Startup Field Guide Episode 16

In this episode of the Startup Field Guide podcast, Sandhya Hegde and John Vrionis chat with Jyoti Bansal, co-founder, and CEO of Harness — an emerging leader in the CI/CD (continuous delivery) space. Last valued at $3.7B in a 2022 fundraise, this is Jyoti Bansal’s second enterprise software unicorn. His first startup AppDynamics was acquired by Cisco the night before their IPO in 2017. Jyoti is also a co-founder of Traceable and Unusual Ventures.

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Be sure to check out more Startup Field Guide Podcast episodes on Spotify, Apple, and Youtube. Hosted by Unusual Ventures General Partner Sandhya Hegde (former EVP at Amplitude), the SFG podcast uncovers how the top unicorn founders of today really found product-market fit.

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If you are interested in learning more about some of the themes and ideas in this episode, please check out the Unusual Ventures Field Guides on customer discovery, early customer outreach, and our introduction to design partners.

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TL;DR

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• The insight for Harness came from Jyoti’s interactions with AppDynamics customers who were dissatisfied with their CI/CD process. For every 10 to 12 engineers at these companies, there was at least 1 DevOps engineer whose job was to build the automation to deliver their code and babysit deployments. When Jyoti spoke to large banks, he saw that on average they employed 10,000 engineers, out of which hundreds were dedicated to writing automation scripts. Jyoti realized that there was a need for a software delivery platform that would automate and manage the process, making it less expensive and time-consuming. 
• During the customer discovery process, Jyoti recommends moving beyond “friendly” contacts. He is a firm believer in cold outreach because customers outside the founder’s network are going to be more direct and blunt with their feedback. Jyoti recommends having at least 50 “cold hard conversations”— this is the best way to validate early assumptions, and iterate on early messaging, ICP, and personas. 
• Founders need to learn how to sell and become comfortable with rejection. Initially, a big part of selling is reaching out to many people, articulating the pain, and the solution. This is critical to the process of finding product-market fit.
• During customer discovery, Jyoti uses the “3 Whys” framework: Why buy anything?—is there enough of a pain to require a solution? Why buy now?—is there enough urgency to solve the pain today? Why buy us?— is the solution differentiated enough to buy from you?
• Jyoti and his team had initially assumed that large companies would be ideal customers for Harness, but initial customer conversations revealed a greater urgency (why buy now?)  within mid-sized companies that were starting a new initiative or moving to a new architecture like Kubernetes. 
• Jyoti recommends that founders “go wide and then narrow.” Don’t restrict your customer discovery phase to companies within Silicon Valley. Out of 35 million software developers, only a million or two are in the Valley. Find companies that have an early adopter mindset across the country or maybe even outside the country.
• Instead of MVP, Jyoti prefers the phrase “Minimum Sellable Product” especially if it is targeted at an existing market, and there is already an incumbent available. The Minimum Sellable Product should not only include all the features of the incumbent but should also include differentiating capabilities so that customers will pay for it.  

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Episode transcript

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Sandhya Hegde:

What was the original insight behind Harness?

Jyoti Bansal:

The original insight behind Harness was that everyone was struggling with DevOps and CI/CD and software delivery. I saw that firsthand at AppDynamics. We had about 400 engineers when we sold the company to Cisco. And for every 10 to 12 engineers, there was one person whose job was to take care of deployment scripting, deployment tooling, babysit deployments, troubleshoot deployments, et cetera. And if you just do the math, that was about 30 or so engineers who were spending their time doing that kind of work. 30 engineers is 5 to 6 million dollars a year and I would just do the math as, we were spending 5 to 6 million dollars a year doing this stuff, which is toil kind of work, and even then we are not very good at doing it and that's a problem. And then all of AppDynamics' customers, I would hear the same story, but at a much larger scale because these were banks and retailers and these are banks with like 5,000, 10,000, 20,000 software engineers working for them.

