Building a Venture Scale AI Developer Tool Company: Moderne CEO Jonathan Schneider (Part 7)

Sramana Mitra: Can you elaborate on how you’re working with the open source community and is that a source of leads?

Jonathan Schneider: It’s pretty ubiquitous in the JVM ecosystem. Most Java developers know about it or have used it. It’s just kind of present out there.

We talked about aligned incentives earlier. Suppose as a framework author, I work on the Spring team. When I make a breaking change, maybe for good reason, maybe for bad reason, the impact of that change falls on all the end consumers of the framework.

The unit economics of the change are kind of upside down. If the Spring team framework author that’s making a breaking change also writes the recipe that helps you move from before the change to after the change, then the burden doesn’t fall so heavily on the end users of the framework. This is sort of a natural dynamic anyway.

Especially in large enterprise customers, if their Spring team is owned by Broadcom and that large enterprise customer is a Broadcom customer, we can kind of whisper in the ear of that large enterprise customer, “Hey, they own the Spring team. If they make a breaking change, they owe you a fix, right? They should be writing that recipe. If you break it, you fix it.”

That large enterprise customer can put pressure on the open source team on our behalf, which has this nice effect. Ultimately, the framework author making the breaking change does want their user base to adopt it more quickly so that they can innovate faster. The end user wants to move faster, and we want to be the distribution mechanism to take that recipe and apply it quickly across the whole organization.

Everybody’s incentives are already aligned. It’s a question of prioritization. Starting in large enterprise has allowed us to add a lot more fuel to the prioritization.

Sramana Mitra: How many customers do you have now?

Jonathan Schneider: We’ve around thirty right now – a lot of Fortune 100 and a smattering of standard enterprise mid-market customers as well.

Sramana Mitra: What about revenue – share whatever you feel comfortable disclosing. I know this was pitched to me as over $5M ARR, and I will stay with that. But if you want to put color on that, I’ll be happy to explore that as well.

Jonathan Schneider: It’s between $5M and $10M in present value ARR. I think what you kind of heard already is that some of the ARR increases are already committed.

Sramana Mitra: Yes, it’s already built in. There’s essentially backlog revenue.

Jonathan Schneider: Right. So for example, in December 2024, one customer just goes up by $800K, which is already built in, right?

Sramana Mitra: So if you’re between $5M and $10M ARR currently, let’s say 2025 is between $5M and $10M ARR. What does 2030 look like based on if you play this out?

Jonathan Schneider: I think this year it’s triple revenue, next year can be triple revenue. I think we can be on that path for a while just based on current backlog. Our goal this year was to increase to $8M ARR and about $4M of that’s already nearly locked in.

Then that snowballs because that carries forward every year. The more of these that we find, the more of these are built in. You have to be patient. We always speak in present value ARR terms only. I know a lot of companies do weird things with ARR sometimes. They talk about potential ARR or future ARR, we prefer to just keep it simple and talk in present terms.

Sramana Mitra: Your financing needs at this point are also limited, isn’t it?

Jonathan Schneider: Yes, we just raised that series B in November. Yes, we’re okay on cash runaway for several years at this point.

Sramana Mitra: Okay. Wonderful. Great story. It’s great to learn about how you’ve navigated your journey. It’s a fascinating background that you come from. So, do you still play music?

Jonathan Schneider: I did start again. It’s an interesting thing. Violins in particular, are very, very expensive instruments. I was the first high school student ever to make it in St. Louis Philharmonic. I got connected to a loaner network of instruments. Collectors buy instruments, but if they’re not played, they lose value and tone quality. So, I had access to these amazing instruments. Then when I went into the army, I got separated from that ecosystem altogether. So, twelve years later, I come out and don’t have a good instrument, don’t have really access to anything. So, I built an electric instrument, just fabricated one myself, got more involved in the jazz ecosystem in the Bay Area as I was there, and just kind of transitioned from that competitive classically trained repertoire to easier, just more relaxed playing. It’s very different, very different for a classically trained musician.

Sramana Mitra: It’s very different. Yes.

Jonathan Schneider: So, I focus now more on that kind of thing.

Sramana Mitra: Well, we love both classical music and jazz.

Jonathan Schneider: I’m headed to Berlin in a couple of weeks to just see the Berlin Philharmoniker conducted by Daniel Baronboim. I’ve listened to so many recordings over so many years, and it’s just kind of a dream to go there and hear it live. I just can’t wait.

Sramana Mitra: It’s marvelous. Have fun. Have a great time. Nice to meet you.

This segment is part 7 in the series : Building a Venture Scale AI Developer Tool Company: Moderne CEO Jonathan Schneider
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