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Tell HN: Amplitude (YC W12) just went public – AMA
416 points by sskates 61 days ago | hide | past | favorite | 150 comments
HN- you are the community that convinced me to get into startups. I wanted to come back and share what the experience of building a company has been like from inception to public listing. I'll be here for a couple hours to answer your questions. Ask me anything.

Holy cow, we're still going 16 hours later! I'm on a flight back to SF today but I'll keep answering questions as I have time. The questions here are so thoughtful (even more than some of the ones I get from public market investors) so I'll keep going!

I read your https://www.sec.gov/Archives/edgar/data/0001866692/000119312... executive compensation section and was curious about the hire of Ms. Johnson in November 2020 and the massive option grant. Can you explain the reasoning here? It appears she got more than any of your older employees? Is this because half of Amplitude's revenue is spent on sales and marketing? I guess that might make sense.

Also, congratulations on reaching the rare high nine figure net worth club! :)

If I am not mistaken, Amplitude was the very first SV startup coming up with the idea of the 10-year post-termination exercise window, talked to lawyers who said it cannot be done, persisted and did it anyway late 2015, then open-sourced the approach for others to follow [1].

Triplebyte made a splash by adopting a very similar policy months later in early 2016 (also discussed heavily on HN [2]) and all YC companies were recommended to adopt this approach off the back of Triplebyte starting from the W16 batch [3]. The rest, as they say, is history.

Many companies on this extensive list of ones with 10-year post-terminiation exercie windows [4] might not have this policy if it was not for this know-how benefitting employees put out in the open - between Amplitude, Triplebyte and it spreading to YC, making this approach table stakes a few years later.

Sir, I salute your for doing this not just for doing this for Amplitude employees (who no longer had a "golden handcuff pressure" after vesting their original grant - which is most companies actually see as a benefit, and a way to "leak" less equity thanks to leavers often not being able to exercise), but for a part in moving the tech industry forward.


[1] https://amplitude.com/blog/employee-equity-is-broken-heres-o...

[2] https://news.ycombinator.com/item?id=11198991

[3] https://triplebyte.com/blog/fixing-the-inequity-of-startup-e...

[4] https://github.com/holman/extended-exercise-windows

That is so cool! I had no idea it had gotten adopted so widely within YC. Wow!!! Be the change you want to see. I'm so glad the startup ecosystem is now adopting it as a standard.

I'm so glad we did it- so many ex-employees are able to participate and celebrate with us this week because they didn't have to worry about giving up their options after leaving. The arguments for the old method of a 90 day window were so stupid. 1) I don't want to keep someone in indentured servitude if they don't want to be here 2) top talent is very savvy and more attracted to places that don't screw them over.

I hope we can see the same for other innovations like more companies doing direct listings in the future. If you're a YC company figuring out how to go public, please choose a direct listing!


HN is always saying that working for a FAANG is better money than working for a startup even if it IPOs, so my question to you is: How did your employees make out during the IPO? Is the prevailing HN wisdom correct? Did your average developer employee that stuck it through with you on your journey end up with more or less than what they would have made working at FAANG?

I'm going to try to answer the question without divulging how anyone individually did.

I took a look at the initial 4 year option grants for the first 10 engineers (this doesn't count refreshers or other follow on grants). The average value at $50/share (yesterday's opening price) is just over $10M. The group varied in experience from just out of school to a few years working when they joined. I feel we were a good deal more generous than the median company: https://amplitude.com/blog/employee-equity-is-broken-heres-o...

Someone on the FAANG side can figure out what the apples to apples comparison is. There's no question that in 90% of cases FAANG compensation is way better. If you are optimizing for how to make the most money over a few years you should absolutely choose FAANG. The real benefit of startups comes from other forms. If you asked that group of 10 I think they'd respond that being an early engineer at a start that IPOs gives you way more career capital and long term earning potential than FAANG.

While I am happy for your company and for your first 10 employees (congrats, really), I am not sure that looking at their return teaches us much.