And if you look at the magnitude of this, so to me it's like we've got to solve this thing. We have to build a solution to solve the problem around DevOps, CI/CD, and make it streamlined. Everyone in the world needs DevOps, everyone needs CI/CD. No one likes the current approaches, everyone hates it, and everyone is struggling. So there is an opportunity to solve this. That's kind of the high-level insight I started with. When you start with the insight like that, now it's like the hard work starts on how do you convert that into a product-market fit? How do you do that? As you know at Unusual, that's a core focus of we look at: can we convert that into a playbook? Can we take those insights, like a high-level insight into a market opportunity, into a playbook to convert into a product-market fit?

John Vrionis:

Yeah, I can say that working with Jyoti all these years, I've now seen him do it three times, but going back to the AppDynamics days and then Harness, I watched him essentially put together a playbook of sorts to go from insight to product-market fit. So really the basis of Unusual was combining his experiences and the hundreds of companies that I've had the privilege of working with over the last 20 years and really trying to provide something to founders that we felt didn't exist, which was this set of steps to go through when you have an insight but you're trying to build a company and ultimately find product-market fit. So we landed on the term, The Unusual Method, which is our approach and you can see it in our Field Guide, you can see it in our founder academy, which Jyoti and I are currently teaching at the moment. You can see it in our engagement model. And I'm really excited today to talk about the specifics of how Harness and Jyoti sort of did that process the second time.

Sandhya Hegde:

And Jyoti, now that you have been through this multiple times, what would have been your ideal experience when you first started AppDynamics? Are you now teaching what would have been useful to you in the past?

Jyoti Bansal:

Yeah, I wish I had a playbook at that time, when I started AppDynamics. I had an insight for AppDynamics that people are building these complex distributed applications and something goes wrong in it. You can't easily troubleshoot and fix it. So that was an insight, but converting that insight to a product-market fit that you can go and build a scalable business around, there was really no playbook. And if there was a playbook and a formula and some approach, I would've definitely gladly take that on.

John Vrionis:

So Jyoti, I want to ask you about the early days of Harness and some of the assumptions that you were testing. We talk about this in the Unusual Method as the customer discovery phase and we highlight the importance of figuring out your USER and BUYER and how to describe the pain and even go about the messaging framework and the approach. I think one of the things that people might be very surprised to hear is how you did cold outreach, how you were testing your initial hypotheses about what Harness solved, who it solved it for, who was desperate, as we talk about. So I was wondering if you could walk us through some of your customer discovery process early on at Harness.

Jyoti Bansal:

Yeah, it's kind of interesting that many times as founders, you end up talking to people you know — your friends, family, people who are working in similar kind of roles in other companies, it could be very misleading. So that's the one thing I've learned the hard way from my AppDynamics days. That's where not having a playbook really hurt there and in AppDynamics I was introduced to these friendly customers and accounts and we would spend a lot of time talking to them. So yeah, we kind of like what you're doing… 

Sandhya Hegde:

They want to be nice to you.

Jyoti Bansal:

Yes, because they all want to be nice to you because they're friendly. You're a founder with a lot of excitement about what you want to solve and they want to be nice to your face. The problem is that nice is very bad for you because now you're not getting the blunt feedback. Most people will end up building a product that is not sellable easily because you didn't hear the blunt feedback around what's working, what's not working, et cetera. So I'm a strong believer in, you have to do cold outreach. Cold outreach is the best way to prove that it's going to work or not. People are not taking your call when you reach out to them cold about the problem. That means that problem is not really interesting enough for a lot of people. That's a validation of your assumptions right there.

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But when they take your call, does the pain resonate? Does your solution resonate? Does urgency resonate? Those conversations are more important to have with someone who's not your friend, who is not in your network. And we talk about it in the Unusual Method and the discovery phase. The things that you really need to figure out is the pain, we call it the "Three Why" framework: Why buy anything? Which is the pain — is there for someone to buy anything? Why buy now? Is the urgency there for them to solve the pain today? And then you have, why buy from you? Does your solution have the differentiation enough for people to buy from you?

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And those are the ones you have to validate. Many times people think like, "Hey you are a repeat entrepreneur, you've built multiple products, so you won't make mistakes on your assumptions on product-market fit." I would say I wish it was true, but that's not the case. And every time I build a product, you still have wrong assumptions and the only way you get out of your wrong assumptions is being very rigorous about that phase of having these kind of cold hard conversations with many people.

