I know this is a basic question but just to ground the world, is there any downturn in the world of IT? I don't know because I don't sell into it, right?
Yeah, is there any downturn? No, it's very consistent because if you think about who these folks are, it's the folks picking up your trash, delivering food to the grocery store, running the electric utility. These are essential services, so they're just constant. They're just running non-stop.
Hey everybody at Saster, we have a treat this week. I get a chance to talk to one of my SaaS-ter Cloud Heroes, Sanjit Biswas, who founded Samsara. Two-time founder, over 20 years. I want to dig into, but we've been talking on Saster folks, I would say a lot of folks in the public markets know Samsara. People have been chatting about it, it's one of the high flyers, which I want to get into. Growing 36% at 1.26 billion in AR, but we've been chatting about on Saster before it IPO'd as just a great vertical SaaS leader. And it has a lot of things I want to talk about, but it has disrupted, I think in some ways, a space that was midsized which is now huge, right? Would that be accurate to say?
And so those so many interesting things here, but before we go, your customers we're going to dig into it. Your customers are in operations, fleets, trucks. Just I know this is a basic question, but just to ground the world, is there any downturn in the world of IT? I don't know because I don't sell into it, right? Yeah.
Is there any downturn? No, it's very consistent because if you think about who these folks are, it's the folks picking up your trash, delivering food to the grocery store, running the electric utility. These are essential services, so there's just constant. They're just running non-stop.
So roughly just be, it's just I know you luckily you don't have to talk with all the IT Debbie downers outside of AI, but you are a market leader which we'll dig into. But roughly your growth in part is tied to the health of the end consumer economy, right? Which in the US is pretty good, right? It's overall pretty good, right?
Yeah, and it's just the size and scale of the infrastructure that runs the planet. So you got consumers, you got businesses, you also just have the world of infrastructure which, like I was saying, it's utilities, it's the roads, it's all of this other stuff that's behind the scenes. Yeah, that is going through this digitization process that it went through 10, 20, 30 years ago. And I hate this metaphor, but it's also helpful to ground things in the beginning. That digitization of the real world, of transportation, of fleets, like what inning are we in? In terms of how archaic are some of the business processes you upgrade.
It's interesting because I spent a lot of time out in the field with customers. I was at a customer last week, I literally saw an IBM AS/400 green screen system that they're still using to type in orders. Yeah, meanwhile I pivoted like 20 feet and there's a warehouse robotic system that's like state-of-the-art. So it's happening, it's happening as we speak. And what's interesting is some of these companies they're over 150 years old, so they are transforming, it just takes longer than you'd expect because it's not like they're starting with a clean sheet of paper.
Yeah, some and Samsara is not that expensive I don't think, but some of these folks maybe even have five or ten year sales cycles to fully create this business process change in that sort of mainframe plus robotic mix environment.
Yes, and what a fascinating environment to be in. So like sometimes you have to go figure out how are we going to make this API call to an IBM server and then turn it around and dispatch it to some autonomous vehicle they're experimenting with.
Yeah, a lot of that is it's still crazy we have to build that stuff sometimes just build it however best we can.
Yeah, it is interesting how much we still compete with spreadsheets and Windows 3.1 in the real world, right? Outside of this little hurricane of like hypertech of the Bay Area.
Yeah, a big place. So I want to talk about all of that, but before we get there, just a couple minutes on something that I think about a lot. I don't want to talk too much about the very early days, but maybe just two things before Samsara. You had what back then seemed a stunning exit back in the old days when everything was smaller, right? You sold a networking company to Cisco called Meraki for 1 point something billion. I wrote it up and the V of the first Saster post in like 2012, I couldn't believe it. It was like four years to a billion or something like that, right? Crazy. Two questions: one, for real, why did you guys do it again? And two, how do you really context switch to a totally different domain? Like how do you, it's fun to talk about it over French toast and stuff like that, but for real it's not that easy, is it?