Joining a fresh startup as employee #10 (or less) is somewhat of a gamble (even at YC). The following data would put things in perspective:

1. How do the average first 10 employees of a YC startup do?

2. How did the following cohorts in your company do?

I am not trying to be negative here, but trying to put things in perspective. Congrats again!

To be clear, it's the first 10 engineers, a very different group from the first 10 employees.

No question that the economics of FAANG is way better than an average YC company. That's an easy one. I don't have the data, but the economic outcome is easily 2-5x, maybe more.

Following cohorts of engineers are a fraction of what I outlined so the economics are different. It's too hard for me to do the work to get an exact calculation, but probably the next cohort of 10 engineers is something like 1/2 that, and then subsequent ones are down to 1/3 or 1/4. They're joining years later and so taking on much less risk at that point.

Thank you for your reply. Makes sense.

By the way, thank you for running this AMA and answering all the questions with so much clarity and transparency. What an example!

To put things in perspective, in 1999 I joined a company that ipo’ed in 1997. The company’s first admin assistant made enough from the ipo to buy a vineyard in Napa valley. I was employee 40 at a YC company and after exit I made 5 figures whereas the founders made high 8 figures. YC definitely teaches the founders to keep a higher percentage of equity for themselves and distribute less to employees.

startups aren’t a game of averages. the averages are definitely worse than the FAANGs. choosing well (and getting lucky) are paths to “definitely better.”

It also depends on what your professional goals are (growth, leadership, impact, fun, next opportunities) assuming they are not only monetary.

While joining a FAANG in the past was most likely the richest path, that may not be true today.

Here's the classic post on the FAANG vs startups debate, for the uninitiated https://startupljackson.com/post/135800367395/how-to-get-ric...

>If you want to get rich, your best bet on a risk-adjusted basis is to join a profitable and growing public company. Google for short. Make $200-500k all-in a year, work hard and move up a level every 3-5 years, sell options as they vest (in case you joined Enron), and retire at 60, rich. This plan works every time.

Yes, now would be a great time to join Amplitude.

I completely agree with the linked post!

For the actual top tier of compensation in tech (out of FAANG only Netflix is a part of that band) I think it still is. This year I've seen multiple engineers get ~500k offers for 4-6 yoe with no particular specialty, just general competence.

High end of Staff appears bumping into the million dollar range once bonuses come around at some of these places.

Are these only in SF? What sort of companies

An engineer 6-7years into their career can pull more than 1M$/yr in FAANG.

I have a close friend at Uber pulling in over $1M/yr. He joined just before IPO so he didn’t benefit from share appreciation.

Can, I guess. That’s generally L8 income; it’d be pretty unusually to make it to that level in seven years.

FAANG pays well, but if you check what I’m saying against Levels.fyi, that’s a pretty exceptional situation for someone with that little experience.

There are more people in L7/8 in FB than they are in google. and it's possible to do 8 in 7-8 years. Decent amount of people do 6 in 2.5, 7 in 4.5

Sorry, is the claim here that there are a "decent amount" of fresh grads who get promoted 3 times in 2.5 years to reach Staff (E6) at FB? That doesn't pass the smell test. "Has happened at least once in the history of the company", maybe. "Happens frequently enough to use as a meaningful benchmark", no.

Welcome to give a try.

At this point I don’t understand what’s being argued about. Are you saying you have anecdotes that this happens? Yeah, probably. I have some, too.

Are you saying the median total comp for a 7-year total experience Facebook engineer is $1m? If so, what’s your source? (Or what are you claiming? The top decile? The top quartile? Etc.)

I think there are more than a few anectodes. This is not true for google but fb promotes engineers really fast from 3-5 and 6.

3-5 if you don't get promoted after a year and a half or something they mark your packet expectation is you go from 3-5 very quick on average and even faster at the tail.

I did 3-7 in 6 years at Google and it was the fastest in the larger org with >500 people. You can do 4.5 at fb easy.

And yes at fb 7 years would rack lots of engineers 1+ m, even assuming modest gains.

If you don't believe it, it's your choice but not all companies treat employees as average. Google optimizes for average, fb rewards high performers...