Sandhya Hegde:

And sounds like you are very methodical about defining your assumption. So for Harness, could you walk us through how did you think about who's a USER? who's a BUYER? How do you think about cold outreach, making it really efficient and engaging? I would love to hear some stories from your early days at Harness.

Jyoti Bansal:

One of the things that we talk about at Unusual, in the academy as well, it's you have to go wide and then you go narrow. Because initially, you want to make sure you talk to customers in large enterprises and mid-size and small companies, you maybe talk to multiple personas as well on the USER side, the BUYER side, and before assuming everything, you obviously will have a thesis around something, but you want to validate that. But then you want to start narrowing it down eventually to, who's your initial BUYER, who's your initial USER, where is your ICP? What kind of companies? You want to be as methodical about it, starting from that point. What you want to see is where is the pain resonating the most? And that's actually I would say, the simpler one to figure out.

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The one that is harder after that is the urgency. Where is the most urgency? Where do people want to solve the pain right now? That's where your initial money will come in. As a startup, you have to survive by driving initial revenue and if you can't figure out urgency, you're not going to have initial revenue quickly. So a lot of that comes from these methodical conversations around, 'what is urgency right now in these organizations?' So in Harness's case, for example, we started with people who are struggling with all these DevOps challenges and we'll go to these companies and say, "We can solve your problems much better. Instead of doing manual scripting and building these manual pipelines to do your deployments, you can have an automated process that can do your deployments right away." The pain was real. People would say, "We spend this much time and energy, we have this many engineers working on it, our pipelines are broken, we can't do deployments reliably," all sorts of things.

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But the urgency wasn't really there in many of those because they had something that was there. So what we found through that process was the urgency was new projects, like people moving to Kubernetes or people moving an application to a new cloud-native architecture. So we definitely changed our messaging and our initial product-market fit around that as well. 

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When I was at AppDynamics, we were mostly selling to very large organizations. So a lot of the conversations that I was hearing were very large companies. My co-founder at Harness came from Apple, which was a very large company as well, where he was seeing some of these pain problems. But the problem in many of these companies that we were talking to and even companies like Apple, they didn't really have the urgency to change it right away, to buy from a startup something new. So the urgency for us was when people were starting a new project or doing a new architecture, moving to re-architecting their applications to move to Kubernetes or re-architecting their apps to move to the cloud or building a brand new app. But we initially started with the assumption that these companies have so much pain, we can sell it there, but we had to adjust it to where the urgency would be.

Sandhya Hegde:

And for your ICP, how did you think about the Silicon Valley bubble of tech company customers versus going outside it? Is the process you use for reaching them different? How do you think about those two buyer personas?

Jyoti Bansal:

I would say it's better to go wide and then go narrow. There is no point only talking to Silicon Valley companies because you could be in that bubble. In Harness's case, the long-term market is not just Silicon Valley, you have 35 million software developers in the world. Out of those 35 million software developers, you only have, I don't know, a million or two at most in Silicon Valley, maybe not even that.

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So the majority of the market is outside of that. So if you find a product-market fit that only suits some of the companies in Silicon Valley and no one else, that's a problem. But the core is to find the early adopter thought leader kind of companies. You don't want to build your initial first product-market fit for the laggards kind of companies. And sometimes people assume that the thought leaders are only in Silicon Valley. That's not true. If you are looking at selling into a broader market, you have to identify who are the smart, thought-leading kind of teams and companies and people across the country, or maybe even wider than the country. And then you try to have the conversation and build the product that could be more widely acceptable to that audience.

John Vrionis:

Jyoti, just to play that back for a second, you emphasize the importance of having these cold conversations not benefiting, certainly in your case from the AppDynamics success even as you built Harness, and I think for a lot of first-time founders, that's a painful experience to reach out to a bunch of people, not even get a response in a lot of cases, or if they do get a response to be told, "Hey I'm not interested" or "That's just not exciting." So can you share a little bit more about that — your specific outreach technique and how you thought about rejection and maybe iteration as a result?