Yeah, so maybe just a little historical context. Meraki was the first start. My co-founder John and I have been working together for a long time, we met as grad students at MIT over 20 years ago. And basically Meraki was us taking our networking research from grad school, putting it in a box, making it into a product that could go have impact in the world. So really fun project that turned into a company basically. And we had never sold a thing in our lives, so it was trial by fire. We had to figure out like literally what's a PO, like really basic questions we had to figure out. And eventually we did figure out what a PO was and we got many more of them, and that's what led to the exit. And then we spent time at Cisco basically getting it to run in the Cisco machine and get to scale. So Meraki now powers millions of networks around the world. You go to a Starbucks, you go to most big venues, Meraki access points. It's really cool, the branding is still there. I see it is it still there today? It's Cisco Meraki but it's still they kept it. Yeah, that's nice. And what was incredible about that is it showed us what it meant to have impact. We believed Wi-Fi was going to be a big deal when we started doing networking research in the early 2000s, it was really cool to be part of the process of bringing it out to the world and having that impact. So that's what got us excited. We realized at some point Cisco wasn't for us, it was a very big company, we hadn't built it, and we were being asked to go work on other parts of it that weren't related to Meraki. So we said okay, we've done our thing, we've gotten to scale, it's going to keep scaling which it has, let's go do something else or take a break. And at that point that was it, we didn't have a plan beyond that, there wasn't like let's go do this other company we've been waiting to do. We were actually tired, like we hadn't taken a vacation ever. So both of us took some time off, both of us had just had kids, so like young kids phase of life, and that's when we started tinkering again. That's what got us back into just building stuff. As engineers we just like building things, we like being useful, and totally became fascinated by the world of operations and infrastructure because you're just curious, like it's the world behind the curtain. At the time I think I was interested in understanding like where do all the missions in the world come from, I was just asking kind of big curiosity questions and kept coming back to whoa this is fascinating, I'd never thought about how the roadways get built, we never thought about how food gets delivered. So anyway became fascinated by the market and the customer, and while we were tinkering we were basically building little sensor systems because we knew how to make hardware, we knew how to cloud connect things, and lots of interesting technology had happened in the 10 years that we were involved with Meraki. Cellular was everywhere, we saw the beginning of GPU compute even 10 years ago, like you could see the inference capabilities kicking in, we just saw like what you could do with mobile apps, everything was new to us, it was really fun. So that's what got us into it. But to your point, we had never spent time in operations, didn't know anything about the market, and so it's actually good to go back to beginner's mind. I think if we went back to it, it would have been tempting to just dust off the playbooks and run them over again, which rarely works 10 years later. So I think it was really good that we switched markets.
And did you find, how did you get just in the early days just that acquire brand new domain expertise? Just go hanging out with fleets? Was there a key hire you made to the team like a COO or VP of Ops or something? Was there anything special? Just good old-fashioned founder learning?
Just get out there. And it was at the beginning was show and tell. We basically built the simplest cloud connected sensor we could imagine, which is a temperature sensor. We took it into two industries, which is food and beverage and then pharma and biotech, thinking that hey, they have temperature sensitive assets that might spoil if something happens. And we said hey, let's see if we can go do something useful with this. Those initial beta testers were the ones who actually brought us into the fleet. They said this is cool, our big fridges don't actually break very much, what does break is the cold chain, like when we try to move something from site to site. We had a customer, they were delivering their Cowgirl Creamery, since you're here in the Bay Area, they make fancy cheeses, they would lose like $10,000 of cheese when they deliver to Whole Foods because someone would leave the doors open and all the heat would come in. Got it, that's a real problem. So that was the process, just go spend time with operations folks. They were very generous with their time, they let us into their loading docks and warehouses, they let us be interns or shadow them for a day or two, and immediately we just saw okay they're doing everything on pen and paper, they're making phone calls to figure out where people are. If they had GPS tracking it was like a breadcrumb that dropped every 15 minutes or 30 minutes, it was super antiquated. And immediately we saw okay that's where we can go be useful, that's where we can have impact.
Got it, got it. So you honed it not quickly, after they pointed you to the Cowgirl trucks and everything, you off to the races from there?
Yeah, and it wasn't just Cowgirl, it was a couple of different folks across different industries, and you say okay this is like an industry-wide problem. And then we started like pulling on the string. We like so how many commercial vehicles are there? 30 something million in the US, even more, like there's 12 million in Mexico, there's even more in Europe, like 60 million. Said okay that's pretty big. What are they using today? Old, year-old technology. And are they happy with it? Definitely not. Did we know anyone else working on it? No. So there were a lot of kind of raw ingredients there, and that's how we just got back into it.
Yeah, and so you your co-founder was John, John Bicket, but there were and I think there might have even been a couple other folks on your senior team that were from Meraki, right? What have you learned? I've tried this experiment, watch it, I find sometimes it works, sometimes the band doesn't want to get together, sometimes they want to be CEO next time or they're on their own journey. What have you learned? What does it work to get the band back together and when does it maybe not work?
Yeah, it's a team that we love working with, and so a bunch of us either knew each other from Meraki or even from before that, we were just personal friends. So that chemistry has to be there, that sort of mutual respect and everyone wanting to do something a little different. So Kieran, who I think has presented at Saster a couple times, great, a couple times, he's running product now, he used to run marketing for us at Meraki, and he used to be an engineer before that. So it was just hey, let me go see if I can figure out how to do product and R&D. There's always a new challenge. And then Ben who runs our hardware team, he did hardware at Meraki but it was different kind of hardware, right? So he was like hey this is fun. So there needs to be enough of a challenge that each person is engaged and has enough to do, and then there needs to be mutual respect so people enjoy working with each other, otherwise it's not going to work.
