$18BN Market Cap and $1BN in ARR in 8 Years; Samsara

Well, thanks for having me, Harry.

Yeah. It’s funny. It’s the kind of way back machine test. So that’s probably a a Intercom, year old story at this point. We’re talking like the early the mid mid-90s And the project that I had was to try to bring my high school online. And this is like right at the beginning of the web browser. So I’m of dating myself here, but probably before you were born. But the Wide web was brand new. And I thought it’d be cool to bring 1,600 high school kids online and kind see what happens.

And I was a techie, and so I’d been kind of online even at a young age, and wanted to find a way to make it accessible. Back then, it was very kind of elaborate to get online. You needed to download a bunch of software, FTP, and all kinds of crazy stuff. And I thought, you know, the typical student isn’t to figure that out. How do we make it just work out of the box? So sat there, typed in 1,600 names from the high school yearbook because I couldn’t get the roster from the administration.

So just kind of brute forced it. We set up web browsers and web servers so you could actually check your email using the web instead of having to set it a command line, is kind of how things worked back then. We brought our high school newspaper online. So it was really a kind of fun time and everyone got into it. And by the way, I was a new student and I’ve just moved from Texas. Probably what my friends didn’t tell you is I was scrawny. I was like a 12 year old freshman, by the way.

So I’d skipped a grade or two along the way. Just moved from a, you know, different state, is practically a different country, and it was a great way to meet people. So I got to meet everyone in the school, quite literally from, you know, the high school football team captain to like the newspaper editor. Really fun experience. Taught me a lot about how diverse people are. Like lots of different things that they wanted to do online, things that they were curious about, but also how fun technology can be because it like really blew people’s minds.

Like this is like you’re going from disconnected, like there’s no smartphones, there’s no internet to oh my God, like, look at all this stuff online.

In retrospect, that project was a bit like a startup, right? Like we were trying to do something. We had very scarce resources. We had no money. It was just like spare parts in in the computer lab kind of thing. And the brute force was one of the ingredients to that, which is like privacy questions. Like, we allowed to give this kid list of names from the roster kind of thing? So I said, well, the yearbook’s not private. I’ll just use that. So it’s just finding a way, I guess.

This actually happened over and over if if we kind of fast forward the first research project that my co founder John and I worked on at MIT was called Roofnet. We built the network by literally installing antennas on people’s roofs. We got like a 40 foot ladder. And like, again, in retrospect, that was of crazy and definitely wasn’t research, but it was just what was needed to build the platform up. So over and over it’s been an unlock. Just being willing to kind of roll up your sleeves and and go for it.

You’re absolutely right. And at some point you need to stop because you’re kind getting in the way. You’re slowing things down, in other words. So the hardest thing is giving something up that you love doing. Like, I actually loved installing antennas in grad school and I loved doing many of the early sales of Meraki and Samsara because and I and I still love spending time with customers, But again, sort of making it a scalable process is the key unlock at the next stage, which is how do you 10x and then 10x again.

So I go through a process which I call rehiring myself. And it’s a little bit like I actually write a job description of what do I think the job needs in the next year or the next couple of years. And I check, like, does my time and sort of how I’m doing things match what the company needs from me and the organization needs from me. The other thing is people will tell you if you listen, Right? They’re very polite about it, but they might of give you a hint or two.

And so you have to have these really big ears and listen.

Well, at this point, Samsara, the consensus numbers have us getting to over 1 billion in in ARR. And so the current job description, in my opinion, is to be building the company not for today’s scale, but actually for scale three to five years from now, which is more products, obviously more customers, just a lot more building. And what you realize when you work backwards from that is the way that I spend my time, it’s still important to spend time with customers, for example, because you have to have that true north, the compass needle, the intuition for what the customers need.

But I can’t be in every product review. I can’t be in every sales pipeline review. It just it wouldn’t make sense. So that’s the kind of thing where I will actually say, you know, this year I’m going to drop the sitting in every QBR, right, a quarterly business review. And that’s okay because I feel like our team’s got it. But I do need to spend time helping write the five-year product roadmap because I have a deep sense for where I think this all needs to go.

There have been quite a few along the way. You mentioned Doug Leone, is our partner from Sequoia Capital in Meraki, which is a company before this. That was incredibly challenging to become the CEO of a startup company. And I didn’t start out wanting to be a CEO. I was a graduate student along with my co-founder John at MIT. We were academic researchers. We wanted to go be professors at some point. So that initial transition from project to startup to actually raising venture money. And that was a big transition because I’d never managed anyone before.

