Head of Content and Work-Bench
A discussion with Michelle Zatlyn: demystifying enterprise founders and their journeys to success
For their Summer Speaker Series, the London Enterprise Tech Meetup and its New York counterpart met earlier this month. We were treated to a demo of Pronto, by its CEO and Founder Swaroop Kolli – a collaborative data-driven management platform, Pronto redefines how companies develop, sustain, and grow strong partner networks. Following the demo, Jeff Elder, Business Insider’s cybersecurity reporter, moderated a fireside chat with Michelle Zatlyn, Co-founder, COO, and President of Cloudflare.
In 2009, as the world economy continued to fight for recovery post-2008 financial crisis, Michelle Zatlyn was a Havard Business School student. That January, she went on a trip to meet with venture capitalists and entrepreneurs in Silicon Valley – it was then that Michelle had her first taste of the world of founders. Listening to entrepreneurs speak, she eventually thought to herself, ‘if he can do it, I can do it,’ and this realisation demystified the concept of founding a company for her.
These days, almost 13 years later, Michelle runs a cybersecurity enterprise, aiming to make the internet more secure, private, fast, and dependable – that company is Cloudflare. Before going public in 2019, the company raised $400 million and today has over 4 million users, including around 17% of the Fortune 1000.
Over the course of the discussion, Michelle passed on some of the lessons she’s learned as a founder in Silicon Valley. The main one? There are two pathways that business founders must follow:
She stated, ‘If you look at all of the great tech companies in the world, they have both business and tech chops. You need to have great differentiated technology that’s sustained, in addition to a really good business model.’
Wondering why? Michelle explained that, on a technical level, it’s difficult to compare rival or similar technologies. Simply highlighting the ‘cool’ factor of your product will only get you so far. On the business side, you’ll find the major differentiator. It’s a lot easier to compare financial measures like revenue and gross margin.
The Cloudflare founder also highlighted that, in the case of this company, they were a cloud-based security, performance, and reliability solution (‘cool’), but their ability to structure their sales and services differently than the competition was the real game changer and what made them stand out (even more ‘cool’). They immediately discovered that having excellent business metrics attracts additional VCs and customers. Once that side of things has been established, then the ‘coolness’ of the tech approach will push the business further.
From her years of working and learning in the enterprise technology space, Michelle gave some sage words of advice for attendees:
- ‘Swing for the fences’ – Though this strategy may not be appropriate for every business, it does force you to consider the long-term. Cloudflare realised early on that they had to earn their stripes and work their way up to Fortune 1000 clients. They began by supplying developer and hobby sites, and over time, they were able to win and layer in larger businesses. In truth, Cloudflare didn’t disclose its first $10 million customer until their Q3 2020 earnings call (almost a decade after their launch).
- ‘Never stop playing the game’: This is exemplified in a story Michelle told about when Cloudflare went public. It was a Friday, and on Monday everyone was back at work ready to start the next challenge – as their founder said then and still believes now, ‘We’re only getting started’. She believes that there is always more potential to work towards, and the IPO is not where the journey ends.
- ‘Choose your co-founders wisely’: These are the only people who will be able to comprehend your experience. Choose them with caution, as they will be your long-term support system through both the greatest and the worst of times.
It was a great event – thank you to both the LNETM and NYETM, and of course, to Michelle Zatlyn.