034 - Bobby Nap is BACK on PartnerUp - Timeless truths behind the AppExchange - MUST Listen
Bobby Napiltonia is a LEGEND of Business Development, Partnerships, and GTM. He scaled the AppExchange under Benioff in the early 2000s, was the CRO of Twilio, Next, and has so many exits I can't count them.
He was our FIRST outside guest on episode #2 of PartnerUp.
And... he's... BACK!
With the most poetic and deep conversation we've had on the show. You will need to pause and re-listen... several times.
It really is THAT good.
Bobby and I could go on for hours.
He's taught me some of my favorite lessons in BD and I consider him one of the (if not THE) most legitimate Partnerships pros to have ever graced B2B.
Tune in to check out his timeless tales & truths behind the SFDC AppExchange and the whole new world we find ourselves in now.
Don't forget to subscribe on Apple Podcasts, Spotify, or anywhere you get your pods on the go. And leave a FIVE STAR rating -- because I do this all for free for all of you. It's the least you can do :)
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FULL TRANSCRIPT:
SUMMARY KEYWORDS
salesforce, ecosystem, companies, people, partner, build, app, bobby, microsoft, apex, enterprise, customer, create, early, developers, thinking, business, cloud, engineers, exchange
SPEAKERS
Jared Fuller, Bobby Napiltonia
Bobby Napiltonia 00:20
Things that we, as consumers,
Jared Fuller 00:21
right take,
Bobby Napiltonia 00:22
you take about gas stations. And you ask yourself, and I'm doing this for a project in New Energy, because I'm wondering, what does the new gas station look like and does a really want in the future, but it's more important about how we consume things. But each and every gas station at the beginning was actually owned and authored by the gas company, your Texaco, Sunoco, and so all of these folks had to really create their retail presence, which became a partner presence, so much to the point that then people created a gas station that the gas station had a convenience store that these companies, companies that you and I know and respect Procter and Gamble, pick a name Pepsi, that they made special packaging just for this store that became a partner for you to go and get your gas for an automobile. And now you start sort of fast forwarding that and you ask yourself, what are those partnerships really look like in an ecosystem? And guess what, now you can get gas at Costco at Safeway, you can have it delivered to your home. And so I think when you start seeing companies that understand and embrace the word, ubiquity, you understand you will never get there without an ecosystem. And I'll drop the mic on that statement, because it's a fact. And we can jump into the meat and potatoes of like, why we're here. And we can also say, Hey, who over history of time because what we're doing is taking a snapshot of what you've seen, that you think of people like RCA. Whirlpool, like those were the real first technological companies that had the solve the distribution problems of getting the consumers with a new technology at mass scale that needed things to drive like records or content. And so when you start thinking about those, those channel partners, and by the way, our industry adopted those same same same channel partners that you would find computer equipment in a Montgomery Ward's, you probably don't even know what Montgomery Ward's is. Now you just start thinking about that, like right there like a Sears or JC they'd ever Okay, me. Yeah, yeah, yeah. So it's interesting that we struggled even in our industry, what was that ecosystem? And then you ask something, we all actually had to invest in it. And that's why you saw big margins. And then you ask yourself, what's the real investment that I want to be able to give my ecosystem? And how do I ensure their success? And that's going to go down to the point that we just talked about, like the big ratcheting down? Is that the right reason? And the answer is yes. Because the more that I get you addicted to my lifestyle, pushing my products. By giving you more money to do that, what do you think you wake up and think of tomorrow, you're going to invest more, you're going to invest more, and the more that I can understand that it's really about me having ubiquity and a footprint, and then I'll figure my continual monetization, but I need to keep giving you as a partner more. And this is a big conundrum for a lot of companies. direct, indirect double bubble, how do I calm? What do I do? And then I think it's interesting
Jared Fuller 03:07
versus features, right? Like, what's a feature? What versus what's a platform feature? Well, I think that's even a question for product orgs.
Bobby Napiltonia 03:15
And most certainly, who builds it when why and that Okay, now we'll get into the circling back to Jeffrey Moore. But to truly circle back when that is, everybody looks at the channel as a route to market what they don't look at as as a customer coverage model. Because if you back out, and then you figure yourself like I want to go for the gold, the golden rule, he she then will have the money. And that's usually the customer. And if I back in the best way to serve them, you're probably going to find out that it's a channel because of a model where you can have a ubiquity from a coverage, a service and support, localization language and all of those things as you get bigger and bigger and bigger and extended. But But that said, Yeah, I think we're really going to this next decade of channels, I have a whole perspective on what enterprise selling looks like that we should come up with. I think enterprise sales reps go away. I think that companies are tired of being sold to and that we have a whole new paradigm and I think folks like Goddard over jeetu are leading with the new what's new and what's next.