I never went to like a management training course. had no idea what I was doing. So it was a lot of trial and error and a lot of listening to make sure that what I was doing was useful to people. Because otherwise, again, like I’m of getting in the way. I’m not helping.

You have that even as a grad student when you’re doing research, like how am I to further the state of the art? So you of get used to this idea of being uncomfortable. But it’s very different because there’s a shelf of business books. You go to a bookstore and there’s like all of these management books and so on. You read through a couple of them. They’re actually kind hard to relate to. And I ended up just of putting them all down at at the beginning and saying, look, this is actually just a big project, right?

So let me do what I know how to do, is lead a project and of get it to the next stage. And that’s where some of these kind of operating principles of kind of working backwards from winning, essentially like what what is the next stage goal look like? And then let’s reverse engineer that. That’s where that came from.

Like you said, we make a ton of mistakes. We try a ton of things. Let Let me give you maybe two examples. The first is when we started Meraki, it it was more of a technology first company. Like we had a cool technology which we were of bringing with us from MIT conceptually. We had a new idea how people could build very large networks. We thought that might be useful for community WiFi, like free WiFi in the town square kind of thing, which in the mid 2000s was an exciting idea.

I think Google and a bunch of others were announcing projects like that. Now the problem with free WiFi is there’s no business model attached to it. And at the time, WiFi was still quite expensive. Like bandwidth was expensive, the hardware was expensive. And I do remember at Sequoia, like a bunch of the partners were like, what’s the business? And I would just explain the technology and they said, well, that’s not a business, right? And I think we’ve kind of figured out the hardware. The funny part though was our not a business business actually doubled in rep.

We bootstrapped the company the first year, which I can talk about. We didn’t actually have venture money. We managed to sell enough product to get off the ground. So that was a feedback loop where, like, well, people seem to like what we’re doing. They to pay for it. And then revenue doubled and doubled It was during the global financial crisis that we realized, whoa, you know, you actually need to have a clear ROI and a value proposition, like the fundamentals matter. And so that transition was actually very challenging and something we did differently at Samsara.

We We started market first with this company. We said, who’s the customer? What are the problems we can solve in a kind of scalable way? And let’s work backwards from that, which is to find the commonality. So that was maybe a big one.

So we got to close to a million in revenue. And by the way, with Meraki, there was a hardware component. So were building these routers. And what that means is you need cash upfront to get the the product manufactured. And so that was a big challenge, which is essentially having working capital for that. The other piece was we were bootstrapped, but we were kind of, I guess, ramen profitable would be like the YC or Graham phase. And we had all been graduate students. So were used to like living below the poverty line.

That was all good with us. We We just enjoyed the work. When you went and tried to hire people, you realized they needed to make a lot more than a graduate student did, right? So we realized, okay, while we’re profitable, it’s not going really be scalable unless we we get a little bit of additional money. Now, we could have taken a bit longer and just gone with taking our time, but actually the venture capitalists started knocking on our door quite literally. They found our dingy office space, which is like, I think a sublease of a sublease in the warehouse district.

People with very nice cars would pull up and quite literally knock on the door. Because word spread that this group of MIT students was out there building routers and doing some interesting things.

We we had no idea. We like we’re not listed anywhere. The fact that they found us, like, it’s really some pretty impressive detective work.

So I talked about being market first versus technology first. There have been a couple of times where even in the course of this company, you tend to get really enamored with a cool idea or cool technology. So for us, it was like AI and computer vision a couple of years ago. We thought it was to be transformative and it has been for our business. But we found ourselves in this kind of techie engineering habit of we’ve got this cool new hammer tool. This is like 2018, 2019.

Where can we apply it? And so for Samsara, we we serve the world of physical operations. Think the supply chains and the factories and and so on. So we thought maybe we could build a camera that would inspect products on an assembly line. We called it machine vision. That turned out not to be a great business for us. Not because the technology didn’t work, but it actually didn’t fit our business model. Like the way that it gets installed on line is highly custom, lots of custom lighting.

You need to know the product and so on. So what we found with Samsara is it’s really important to have a rinse and repeat recipe. Something that’s truly plug and play. That was not plug and play. So that was a mistake that we made at Meraki as well. We built some exotic networking products that didn’t quite get off the ground. And you would have thought we would have learned the lesson, we of did, but you find yourself reverting to those kinds of problems. Even if you’re aware that I shouldn’t make the same mistake twice, you find yourself doing it because it’s a natural tendency that some of us have.