Like I said, it's not a quantifiable statement, so I don't believe it or not believe it. If you're saying that FB promotes people faster, yes, I can believe that--younger companies generally tend to.

I am quite skeptical that the median time for a new-grad hire to get to L7 at FB is 7 years or fewer, but I guess this is something that we could answer with some weekend scraping of LinkedIn. ;)

You can't, not for facebook - everyone has the same title for ICs.

Doesn’t this depend on yoe? Startups could certainly match faangs for early career engineers but the more experienced folks are likely going to get unmatchable offers.

Not everyone cares about the money though. After a certain point you get tired of politics and process and just want to build things. A successful startup culture seems like a win win.

Extended exercise options tilt my scales back to start ups.

So a slightly different take on this question is what is the highest "employee #" you would want to be under to make more money (in total including comp and level growth) than as a FAANG engineer over the last 9 years?

PS: Definitely a huge congrats on this journey and outcome.

I'm really surprised this thread isn't more active! CEO of a newly public startup opened a thread and is active in the comments. This is great stuff.

- Just rewinding back to when you decided to get started - how did you convince yourself to leave a (presumably) comfortable, reasonably paying job to starting your own thing? It's that leap that scares me the most, so curious of your take.

- If you have anything you'd care to speculate, what would be easier and what would be harder about doing a startup now versus when you all kicked off a decade ago?

I was doing high frequency trading before starting Amplitude. It was a great job: incredibly smart people, rewarding problems, great money and career progression. The only thing I didn't like was the ethos of secrecy in the industry.

It was clear the long term potential of positive impact on the world was way greater through building a company than anything else. And if you didn't quit you were very likely to get there. One of the things that most resonated with me was one of the Airbnb founders talking about how they were having the same dilemma as you. But then they saw someone who had started a company and realized the only difference was that they had made the decision to start a company and that's what made them realize they could make the same choice. I wouldn't recommend it if you have other life circumstances like debt or significant family obligations that constrain you. But if you don't have that I think it's a great path.

Better: Markets are way bigger and so the ecosystem has adapted around that. Funding is incredibly abundant (kids these days...). Information on how to start a company is more widely available. There's much more experienced help available. Tooling is much easier. What's crazy is people said the funding market was too hot in 2014: https://techcrunch.com/2014/09/05/its-time-for-vcs-to-run-to...

Worse: Hiring is harder. There is a lot more competition but I think it's outweighed by markets being bigger. I think talent is still the rate limiting factor overall for the growth of the ecosystem.

Surely the hiring issue is a market inefficiency, then, no? There's got to be plenty of engineers out there, but maybe not for typical startup cash/equity structures.

I believe a few things are happening:

1) The number of software engineers is growing quickly, but the market for software is growing even more quickly. So engineers are becoming more scarce relatively speaking and that pushes prices up. I don't know that I'd call that an inefficiency so much as markets working properly! OTOH, that's also why you see the explosion of coding bootcamps and alternative paths into the industry. Both my brother and sister in law did a coding bootcamp and 2x'd their salaries in 6 months! I don't think there's any sort of career investment you can make that comes close. So yeah- we haven't reached an equilibrium yet, there needs to be a lot more software engineers, and everyone is struggling to hire.

2) The market is not efficient at pricing top engineering talent in particular. It's hard for most companies to tell who the top engineers are (pg has written extensively about this). As a result, top engineers are underpaid by and large across the industry and companies that figure that out can get an edge. I've always said I'm for paying 10x engineering talent 2x above the average as you're getting 5x the value! You see a lot of FAANG taking this approach as well which is why salaries for the top end for engineers is growing at an outsized rate relative to engineers as a whole.

Makes me curious about your recruitment process :-)

(I agree with everything you wrote btw)

For example, screening questions? Work sample? Take home? Coding interview? Whiteboard or type on computer or something else?

