterwards. You could really do listen to it and perfect your pitch. So I gave my pitch on Auth0 or something very close to Auth0 back then. And this was one of the final one. So, but the end was like even more polished. And I remember this judge’s words, “I have good news and bad news for you. The good news is that this is a massive problem and it’s like a massive market. There’s like millions and millions of dollars to be made if you solve this problem. Now the bad news is that I don’t see you doing this, you specifically, you doing this.” You know, and that was it. You know, after that . . .
Andrew: Why? What was it that you were lacking? You were guy who worked at Microsoft with developers. You wrote the book on this before, right? What was it that you were lacking?
Eugenio: Well, you know, I don’t remember the exact specifics. I think part of his concern was that it was like a massive problem that cannot be solved with, you know, even with a small investment. I think he believed that it was, you know, something that the Googles of the world today, the Microsofts of the world would be able to do . . .
Andrew: But not you.
Eugenio: . . . but not a startup. Right? And, you know, I am the . . . you know, there’s somebody told me once, there’s two types of . . . there’s three types of people, people that see the glass half full, people that see the glass half empty and people that are happy that there’s a glass, and I am on that category. So I am the eternal optimist and I’m already happy that there’s a glass. And I took the . . . I had good news for you and I really wanted to do it.
Andrew: So you just walked away not thinking, “Hey, I’m a loser who can pull this off. And even a smart guy told me to give up.” You said, “Hey, this is a multi-million dollar opportunity. We could be big.” All right, so then you went to your wife, you had a conversation with her, and did you sign a contract with her?
Eugenio: I did.
Andrew: What was in this? Do you guys sign contracts a lot?
Eugenio: This was the biggest one. I would say, the scariest one. The one that I had to yield on many.
Andrew: What was this contract about? And then what did you have to yield?
Eugenio: The contract was a conditions for starting the business and the conditions for ending too. And so it was like a, you’re going to do this for one year. I have one year to prove that this was, you know, working. I had to generate revenue in, I think it was six months or so. So she gave me one year and some revenue, six months or so. The third condition was that if at the year, it didn’t work out, there was no waiver. There’s was no like . . .
Andrew: No negotiations.
Eugenio: . . . “Oh, I have another idea, is not like identity, but it’s something else.” So it’s done. You go back and work for Microsoft or somebody else. And then there was a fourth condition which was around moving back to Argentina. So she didn’t want to move to Argentina. I didn’t want either, but she said like, “Well, if it really doesn’t work out and we have to, you know, if you find a job in Argentina or family support, you know, our kids are growing up here, their friends are here, they’re like, you know, they are 10 years old and 12 years old.
Andrew: It’s hard to uproot them.
Eugenio: We cannot afford to take lives, so we will not move out to Argentina.” And I signed the contract.
Andrew: This is very personal. But as a guy who had worked for so many years in such a big company, you didn’t have years and years and years of money in the bank.
Eugenio: Well, you know, being rich is not about how much you have, it’s about how much you need. So my most personal situation is that one of my sons has special needs, and so he needs to go through special education, you know, our expenses with him are pretty high. And I wanted to support that. But, you know, I could fund the venture for one year for us without making any significant changes in our life. And especially in our life know, for him. And so we wanted to provide the same level of education, support and training and therapies that he goes to. And so I could do that for a year. That’s where the year comes from.
Andrew: Matías Woloski is your co-founder?
Eugenio: He is.
Andrew: How did you guys connect?
Eugenio: So Matías worked for my team as a vendor in Microsoft. So he was not a Microsoft employee, but the company that he founded . . .
Eugenio: Southworks, it was . . . he was one of the co-founders. We hired . . . I hired that company to help me produce some of our content or our software. And he was actually one of the co-authors of the book on identity management that I told you before.
Andrew: Okay. So he was your co-founder. He was in Argentina. He did not want to move to the U.S. You and your wife did not want to go to Argentina. You said, “You know what, let’s just do this as a remote team. You decided to go to a remote team. How long did it take you to build the first product? The first version.