Well, I think product market fit is something you don’t to force. And the way that I’ve always kind of gone about it is just to get out there with customers, with beta testers and listen for the wow, where you’re showing them something. What we’ve done in the past is kind of what we call an allergy test. So we’ll bring them a few different ideas that we’re playing with. And sometimes they’ll of nod their head or they’ll be very polite and and that sort of thing. But then you show them something that’s truly useful to them and they will quite literally stop you right there and say like, hey, can you click on that?

Like, show me that again. Even better is when they call someone into their office or in from the hallway and say, hey, so and so you need to see this, right? That’s when you know you have something that’s a true solution to a big problem. It’s probably the beginnings, right? It’s not robust enough to be a full on product, but you listen for that feedback loop and then you double down there. That has worked for us across both companies and and many, many, products that we’ve built.

I think so. And this is something I’ve learned in the world of B2B, which is companies pay to have their problems solved. And so when we talk about things like revenue and revenue growth, for me, it’s actually impact and problem solving growth. That means that we are solving a lot of problems for a lot of customers. And that I think is an important connection. It’s not just dollars or revenue for revenue sake. It’s actually impact. And that’s why people are paying money.

Well, I think some of it has to do with the fundraising process. and you see probably a lot more of this as a VC than than I do. But it’s because people want to go to investors and show I’ve achieved product market fit. Now imagine that you didn’t have to tell anybody about it. You just had to feel it. Then you maybe would be a little more honest with yourself about like, is this product just getting pulled by the market? Right? Like that’s what you’re looking for.

It’s almost unmistakable. You’d have to be blind not to see it. I’ve had customers or beta testers call me the next day after going site and they’ll say, hey, was that thing for sale? Like, can we place an order for that?

Just the Samsara anecdote is fascinating. So our first product that really kind got us going was real time GPS tracking. So think about all the work trucks that are out there as part of different fleets, not just in supply chain businesses, but construction, field services, all these different kinds of businesses. What we found, even in 2015, is people didn’t have real time visibility of their operations. So they wanted GPS tracking, they wanted a nice interface, they wanted reporting and alerts and that sort of thing. So that was our first product.

What was interesting is that got our foot in the door and we started talking to these operations users. What quickly happened is they loved the GPS tracking product and then they started asking us, hey, is there a dash camera that you all recommend that works well with your system? You hear that five, maybe times. And then, you know, we said, well, if we built a dash camera, would you use it? And they say, oh yeah, absolutely. I prefer that the dash camera was in the same system.

So that’s how we built our second product, which was basically what’s now our safety product. Those conversations were happening when product one was maybe 10 million in revenue. So it was really happening very early for us. And so we organically built product line number two because the customers wanted more. And And this idea of a platform became very clear that folks wanted to be in one system.

We think of them as independent products. So we have customers that will transact with either one. They could maybe just buy the safety product or just buy telematics. They do make each other better. There’s additional context there. So most of our customers today buy multiple products from us because they’re trying to solve a bunch of different problems. But it helps when they fit together. I will say though, what we learned is concentric circles matter. So if you can be solving a problem for the same customer, it’s the same person you’re talking to, maybe they have two problems they need solved. solve.

That’s way better from a customer conversation perspective because that single lead that you have can lead to two pretty productive sales conversations.

We try to use like an 8020 rule. So if 80% of our customers would benefit from something, we to bring it onto the platform. Now, there’s a bunch of stuff that we get asked for by customers that are exotic or esoteric. So there we partner. But if you hear something like the dash cameras, we heard about apps from our customers, we heard about tracking equipment. Those kinds of things you say, oh, I’m hearing this all over the place, and I’m hearing in multiple geographies, multiple market segments, we should build something there.

That’s kind of what we tend to do.

I do think that there’s something deep about founder led sales, which is you have this amazing advantage of you actually know how the things are built. right? You may not actually be the best or most classically trained salesperson in terms of running a perfect sales process and that kind of thing. But you can be in a meeting and navigate in a very dynamic way, is, oh, tell me more about that. or is that something that’s a big problem or a little problem? Like, it’s a very sort of interactive conversation.

And I actually think that on the other side of the table, the prospect loves that because here they have someone who can solve their problem, perhaps solve more problems for them and really wants to partner. That’s something that is very rare, that if you’re a prospect, you don’t get that conversation very often. So I think founder CEOs especially have an advantage there. When you’re speaking to a customer, they know you have the ability to shape the roadmap. It’s not to change what you do next quarter, but it’s to change what happens two three years from now.