Jared Fuller 04:15
Yeah, absolutely. And I just press record because Bobby and I were just ripping back and forth. I'm like, I don't even care where we start. Let's just hop in right now like start recording because Bobby's dropping some knowledge so, so welcome back to partner up. We have the Bobby napal Tonia, Bobby, thank you so much for joining us. And if you didn't hear Bobby, this is the first guests that we've had on twice on the show. And Bobby's first story was kind of around the origination of enterprise channel at Salesforce and he shares some tips on how they really turned you know Accenture into the the SI that we you know, no love in difference maybe about today. And kind of created that jogger juggernaut of si eyes that are really more focused on you know, SAS and cloud didn't exist prior to Salesforce. But Bobby was also at Salesforce. During a an equally interesting time, perhaps the second half of his just the Salesforce story was the origination and kind of initial scaling of the app exchange. Right. So welcome back to partner up. We got Bobby on and this is going to be a fantastic Convo. Bobby, there was kind of a couple topics we were aligning on prior to starting. And one of the first questions I asked you, because I brought it up in the past couple shows like, and I don't think anyone's had a strong, strongest perspective as you might, given that today, we want to talk about app ecosystems, I think for a little bit right in some of that app exchange origination story. But I still don't think that this is reverberated. As far or as wide as it will, which was Microsoft dropping the hammer on their ecosystem, you know what? It's like 25% 2015, there's kind of ranges but down to 3%. What's your what's your hot take on Microsoft making that move? Given their you know, behind in the dynamic, right, so
Bobby Napiltonia 06:06
you said a couple of words there that I'd like to unpack as it relates to Microsoft. And let's give a big shout out to Satya what he's done there. I mean, if you really think about, yeah, Lee, you've got to give credit where credit without a doubt. And and if you really understand the channel, Microsoft's truly been like without it, they would be nothing just because of what their software set out to be, as it required a PC to work from the very beginning. So without an ecosystem, you had nothing. And we could reflect on that deal. Look, I think what they've realized is that the money that matters is the percentage of flesh I take from a partner. But it's the amount of partners I got pushing my product over time that I can have them have a great livelihood. And if I could get by with a 3%, skim, to me, that's like a MasterCard visa tax for taking your credit card transaction. If you think about that, that's just really a sorb cost of doing business, which is a profitability on the partner back, which is what a lot of people look to have.
Jared Fuller 07:03
Right? This is, this is not the revenue stream that I think people thought it was an actually, in one of the prior episodes, one of my favorite. She's like the channel lead at Forrester, I just love geeking out with Jay, it. And what's hilarious, though, Bobby, is that Jay predicted that Salesforce would start to charge that margin on even services, right that their partners are selling. And then Microsoft goes the exact opposite direction and drops the floor, Jays Jays prediction. He basically told me he's like, I don't think that's gonna happen. Now I don't think Salesforce is gonna start charging a margin on services like they did with the app exchange, I think what you're, what you're illustrating is like, this wasn't the monetization engine, the direct monetization engine, that maybe a lot of companies thought it would be right, like, okay, we build the ecosystem, and then we monetize through commission or revenue share. And what Microsoft and Satya are saying is like, no, that's, that's not the game. Well, the quest,
Bobby Napiltonia 08:02
the quest, the quest of $50 billion, will make you do a lot of things. And so probably everything will be thrown at the table. But you said something actually more important, I think that we didn't even pack which is late. When is Microsoft late. And I would argue, and you know, I've never worked there. And I've competed against them. And I beat them fortunately, a couple of times in my career, but even when they come late, they've got the staying power and the wherewithal to be a jogger not take take, I would argue what they lost, which was the most precious thing they learned from which is mobile. And you know, we look back 20 years ago, yeah, Microsoft mobile was it and then all of a sudden, some stuff came and disrupted what they did. And I don't think that they've ever lost anything since then. And if you look at gaming, they were not even in gaming. And it would have been owned by Sony and PlayStation. And the one thing that they're able to do is really get developers to anchor around something to build content that drags a platform like it's an ecosystem that really has that perpetual fulfillment machine. And so, yeah,
Jared Fuller 09:06
yeah, I mean, the Xbox ecosystem is arguably What I like best,
Bobby Napiltonia 09:10
and it went from zero. I'm number one or two around the world quickly. And I believe as we look to the cloud, look, it's so early, it's still so so early. And if you look at their initial investments with go back to that name extension, or Nava nod, to truly try to make as your a mainstream, but let's just fast forward. And if we think about 10 years from now, what technology companies exist, what will be the most important thing, it'll be their ecosystems, because the only way that we're going to hit every single corner of the world and corner case of technology extension is by understanding how we get the partners to build local and things that are unique to what they want to get out of it.