Eugenio: It took us about three months to build the very first publishable thing.
Andrew: How? How did you do in three months what this investor with all his background said, a Google can only start accomplishing this?
Eugenio: Well, we maybe took a naive approach to the problem. You know, we looked at . . . the situation forced us to look at the problem from a very, very different angle. And from an angle of, you know, first of all with a developer angle, which is a unique angle. Second with an angle of not trying to make everybody an expert on identity. So we’re moving everything and make it dead simple for developers to use our software.
From day one, we focused a lot on usability, on documentation, on, you know, design and experience. So we make it really, really, really easy. We were inspired by companies like Stripe, like Twilio, like SendGrid. Those are like, you know, companies that we look up to in terms of same audience, different domain of course, but same audience, similar approach
Andrew: Because with like SendGrid, which recently sold to Twilio. Speaking of those two companies for $2 billion, they said we want to make it easy for app makers to send out email from their apps. All they have to do is just make these one or two little changes and then boom, the thing just works. I remember the founder Isaac was on here talking about how simply he wanted to make it, said we want to do the same thing.
So simple takes a long time to get right. I wonder if it’s also that you guys decided . . . I’m looking at some notes from the beginning of the company. You said we’re going to make people’s apps work with Office 365 or Google apps and Active Directory and single sign on. You kept it simple that way, right?
Eugenio: Yes. So we, you know, if you look at the product in those first three months, it was really, really small and it was ambitious in the design and the developer experience, but it was very, you know, narrowed down the scope to just a few use cases, have a few use cases to prove the point.
Andrew: So I caught an app and developer makers and say, “Hey, you know what, like Google apps, so my people are really big on Twitter. I need to let log in with twitter.” You would’ve said, “I can’t help you. Maybe in the future and I can’t do it now.” Okay, so that was part of it, limiting the scope, three months in and plus you’ve got that 12-month agreement with your wife that’s ticking, ticking, ticking.
Did you leave Microsoft before that ticking started?
Andrew: Okay, so you left it. You’re fully in there, you get that first version going and I mentioned earlier the now you’ve got to start selling. You became the big salesmen of the company. You started to do things like reach out to . . . here’s what it says, “I reached out to every single person in my network. I spoke with hundreds of people.” And you had a network because of what your book because of working at Microsoft, all the Microsoft clients?
Eugenio: Definitely my work at Microsoft was somewhat public, you know, and so I had like, I was speaking at conferences, I was a published author. These are not the two only books that we wrote. We have other publications in this space. So I was relatively . . . no, I was not a celebrity or anything, but I was well known, I was respected in my career. I have like, you know, 13 years building software, helping people build software. And so, you know, I tapped into that and yes, I spoke with hundreds of people and I got like tons of no’s. Know you . . .
Another lesson I would say for, you know, other people considering something similar is that you’re, you know, you might think like being a big company, that you’ll have all this power.
Eugenio: But the minute that you’re outside and the people don’t recognize the domain anymore in your email, you’d say, “Oh yes, I replied to your email before, but I’m not going to reply now. Who are you? Who are you?” So there’s a little bit of that.
Andrew: You went from being able to send email to people from an @microsoft.com email address to an @outlook.com email address and that’s . . . Am I right?
Eugenio: Yeah. There’s a little bit of a change . . .
Andrew: More at Auth0. Got it. Okay.
Eugenio: Yeah. Auth0.
Andrew: But still, every single person who you could, you would reach out to them. You would follow up with them. You would offer them a freemium model, which at the time had just free. I don’t think you had the “-emium.” You didn’t have the premium. You didn’t have the premium version, right?
Eugenio: No, not at the beginning.
Andrew: No at the beginning.
Eugenio: One of the key things that we did was to focus on developers and where they flocked. So everywhere where there was developers, we were there.
Andrew: For example?
Eugenio: We were in Stack Overflow. We were in forums.
Andrew: Answering questions?
Eugenio: Answering questions.