Getting that face time with the customer is so valuable. It’s so high bandwidth. As travel opened back up, I realized, hey, it’s worth it to get out site. And that’s when I started actually bringing others with me. So we travel in pairs or sometimes a trio. And that’s really fun because I brought our president who runs all of go to market for us. But I also will bring folks like our chief people officer who’s like, you know, runs HR. He doesn’t typically get out in the field, but he has a lot to sort of see with our customers.

And when we talk about talent brand and why people come to Samsara, it’s around real world impact. And so he connected immediately. I wish we could do more of it two days a week. That’s kind of the maximum time allocation that I can devote to something like that because there is a company to run.

Yeah, it’s sort of like Instagram. right? Like a a picture can be really powerful and describe a lot. And our customers are the world behind the curtain. right? They’re the infrastructure of the planet. So if you think about we have customers that are some of the largest chemicals distribution companies in the world or the largest crane rental companies in the world. you don’t get to peek behind the scenes quite so much. So I don’t know if you’ve seen shows like How It’s Made. I grew up glued to the TV watching stuff like that.

And so I’m always taking pictures behind the scenes. And our team loves it. They get a lot of context and sometimes the engineers will say, hey, what’s that thing over there? Or can I ask them about how they’re tracking pallets or something? So it leads to more conversations than not. So that’s kind of why we do

I would say it’s pretty typical enterprise sales cycle. So we have a few different teams in the company. Our mid-market teams will close deals within a quarter, and that sales is inside of 90 days. Our field or your major account teams might take six months to to a full year to close a deal. But that’s pretty similar to other kinds of enterprise software. And you think about quotas and cycles and things like that, we benchmark pretty well there. So I think that’s maybe a misperception. You do have to sell.

So we have what’s called a see, try, buy motion. So you see the product with the Zoom screen share. You can do a trial. So plug and play and see it in your environment. And at that point, the ROI becomes very clear. And then we work out commercials and negotiate and close. That process is pretty similar to I think, how a lot of software companies do things.

Well, I’d say two things. One is we have a direct sales force, so they become more productive the longer they’re in seat. And we’ve been growing so much as a business, we’re adding capacity on a continuous basis. So you need to give them time to ramp. The sales reps are financially inefficient and you know all of this, right? Like they’re still of coming up to speed and and still learning the product, learning the customer base, building a pipe. Once they have that, the cruising altitude has always been very efficient.

And so it’s kind of just seeing that through. That’s maybe area number one. Area number two is we have developed just a clearer sense of process of what needs to happen next. And customers actually want move quickly because they don’t to spend time in the sales process. They to of get the product and get going. So we found that aligning more closely with how the customer likes to buy has really unlocked a tailwind of growth.

It varies. So part of it is getting a few of those sales cycles under your belt. So we can ramp within a few quarters. Right. And it varies by. it’s not that we hire people that have sold this kind of product before. So typically speaking, people have to understand the industries, the vocabulary, and the jargon, that sort of thing. So there’s like a bit of just initial period. And then you just have to get in there and try it. I think we can make enablement even better, but to answer your question, it’s a couple of quarters.

That’s a great question. I would say the deal size tends to be where we focus a little bit more. Are you used to transactional selling of a few K ACV and just really move through things really, really, fast? Or are you a consultative seller where you sit down with the customer and maybe you go visit them, figure out the kind of business value proposition and come back to them with that? that. takes longer. You could have been selling HR software or CRM. You know, these are all kind of similar conversations because it’s business value.

But that’s a different way of selling than just picking up the phone and and closing deals really fast.

You know, as I mentioned earlier, we’re a direct sales company primarily. So for us to be in front of more customers, we need more people on the sales team. And the recipe is working, so we’re continuously adding capacity. I wouldn’t say it was a moment in time where we said, like, let’s press the button and and hire a bunch of salespeople. It’s been a continuous build for us and it will continue to be.

First of all, I think it’s hard to find a one size fits all policy. As a small startup, we benefited tremendously from being literally in the same room together because you just overhear conversations. So the cycle time is super fast. The difference that we saw when we went to Flexwork in the pandemic was access to talent. So we were about thousand ish employees, maybe a little bit more. And we’re in the Bay Area. That’s where our headquarters is. And so there’s quite a lot of tech talent and sales talent out here.

