The company’s developer-first community engagement and thoughtful monetization guided them from idea to product-market fit

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You’re definitely on a roll when TechCrunch deems your company “the database that just won’t die.” Such was the case for Cockroach Labs, the parent company of the open-source project, CockroachDB, in summer 2021. That same month, Cockroach reported 200 enterprise customers, with the cloud side of the business growing 500% and overall annual recurring revenue tripling year over year. 

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Designed to be a global database from the get-go, Cockroach serves the needs of mission-critical applications for major streaming platforms, delivery companies, financial institutions, and many others. Companies ranging from Comcast and Netflix to Bose, Shipt, and AllSaints have incorporated CockroachDB into their cloud architectures.

In other words, Cockroach has hit the high marks of a successful startup, including product-market fit and significant growth. How did they get here? Not unlike other success stories, they were armed with strong leadership, an innovative take on the future of the cloud database market, and unfair advantage of witnessing the effects of extreme growth at Google. And at the heart of it all is their open-source project for developers by developers. 

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In January 2014, Spencer Kimball (co-founder and CEO of Cockroach Labs) wrote the first iteration of Cockroach. Contrary to what you may have heard, Spencer did not create Cockroach based on his experience using Spanner, Google’s  internal system that juggles data between millions of database servers and keeps Google's services humming even when servers go offline. “We worked on a team adjacent to the Spanner team and heard about the frustrations of teams using Bigtable (NoSQL) and wanting a system with richer semantics — i.e., indexes and transactions,” said Peter.

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In February 2014, Spencer began the Cockroach open-source project on GitHub, inviting fellow developers to contribute to the project that would become one of the most ambitious in its class. 

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In this case study, we’ll uncover how open source played a key role in Cockroach’s journey from initial idea to reaching product-market fit. Cockroach Co-founder–CTO Peter Mattis and CPO Nate Stewart share insights about how the sequence of events in building an open-source business differ from other commercial and SaaS companies.

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How CockroachDB grew in the early days

• Focusing on developer adoption first 

Before Cockroach established a business model, it began as an open-source project that focused on developer adoption. The Cockroach founding team steered its energy into building a large, engaged user base. At first, this was primarily made up of  enthusiasts, hobbyists, and people who wanted to contribute to the project. 

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• Investing in community building

The Cockroach co-founders invested in community leadership by fostering and engaging with their budding community and providing educational resources to help them onboard and use the product as seamlessly as possible. 

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• Thinking about — but waiting a bit — to execute their commercial strategy

From early on, the Cockroach founders started thinking about how to shape their GTM and monetization path. They considered potential avenues to monetization, such as an open core model and a cloud service, in parallel with driving open source adoption, to understand how the product would need to evolve over time.

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What is Cockroach?

CockroachDB is a cloud-native distributed SQL database that provides scalability, high availability, and resilient data to applications. The three co-founders — Spencer, Peter, and Ben Darnell (Chief Architect) — set a clear albeit difficult goal: to make sure that data written in one place would be viewable instantaneously in other locations, no matter how far away. “We’re disrupting the traditional transactional (OLTP) database,” Peter said when we spoke with him in July.

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Cockroach’s 3 main features

1. Enables data to be distributed across geographical locations

2. Guarantees the accuracy of all data whenever the database is queried. 

3. Ensures that data is always accessible even if a data center or region goes down.

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The problem that CockroachDB solves — data inconsistency at scale — is technically complicated but the Cockroach founders were uniquely qualified to tackle it.

Why does immediate consistency matter? Because we live in a global economy connected by the internet, and both business and consumer applications demand fast, reliable data.

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Open source runs in Cockroach Labs' blood

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Spencer, Peter, and Ben have a long track record with open source technologies. In 1995, Spencer and Peter created the open-source graphics program GIMP while studying computer science at Berkeley. That project was so successful that when they joined Google in 2002, Sergey Brin and Larry Page stopped by their desks to say they loved GIMP and used the program to create the first Google logo.

In the years that Spencer, Peter, and Ben worked as Google engineers, they experienced the company’s remarkable growth — and the fruitful problems that often come with it. Google struggled to manage its data; for example, AdWords was not just a mega moneymaker but a mega user of data, which triggered Google’s databases to strain under extreme scenarios.