Jyoti Bansal:

That's a good question. As a first-time founder, especially when you come from an engineering and product background, you normally don't have sales experience. I didn't have any sales experience when I did AppDynamics. And rejections are hard if you're not used to selling and you'd reach out to someone and say, "No, we don't really want it" or "We don't really care" or they don't even respond, it's hard the first time you do it. But I do think that's very important for any founder to learn, and it's very important for founders to learn some selling. There is no way you can build a company if you don't try to develop that part of your skillset of how to sell. And a big part of selling is figuring out, reaching out to a lot of people, identifying, qualifying where the right audience is for your pain, articulating the pain, your solution, and then getting them in the process.

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So I'm a strong believer, just from an outreach tooling perspective, LinkedIn. LinkedIn is such a powerful tool available for any startup these days. You can search and find the right industries, the right personas, it doesn't take too much effort to reach out to people on LinkedIn. But yes, you will have rejection. If you reach out to a hundred people you ideally going to get maybe, at most, 8 to 10 conversations. But those 8 to 10 conversations are quite good. And out of those 8 or 10 conversations, you will convert some of them into your ideal customers with the right pain.

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And over time once you have those conversations, maybe 30-50 times, you can start narrowing it down where your success rate gets higher. So in Harness's case for example, initially we were going very wide, but then you figure out where we get the most response and the pain is pretty acute is people building and deploying on Kubernetes in some mid-size to large-size companies where there's the big projects going on, but the current pipelines or the CIC retooling that they're building out, especially on the deployment tooling doesn't really work well in the modern Kubernetes environments.

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They are all figuring out," Okay, how do I go and deploy in these environments?” So once we narrowed it down, then we will go and search on LinkedIn who are these companies that are doing large Kubernetes projects, and if you reach out to them your success rate is higher. So initially the success rate is lower because you're wider. Once you narrow it down you can get better. But I encourage every founder to use LinkedIn, reach out to people and many times do it yourself, not just rely on a salesperson to do this thing. At least in the beginning, it's better for founders to do it because they need to also see what roles are there, what personas are there, what industries are there.

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Just doing the search on LinkedIn gives you a lot of insights and reaching out to people and figuring out who are responding, who are not responding, it's very important. I strongly encourage all founders that they have to be on the calls, that if you don't do the calls, you don't have to do every call but you have to do a large number of calls in the beginning, otherwise getting the product-market fit, it will be at pretty high risk.

John Vrionis:

I've heard you say that talking to friendlies or warm introductions, it can be more misleading than talking to cold outreach connections because it doesn't feel good to tell people no, especially people you have a common connection with. The second thing I've heard you actually tell founders is that when they do talk to people and they ask essentially why buy now, prospects don't always give you clear answers. So I'm curious, in the case of Harness, what were you looking for when you talked to a customer prospect that gave you a signal that they were serious about why buy now. Did they have an alternative? Were they hacking something together already? How did you know that there was a yes to that question versus a maybe or a no, in which case you would be wasting your time?

Jyoti Bansal:

I think you have to ask the right kind of questions there. To me, the important question to ask is: what kind of initiatives do they have going on right now? They have KPIs around it, they have MBOs around it, they have OKRs around it. Let's say someone is talking re-architecting to move to Kubernetes. And so the first thing I'll ask is, "What is the timeline? Is it six months, is it 12 months?" And then do you need to have the automated deployment pipelines, in Harness case, when you do that launch of say the new project, new architecture. And if the answer is, "Yes, in six months we want to move here" or "The phase one of our re-architecture has to happen in six months, our OKRs are tied to it and to achieve that we need automated deployment pipelines," then you know that there is the why now urgency there.

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If someone says very broadly, "Yeah we have vague things around that. We don't have a clear timeline. Yes, what we're talking about seems exciting, important, but we don't really have a project going on or something that ties to some initiative or some project," then the why buy now, is less. The second part that is very important also is understanding the business case for them. The people can have urgency but if the business value of what you're providing is not clear, it would not convert to business for you. My favorite question to ask in many of these conversations is, "How would you make the business case to your boss?" Say if you have to ask your boss, "Hey I want to bring this product Harness into the company and you want to spend some money for it, what will you tell your boss?”