But what was interesting is a lot of our salespeople were moving. They’re moving to San Diego or Austin, Texas. Then we said, well, if we’ve got teams out there, we didn’t know how long this remote work thing was to last. We said, let’s do an experiment and hire people from this kind of broader talent TAM. And what was fascinating is I would say our talent quality went up. right? Because now we were able to find that fantastic salesperson who, you know, wanted to live in Austin, Right?

Who didn’t to live in San Francisco for a variety of reasons. They also happen to be time zone aligned with our customers who are spread all over and not just in the US, but Mexico, Canada, etc. So we were able to get closer to the customer. We were able to increase our talent TAM, like, so access to many, many, more pools of talent. I’m talking about 10, 20, 30x increase, not like a 20%, but like a 10x x kind of thing. You don’t to be talent TAM limited.

We’re a couple of thousand people now. We’d probably start lowering our talent bar if you’re trying to hire such a big direct sales force in one location.

The ones that come to mind are when it wasn’t a stage fit. For example, there may be someone who’s been very successful at a bigger company. Maybe they grew a business from X hundred millions to to y billions. right? If you’re an early stage startup, it doesn’t make sense to bring that person in quite yet. Or you could, but you’re taking real risk, right? Because that person’s not to have all the infrastructure they’re used to. They’re not to have the brand behind them. They won’t have a huge number of reference customers.

Those sorts of things happen over time because you get wowed. You’re like, oh my gosh, this person is so amazing on paper. But are they appropriate for this stage? So that’s one. And then two is sometimes I would say when we move really fast on hire and not done the references, it can backfire on you because someone again may look great on paper. And then you realize, wow, they’re really a terror to work with behind the scenes. Like they’re not cooperative. You want people that work well in a team and that’s something you find out via references because the individual’s achievements are what’s on the resume, not the sort of credit history, I guess, of how they operate in an organization.

You want hardworking people that work well in a team. So those two, maybe number two and number three, I rank very highly. And then smarts, I think again, it’s not about book smarts or IQ test or something like that. It’s a little bit more street smarts. Right? If you’re in front of a customer, are you listening to them? Are you solving their problem? Or are you just pitching the product? Right? That’s what I mean by smart. So I think we look for people that are kind of well rounded in that regard, but you to make sure that they’ve got that drive, that ambition, the grit, the motor, whatever you to call it.

It’s also about talent fit. Right Now, I will say we have some people who are extraordinary technical architects and they would say, I’m not a people manager. I’m not a big people person. I don’t like big meetings. And that’s totally fine. We We don’t want a lot of big meetings anyway. So there what we say is, hey, you help build the next product, right? And then we will bring in product managers and we’ll have engineering managers and so on that will help get the thing made, but we need someone to architect it.

You know, there are some personality types and some roles where it is a little bit more of kind of individual brilliance. But you want those people to have the ability to work with the other people in the company. Right? Otherwise, it it really isn’t to be productive.

The CEO is the chief capital allocator of the company, and that’s essentially where the company is spending its time. It’s where the people time is going and you’re paying their salaries. So that tends to be for a software company where most of the the money is spent. We have always kind had a capital allocation strategy and happy to talk more about it, but I think somebody has to make that call and be the editor in chief.

You know, we were talking earlier about what are some of the differences between Meraki and Samsara. With Meraki, we were of glad to see another year. This is a company that survived the global financial crisis. Like, we didn’t raise a lot of venture capital because the the markets got tight and so on. In some ways, didn’t build for the long term because we were just, again, trying to get to the next revenue milestone. Like, how do we double? How do we double again kind of thing?

With Samsara, we said, if we do this right, we will scale 10x and then 10x again and 10x after that. So we need to be building for the long term, which means you’re allocating capital for the long term. That means allocating engineering budget, for example, to scale the products that are already in the market, but also planting seeds for stuff you’re to ship one to three years and then three plus years out. So we have a kind of 70, of,, 20, 10 capital allocation strategy when it comes to R&D. d.

That’s worked really well for us. We basically built our products organically by having money set aside to invest in teams to go build those next products and try things over time.

Maybe I’ll answer the question in a little bit of a meta way, which is I’m glad we took risk, period. Right? So we were talking about multiple products earlier and how we went from GPS tracking to safety cameras. That was again early in the company’s trajectory. We were doing 10 or maybe 15 million in ARR. A lot of people might have said, just stay focused. You know, there’s still bugs in the product. There’s still new feature asks, like just allocate all the capital there. We said, hey, we’re to fix those and we’re to invest, but we’re also to try this new thing.