You've got four members of your senior team who are all multiple times together, right?
Yeah, that's the name Samsara, it's the cycle of reincarnation, rebirth, we thought it fit. But actually not know I did not know that because it's the team, it's the team being reborn. Yeah, but actually a lot of our early sales leaders even our early reps, a lot of engineers, like people we all liked working together, so that's what got folks interested. They didn't know anything about operations either, but we were like let's go figure it out.
Yeah, you really can pull the reps and the individual contributors together if the managers are like super excited, they want to follow them. It's funny, I'm trying to help through some founder conflict of a couple folks coming up on a hundred million today that are incredibly talented, worked together for a decade, out eggshells with each other. Any tricks for keeping you, I'm sure it's great, but there must have been a few tough tense moments or not? Everyone grows at the same rate even if they get to the same place. Any good learnings or tactics to keep the four of you together for so long to deal with the frictions?
I think it's always just being super real with each other. We've been friends now 15, 20 years across these companies, and we've been through a lot. I think we each know our strengths and weaknesses with each other, so we can be very open about hey I think you're missing this. It's actually just all being honest and being open about okay we're all figuring this out together, it's not like any of us have done this at this scale. We are figuring it out as a team, and I think once that humility is there, it actually is much more possible to have a real conversation. I think when egos are at play, that's when you tend to see those crazy conflicts. And you just step back, like we're all just trying to solve a problem here. It is ego, right? We like to think you need a little bit of it or you can't do this stuff. You need some, maybe ego is the wrong term, but you need a certain amount of self-confidence, because otherwise imposter syndrome can overwhelm you. But it can be tough. And we've been at this long enough that you try a lot of things and those are the two-way doors, like it didn't work, back up, try something else. And as long as everyone's okay with that, like totally made a mistake on that, I often say that was the wrong call, we just messed up, my bad. But if you own it, it's way easier to figure it out together. If you don't own it and people are too afraid to tell you, that's where I think those conflicts start to brew.
Yeah, for sure. Or even just finger pointing when things are tough. Just you just said, you've got to step up and take ownership, number one, because everyone's to blame, right? For every shortcoming, everyone's to blame. And as founders and really as a CEO, it is all technically your fault, you're the one who's responsible for it, so let's go figure out how to fix it. I found that help. And then I think the other piece is you have to actually be spending time together. If you're all working in different corners and not working together on things, that trust starts to erode. So we still all collaborate and work on whether it's customer deals or products, we're always working together on things.
Yeah, now do you guys hang out on the weekends?
We do, and probably talk on the phone every other night at this point.
That's a good, that's my view of a great co-founder is it's someone you'd like to talk to at the end of each day or every other day. When you enjoy catching up, it's a good sign. And on the co-founder relationship, especially as a company morphs as it goes from seed stage to 100 million and beyond, there are very few people who you can be totally honest and open with because other people may have agendas or they're insecure. You've all been in it together, and anyway it's great to have buddies. All right, one more question on management, then I want to dig in on Samsara business model. But you've got so much energy, it's been 20 years with the team, how do you keep the energy going? And how do you, I find that every five years you've gotta reboot your strategy, and I don't know how long you have to reboot yourself, but it might be at least once a decade you have to reboot yourself too. So what have you learned about these 20 years, the Samsara 20 years with these teams in this journey, how do you keep the energy up and reboot yourself?
Yeah, it's you got to install the software updates every once in a while, otherwise you become that IBM mainframe. So what I found is it is actually about challenge. If you think about what it's like to build up experience, imagine you went back to like fourth grade, you probably do everything in fourth grade super easy. I've got a nine, ten year old so I think about that a lot. But it's challenging when you're in that moment because you've never learned multiplication or whatever it is. Once you accomplish it though, you know how to do it. So it's important to always be challenged. And I feel like as tech founders there's always a new challenge, there's a new market you're trying to enter, a new product you're trying to build, new integration, new partnership, whatever. And you have to have enough challenge for it to be interesting, and that's where the energy for me comes from. It's a puzzle, you want to solve it, you almost start obsessing over it, like I know there's a path here, and once you unlock it you get this dopamine hit of wow that was amazing, let's go do it again, let's see if we can 10x it. That's what keeps it interesting, like the numbers rack themselves up in the background, but really it's about solving challenges and puzzles and doing it in a way that's useful for customers.
And you still, we just before we started we're talking about how you're just out in the field with customers, tractors and all that. Does that still give you energy? Does being out with customers give you an energy boost doing that?