Andrew: What’s your username on Stack Overflow? How do I find your old posts there?
Eugenio: Eugenio P.
Andrew: That’s it.
Eugenio: Eugenio P or Eugenio Pace. Pretty sure, one of those.
Andrew: Pace Stack Overflow and that was you personally sitting down saying, “I got to respond to everybody.”
Andrew: Oh, I see it, Eugenio Pace.
Eugenio: Yes. That’s me. I still go every once in a while.
Andrew: You’ve got 11,898 reputation. 11,000, that’s a lot of people loving and hating your stuff.
Andrew: Here’s one of your answers. You answered, what’s the difference between the two workflows when you use authorization code flow? There’s another one. Is it better to have many small Azure storage blob containers each with some blobs or one really large container with tons of blobs. That was from 2011.
Andrew: So this is you getting down. Got it, got it. Okay. I want to talk about your very first customer, a guy named Robert. But let me first talk about my sponsor, a company called Toptal. Let me ask you this. As a guy who’s worked with a lot of developers, if someone is listening to me Eugenio and wants to hire a developer, what tip do you have for them for hiring the right developer? Oh, it’s so tough.
Eugenio: One of our best practices is to, you know, inquire on culture fit, so that’s one of the traits. We want people that embrace remotes as well, so their location is not as important. And the last thing we do, which we really like and it’s been a predictor of success in our company is what we call the exercise. The exercise is not a is another traditional, you know, brainteaser. I don’t believe in any of those. It’s not the coding exercise on the whiteboard. We give people a small assignment in written and you can take that home, do it on your own and then present it to us.
Andrew: Because what are you looking for with that?
Eugenio: Because we’re looking . . . we’re trying to look into how people operate in the real world. An interview it’s such a unnatural setting.
Andrew: Right to come up with an answer on the spot is not the way most people do . . . yes, salespeople do, but the rest of the company does not have to answer on the spot and that’s what you want. You want to see how do they Google? How do they find the answer? How do they come to their conclusion? Got it.
Okay, well that’s good advice for anyone out there who’s looking to hire. That’s one of the things that you could absolutely do with Toptal. When you go to Toptal, you tell them exactly what you’re looking for, the type of person you want, the culture that you were working in, number of hours. Do you want a full-time team of people? Do you want a part-time person, anything in between and then they’ll find them for you and you get on a call with them and you could often hire them within a couple of days. They could get started.
One of my past interviewees, Derek Johnson, heard me say this so many times. He must have just gone, “I’m tired of Andrew talking about this,” but you know what? He and his CTO were trying to actually find people. They did 20 to 30 interviews looking for this one type of person. They waited and looked and wasted their CTO’s time and wasted Derek’s time, and then they finally said, “All right, let’s just try this Toptal thing that Andrew’s talking about.” So they get on with Toptal, when you, whoever’s listening to me and frankly Eugenio or anyone who you’re investing and now that you’re doing so well. You’ve actually got a new CEO running a company, so maybe the next company that you advise is looking to hire someone, you’re all going to do the same thing.
You can hit a button and basically schedule a call with someone, a human being a Toptal. He did that. He told him what they were looking for. Toptal then brought in two people. They said either one of them they could to hire. They found the one that they felt right with. That person now is a full timer at their company. They’ve hired more since then, but here’s the key, his CTO said to Derek, “This guy you hired from Toptal, he could basically be CTO instead of me.” That’s how good they are at Toptal.
So if you’re out there and you’re looking to hire, go to toptal.com/mixergy. When you go there, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period. Guys, go to top as in top of your head, tal is in talent toptal.com/mixergy. Robert, first customer. How did he find you?
Eugenio: Robert at that time we had like an online chat on the website, which I was monitoring as you can imagine. Like 24/7.