It didn’t cost us a tremendous amount of money to build that first prototype of the product and then V1 and V2, but it took time and you needed to plant those seeds so you could harvest them years out. So I’m glad we did that. It’s really important to, again, have a sort of ladder of risk where you’re saying, hey, this is low risk, but we’re to try a couple of high risk, high reward things as well.

Because if you build for the long term, you’re to be glad you did them three years out. Right? So products two and three, I’m super glad we have them now. Like product two for us, safety is now our number number one revenue product. Very glad we did that. And along the way, we tried a couple of other products, you know, products three, four, five that maybe won’t have the same trajectory, but you won’t know until you try.

We took a lot of risks. So I I wouldn’t say there’s this list of things that I wish we tried. And this company grew very, very, fast. So Samsara is about an eight year old business. You can see the numbers were public, so it’s grown very fast. So we took quite a lot of risk and it’s paid off well. I would say the intensity was something that we only were able to pull off because it was the second time through company because I think the ship would have blown apart had our team not been through it before.

I absolutely think so. Because for us, it was a pattern matching sort of thing of like I mentioned product market fit. We weren’t questioning it. We just knew what it felt like. And then when it came time to build a sales team to start scaling up, we had people that we’d also worked with that we enjoyed working with that came and joined us again. and that enabled us to move so, so, fast. So I think the pattern matching, but also the people matching where we had kind of role fits for them.

Well, I think you actually get an interesting selection bias of people who opt into it again. So, know, I think there are many founders who will say, having been through it once, I probably wouldn’t get back on the roller coaster. Like one ride was enough. For us, we literally opted into it a second time as we began Samsara. And that’s what the name Samsara means. It’s the cycle of reincarnation and rebirth. So we very much said, okay, we’re to do this. So there probably are a bunch of second time founders who are maybe reluctant or unsure or want do it in a sort of lighthearted hearted way.

We were fully committed to this business. So if you can find founders like that, I think it’s really powerful. That being said, there are a lot of first time founders who are phenomenal. Jensen from NVIDIA, I think that’s his first startup. That’s the sort of thing where you also don’t to sort of filter out first timers because some first timers just go and go and go Toby, you mentioned there’s a long, long, list, right? So you wouldn’t to miss a Mark Zuckerberg or a Toby or a Jensen.

I mentioned some of these products that we’ve tried out. Sometimes you again become really deeply enamored with the product or the technology. You really want it to work. You really want believe in it. Machine vision, which was that product line I mentioned earlier. There were signs probably a quarter or two into it that it wasn’t to be scalable because of the manual installation required for it. I think we were like, okay, let’s see if we can just like power past those. right? At some point, you need to call it and reallocate.

We should have made that call a little bit earlier, but it was single digit millions. it’s not like a huge downside.

On people, that’s way more challenging because you have to really be honest with yourself. You know, the keeper test essentially, which is if someone was leaving, would you try to find a way to convince them to stay? Or would you sort of be like, I’m of glad that that they’re moving on. I’ve applied that test. I’ve seen that elsewhere in the organization where someone’s really not a fit. And doesn’t mean they’re bad at their job or they’re worthless or something. It’s just not a fit for the org.

You have to call it. And sometimes the person is with you or they’re already there. They’re feeling that this wasn’t a fit and they’re looking for a way out. So it’s again a very practical reality when you have thousands of people. That’s to happen.

You’re right. Your financial profile absolutely changes. As you get to the point where you have a family and, you know, you’re trying to think about a house and all that kind of stuff. It helps to have money. It helps not to be worrying about it because then you can focus on where you have the most impact. The liquidity from that sale took care of all of that. Right? I love books, by the way. I remember the biggest thing for me was not stressing about buying a hardcover book.

And it’s just fun like to be able to not think about buying $25 books. Like it’s pretty cool. For everyone, it’s a little bit different. I didn’t grow up from a very affluent background. My parents were very much middle class. So I think the values are there. And once you have the money and you keep those values intact, it’s a huge weight off your shoulders. Right. Which is kind of obvious, but you don’t realize until many years later where it’s like, I’m just not worrying about that. right?

I’m not worried about my kids or any of that kind of stuff, which means I have more bandwidth to either build companies or spend time with my kids or do things that are more meaningful than worrying about the salary and the financial side. Now, just to kind of elaborate on that, as you do a second company, you actually have a lot more flexibility in terms of we didn’t raise seed funding for Samsara because John, who’s my co and I both did very well from Meraki. We were able to be that seed check.