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So ideally you want to hear from the person you're talking to, normally would be some sort of a technical champion in this case. So you want them to talk about, The case I will make is that every time we do a deployment we have five engineers on the call babysitting the deployment and that's costing us this much money on the engineering time, or we have deployments fail 20% of the time and troubleshooting the deployments takes time and it impacts our customer satisfaction in some quantifiable way, or that we cannot go and even finish this project unless we have automated deployment pipelines built out here. So there is no way we can meet the deadlines of finishing this project unless we have that. So how you would articulate the business value in the case to your boss, and if they don't have a clear clarity on how would they talk about it, most likely when they go higher up and ask for the money through the boss, CFO, whoever, they'll be rejected. So you have to understand that as well in any of those conversations.

John Vrionis:

Can you give our founders who are listening a sense of how many iterations you did on your pitch deck and how many meetings you had? Because we rarely meet a founding team who doesn't think they've had enough conversations. A lot of people think they've done this work but in reality they probably haven't. And so how did you know when to move on and start working more closely with design partners and then how many iterations did you actually do ahead of time? Because I think that usually surprises people as well.

Jyoti Bansal:

Well, it is a lot of work. My rule of thumb is about 50. That you have to do about 50 conversations to really get it right and you start with, let's say your first pitch deck or whatever it is, demo, story, pitch deck that you start with and initially after three or four conversations or maybe even sooner, you'll be, Okay, this doesn't work, it didn't resonate, let's try changing something and you change it to something else and then you do it again after another three or four and then you start learning and you do it again and you're also honing in the persona and the USER, BUYER and the ICP at that time. By the time you normally get to 30, 35, you start getting... The ideal state should be that you're not hearing anything new now.

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It is the same kind of pain that you heard multiple times and how you are talking about it is what you're hearing the same kind of urgency that you figured out how to talk about it and how customers are talking about it, the business value, the solution, how you articulate the differentiation and your solution and how people are perceiving it. So it takes about five, six iterations at least for that. So every 3, 4, 5, in my case when we were doing it for Harness, we'll do these calls with customers, after every call we'll do a, "Okay, what didn't work in that call and do we need to change our message? Do we need to change our positioning, how we talk about it, how even the product roadmap should, if we talk about that," based on those conversations and then we'll try that out in the next three or four or five and then we'll change it again and we'll try it out and by about 30, 35 you start hearing the same things and then you know you can slow it down.

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You can still have another 10,15 if you want at that point and if you're still not hearing the same things, you don't have a consistency of those, the personas and the ICP and your messaging at that time. You still haven't really figured out the foundation of your product-market fit and it's kind of a waste of time to build out the product without getting that. So you want to make sure you're doing more and more of that.

Sandhya Hegde:

And brilliant, it's simple but so effective. I think the two really big takeaways here are one, in the early days it is brute force. You have to do the outreach, you have to iterate on the deck, there's no secret sauce, there's no magic bullet, you have to put in the work. And two, I think the beauty of asking the right questions is so clear. You're not asking them would you like to ship faster, because everyone would say yes. That is actually the easiest way to poorly validate your idea. Yeah, I love that. So what I'm hearing you say is once you start hearing the same things, like your deck is now stable, you can start thinking about okay what is the Minimum Viable Product. So I'm curious what's been your approach to MVP? Do you think it's more or less the same? Has it evolved a lot between building AppDynamics versus now, Harness?

Jyoti Bansal:

Yeah, MVP is an interesting question always. It depends on are you creating a new market or are you going into an existing market? If we're going in an existing market, many times product managers obsess with MVP like, oh this is the thing we can ship with and someone can start using it and which is the minimum definition, a minimum viable that you know can have these three features and you're still some viable product that someone can use it. I like to think of slightly differently. At Harness, we call it Minimum Sellable Product. What is your Minimum Sellable Product? And if you're going into an existing market, the Minimum Sellable Product bar is a bit higher. If you have to replace some incumbent or someone is evaluating you against some incumbent, you have to at least do the core capabilities that the incumbent will do.