Andrew: You were monitoring it? Yeah, I shouldn’t be shocked. Of course, it’s you. Right
Eugenio: Yes. So somebody pops up in the website and the chat and is like, “Hey, I’ve got a few questions here and there.” And so I offered like a Skype connect, “Let me call you . . . will, you know, tell me more.” Every, every opportunity I had to talk to people trying to use us, our service, I took. And Robert was like one of them. And he was like super excited. He wanted to learn everything. He wanted to, you know, he asked us for 20 feature requests. They were like, it was awesome.
So, but at one point, you know, he said something like, “Look, you know,” he said something like, “I love it, I want to be a customer.” I don’t think we even have pricing by then. And he said like, “No,” he insisted. “I want to pay for this. This is so good that, you know, removes so much of my troubles that I want to pay for you.” And so anyway, we were like, we came up with a price. And he was . . . he became our first paying customer in, I think it was April 2013.
Andrew: You know I have a note. Go ahead.
Eugenio: So but in the window that I had in my contract.
Andrew: Oh, with your contract. So this was revenue . . . that counted?
Eugenio: Of course.
Andrew: This isn’t even that much revenue. Can I say what the revenue was?
Eugenio: You can.
Andrew: You said to him, “I don’t know. How about if we charge you $50?” He said, “I’m running a small company, 50 is too much for me.” You negotiated the $27, but that was enough for you with your contract with your wife.
Eugenio: That was enough. I mean, you can imagine the conversation that we had that night. So I said, “Look, I have our first paying customer. Actually somebody that like, you know, signing a check.” And she asked, “How much?” And I say, “It’s $27 per month.” And she looked at me and say, “Are you going to get more of those?” I said yes, this is the first one of many.
Andrew: I’m very proud that I am a first customer of many people’s books and software products. The most famous one is probably, oh, ManyChat. First customer of ManyChat, first customer of Zapier. It is the best to be the first customer because first of all, you’re never forgotten. You remember Robert’s name, and second you get direct access to these people who are going to basically start to build things based on what you need.
Andrew: All right. So you had your first customer and then here’s what you told our producer. We started reaching out to developers that were the purchasing influencers of large organizations. You started to get really systemize it seems like early days, but can you talk a little bit about that and how the book “The New Kingmakers” fits in with this part of your story?
Eugenio: Yes. So the underlying premise of our company is that every company in the world is a software company. It’s very much in line with, you know, there’s a very famous essay that was written by Marc Andreessen. It’s called something like this, like software is eating the world.
Andrew: That’s it. They actually have that on Andreessen Horowitz’s website. I don’t know if they still do as their logo, software is eating the world. A16 . . .
Eugenio: Software is eating the world. And it’s this premise that, you know, every company is a software company, I like to use the analogy of, you know, our family runs a dairy farm in Argentina. And I’d like to think about them as being, you know, it’s just a software company that produces milk. But everything is run by software, the food, their, you know, the way cows are treated, you know, their reproduction, everything is software, And so, you know, two years later after that essay came out, this book came out, “The New Kingmakers.”
Andrew: Let me read the subtitle it’s, “How Developers Conquered the World,” really gives you a sense of it.
Eugenio: And so it’s about the . . . this notion that, you know, because everything is run by software. Anything that makes software developers more productive, build better software, more secure, more robust, better in all sense, it’s going to be attractive in the world. That’s us, right? So our whole premise is that we serve developers.
Now developers perhaps, you know, like Robert, they are building software for themselves. They’re running their own company. They’re like entrepreneurs on their own. But a big chunk of the developers of the world working for another company. They’re working in oil and gas. They working in insurance companies, in banks and whatnot, and more and more they are become the decision makers. They become like the purchasing agent in a way.
They don’t have the budget, but they go to their boss and they say, “Look, I can spend the next three months building identity, building authentication and authorization infrastructure for this app, or you can give me this budget and I can go and have that done in two days. And I can spend all these three months building our software, which makes us unique.” That’s the value proposition.
Andrew: And then how are you going to find these people who are the deciders within companies?
Eugenio: And it’s content, content, content.
Andrew: That was it.