So, again, were able to move so much faster because we didn’t have to go fundraise. Now fundraising can be valuable for feedback, and so we’d get feedback, but we didn’t have to go around saying, hey, do do you to invest in the company?

Let me actually talk about in the company sense first because we were talking about capital allocation. And something that’s really interesting that people sometimes lose sight of is companies reinvest their sales. Right? It It makes intuitive sense. Like you get revenue, it has a gross margin, you can like reinvest that back in the company. I don’t know the numbers exactly for Samsara, but it’s in the billions in terms of what we’ve reinvested in the business so far. That is mind blowing in terms of our ability to build.

Right? And you see this with some of the biggest, best companies that are out there, whether it’s Amazon or Microsoft. You you look at them over long periods of time. Think about how much capital has been reinvested into an Apple or an Amazon or or any of these huge companies. It’s absolutely mind blowing. So money is important for that reason, which is it makes it a sustainable model. And then you can do more. You can make more bets. You can build more products, that sort of thing.

That’s the core of why I think money is important. The side effects of that, if you’re an equity owner in the company, you share in that upside, but it’s actually driven off of the business that you’re building. It’s It’s not an end to itself. It’s actually a side effect. Does that make sense?

I would say it’s probably a few years into Meraki. There was a moment where I realized that my salary was allocated under GNA, not R&D. d. So it’s a very in the weeds sort of sort of view. I was like, wow, I guess I’m overhead. But for me, that was actually an important milestone, which is like, this is an important job, right? The leader of the company, we talked about capital allocation. as a founder CEO, you’re the soul of the company as well. So I think those kinds of things make it feel natural over time, which is, hey, this is the job, right?

It’s not being an engineer. It’s not being the chief salesperson. It’s actually being the leader of the whole business. And so that probably for me happened maybe as Meraki became 100 people or something like that.

Oh, how much time do we have? We’re entering the next phase of growth for Samsara, which is really scale growth, right? And the way that you continue to achieve scale, you mentioned you’ve interviewed people like Marc Benioff and others. They’ve seen tremendous scale. The CEO they are today, the way they operate, it’s very different than, you know, early stage startup CEO. You’re getting a lot more leverage. You’re thinking a lot more strategically. You’re thinking like three, five, seven years out. So for me, that’s where I’m constantly pushing myself of, hey, as much as I love being involved in the details, am I spending enough time on the long term?

And that’s a question of time allocation, is you really have to carve it out.

Well, first of all, my kids are young. They’re all 10 at this point. So first we spend time. Like when I’m in town, try to be home by dinner and bedtime and all that kind of stuff. I think that interaction is really important. So it’s not an intellectual or academic exercise. It’s actually just like hard time face to face with the kids. And we try to emphasize things like building things that you actually can’t buy us with money. Even if it’s like building a Lego construction, it’s something that just takes a little bit of trial and error and effort.

So it’s not like you can just maybe you could find someone to build a Lego for you, that’s really silly. Kids love things like that, right? It’s things like writing stories and being inquisitive and that sort of stuff. Money doesn’t pave the way there. So we try to find those kinds of timeless things. Money makes a lot of things easier, right? Like my kids, we have a nanny at home, so they actually have a lot of face time with people they’re not watching the TV, etc..

But the stuff that’s truly, I think, enduring, the problem solving ability, creative function, being able to sit down and focus, those are things I don’t think money buys.

Yeah, it sounds great.

Let me of go back to the idea of long term building. I have seen this now through with two startups. If you can build for the long term, you’re so much better off than you are building kind of a year at a time.

Maybe not most first time through startups. Eventually figure it out. Like I would say like Facebook is the prime example of it’s a first time founder who’s done phenomenally well. Now they’re absolutely building for the long term, but I think everyone goes through this period of you’re trying to stay alive and kind of put one foot in front of the other.

Yeah, I’ve been thinking about this one quite a bit. So I think on the large scale infrastructure side, if you look at who’s won the hyperscaler wars, right, like who who runs the biggest clouds, it was actually the some of the best capitalized companies, right? You’ve got Amazon and Microsoft and Google and now Oracle. So in that sense, AI infrastructure may be well suited for companies that can invest billions of dollars ahead of time in building big data centers. The applications, on the other hand, I think that sort of rapid feedback loop and kind of creativity is really well suited to startups.

So again, I think AI is to be transformative in many ways. And so it maybe isn’t an either or, it’s where do people play in the stack.