(Best wishes btw)

When it comes to startups in particular, it might be a case of actual shortage. Not everyone wants to work at a startup, particularly in the earlier stages, even if comp is similar to what one could get in a public company. Couple that with the relative rarity of actually good engineers among the population of qualified software engineers, the fact that you don't want to hire juniors or new grads at very early stages, and the general difficulty of hiring SWEs, and, although I'd like to see data before making a definitive statement, I can see how it could be many times more difficult to hire at a small startup than a larger and more established company.

Does anybody happen to know whether data on this actually exists or not?

It seemed critical early on that Amplitude basically made what MixPanel charged a lot for free, by providing a huge free tier. This is how my company ended up on Amplitude... and then we didn't pay for years, until we eventually ended up paying $40K/year then more.

That pricing structure seems like a very long-viewed approach that could have easily been ruined by short-term product thinking.

Was there ever internal or investor pressure along the way to cut or pare down the free tier?

It's great to have you as a customer. Make sure you give product feedback to our team!

Most of the money in SaaS is in large clients in the enterprise. Almost all large SaaS businesses have been built that way (Salesforce, Adobe, ServiceNow, Workday). Once you figure that out monetizing smaller companies goes way down in priority and it's a better strategy to give your product away for free.

For us in particular: 1) It was a great way to grab attention from Mixpanel and others in a crowded market. 2) A lot of those companies become large customers over time when their needs become bigger and more complex. Doordash, Instacart, and Rappi all started out that way and are now huge customers. 3) A lot of those companies and people at those companies get acquired by larger companies over time. Under Armour, Capital One, and Twitter were all companies where Amplitude was brought in through acquisition of a smaller company. 4) It's not that expensive relative to your overall cost base. I believe 8% or so of our server costs go to our free plan, which is significant, but worth it.

We've never received pressure to do that, our venture capital shareholders are very aligned towards winning the market over the period of decades. We did get some stupid (IMO) questions about gross margin as we went public but no one ever gets down to the level of messing around with your pricing plan and free tier. If we were owned by private equity though it'd be a very different story. Those guys are experts at wringing blood from a stone.

To be fair Adobe IPO'd in 1986, long before SaaS was a thing. I wouldn't say they quite fit the bill of "built by selling large enterprise software contracts".

I would. Back in 1986, enterprises paid for Adobe software (paid a lot) and everyone else pirated it. Piracy was the free tier -- you'd pirate it as a student or small business, then pay as you either got a job at a big company or turned into a big company.

I agree. Even at the small agency I worked as an intern, all Photoshop's were pirated. Not cracked but same serial with no online checking. Licensing for small companies wasn't a thing until online verifications became a thing.

> you'd pirate it as a student... then pay as you got... a job at a big company...

Ah, the Netflix model :)

Yes, but they later pivoted into SaaS and have gone on to dominate enterprise CMO budgets. It's one of the most impressive business model changes by a large company.

One of the mistakes Mixpanel made was to position themselves as a “better” Google Analytics. That meant a generous free tier without the benefit to search that Google gets.

Amplitude, from the moment I was aware of it, was more about productizing the Facebook/Zynga style product analytics approach.

I left Zynga for an early startup in 2011. At that time, I tried to use Mixpanel for acquisition and retention analysis - it fell woefully short. I wasn’t able to use any of the built-in reporting.

Meanwhile, I have been a mega fan of Amplitude from the first time I ever used it. It was built for the “product data” use case first, not as a Google analytics replacement. That positioning made it easier for them to demand premium pricing.

Thank goodness for the Zynga diaspora! Zynga was ahead of its time when it came to building data driven products. They were the first company to get it down to a science. We're lucky to have so many ex-Zynga product people come across Amplitude. You, Siqi, Bret, and tons of others were hardcore early supporters of us and we would not have been successful without you. Thank you, Teej, and keep the feedback coming!

There are loads of products this applies to, I think trying to charge small clients too soon is often a false long term strategy especially if you have growth and a plan!

Hi Spenser! Congratulations by the way to you and your team.

I've been working quietly on a project which I hope to turn into a product. When I speak with potential customers and users, they're very excited, but when I work with VCs, I receive the tired argument of "but XYZ incumbent pretty much dominates the market."