Sure enough, Google wasn’t the only company struggling with data demands — other companies building applications that needed to reliably and consistently scale were starting to face similar challenges. This became abundantly clear once again after Spencer and Peter left Google to start Viewfinder, a photo-sharing app they sold to Square in December 2013. Viewfinder users needed immediate access to photos anywhere on the planet.

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Just a month after the Viewfinder acquisition, Cockroach took its first steps into existence and open source. “By the end of 2014, we got enough traffic and interest that we decided to form a company around it,” Peter said. Fueled by high demand, they’ve steadily launched major releases of CockroachDB since 2017.

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How do you know if open source is right for your idea?

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Open source is a strategic decision that impacts both your product and GTM approach. Done well, open-source development can fuel growth for an enterprise software company.

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The founders of Cockroach prioritized developer adoption for a while before driving their revenue model. The focus paid off: Cockroach’s open-source codebase now has more than 300 external contributors. Peter says there were multiple considerations and factors in deciding to continue Cockroach as an open-source product. “We felt that doing open-source would add credibility and weight to what we were doing. People could see the complexity of the product, which gives them a stronger belief that we're doing something real and not something that's fluffed.”

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Cockroach’s Chief Product Officer Nate Stewart says open source was beneficial to Cockroach from the earliest days in these two main ways:

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• Databases are complex and mission-critical. Early adopters want transparency into how they work. And with that understanding of the inner workings of the project, they also want assurance that even if the company fails, the project and code will live on for them to use. “We wanted to get people to a reassured feeling that, ‘We're building this thing. If you adopt it, even if we go away, you're still going to be able to keep on running it because it’s open source.’” Peter says.

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• Recruiting talent. When building its technical team, Cockroach’s leaders didn’t have to look too far. They hired a number of early contributors to the OSS project.

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What role does documentation, educational content, and community play in user adoption?

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Peter attributes early adoption to the team’s all-hands-on-deck approach to producing a steady drumbeat of content. From the onset, all three co-founders wrote blog posts about what they were building, the technical challenges involved in running a database, and engineering.

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“Those blog posts were one of our main engagements with the community early on — and these things were juicy,” Peter says. “Content drove a lot of the enthusiasm and would frequently get onto the front page of Hacker News. We’ve really managed to keep up the blog publishing cadence over time.”

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In addition to blog posts, they invested in creating detailed documentation, which continues to pulse through the CockroachDB community. The company hired their first docs writer, Jesse Seldess, in late 2015, and the one-person operation has since grown into a thriving education team. Jesse led Cockroach University, a free platform covering distributed databases, cloud-native applications, general purpose SQL databases, and more. 

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“CockroachDB is incredibly technical and the documentation must be top-notch,” Peter said, adding that technical writers play an important role in producing docs. “Documentation is a technical writing skill — distributed systems and database engineers aren’t necessarily good technical writers, just as technical writers aren’t necessarily good engineers.” 

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Cockroach pricing and revenue

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At the base level, CockroachDB is a free, open-source product. It doesn’t cost anything for developers to download and set up on their own. So how does Cockroach Labs make money — especially since they’re targeting developers who, Peter says, “prefer not to pay for products”? As engineers themselves, Peter, Spencer, and Ben want to keep the product interesting and valuable and reduce friction wherever possible for customers. That’s why Cockroach now offers multiple commercial offerings, including a serverless version with a generous free tier, a version that can be run on different cloud providers, and a self-hosted version. It’s also why they thought carefully before nailing down the specifics of monetization. “From the moment we were out raising our first round, we were thinking about the open-core model. I don't even think we properly understood everything about it at the time, but we were thinking, ‘We're gonna make this open source, and then we’ll build enterprise functionality around it.”

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During the early days of the project, they observed and got to know their developer community, where they worked, and how and why they used the product. “Getting to that 1.0 version in a self-hosted consumption model was the prime focus for the first few years before we could possibly consider the managed service offering,” Peter says. The more the Cockroach team learned about how developers used their product, the more they were able to confidently steer the direction of product development and appropriate pricing. After 1.0, Peter says they “saw the writing on the wall, the way that the winds were switching.” That's when the Cockroach team started building the managed service offering and navigating sea changes. “The managed service offering is the future of the database,” he says.

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Questions for founders

• Is open source important to your product and GTM strategy — why or why not?
  
  
• What are potential revenue models for you to explore?
  
  
• How will you build a vibrant community?