Jared Fuller 09:48
100% I think this is a good segue into, you know, the book that I've been bringing up more and more I think the episode where we had Sudhir Shah on, shout out again to the cloud software Association. See how I worked that back in so So if you're not a member of the cloud software Association, go join the slack group participate in the discussion. It's 4000 partnership professionals and then that we have the conference coming up the end of the fall. So cloud software Association, join the slack group join the discussion. He in his episode, he brought up Geoffrey Moore's Crossing the Chasm, which is it, you know, 90s book is still as true today as it was then. And I've been less interested Bobby in like, trying to follow the latest trend, the latest trend, the latest trend, I've been more interested lately in the things that don't change, right, and Crossing the Chasm in terms of like owning your early adopters, and then breaking into the laggards the late market. You've experienced that a couple times where you got caught in the middle, or you finally traversed it. And I think in that time that it was written, and then the Salesforce appexchange had merged, I would love for you to, you know, as we're thinking about the future, let's go back. Right? Because the things that don't change often are the things that drive what will change. I think the Salesforce app exchange story probably has a lot of informative lessons for our audience, and the people thinking about creating ecosystems today that it might look entirely different. But there's some lessons in there that we should probably all learn from. So let's go back to that concept. You know, Salesforce had primarily high tech companies, right? I mean, those were your those are your customers was tech companies, mostly. You know, you had enterprise channel, which we talked about in a previous episode. And then there was people that wanted to integrate, let's let's talk about Crossing the Chasm and how the app exchange emotionally
Bobby Napiltonia 11:37
so I actually think there's probably a lot too, that we can unpack there in terms of what that app exchange would do it what No, we won't, we won't. But let's start and do the same thing I'm most proud of, of all of a lot of what I've been had the opportunity to build and work on, and particularly with mark on the app exchange, and it was two years in the making before I joined him, and eventually said, Yeah, I'll take on that shore and they had become public. And it seemed like it was a Herculean task that was worth the worth of all the dice on. And that said, it really turned out to be that way. And, look, we were a young company. And it marks thesis was no software means no services means no ecosystems means no billion dollar organization means what are we going to do. And fortunately, somehow My name kept coming up. And we connected and connected. And finally, in the first week of May, that year, I joined him, and I inherited two employees to figure out what we were going to do around it. And I got to bring a lot of my past with me having run some very, very, very large channel organizations in the past. And what we tried to set out to do was really, how do we, you've heard me say this? How do we meet the customer's needs, knowing that we can't do everything, all of the ecosystem? And so I'm taking a page out of Geoffrey Moore's book, which has talked to a lot of startups today in general and 10. surprised how many don't even know who he is, I'm thinking wherever you were, what are you doing, like stop being an entrepreneur, if you don't understand any of these theories that still exist. And it was around core versus context. And as you can imagine, we want to do everything, you're trailblazing a new industry, you've got to create it. And what we realized was that we couldn't do everything. And in the session that we had with Jeff, we really beat up what is core, what is core, what is core, and it came down to what CRM and if you could own the customer Master, just like SAP owns the product Master, just like Oracle owns the financial master. And you could own that master and have a data bottle be that customer, you can all of a sudden span out and have this fan and a lot of early work was fanned the diagrams that showed you what you could have offering wise, is that if I was core, and that was the CRM piece, I then started to understand what am i customers need. And this is where the first ring came in the first ring was complete, complement and extend. And so you asked that question I want to integrate, I want to do some things. Well, the first phase of this was, how do I complete my offering. And so the early partners were marketing configuration, the things that you would want a salesperson to do, ultimately, the folks like the docu signs decided to complete the transaction with so that we did compete great what completes a sale that we can compete against a Siebel or someone at that time that had an offering, then the compliment, what could we bring that would give us something that no one else had. And this is really early on when we were talking to people like the hard Hanks and the data's the company that had data that we wanted to bring in and help cleanse and give fresh data because CRM is nothing without data. And so we then said, Well, this will help complement and then we said, let's complete it. Well, this is very extended, and this is where the integration comes in. Now these were all really early ideas of what we thought we needed to get to. And so our first apps were built by our SES and these were sales Force labs that gave you the opportunity to start thinking I could build these things. And we knew in our heart of hearts that we need to start getting like some real ISVs. Someone to actually say I want to do this because otherwise it was two guys in the tricked up trying to complete something that were unfunded. And that's when we realized, let's start with what we have. And these were the size. And we created a blending and blurring between an SI and an ISV. Keep going.
Jared Fuller 15:28
I actually want to unpack that just for a second, because I want to see like, it's table stakes for most SaaS companies to have a dev API, right, like a reasonable maturity, right? So let's say you're past the, you know, two people in a truck, right? But you have employees, you have developers, you have go to market, you're in revenue, right? You're in scale mode, or just you have an API, right? It's, it's, it's a footer on your website, people can, you know, make calls against it. But the transition from having an API to having a platform, people aren't really sure where to take that first step, every
Bobby Napiltonia 16:04
se So no, no, no, every se got to build an app, every se so now because we had agreed to 20 different things to show you the art of the possible.
Jared Fuller 16:14
Every se
Bobby Napiltonia 16:19
almost certainly.
Jared Fuller 16:20
Okay. pause, pause. Is that an enduring principle? Right? So if I, if I'm thinking about like, I have a sales consulting organization, should I go out and try to do partner recruitment first? Or should I make my SEO experts on the platform and have that feedback loop with product to go, Hey, here's where our API is. And here's what I'm hearing from cuttle. I think everybody
Bobby Napiltonia 16:38
should drink their own champagne. I think we everyone should drink our own champagne. Right? Just by principle, yeah. Should we start with SES? Right? And then you know, if it's any, you know, if it's pointing, huh,
Jared Fuller 16:53
I like that. I like that a lot. I'm good. I'm going to go talk to my head. Yeah, I'm gonna go talk to my head of sales consulting immediately now. And we're like, Alright, we got a new thing.