I think we’re to have frontline workers for a very long time because some of these jobs are difficult to automate. If you think about what’s going on with AI, a lot of the sort of disruptive impact might be in the back office or the sort of white collar jobs. Frontline work transformed 150 years ago when agriculture got the the combine harvester and diesel engines started showing up everywhere. What happened is a bunch of jobs transitioned, right? A bunch of jobs that weren’t so fulfilling were hard work, were actually quite dangerous, kind of went away because automation kicked in and cranes showed up.

And so I actually think that disruption happened in our great great grandparents generation. What we’re seeing now is a similar disruption maybe on the white collar side. And I actually think we’re to come out of this with better jobs that are more fulfilling, which are, again, more creative and more unique to us and where we get leverage from technology like AI.

I would say looking pretty big. So I’ve lived now through the Internet wave, which we talked about earlier, the mobile phone kind of disruption and wireless technology, and now AI. So I feel really fortunate. I’m not I’m, you know, in my early 40s, So this is still kind of mid-career for me, but this one feels huge.

It’s an interesting one. I would love to live in the shoes of Jensen from NVIDIA just for a day because I think the work they’re doing is so incredible. He’s been at it for 30 years. So just understanding how he’s laddered his time and his investments. If I could do a day with him, that would be incredible.

So with Doug, I would say it was really about being direct. Doug is a very clear communicator. He’s very straightforward. And actually, he’s just a great guy. Like, he was very just straight with you. So I would say that’s my biggest takeaway from Doug is just tell people what you’re thinking, what you’re feeling, and just be straightforward with them.

So Mark is very different personality, as I think many people know. What I learned from Mark has been his information diet. So he’s talked about this a little bit, but I think Mark spends time on X or Twitter, gets a lot of what’s going on in the moment. And then he reads some really old, old, books, right? Like stuff that’s maybe out of print hard to find, sort of the timeless sort of thought classics. That barbell of information is really fascinating because we all have a limited amount of bandwidth to take in.

And so being able to kind of do the timeless stuff and then what’s current is really interesting.

So fastest adoption of EVs would probably be China. Norway is maybe technically the fastest. I think 80 something percent of all new vehicles sold there are EV, which is remarkable given the weather. There have been a lot of government subsidies, lots of initiatives there. China is is pretty far along. I think that’s also maybe driven by the government. Again, air quality is a significant issue for them. So EV and the energy transition there. And then slowest has been really in the US. And it actually varies by regions of the US.

Some of that is because our geography is so broad. Right? Like we’ve got lot longer distances here to cover. And the very slowest has actually been heavy vehicles, what are called class 8. So these are the big semi trucks that you see or HGVs that you see in Europe. Those are the hardest transition and they’re starting to happen now because the technology hasn’t quite been ready.

There’s a lot that people tell you about how your time allocation changes because every days you’re doing earnings and you’re out as a public company reporting. What I didn’t appreciate is that’s maybe 10% of my time allocation. But as a CEO, you’re already quite busy. right? Your schedule’s packed. So finding an extra 10%, you have to pull back on something else or carve out time. So it actually forced me to go find another 10% of efficiency in my own calendar. No one told me that I would need to do that, but I found it some way.

Well, first of all, it’s actually, you know, just from a priorities perspective, when you’re on the other side of kids, you just realize, hey, these are people that I’m to be with for decades and decades and decades and I really want see how it turns out. So you were, you know, if you think about startups and building for the long term, your kids are like the ultimate startups. And it’s really what you put into it and the relationship you build and that sort of thing. So I don’t think I understood how special that is and how it’s actually different.

I have three kids. So each kid is different in their own way and they’re young and you can already see divergence in their personalities and their interests. So anyway, I I think it’s such a special thing. I don’t know that I would have been able to explain it to myself.

So I think we’ve got a lot of runway with Samsara because, you know, the the world of physical operations we serve is so broad and vast. We’re talking about 40% of world’s GDP. So there are a lot more problems for us to work on and solve. And what we’re doing is kind of building up a platform, like a system of record where all this data is in there and we can solve even more problems with it. So years from now, I would love for us to have a dozen or dozens of applications on the platform.

I think the world’s to be very different. I think there’ll be autonomous vehicles, there may be delivery drones, there’ll probably be some robots, there’ll be a lot of AI. And I think that’s to be a really interesting space to be working in, which is like physical operations going be with us forever. Right? It’s the infrastructure of the planet. How will that transform as we of go through this this digital journey?

Awesome. Well, thanks for having me, Harry.