From Zero to $3.7 Billion: Jyoti Bansal’s Textbook Case Study of Building AppDynamics (Part 5)

Sramana Mitra: How much runway did you have to raise money at this point?

Jyoti Bansal: I had runway. I was managing the expenses carefully. Even though we had funding, I kept the team to less than 10 people until we got to the first set of customers. Once the first set of customers came in, I started bringing out sales and marketing teams. We launched the company out of stealth. We raised our Series B about six months after coming out of stealth.

Sramana Mitra: We are now in mid-2010?

Jyoti Bansal: Yes.

Sramana Mitra: What happens next?

Jyoti Bansal: The V1 product is in the market. The initial sales and marketing people are on board. Now, the question was, how do you grow the company? Growing the company, at that point, is about acquiring customers and growing the sales function, and creating a repeatable sales process. That’s a very complex thing for a first-time founder coming from a product background to really understand sales.

When I started, the product-market fit was strong. The product was very good. That was my background. We were selling because the product was really strong. If you want to grow fast, you want a repeatable sales process. You have to build a very strong sales function. For me, I set my goal as, “I need to understand sales.” I needed to get good at learning enterprise sales and managing enterprise sales. We spent a lot of time building a good sales function.

Sramana Mitra: Did you hire a Head of Sales?

Jyoti Bansal: I did. I hired a Head of Sales. If you don’t know something well, you have to hire the best people who know that thing well. The first year, which was in 2010, we grew to 40 to 50 people. In 2011, we doubled to 100 plus. In 2012, we doubled again. The company took off. You continue to evolve. Your needs change.

In the first million of revenue, things are different. Then in the $1 million to $10 million revenue stage, things are different. At AppDynamics, I saw these multiple stages. There was the zero to $1 million stage, which was the product market fit. The $1 million to $10 million was really about figuring out your sales process, your sales model, and go-to market functions. Then from $10 million to $60 million of ARR, it was more about scaling the organization and pressing on the gas.

As an entrepreneur, it was about learning how to scale the team and scale the culture, and managing a larger team. Once we got to the $60 million to $70 million of revenue, the next challenge was around going from the first product to a broader set of products. The growth slows down in many of these markets if you don’t build your product number two, product number three, or product number four. That becomes the next set of challenges in that space. After that, it’s about going public and operating as a public company.

This segment is part 5 in the series : From Zero to $3.7 Billion: Jyoti Bansal’s Textbook Case Study of Building AppDynamics
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