Bobby Napiltonia 17:03
You know, it's interesting. You asked earlier we we talked What are enduring principles. That's one every se you should pretend like they're a customer. Every engineer should work two weeks and support a year. Right? Yeah, naturally.
Jared Fuller 17:14
So you got you got the SES. And they were they were playing around with the app. But there there wasn't commercial opportunity. Right? Like they weren't driving adoption early. Like the art of the early
Bobby Napiltonia 17:24
adopters. Like, who could we go after. And this is these were the two guys the trip ducks, you got to remember, not only were we young and early the people to place bets, the ecosystem is young and early to place bets. And so really trying to get people that cared enough to bet on their future was tough. So I'll tell a story. So we, uh, we, you know, one of the things that I love about working with Mark was we fabricated the stories and we orchestrated the outcomes. And we had to do that because no one else has ever done some of the things that we had done before. And so you really had to go, this is a moonshot, this isn't a thing. And so if you fabricate, I want a world that looks like you then say, I just need these color paints, these type of clouds, these types of things, and you can actually orchestrate that occurring. So we knew that we needed a large ISV to validate that the SAS at the time, it wasn't called Cloud was real, and people would buy it. And thankfully, a company called BMC Software, you probably never heard of them. The largest provider of mainframe software, mainframes used to be around AD but just bought a company called remedy. And remedy was a client server that did service and support. And so we had an internal product called bug force. And so what we did was we cross licensed it to them, and it became remedy force. And within a matter of 30 days, the world's biggest company supporting mainframes had a SAS app. And if they could do it, guess what anybody else in the world could do. And then we got behind that with that arrow to help them get market traction.
Jared Fuller 19:03
Interesting. I mean, that story, that story allows you like that narrative for subsequent ISV partner recruitment is like,
Bobby Napiltonia 19:12
all of a sudden, I want to know how you help them, I want to know what you did I want to be like them, because everybody has FOMO when you get the, you know, when you get the dinosaur to move, and so we could then go over like, enablement. What were the modeling, how do we look at them by category by segment by sector alignment and product management, but the first phase, so we just went over that first ring, complete compliment, extend, and then the second ring ends up coming is build, buy or partner. And when you have this framework for where you want to get to, you can say to yourself, I know I need everything, I can't build it, I can't buy what I miss need a partner and allowed you to have some strategic maneuverability into making your decision. But it got better than that. Because over time, we ended up bringing VC into the mix to show them that not only you know, it's interesting, he made a statement earlier, why do we charge for the app exchange? Look, I took about 90% of your problems away from you when you actually came in build. And we were very prescriptive of what people should build early on. And we help them build these product offerings because we wanted them to build successful companies that would then get VC funding that would create this ecosystem that would allow us to have Salesforce ventures that ultimately we funded our future by having other VCs funded alongside of us by giving you a building go to market that would ensure your success if you comply to operating the way I want you to.
Jared Fuller 20:35
Yeah, Salesforce ventures has not been successful at all right? I mean, that is such a what people don't realize, I think in a lot of ways is if you really sit down and try to build from perfect backwards and you think about this, like partnerships really becomes corporate strategy. So like one of my friends and mentors like Brad coffee, Brad coffee, led the development of like HubSpot connect and hub spots, you know, SMB ecosystem, right? Which is probably the, I would say it's the second best ecosystem in SAS and modern SAS, like Salesforce, crushed it. And then you know, of recent HubSpot, undeniably the next best one and having participated in it built on it, and help them form it. I couldn't disagree and what's interesting is that Brad started in product right got into BD and then that became corporate strategy. And then what what's interesting is that at panda Doc, where I was at leading sales Bobby, I got Brad to make the first ever investment first one from HubSpot into a company panda doc because we were the first like real big CRM integration partner
Bobby Napiltonia 21:47
well yeah more surely like this goes back to staying principles will stand the test of time and you may tweak them or put toppings on them the flavors are always the same.