Eugenio: All we do is . . . and it’s not easy of course, but, you know, I invite you to do an experiment, go to . . . open the browser and type authentication, LDAP, iOS. So there are three key words that you would typically use to, you know, build . . .
Andrew: Yeah, there it is.
Eugenio: . . . iOS application, connecting with LDAP, which is a protocol for identity and, you know, authentication. If you worked on your browser, you will see that the first link is us.
Andrew: Yes, I did it and the first link was you. And the second link was Stack Overflow.
Eugenio: And that’s not an advertisement. So that’s real content. So that’s tutorials. It’s quick-starts. It’s tools.
Andrew: But this was the way you got the next batch of customers. The first batch was you reaching out to people. Guys like Robert coming to your website because they’re searching for this tool and signing up.
Eugenio: Searching, finding us on Stack Overflow, etc.
Andrew: But the next batch of customers was . . . Right, Stack Overflow. That’s where the first group of people came in. Freemium, I think . . . Do you still have freemium? I know you had it for a long time.
Eugenio: We do. Yeah.
Andrew: Okay. Freemium back in 2014 for example, that I’m looking at, said one application, 100 social users, 50 users with passwords. And 10 enterprise users to give me a sense of what you were offering for free. People would try it out and then they would sign up. It was you writing the content in the beginning?
Andrew: It was?
Eugenio: o blog posts and . . . You know, remember I had some experience in writing.
Andrew: Because of the book?
Eugenio: And producing content for developers. So I figured I had like some, you know, skills I could tap into. Over time of course, we hired and we invested in content people. So we have technical writers and we have developers that are all they do is produce content for developers to help them with a common challenges.
Andrew: You’re still doing this because writing is its own. It takes a lot of time. Talking to customers takes a lot of time. Product envisioning takes a lot of time and you were doing all this.
Eugenio: In the beginning of course in a much smaller scope that what we do today. But yes, I was doing . . . Matías was very much focused on producing the software and designing the surveys and running the service. So he was essentially running engineering, product management, operations, security and I was doing everything else. You know, everything that was customer facing, selling, everything that was support.
Andrew: Chatting. Then in 2014 customer venture partners put in $2.4 million. Was that you going after them?
Eugenio: So at the end of 2013, we were . . . we knew that we were onto something, because by then we got another second customer. The second customer is a big insurance company. And so the first customer was Robert single developer. Second customer was, you know, hundreds of thousands of dollars of a deal for a big corporation. Again, a developer that found us and then they say, “Oh, this is great. We can use it here. It can allow us to move faster.” You know, we signed a deal with them. It took of course much longer, but I had the proof point. I had like a single developer and I have a big enterprise.
Andrew: And this big enterprise with a comfortable working with a company that had no funding and who’s founder had a contract with his wife saying you might have to close up shop?
Eugenio: Yes. So we built like the provisions in the contract with them, you know, accommodate the risk and of course, you know, it was a really good deal for them as well, because, you know, that time we were really, really able to deliver for them something that was outstanding with a squarely to where they need it. And we accelerated a number of features for their use case.
Andrew: He was hiring you kind of is like, a contract developer, kind of as a software vendor?
Eugenio: But we gave them a product. Right? So yes, we were like accommodating lot of their requirements, but we did it in a way that we packaged that as a service, as a product. And so we were lucky to. You know, I’m not going to, you know, luck. It’s a big component of any successful startup.
Andrew: They could have come a few months later.
Eugenio: But they knew me personally. So I knew them from previous lives. They knew me personally and the commitments we delivered. Everything we promised we delivered and they were, they’re still a customer. Both of them are still a customer for five years later. Now we have the proof point — big company, these revenue in 60 their revenue, but all this developer love. And so, at that time I should say I was a CEO of the company but I wanted to focus and I wanted to grow the company fast. And so we hired a CEO in 2014 with the goal of helping us accelerate the, you know, the what are the building blocks for the company.
So I decided to hire somebody new in the role of CEO, primarily looking at funding. I was going to look after customers and Matías was going to look after the service. And so we raised $800,000. So this new person helped us through that transition. He led the first fundraise, so we raised $800,000 from angels and small investors.