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So the incumbent has 20 core features and out of 20, let's say 10 are bells and whistles that many people don't need, but the 10 that are very core out of those. So then those 10 you have to have in your MVP. So at Harness when we build new products, we started with our CD product and now we have eight products. So we go through the same cycle in each of our products that we build, what we call it if you're going in an existing market, you look at what are the table stake features, which are really coming from what the incumbents would have and what you need to address an incumbent and then what are your core major differentiating capabilities on it?

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If you don't have major differentiation and that's a challenge as well, but many times if you only do the differentiation, it's not going to work because for someone to pay for your product compared to an incumbent, they need the table stakes things as well. To me, the MVP has to be defined with that in mind. So that's why I don't even like to use the word MVP. At Harness, we call it the Minimum Sellable Product because it's clear what can we sell versus not.

John Vrionis:

How many early design partners, that's what we call them in the Unusual Method, did you work with to go from initial instantiation of Harness to something that was the Minimum Sellable Product and did you have a timeframe in mind when you started it, and did the timeframe line up with reality?

Jyoti Bansal:

No. I don't think it ever does. The timeframe, you start with by shooting for six months, nine, we understand what to build it now, normally three to five design partners are a good number. Maybe the most you can handle is five to seven and beyond that becomes too much to handle and we thought in six months, nine months we can ship something and be in a good product but it takes time when you start releasing it out. Let's say when we launched the first version of our product, what we thought, even working with the design partners would be our V1 Minimum Sellable Product. It had major gaps, we launched it and we built this beautiful UI because some of our design partners all wanted a beautiful UI and then we started selling it.

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We figured out that for people to really adopt it, they actually need automation through what people call a pipeline, as code. You write your pipelines as code into these YAML files and do automation because otherwise, it doesn't scale, and you can't really get hundreds or thousands of developers to come in and onboard quickly. So we had to almost change even after we did that which is, "Okay let's make that as the more first-class element of how people use our product," because when people start adopting something, it could be a different set of requirements that you didn't think about as carefully before.

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So there is that element when you're showing the product, you hear the feedback and the design feedback from the prospect you're working with, but when they start using the product, it can change. So that's that and then you have to adjust your product into it. Then they may realize, okay using it has these challenges or these gaps and you have to be very nimble and iterative about that, as well.

John Vrionis:

So during that implementation phase, I would imagine you ran into a few surprises. Is that something that you'd recommend founders think about in terms of their timeframe and being open-minded about the surprises?

Jyoti Bansal:

There will always be surprises, but you want to reduce the surprises is the main thing. The more conversations you do and the more you get the product in hands of people earlier, you reduce the surprises there. There are two kinds of surprises, there's technical surprises. The product won't work because of whatever things — your product requires some kind of installation and in practice, customers won't do that installation. On paper, it sounded right but they won't do it right now, or something like that. So the sooner you can remove the surprises by asking people to install. If you have an alpha product, if you can get even the basics of it installed by some people, you can get rid of those surprises or install or get going some things, so you can do it right. The second set of surprises, which could be even harder is the business value surprises.

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You build the whole thing out and you're trying to sell it at some point. Okay now the design partner phase is over, pay us money now and people say, "Okay this is not good." You work with someone for six months and now they still don't really have the business case to justify the money for it. That's a big surprise as well. Then you probably built the wrong product or you have gaps in the business value side of it. So I would say keep asking that question as well. Okay, what we are building if we do this, do we have the business case to pay for it or not? Because that creates honesty. You don't want to be surprised by that, that you build a product that people are not going to buy.

Sandhya Hegde:

Maybe it's a good segue to the problem of market environment changing the priorities that a company might have, which means that you thought you had business value, but maybe their circumstances have changed. How are you thinking about the environment we are in right now where there are a lot of headwinds but they are very unique and there's low unemployment, but we are still expecting a recession. How are you thinking about how the company Harness should plan in terms of growth goals and how are you evaluating this recession for a software company?

Jyoti Bansal:

Obviously, we are not in recession yet I think, but we will be soon. Everyone thinks we will be soon and I do think we will be soon, as well. Every company has to plan for it. As the world for tech startups has changed, if you're an early-stage startup, the assumptions that you made on the business value have changed. A year ago maybe your assumptions were about, “We can create more velocity for you, that you can ship some things faster." But in the current economy, many of the people who wanted to focus on that velocity may not want to focus on velocity right now. They may really care about efficiency, so your business value prioritization changes. The one thing that is very clear that we are seeing in Harness and every company is seeing is that almost every deal has to be approved by CFO right now.