Jared Fuller 21:57
It's It's so interesting how you just mentioned that kind of coming full circle is like I think that's what the executives that the tune into this episode because whenever we have someone like Bobby and we tend to be on partners Johnson
Bobby Napiltonia 22:09
Morgan, I work yeah, Johnson more downward fairly closely on that trying to identify which to invest in what to do, what geographies how they would help us in training. But let's just take a page out of that full circle and move since we're telling a story. We and we telling a story about old world companies, there was a company called Borland. Do you remember Borland? No, probably not. So these were all big juggernauts during their decades. And we had a customer there who was the CIO, and he saw our product, and again, mainframe old school technology, and he saw the product and he was like, Oh, my God, this is the future. And we got him as a customer. And the next thing, you know, he saw the light. And he left. And he joined a gentleman that I had met after I spoke at a conference and came up and said, Hey, I'd like to talk to you, I'm going to be your next biggest partner, you can imagine we have a lot of people that did that at that time. And so I'm, I'm a fairly friendly person, and I'll listen to her talk to most people, just time. And unless it's crazy conversation, and so we went to lunch. And it turns out that it was just him. But he used to work at SAP and he worked in the office of Shai gase. And after they had acquired his company, and he realized SAP would never have a cloud business. He wanted to create something on his own. And so we connected this CIO from Borland, and this gentleman named Rinder and they created a company called appirio. And we took them to Sequoia and got them funded and we wanted to grow in Japan. So we let them be our distribution arm and service services arm really so that we didn't have to grow services there to your point, and then they ended up selling to a big si and now Chris Barban, that CIO from Borland is has a new company and the best form of flattery is he's out teaching companies, how to be successful in the Salesforce ecosystem. So the fact that we can take a CIO from a company and 20 years later he's preaching and teaching a religion that we started that that really made an industry go as a testament to how you can not just affect and change lives but have other people adopt your story, your strategy, create a business, sell it for a billion dollars and then go teach everyone in the world why this is the next best thing for them. And that's pretty incredible. That doesn't happen often. Well,
Jared Fuller 24:28
the reason why I asked is I've not heard jack although the there's a company right now with what's hilarious is that story I did while I was waiting because the CEOs name is escaping me. But if you heard of a company called tackle.io This is crazy. You're gonna look at look at it after the call. You know what Apple does? They're a super fast growing company. And you know what they do they help companies launch their first app on ecosystems. So like Microsoft did, right? Like AWS like they help companies get into Cloud marketplaces. And whenever this started, I'm like, wild, they're like, is this gonna work? Like, is there really a service and an application to help companies use marketplaces for distribution, and it is a wildly successful hyper growth company now, right? Like, there's an entire sub industry of people that are helping other companies launching cloud marketplaces today. So like, check out tactical, if you if you're trying to get in, actually, my wife
Bobby Napiltonia 25:29
and I talk about that she's cloud Queen, and we joke around that she should just go help people get easy on ramps and collect the toll at the beginning and just sit back with us. And we talk because there is a lot of knowledge over the decades that you get to help people go from three years to one week and understanding how to get get be successful, right?
Jared Fuller 25:47
No, I mean, is someone that's gone through, you know, appexchange listings multiple times, that process is still as opaque as it was, you know, by first time that I went through, and I'm sure that's not your intention to kind of creating it. And I don't want to get caught up in the nuance of that. I mean, there's, there's more that to that story of like how marketplace ingestion works. And some of the things you do need to set up security infosec, all that Oh, without that, let's let's extend beyond that second of their
Bobby Napiltonia 26:13
top tier for two reasons. Number one, they crack the code perhaps better than anyone that if you invest my ecosystem, you're gonna have a billion dollar unicorns. I mean, think about that. Like what other ecosystem has that type of machinery operating working, then you take this last couple of years, they're investing outside of their core competency into places like snowflake, because the understanding of the future where the cloud will be, we don't know. But we know data, lakes will play a role. Well, they will. So to your point, without a doubt, top tier, but top tier in a unique way that no one else has been able to ever even come close to thinking about replicating about Sapphire ventures, look, take Microsoft ventures, Sapphire, bentinck, all those other people, having been part of the Salesforce community, I will tell you that we out operated because of the way in which we injected you back into our world, and you're important for the success of our customers, greater than anyone else out there.
Jared Fuller 27:08
What's interesting, too, going back to the Microsoft point, right? So Microsoft, reducing their commission, so to speak down to 3% why I could imagine Salesforce retaliating in a way that could Yeah,
Bobby Napiltonia 27:18
look, I think at the end of the day, you're at, you're chasing the wrong problem, which is what am I paying for? And what am I getting? And is it worthwhile for me and you as an entrepreneur are going to decide what ecosystem or ecosystems you'll play in based upon your core competency and where you want to live in land. That said, you can have a billion dollar company just living in one ecosystem. And if you don't like the way one operates, you can move into another well, that look we we did the configuration was the first one he was one of our first
Jared Fuller 27:49
brought godart earlier, right, so jeetu, obviously, that he's had a few exploration partners sold big machines to Oracle, right. And then he did the same thing with steel brick. And then and then he built steel brick which is now Salesforce CPQ. You but look at aptus Whoa, if you're not familiar with app, this app, this was neck and neck with steel brick, in the CPU space, they went all in on the Salesforce ecosystem go dark, obviously out entrepreneurs, them, because he's fantastic. You just got the Midas touch, and then app this whatever steel burger got acquired, aptus was screwed. They were set to go public cancelled the IPO that
Bobby Napiltonia 28:27
will be a case study in individuals and not technology. And if you really know the to app, the story being there from the beginning, we table up for another conversation, because I think that what you see on the street might not necessarily reflect what occurred. And I'm well familiar with that.