Oh yeah, it's super fascinating. I learn something on every single trip, and like I said these are not parts of the world you get to see. How many distribution warehouses do you get to see robots running around in? Super cool stuff going on there. I saw, we were talking about tractors before we started, autonomous tractors that are controlled by an app, right? That's pretty futuristic. So anyway, each of these trips is really fun.
Yeah, I almost feel like if you don't, at least in business stuff B2B, if you don't gain energy meeting with customers, maybe you should find another CEO. It's not a credential, it's just a sign, it should just fill you with energy when you go out and fascination when you have that factory visit, right?
Yeah, and the fun part is I see more problems that we can solve every time I get to set on site, because you're like oh wow I hadn't even thought about that. Would it help if we had an app that did this or can we build you an integration that does that? It feels like you're being useful, so there's something deeply fulfilling about that, at least for me.
And do you still get at your scale, at 1.26 billion more when we do the next quarter, how many of your ideas do you get out in the field just to help other folks? How many times you come back a year or a quarter with an idea that actually goes into production?
Oh, pretty often. And a lot of these are features, right? They're enhancements or tweaks, but they might be like wow. And every once in a while you come back with something where you're like whoa this could be really big. And that's actually like everything we offer on the platform we came up with organically through these customer conversations. We can talk about being multiproduct, but it's really just solving multiple problems for the customer, if you boil it down.
Cool. So let's talk about a couple things that I think just are really interesting about the business. And I may be misdescribing it, I'm just an observer, but probably an unfair way to describe Samsara in the early days is next-generation fleet management, not completely fair, but your customers are in transportation, it's an old category. You've got folks like Qualcomm and Verizon charging a lot of money for very limited capability on creaky old networks. I don't know what it was, but it's probably a couple hundred million dollar market, right? $500 million market pre-Samsara for all of the vendors, sure for all of them, right? What changed? Even you said there's 100 million vehicles in North and South America, right? But if you only got 10% penetration, your product was creaky and expensive, it's hard to get to 1.26 billion growing some odd percent. So the market, this is what we all hope for as founders, is that between our innovation and market changes, because sometimes it's got to be both, it's got to change because you've unlocked a market that's got to be 10, maybe 50 times bigger than what it was before.
Yeah. So what we didn't create were the need for commercial vehicles, those were there already and had been getting built up over 100 years. What you would find is if you stopped commercial trucks on the road and just looked what they had on board, most of them at least when we started didn't have a ton of technology, they weren't connected to the cloud. So if you wanted to know where your telecom field technician was, you were making phone calls. Right? The industry that did invest in it was long-haul trucking. So you mentioned Qualcomm, most people don't know this, but Qualcomm's original business was tracking trucks, like it was the Omnitracs system. This is what got them building the predecessor to CDMA, you can nerd out on this stuff, it's really fascinating. They took the, yeah, in '91 if you looked at it, tracking was their product at the time, they went on to do amazing things with chipsets and cell phones and stuff. But anyway, the interesting thing is it's an old market, right? So tracking trucks have been around 20, 30 years, it had been kind of niche. And what we found was that outside of transportation, people hadn't invested in it, so that's why it was so small. It felt inevitable though, right? If you're delivering food, if you were doing field service, if you're even doing construction, you would want to know where your people are, right? So that was the, it felt obvious to us, but the dots hadn't been connected. And the products were a little clunky, like they had been acquired by private equity, the R&D teams had gotten hollowed out, they'd been frozen in time in other words. And so if you wanted to take the Qualcomm Omnitracs platform and stick it in your field service fleet, it wasn't practical, you'd be dealing with a bunch of wires, it was very expensive, it just wasn't worth the effort. And that's why people hadn't done it. Meanwhile, in the consumer world, DoorDash was happening, Uber and Lyft, and all this real-time tracking, so you knew it could be done. And it was like okay, how do we bridge that gap?
Yeah, I hadn't really thought about that, but you already saw the example it exploded in consumer right, from Uber and DoorDash. Why can't that be in fleets? On the business side, why can't everyone have that identical functionality? Why not?
Exactly, that was part of the unlock. But to your point earlier around you do want this kind of market tailwind behind you, like the market has been growing for us at a pretty hefty rate. And the reason is because everyone is a consumer, they're all seeing this modern technology in their hands, in their mobile phone, and so on, and they're asking the question of how do I get this for my fleet of 5,000 vehicles? This seems obvious, how do I make it happen? Then they end up engaging with someone like us.
Yeah, they ask, and it's also great marketing too, right? If you can leverage it, right? This is what we should, we can deliver this to your fleet, right? We can deliver what DoorDash and Uber and Lyft can do, we can do this for your fleet in a week. It's a pull that maybe didn't exist, right, but do it in a way that it's going to work for your enterprise and be set up with the right hierarchy and structure and security, that's the enterprise side of things, right?