And then Bessemer, that was like . . . That was also fantastic, you know, that happened to us because for many reasons. One is that we pitched to tens of VCs by then? So not in 2013, in 2014, I pitched to tens of VCs. And Bessemer was the one actually that gave us the book, “The New Kingmakers” and they say like, “You guys are this, that’s why we want to be in.” And they were investors in Twilio. They . . . I believe they were investors in many developer companies like Twilio and so they said like, “We believe in this model. We think that this is a great way of, you know, selling softwares and selling services. So we believe in you.”
They are typically a later stage investor. They will only do series A investments, so that’s, you know, once you go over a million dollars in revenue typically, but we, you know, they . . . I guess they liked us and so they overall was, you know, $2.4 million in 2014. And then 2015 we raised series A, series B the following year. So every year we’ve been doing like another series.
Andrew: How hard was it to raise money? Was it just not your focus? You’re still focused on customers and the marketing?
Eugenio: No, I was involved but it wasn’t led by me in those years. I led the latest round, which happens to be the biggest one. So the series D which happened this year, was, I did it because I am the CEO now.
Andrew: You are the CEO now again?
Andrew: Oh, I didn’t realize that you became the CEO again. What was that like to step back into that role?
Eugenio: It was great. It was somewhat difficult. But, you know, I am super grateful to John our previous CEO. So he led the company from 2014 to 2017 and, you know, he was great in that sense. You know, he built like the foundations of the company and then he was leading the fundraising. You know, I was part of the same roadshow with him. But he was . . . his experience and background was in M&A. He was in, he was a VC himself before and so, you know, he had a lot of experience of how thing works.
Andrew: Looking at his experience he was at Intel Capital.
Eugenio: Yes. Intel Capital, then . . .
Eugenio: I see. Senior investment manager there.
Eugenio: So he knew how to do that very, very well.
Andrew: And he was at Microsoft around the time that you were there and you guys had other places where you interacted.
Eugenio: Yes. And so, you know, it was great. But, you know, building a company is more than fundraising. We’re at a stage now where other things are also important but I felt that it was . . .
Andrew: What’s the big thing? What’s the big thing that’s drawing you back? It’s no longer blogging and going into Stack Exchange daily. What’s the job like that’s so exciting?
Eugenio: No. [inaudible 00:49:21]
Andrew: Oh, there we go. Sorry, lost you there for a second. I thought maybe it’s a whole computer froze up. Sorry. You were saying what was exciting about the job right now?
Eugenio: Yes, so there’s a couple of things that I spend all my time on, so I stepped into the role back in December 2017. So I’ve been here for, you know, 11 months or so in this new role. So back again in this new role, the new old role. And my focus right now it’s on culture, it’s on company, it’s on team, it’s on product as well, but more in the strategy and where we need to take the company, where we want to be in the next five years.
Andrew: When you work on culture, what does that mean for you? How are you thinking about culture?
Eugenio: So I’m pretty, you know, hardcore on that because I believe that if you don’t take care of the culture, one culture will emerge in your organization, and it might not be necessarily the one you want. You know, I always try to a little bit with work and life balance, because for me I always pictured that as two separate things, you know, my work and my life. Where in reality it’s more of like a Venn diagram where work is a subset of your life. It’s inside your life. And so, I want to work in a place that doesn’t suck. You know, I want to build a company that’s it’s, you know, an enjoyable thing.
Andrew: What does enjoyable mean for you?
Eugenio: Enjoyable means that we are doing things that are meaningful, that have a purpose that I, where I feel that I’m learning, where I feel I’m contributing, where I feel I’m making a difference. And I believe that all our employees, you know, the people that we attract have the same inner fire. You know, they want to do something meaningful. They want to do something impactful. They want to learn. They were learners. They are people that want to grow. And I want to build a company that when you look back, you know, years in your career, whether it’s within Auth0 or not. I want people to look at that and say like, “That was a time in my life where, that I’ll remember, you know, with great memories.”