Jared Fuller 28:41
Okay, well, so without getting into the, you know, the, the underground of that conversation. Do you think that's something that people are at risk today, though, Bobby, like, so if whenever you think about build by partner, yeah, you think about build by partner, and you're creating this ecosystem strategy. If you think about it from like, the startup perspective, couple 100 employees, right? We have a Salesforce app, we're playing in this ecosystem, whatever. And I feel like I have that conversation. Are we too dependent? Right on the juggernaut on the Adobe, the Microsoft, the Salesforce, are we too siloed? We diversify. I feel like a lot of people are having those conversations.
Bobby Napiltonia 29:19
So there's a great question, you have to remember that all of our early customers didn't have previous businesses because no SAS existed for them to actually do something with. So if you all all, so all of those names you just mentioned, never had a prior life. And by the way, like aptus, that guy was a product manager VA where I worked and advanced sickling on my team convinced him to come build this app that we needed around contract management that started the whole story about how they became who they are. So when you think of genesis of most of those early companies, they really came out of our group, and we had a lot of rhyme and reason now let's unpack how connected to motherships should I be? Because that's what I really think you asking yourself and if you've got a if you've got a ubiquitous technology. And you also have to remember, we're still so early in the cloud rollout, less than 10% of it, budgets have been deployed. So you picking an ecosystem to live in getting you to a billion dollars when 10% of the budgets been spent, gives you the opportunity to support a second and a third ecosystem, if you have a product is horizontal enough to actually stratify them, right? Meaning the problems pervasive, regardless of what ecosystem you're in, which a lot of the problems will be. But by the way, look, either way companies struggle with this forever. If I was an ISV, 15 years ago, I wanted to know, did I build to support dotnet or Java? Right? We there's no different and then I determine which market share Am I going to land on to have a business? And what do I want to do? Think about that, like if you create a dotnet, and Microsoft came up with something in their portfolio that killed you, you were really screwed because you could only live in their world?
Jared Fuller 30:55
I'm actually going to take this as an interesting aside, because this is a very interesting point. Yeah, that I haven't heard anyone talk about my entire career of partnerships is the app exchange in apex. Right? So there's this programming kind of like interfaces, middleware language, you just brought up how, you know, Microsoft built an ecosystem around like dotnet, right? And what I'm seeing opposite of that today, is like, what are the people going to build in in you know, drifter? like whatever other application that's being built out there?
Bobby Napiltonia 31:27
Yeah, all right. You You've Got Mail is a topic that I'm beyond passionate about what's what's the future really look like? I've been very fortunate. Most of my career has been the pointy, pointy, pointy piece of the spear. Most technology companies that I've worked with that we grew to a billion we're so early that we tried not to get enough arrows and die. And then we ended up being able to become the standard. But these low code, no code platforms, I have a 16 year old daughter, and three weeks ago, she told me she loves spreadsheets and I asked her what do you love about a spreadsheet? And she said, she actually manages her employees. I'm like, What employees and it turns out in Roblox she's built a gymnasium and she's got 12 kids that work for him. She's got calls on Sunday nights they come to and they've created leotards that they're selling stuff out of. And here's a girl that I'm trying to figure out what she's going to do when she grows up. Yeah, now I'm sitting by the way, I've tried to get her to be an entrepreneur more than once, and we've got a bunch of URLs, not try products, we've got a lot of great business plans we could pull out and dust off. You might wonder where they come from, but she's found one passionate for her. Now let's go into how many engineers are graduating in America this year. On an ecosystem, we never go there. Let's go to address your problem. How many engineers are graduating in America this year? 30,000. How many openings in America for engineers are there 300,000. Alright, problem is only going to get worse, low code, no code platforms will take a place for a class of applications. And we may not have a world where we need developers to develop but we need developers to build platforms that we can consume. Because you also have to remember those early platforms required you and I to be way smarter than what you and I are today, you and I can actually go do things because the machinery has gotten so much to the point that I can tell it, what I want to build is going to actually build it and test it and make sure it can even scale before I roll it out. That was never happened before. We're in for what I do believe will be a whole new class of not just enterprise applications. But what what what an enterprise landscape will look like.