That's fine, and I feel that I am differentiated enough, but I'd love to hear how in the early days of Amplitude you battled the "okay but what about Mixpanel" conversation?

I'm fine with not raising cash for a while. I'd much rather put something out there and then have my user growth speak for itself.

Almost all of SV passed on Amplitude at one point or another. I remember one of them made a comment like "analytics companies pop up like mushrooms after a rainstorm".

Raising our seed round was brutal. It took 6 months end to end and was one of the lowest points for me personally. I was trying to scrape together $1M in $50k chunks from any angel who would give us money. We ended up having to lean on our background as founders (MIT engineers, winners of the Battlecode programming competition) to convince the first set of VCs to come in.

Once we started showing traction (0-$1M in ARR in 9 months) we went like hotcakes in our Series A and beyond.

The real test is do customers buy. If you can show that everything will follow. VCs are weak predictors of market success. There's some signal, but they get it wrong almost as often as they get it right. If you close 3-4 paying customers I guarantee you they will change their tune. The incumbency argument is pretty weak IMO, particularly in B2B. Markets are so massive these days it's easy to carve out a large niche. For example, Freshworks went public last week even though Salesforce "dominates" cloud CRM.

How much of that first $1m was mid-market/enterprise vs lots of smaller plans?

Deals ranged between $12-120k/year. We were very much the "deer" range vs rabbits or elephant hunting. The customers ranged from small to mid sized companies, we only had 2-3 true enterprises at the time.

Getting first 1-10 paying clients is really tough. And with the $12k-$120k/year range, it might have been really tough. Would you be able to share how did you get those first few paid clients? Thanks.

Our first one was intro from a prospective investor. Second sent me an email after we launched on TechCrunch. The third one sent us the following email:

"Hello — we are a Mixpanel customer and evaluating alternatives right now and came across the TC article. We also use RJ metrics, so what you guys are offering is really compelling.

I do have a question about what "custom integration" means on the feature breakdown by tier. Let me know if there is some more information about what that includes that I could review."

After that I can't remember. Ex-Zynga product people were an early sweet spot for us and we're lucky we got on a few of their radars. It was then about finding our way into more similar situations.

That's hilarious -- I worked on Zynga's analytics system in the early days, and we made it (hopefully) very easy to instrument code and get up and running. We created patient zero I guess.

Congrats! It was a fun many years competing & excited to see the space validated in the public markets.

Suhail! It's good to hear from you, thanks for the note. Let's catchup sometime.

Do you have any screen shots from the first version you put in front of customers? It'd be fun to see how far it's come.

I assume investment banks were trying to convince you to do a traditional IPO instead of a direct listing, so they could collect some fat fees. What were their best arguments?

The other posts have some great screenshots of our product. Giraffe Graph! That brings me back.

The fees are actually the same between a traditional IPO as well as a direct listing. We ended up paying $15M or so all in between everyone. The reason some banks push you to a traditional IPO is that their real clients- public market investors like hedge funds who to repeat business with them, get a good deal on your stock.

I heard all the expected ones: not having control over your price, wanting a monotonically increasing stock price, having the price trade up on the opening for good press. It's all bullshit, if you read any of the coverage on Amplitude we were able to achieve all the goals we wanted to: https://www.google.com/search?q=amplitude&tbm=nws

My absolute favorite argument was that if you price too high, you price out people who will stick with you, and that will cause your price to be lower in the future than it would have been otherwise. Luckily, I did a year in the finance world in high frequency trading so they couldn't pull this one on me. That logic is the opposite of how pricing in a market works. High prices now are a signal that prices in the future are expected to be higher. If you want your price to be higher in the future, having it be higher in the present will increase the likelihood of that outcome. The thinking reminded me of Yogi Berra's famous quote: "Nobody goes there anymore. It's too crowded."

I know a bunch of other companies planning to go public were watching our direct listing to see if it was a viable path and I hope our results convince them. Please reach out if you're a CEO and trying to figure this out!

I’m glad you went direct. As a small retail investor it allows me to have access, and buying from employees and giving them some liquidity feels good like what a market should do.