Andrew: Because of what? Because they learned more because they did . . .
Eugenio: Because of growth
Andrew: . . . more than they thought they . . .
Eugenio: Because of what they learnt, because what they were able to do and achieve.
Andrew: So I’m looking at what seems like your list of company philosophy. The points that you guys stand for. One of them is we’re obsessed with discovering customer value. We trust and respect each other. We hold ourselves to higher standards, etc. How does, like we are passionate, for example, express itself? How do you know that you’re actually living that one? Or what do you do to make sure that you’ve lived these items here that you guys put together in an offsite?
Eugenio: Yes. So we codified our values, you know, at the beginning of the year than the version that you’re reading, you know, the new ones. So we codify a lot of things. So part of the culture was the defining those elements, our culture is . . . that backbone of our culture is built around four elements. One is our values. The other one is our promises to our customers. The third one is mission and vision, which are more classic I guess.
But passion in particular shows up in many, many ways. You know, it shows that in, you know, perhaps a better title for that would be like, you know, this sweep the floors concept. Which is nobody . . . nothing. It’s a somebody else’s work or problem in Auth0. When somebody has a problem, a customer has a problem, know you will see people in jumping in to help and to do well for the customer, to put them back in a good place regardless of their job.
Andrew: Do you have an example of how you guys have done that or have you done that?
Eugenio: A few, you know, there was recently a customer that deployed the solution they made use of, you know, of our platform that was not really scalable and it wasn’t the best way of deploying our system. And so, you know, they launched and it was not working as expected or to the levels that they were expecting. And it was a little bit of a scramble because it was, you know, limited. It was on a Friday. The classic. Right? Nobody. . .We don’t work on weekends. We don’t work overtime. We don’t believe in that. We don’t believe in 70 hours week long works. We don’t believe in any of that.
But in this time we’ve got a customer. He was in trouble. We had to fix. We had to help them. It wasn’t necessarily our fault, but it was our problem. Because they were saying, “Well, what should we do?” And we help people from our professional services team, from engineering, from support, from all professions jumping in. We assembled a swat team to fix everything for them, and we did it again. On Monday and they were live and they’re a happy customer now.
Andrew: I get it. I feel like at some point all entrepreneurs end up having to deal with culture more so than all the stuff that they got into entrepreneurship for. And I see more and more entrepreneurs that I talk to geek out on it. Like this thing that they didn’t think would be fun is now a passion project. And I want to ask more and more about it.
All right. So, and by the way, I interviewed this guy here. Here, he sent me his book. I said you didn’t have to send me a book. This is Scott Bintz. He talked about how he built this truck part and pickup . . . pickup truck parts business. Got it up to a hundred million dollars in sales largely because of culture. He was stuck at like $3 or $5 million dollars. Couldn’t actually get beyond it, got culture to work, and then suddenly the people built up his business. Fantastic story.
Anyway, I’ve been seeing that more and more. I invited him to do a course on Mixergy. I’ll talk more about that with you guys later. But I want to thank you so much for being on here. Eugenio, for anyone who wants to check out your website, you’re like on all the social networks also. Like I’m looking at you guys on Dribbble. I don’t know why you guys need to be on Dribbble, but I see a bunch of interesting designs and like the logo design. You’re everywhere.
Eugenio: We are.
Andrew: So go check them out on dribbble.com/auth0, or just go to auth0.com if you want to check them out. And I want to thank my two sponsors for making this happen. The first will help you guys find phenomenal designers. Go check them out at designcrowd.com/mixergy for a big discount and the second will help you hire phenomenal developers. It’s called Toptal. Check them out at toptal.com/mixergy. Eugenio, thanks for sticking around a little later than we expected with me and I appreciate you doing this interview.
Eugenio: Thank you so much. It was a pleasure.
Andrew: And congrats on doing more than a million dollars.
Eugenio: Thank you.
Andrew: Thanks and bye. Bye, everyone.