Jared Fuller 33:27
Yeah, so if you look at Zapier, trade out io workato. these are these are all, you know, wrote, like relatively low, no code, kind of applications, connective tissue, it was inevitable. And it's fantastic to see those businesses, I love those businesses, they make my life easier as an entrepreneur in partnerships, just in general, like it makes business productivity easier. But I'm kind of curious, like, if you look towards what's the next ecosystem, for example, like hub spots Connect program, there isn't that underlying thing that's apex, right? Like is ubiquitous to Salesforce or dotnet. to Microsoft? Is there going to be in terms of like business applications? What, what what needs to be created, if not a no or low code platform that allows Well,
Bobby Napiltonia 34:18
okay, so let's get back those All right, came about at a point in time where you didn't have standards that you could actually integrate on and dotnet is a little bit different than Apex because it's a real language framework. Right, right. Well, log Apex was named by a gentleman named Craig because it was the top of the pinnacle that you could write to, and I remember the meeting and I thought to myself, this is gonna be horrible. You have to remember prior to Salesforce, I ran some of the largest developer networks in the world and BVA in terms of job and it said that prior to that I was exposed to them at Creative Labs where 99% of the software that was ever built applied to and work with our standards. So when you think of ubiquity to keep doesn't get much better than 99%. So when you think about that, getting a developer to adopt a new standard is like a religion and people were really different. Call for religions, which is ultimately why Salesforce bought Heroku, because we needed a runtime layer that we could run job applications. And yeah, we're Apex was really the beginning of the mashups. And I would argue Apex was kind of equivalent to what ETL tools did where extract, translate and write. But we needed to get to this new paradigm. And so Apex allowed you to write code and triggers. And by the way, force comm was arguably the first mainstream enterprise low code, no code platform that's 15 years ago,
Jared Fuller 35:29
right? So I mean, you have developers that know how to do Apex and these triggers, but they're not. I might contrast the phrase and tell me if you agree with this, no,
Bobby Napiltonia 35:38
look, your house has finished work, you have a foundation that was built by an engineer that was an engineer, he was just happened to be a structural engineer, and then you've got the carpenter and the painters, which are equivalent to the developers that came and make it look pretty and for you, so once the skeletal infrastructures in by the people that actually know how to build massive things, then you can do all of these things on top of it, which is what developers do content flavor, you know, those types of things. So
Jared Fuller 36:02
that's I mean, that that really is the question, I think, that a lot of people can't answer. Whenever they have API's, they have integrations, right. I mean, most, if you look at most more tech, or sales, tech, software companies, like an outreach, or a sales loft, or a drift, or sixth sense, whatever, they're gonna have dozens of integrations built on their public rest API's. But none of these companies that are best in class, you know, even unicorns, right, like category leaders in emerging categories, have that abstraction layer on top of their API's that allow customers to do things like triggers that you would do in apex, you know, spot Connect, necessarily even has that yet. So it really begs the question, you know, I feel like the next emerging ecosystem is going to have to have something that allows people that not just so to be engineers, but more like developers that can build customization on top of
Bobby Napiltonia 36:52
the Creator.
Jared Fuller 36:56
Right, right. I mean, you don't even need you don't even need API's on top of that, right? Like, I mean, it's, it's
Bobby Napiltonia 37:01
okay, what What did you just say, What did my daughter not do? My daughter did not open a rep, she did not hire developers. She did not interview them. She did not overpay them, she did not let them leave her next week. Wow, there's a lot of did not that allowed her to do and when I was blown away, so just let me also start believing I saw the future. I don't know what it means to me, because it's definitely something where we can enable a group of people to solve problems that we don't even know exist. So you ask a question. Let's double, let's unpack that. We don't know what the enterprise platform could look like. Because we haven't seen the tick tock of the enterprise yet. No, but what we did see was hold on now let's if we unpack that, we did see the Skype of the enterprise, let's does argue that Salesforce was the Skype, not the compare how they were bought, sold, or trade, but just in terms of paradigm shifting from a telco infrastructure, hardware, rolled out all that stuff to just software to make a call Salesforce, same way, you didn't need all that stuff, software to run your business. What if all you really need is an idea and a person?
Jared Fuller 38:10
Well, actually, you know what, this is an interesting, intersect, which is like Slack, for example. Actually, slack is very interesting, because there's a ton of customizations, right? And triggers and reminders and workflows and things that you can set up on, on top of slack that actually matches somewhat similar to what we were just discussing. And I see it every day, like, you know, I'll type a certain phrase into slack. And they'll get a custom reaction, right? I could set up a whole bunch of things that I'm not an engineer by trade that allow me to customize. Look,
Bobby Napiltonia 38:42
I you, you made me think of something I hadn't thought about because I Well, I think about the enterprise, I think a lot of the enterprise problems to solve are boring, their problems, how am I going to have a better secure container to get my Kubernetes to move my 90% look like that's just always got to be taken care of and addressed. But they're really not novel problems that are going to be breakthrough, like the ones we just said, like low code, no code platforms that we don't have this constraint of developers and innovation runs perhaps more ramp and more wild than we've ever seen before. Because this creator community actually knows, by the way, we don't even know what an enterprise will look like in 15 years, where will we be doing our manufacturing intensive isn't really a good time. I don't know that anyone can pull it off. And so to your point, is it going to be a federated way in which these big three or four say, look, we're gonna keep fighting for Turf Wars? I'm going to disagree, just because when you think about the 90% that haven't been moved to the cloud, it tells me there's a lot of money up for grabs. Now let's go on to this next story. Hold on. We, you and I just talked about the constraint on the amount of people in the engineers and we just said 90% needs to get to the cloud. Where are they going to find their engineers? How are they going to become software companies, because you're going to I'm going to argue with you everyone's gonna have to be a software company at some point in time and they don't have competencies. capabilities are the DNA. So if we think the last decade was tough, just imagine how tough the next decade could be bringing what you just said, let's go back to Geoffrey Moore, we got the early adopters, we're swimming in early majority. Now we're going to go into mainstream, we haven't even thought about the laggards are the next phase in terms of the sunsetting that we would wash, rinse and repeat this because we're still in the second wash cycle