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So in most companies, people are not buying without a financial team approving something. So now it's like is your business value justifiable to the CFO, which a year ago or 18 months ago, CFOs were not involved in most of the transactions. People will have their budgets, if you're operating in your budget you can go and buy things. You didn't have to get approval for everything from your CFO. So things change in this kind of market. So startups, you have to be nimble.

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If you're an early-stage startup, you have to think about your business value. If you're a late-stage startup, you also have to think about your business value and I do think efficiency is a core driver in a lot of the value that's happening. That's how we look at Harness as well. We are fortunate that our value pitch was always built around efficiency, how many engineers it takes for you to do these kinds of fast deployments, and by not having those, how much developer toil is happening, that your developers are wasting like 10%, 20% of their time doing this stuff that could be automated through the right kind of automation. What's the cost for your time, for your developers?

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But you have to become even better and better at making that case. That what we're investing in is going to save you money in the current environment is important. On the business side, every founder right now, every CEO right now is thinking about, "Okay, what is the right balance of growth versus runway efficiency?" If you look at it, the stock market for high-growth tech companies was corrected by 50, 60, 70%. Many times people think that is a proxy for how much the sales demand for products that the tech startups are selling has changed, which is not true. There is an impact of the economy and recession, but the impact is like 10, or 15%. It's not like 50, 70, 80%, what we have in the stock market.

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So the stock market hasn't completely changed. How much impact is there from the sales side? But there is some impact. The primary impact is the scrutiny that when you're selling something you have to be ready for more scrutiny. Scrutiny from the CFOs, better scrutiny of your business case and your sales processes. As CEO, you have to bring that in and we are bringing that in Harness, much better scrutiny, much tighter sales process so that we can do that. When you plan for how much you grow versus not. I do think the access to capital and uncertainty around capital is definitely there.

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As all of us in the VC world know, there's a lot of dry powder but still, people are waiting and watching in many cases, especially when it comes to later-stage companies. Early stage, the industry is still almost about the same. So as a company, you have to plan for that. So I really encourage everyone closer to a two-year runway is good. So plan for that. Everyone wants efficient growth right now. If your growth is inefficient and because of that you need cash in less than a year or so, it could be a tough spot. So you have to design for efficient growth and extend the runway to closer to two years in this market.

John Vrionis:

Jyoti, that's a great way to close the segment because we see a lot of startups out there who aren't able to grow efficiently. And that efficiency, it goes all the way back to the customer discovery process that you're describing, that you followed at Harness. If you never figure out how to reach cold customers and identify the why buy now, the why buy anything and you didn't build the right product. You took the elevator and not the stairs, then it ends up showing up in your efficiency later on. And now where the cost of capital is so much higher, you're seeing investors turn away from those companies. And so just bringing it full circle, obviously, Harness has done extremely well, found product-market fit, and is scaling very efficiently and I think it's really important that our listeners understand that's all the way back to the early hard work that you did.

Jyoti Bansal:

I 100% agree. That's why it's so important. Sometimes you hear seed companies where they got to the first million revenue fast and then they can't figure out how to scale from there because they didn't really get the product-market fit exercise properly. So the product-market fit — you thought it was there but it was kind of fake. And a lot of times I see companies getting into that fake product-market fit that you think you have it because you brute force into some friendly conversations and friendly customers or one or two concentrated customers and you don't really have a true scalable product-market fit.

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But if you do the right product-market fit exercise, you're building the right foundation, you can scale on it. The only thing I would say there is you have to keep doing it, because the product-market fit you found at some point, will change in three years because markets will change and markets will evolve and competition and scale will change and technology trends will change. So you have to constantly, every few years, you have to keep going through, "Okay, let's find your true product-market fit again," exercise. And if you have the true product-market fit at any point in time, you can build an efficient growth model. And that's why it's so key to get that right.

Sandhya Hegde:

Amazing chat. Thank you so much Jyoti for hanging out with us today and John for co-hosting with me and that's a wrap.

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