January 7, 2022. Last is, about once every two weeks, my co-founders and I get dinner. . Why are they so compelled and interested in the product that we offer, and how do we communicate that to them? Net Worth. Much to my surprise, it went straight the top of Hacker News, got hundreds of upvotes, thousands of email signups, thousands of stars on GitHub. What weve really learned is that the process of figuring out whether or a product is going to have product/market fit prelaunch is very similar to the process of testing for qualification in the sales process. The January reading for new-home sales is due next week, but the figure rose 2.3% in December. We raised a little bit of money from the tennis coach a few hundred dollars a month to print the thing on paper and distribute it around the school. Peter Reinhardt: I think from the founders perspective, the only way to scale the team is to hire strong senior executives who then have their own capability and their own network to go hire and recruit aggressively. His father introduced him to the recordings of Belgian gypsy jazz guitarist Django Reinhardt. "We were in a pretty downward spiral at that point. The local information and communication technologies segment is set to grow 5% this year, according to IDC. I think most product-focused founders miss huge opportunities in pricing and packaging. I think that in the last couple of years, over 100% growth in terms of the number of employees. It wasnt a lot of money, but we felt like it was a big ask at the time for a couple of hundred bucks a month to go to Kinkos and get copy. Tell us about what happened, and how did you guys overcome that challenge? : Then eventually, you had to put this out there. Ilya Volodarsky: I work in the products engineering team, so both doing products and engineering. Peter Reinhardt: Weve raised a bit shy of 300 million in capital in the West, seven years. Tell us about what happened, and how did you guys overcome that challenge? Theyve raised quite a bit of money too. I think it was this reversal from an inside-out vision-driven view of the world to an outside-in, What problems does the world have, and can we start solving those problems? Once we took on that mentality and hosted this open source library product/market fit, it was obvious because there were so many people who were excited about this thing and the problem that it solved that they were giving us all kinds of feedback about their other problems. Bradford: Tell me about that first company idea that you took to Y Combinator. 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We were clearly failing on this sort of customer sales side of things, and we were just spending all of our time building, building, building. The first half of the year, we went from 10 to 12.5, which scared us. Are there any characteristics they have in common? They do normal things. By the spring of 2011, the friends had landed on the idea for a "classroom lecture tool" that would let students flag any points of confusion to professors. In terms of growth, recruiting, and bringing people into the company, that, for me, has been a big on-mark. We made a pricing and packaging change where we rolled the two separate packages into a single package, and then changed our self-service pricing relative to our sales list price for larger contracts. Eventually, we open sourced it, and we started using it as a growth hack. Bradford: Think about the "A player" employees at Segment. Your father was a carpenter, and also, your mom was an art teacher. Peter talks about why building a business where the target customer is developers can to some degree sidestep the question of what company size range you chase . We were a year and a half in. Master breadmaker Peter Reinhart is also a teacher, author and theologian. I was thinking this would just totally kill it. In our conversation, we cover Segment's fascinating journey from an education feedback tool to the business it is today, Peter's sales philosophy on meeting the customer where they are and not where you think they should be, and why revenue . In fact, before MIT, the friends didn't know much about start-up culture. : About six months after we launched the open source library, we had a good bit of free traction some customers using the product for free. Segment did not raise any money in its starting years. Heat some water, preferably in a kettle, so you can pour it into this pan later. Additionally, Peter Reinhardt has had 1 past job as the CEO & Co-Founder at Segment. I lean on those direct reports, who are best a creating clarity to help me figure out how to synthesize at that next level. We thought, Okay. French-Owen: At the time it was something completely different. We always find ourselves having to put way more effort into that than we think is necessary, and it always pays back in spades to reinforce our core company values again and again in as many different places as we can in the interview process, in the welcome package for onboarding, in the performance review at all hands every two weeks, etc. 2016, for us, was rescued by pricing and packaging. Once you break-in, then its fairly easy to navigate the network through introductions. We raised a bit of money coming out of demo day for Y Combinator, about 600k. Each week in their MIT "Founder's Journey" class, the founder of a successful start-up would speak and answer students' questions. We got to December 2012 and realized that this analytics tool wasnt a good