Jared Fuller 40:24
that is mind boggling big. Because if you if you really think about it, there's a 10x shortage and engineers, but your daughter's example is so illustrative of, of being able to create value on top of an ecosystem that involves no engineering work, right? There was an engineering work that she did it all. And well, let's go there. That is a
Bobby Napiltonia 40:49
Let's go there. So what just happened is weak in the consumer world and for the creator economy, which could be most disruptive for them. And I don't know if it's a flavor of topic for your podcast, but it's real, and it's in the news. I was listening to Jason Calacanis talk about it just this week, which is what fans only did in the
Jared Fuller 41:07
consumer world that is going to completely transform the enterprise only fans yeah. Oh, yeah. The only fans debacle what they were what they were Yeah, what they were what they were trying to do you know it what's interesting is like those examples are are good because they they are from a business standpoint. So like they take any politics or any of any of the frame rate components of like the purpose built matter, you know, away from it, let's just look at isn't done isn't a dotnet framework purpose built for that was the creator taught me that was a platform, and I
Bobby Napiltonia 41:39
look, we can learn a lot of things where consumerism will be far have bought because of the adoption curves of you and I being able to be whimsically deciding what we want to do versus an enterprise that we then can see one to five years later, they follow on some of these models that will go look you see right now Canvas hiring for, for someone to come leave their enterprise and you're thinking Canvas for freelance designers, what will an enterprise do? Well, what if you can unshackle the old ways of an enterprise doing business because a new economy player came and completely disrupted up their design? Yeah,
Jared Fuller 42:10
I mean, they're they're democratizing design, right? Like Canvas gonna go into Canvas gonna have a platform, they're gonna be the design platform for every SaaS application. So if you ever need something Canvas gonna be like, right, look, I
Bobby Napiltonia 42:23
got a Plex server and upload movies designed to watch for my daughter and the different formats Do you know I so, so hard, I actually struggled, I had to give up. But you know, we should have started the segment with was, what was the initial thesis for the app exchange, and I want to make sure we at least touch that my objective from Mark was, every employee needs a login, go figure out what they need. If we were selling Salesforce into a company, what percentage of the people would actually use Salesforce login? 10%. So the goal was I want I want 100% of employees at every company logging in, what will those apps be? And how do we get them? And how do we use the customer master to extend it so that everyone in the legal department needs to do its review, everyone in the product department needs to see what like the white even remember, I heard this just the other day again, listen to a podcast on Starbucks launching the idea exchange, which we haven't even talked about, which was a product that we launched, so we can take ideas from our customers on what we should build, because we were building into a frontier no one ever experienced before. Well, you had a big word, it was a small word, you know, you didn't even ask me if appexchange was the first name, and I'm gonna have to tell you, no, we'll save that for a subsequent one, because it was a small trip down to Cupertino that James dirname from App Store to the app exchange. And I'm gonna leave you and I'm going to leave you on that one and drop that dime,
Jared Fuller 43:41
Bobby, there's been way too many bombs dropped in this conversation. And you're gonna have to, I don't look,
Bobby Napiltonia 43:48
I, you know, I like you personally, which is why I do this, I don't do a lot of them, not because I don't like sharing. You use score does place in my heart, when I met you the first time and I want to help you be successful. But I also want to help you get to the point in your career by taking knowledge from folks like me that we can actually find the next generations of you because I don't know who you are, but you do and they follow you. So I want to help you be successful, and all of your peers that really want to make this a great place. Because guess what, we have a phenomenal industry that can change lives. And on that note, I will ask everyone, like let's do something for everyone from a diversity perspective. And let's let everyone have a chance. You know, we didn't even get to talk about the importance of the app exchange for us to really reach into the far corners that anyone could be a millionaire by building an app and I will give you a building go to market and some of the same things we tried when I was at Twilio, in designing that ecosystem that we can empower those that couldn't to be those that have it's,
Jared Fuller 44:42
it is such an empowering field of the business world to think about ecosystem as it really is the most democratizing component of being an entrepreneur is ecosystem. It's not actually your employee base. So Like, you just unlocked in an entirely separate conversation like if you really want to be committed to die. Are you just going to do that solely by way of hiring people like no, it's ecosystem, that's how you really start to level the playing field and move past, you know, quality into some of this equity conversation. That's top of mind for everyone. Bobby, this was incredible. We got to have you back on for another series. So that means we're going to be texting and shooting emails back and forth and figuring out how the heck we turn this into some sort of series. Because we really appreciate you giving back. I have done dozens and dozens, probably hundreds of calls with people starting partnerships. That's why I started this podcast to get back. Because there is no book there is no formula or manual, like people sharing these ideas in these conversations, that future of ecosystem, you know the analogy with your daughter, all right, that's probably going to be impacted by what comes out of this podcast and these discussions in the democratizing of knowledge that is really been institutionalized and not shared broadly. So partner up. That being said that Bobby now Konya, but everybody will see on this side. All right, thank
Bobby Napiltonia 46:10
you so much, Jared. Always a pleasure.