They also use restricted supply to keep the price high. Everyone’s locked up, no supply, it’s no wonder the price often jumps.

Curious what you would say about pricing startup raises? There’s a line of logic which says don’t price too high, you never want a down round and that keeps the risk low.

Yes, you've hit on the other advantages of a direct listing! Retail investors get the same treatment as big funds instead of being shut out which I love. Everyone's also allowed to sell right away which so you know you have full market information AND it's much better for the employees.

RE startup raises these are all what I call champagne problems (is it possible to win too much?). My philosophy is to aim for a little above (eg 20-30%) "market price" for what similar companies are raising at. If you go too much beyond that (eg 2-3x) then it can start to set the wrong expectations and it can get difficult to beat in the future even if you're doing well. It's not great to have misalignment with your shareholders (eg the investors who are now partial owners of your business). There is another train of thought that says to get the highest valuation you can, investors are professionals and will deal with it. So maybe I'm not bold enough. Either way, funding markets, particularly for startups now, are incredibly rich. They're probably 3x the valuation when we did venture/growth stage funding so you'll be in great shape no matter what.

Oldest screen in web archive I can find is https://web.archive.org/web/20121204213532/http://www.amplit... "Welcome to our awesome mobile analytics platform!" with just a login form.

Oldest landing page I can find is https://web.archive.org/web/20130529150217/https://amplitude...

Hmm - I re-upped* this post after seeing it, but I wonder if Spenser is now busy with other things, since more than "a couple hours" have passed.

In the meantime, Geoff's article from yesterday is here: https://blog.ycombinator.com/amplitude-w12-is-going-public/

* a la https://news.ycombinator.com/item?id=26998308

Thanks Daniel! Sorry, I'm on it right now!


Daniel, any chance we can have these AMA with more YC later-stage founders?

This is such an amazing experience (we all want to talk and listen to this amazing founders)

maybe a new category? AMA HN

That's a good idea. Anybody have any nominations?

In the meantime, Kyle from Cruise has some posts in this thread: https://news.ycombinator.com/item?id=28710098

Off the top of my head:

Mathilde, Front

Reshma, Gingko Bioworks

Emmet Shear, Twitch

PC/JC, Stripe

BA, Coinbase

B Chesky, Airbnb

Sid, GitLab

S Hykes, ex-Docker

P Conrad, Rippling

H Mathur, Razorpay

V Aatrey, Meesho

Ryan, Flexport

Drew, Dropbox

Tom, ex-Monzo

Immad, Mercury


Well done and congratulations.

Just like the Freshworks IPO which the CEO was inspired by a HN comment [0], it is good to see more founders getting their companies listed on the stock exchange and have gotten their inspiration from this site which is what I want to see here. Once again well done!

And I also will be buying Amplitude stock at near market close.

[0] https://news.ycombinator.com/item?id=28625322

I’m an ex-Mixpanel employee. Congrats Spencer + Amplitude team. Competing with Amplitude raised the bar for the industry. Seeing that Amplitude was a SPA app that was very snappy, it was a core goal our team to make Mixpanel even faster and more flexible. Thank you for pushing us.

I'm glad we can push forward the state of the art for customers together!

Did you ever consider bootstrapping the business after growing so quickly to 1m ARR after your seed round?

No, I started a company to maximize my positive impact on the world. Maximizing my economics/ownership/control was secondary so there was no question we'd raise venture capital if it would help us scale (and it did to massive effect!)


In addition to claudiulodro's question about whether the employees, especially the early ones, made a good chunk.

- Could you explain the reasons you took it public? What were the parameters and different tradeoffs? Did you want to take it public? Was there a consensus? What were the conversations about that?

- How long have you been preparing for and do you have a playbook for this?

- Who did you hire to take it public, and how have you selected them?

- What was your relation with the underwriters? How did you choose? What did you optimize for?

- How has your cap table evolved from formation to now? How did you ensure fairness?

- Hindsight is 20/20, but what would you differently?

Thank you!