market, and we didnt have a great idea for a product there. Its hard for them to understand the broader space. The first half of the year, we went from 10 to 12.5, which scared us. If it is then, at least, in the B2B world selling software to other businesses, I think you can do a lot of good product/market fit testing with relatively few conversations. We should have been able to figure out analytically from the data that this wasnt working during our summer test. If you can leave a review as well, that would be fantastic. Our churn rate spiked in the first half of that year. Peter Reinhardt: I read somewhere recently this concept of two ways of responding to problems. In high school, the first entrepreneurial thing that I got myself into was starting a high school underground newspaper called The Watchdog. Since this interview Peter Reinhardt, CEO and Co-founder of Segment, and his team have raised another 175M USD to bring total funding to to $284 million and a valuation of over 1.5B. The company has raised $300 million from top tier investors such as Accel, Google Ventures, Meritech Capital Partners, Thrive Capital, NEA, Kleiner Perkins, and General Catalyst to name a few. A Division of NBC Universal. We should have been able to figure out analytically from the data that this wasnt working during our summer test. Now, youve been at it for quite a while with the business, and everything started back in 2011. Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. I think we had a big success there, but I think we have also massively under-invested in pricing packaging, aligning pricing, and packaging to help customers want to buy is critically important. We basically spent the next year building out various variations of that product, and frankly, not spending much time talking with customers. Peter Reinhardt: The most important thing to realize is that the world doesnt care how you think it should work. So, the concept of a CRM being the customer data system of record doesnt make sense anymore. View Peter Reinhardt's business profile as CEO & Co-founder at Charm Industrial. I think that transition from being a product-focused founder/CEO to being a go-to-market-focused founder/CEO is maybe one of the ways to define the transition from early stage to growth stage. Subscribe: Google Podcasts | Spotify | Stitcher | TuneIn | RSS | More. Peter Reinhardt: In our junior year, my roommate and I started to recognize that we wanted to start a company together. To the friends' surprise, Smith said yes. : So originally born and raised in Seattle. I think MIT is a really good place to learn theoretical computer science, but I find that many of the hardest skills to be a successful software engineer you learn in the industry right afterwards: learning how to be on a team, set a team's mission and vision, and keep people motivated. When? Published: 26 Mar 2021. Peter Reinhardt: We had just raised this money about two weeks before we deployed it, so we had to call back all the investors and say, This thing you just invested in, were really sorry, but its a terrible idea. : Very cool. : Is there any specific strategy, for example, that you use in order to get in front of those investors. Made with great respect for entrepreneurs in Missoula, Montana. That's where we first bonded, counting fish. How do you go about embracing culture, and what are some of the key lessons there that you could share with the people listening? Its like a snowball effect kind of thing? His net worth has been growing significantly in 2021-2022. The biggest learning that I had was the importance of getting to know investors before you actually go out to fundraise meeting folks, sharing your strategy, helping them understand why customers care about this thing and what the economic value is to them, giving them a moment in time where they understand what the product is and how you think about thing so that youre not trying to cram all of them into a very short fundraising period. Date Of Birth. Net Worth in 2022: $1 Million - $5 Million: Salary in 2022 . Product managers that would use tools like Mixpanel and others to analyze their users. "Ian was like, 'You know what, I think there's a big business behind Analytics.js and I think we should do that instead,'" Reinhardt says. People started picking up this open source library. For us, that is the big transition were going through now, which is how do we figure out the go-to-market strategy and details of who we go after? But the world has its problems, and it doesnt care what you think in terms of how it should operate. The hardest thing is breaking into the network for the first time. Peter Reinhardt, Segment's CEO, has spoken publicly about being the data infrastructure for the next generation of marketing tech. Peter Reinhardt: Yes, investors are in the business of making good investments, not just investing. "I'm excited to bring my passion for tackling climate . We shouldnt have had to we actually stood in the back of classrooms and counted screens to figure out what people were doing. Perhaps they will also appreciate it. "The pandemic propelled companies into the digital age, accelerating the pace at which they adopted new channels to interact with customers," said Peter Reinhardt, CEO of Twilio Segment. Eventually, we open sourced it, and we started using it as a growth hack. Peter Reinhardt on Github: Id love to use this to send data to Google Analytics and Mixpanel. 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