There are 3 main reasons we decided to go public:

1) The market opportunity is massive and we believe we are entering the "inside the tornado" phase where there are increasing returns to leadership. We're seeing more mainstream adoption of Amplitude as well as more companies giving a similar sounding pitch to us and we want every advantage we can have. Being public helps contribute towards that. As an example, we've gotten more press in the last 24 hours then we have in all of Amplitude's existence.

2) Having a liquid currency for our stock allows us to be much more aggressive about acquisitions and other similar moves.

3) You really should take your company public once you reach 100M in ARR. The expectation for performance across the board goes up and good companies rise to meet the moment. You're expected to do a better job of forecasting and planning your business, telling your story, sharing your long term vision, ensuring proper financial and legal oversight, and a lot else. Companies staying private so much longer has been bad for the them and for the ecosystem IMO.

We hired Morgan Stanley as our lead investment banker. As we were meeting with different banks, they were the only ones who really understood my frustration with the traditional IPO process. They also have the most expertise by far with direct listings. I was expecting a lot of resistance to my views from everyone involved in the process but talking to them was like finding a partner who I wouldn't have to constantly fight to run the public listing process "my way". Colin Stewart at MS is also probably the single most knowledgable individual on IPO/DL capital markets in the entire world.

I'll reply to some of the other questions in another comment.

Thank you for your answers...

>As an example, we've gotten more press in the last 24 hours then we have in all of Amplitude's existence.

The spike is certainly welcome. Would you attribute this to the product being invisible to consumers (not something to talk about), or that the company has focused more on the product and revenue until going public, and now it will "do press" (if this is too "forward-looking", a general view on a hypothetical company). How do you measure the impact of public relations in general on the company's objectives?

Has the link between a flamboyant/controversial CEO and press been discussed?

>We hired Morgan Stanley as our lead investment banker. As we were meeting with different banks, they were the only ones who really understood my frustration with the traditional IPO process. They also have the most expertise by far with direct listings. I was expecting a lot of resistance to my views from everyone involved in the process but talking to them was like finding a partner who I wouldn't have to constantly fight to run the public listing process "my way". Colin Stewart at MS is also probably the single most knowledgable individual on IPO/DL capital markets in the entire world.

Was going with Morgan Stanley influenced by the fact Asana did the same. From what I've read, you were both with Benchmark and you're the second to do a direct listing there. Is it a "why change something that works"? If so, was there a "here's what worked, here's what didn't with Asana or Here's how to do it better next time"?

Thanks again,

It's very difficult to impossible to measure the impact of PR on the company. I can say that broadly we've not been well known since we started Amplitude and it's driven me crazy as CEO. There are a lot of conversations about product data we just never end up in as a result.

We didn't have someone managing it internally until recently. We just hired some phenomenal communications people and they've done an outstanding job with PR for our public listing (incredible work Darah, Jenna, and JJ!). I'll update you on the results but hopefully we're in many more conversations!

Having a strong point of view helps a lot. You have to find your voice on it. My views on direct listing which is a new hot topic certainly helped a bunch.

We heard the pitch from a number of bankers and it was clear Morgan Stanley's expertise on the process was the best. The fact that they did Asana as well as most other direct listings helped too.

I came to wanting to do a direct listing for Amplitude through my own study of the options. The path of least resistance would have been a traditional IPO.

Your goal during the process is to minimize volatility of your stock. Jumps in the price from imbalances in supply and demand make people unhappy because it means someone is getting a raw deal and there is imperfect information (which is the biggest part of why I don't like traditional IPOs). There was definitely a bunch to learn from previous direct listings where there was higher volatility.

Thanks for taking the time. This thread has been more valuable than any interview you gave. The CNBC one[0] sucked as they invited you but you did not get the chance to speak. I don't know what they were thinking.

- [0]: https://www.cnbc.com/video/2021/09/28/amplitude-ceo-on-going...

Alright, I'm back 24 hours later to finish out my responses!

RE going public- yes, there was a lot of alignment between everyone internally about the advantages of being a public company. The main downsides are 1) cost 2) distraction to the rest of the company. Huge credit to our CFO Hoang and the internal team for getting it done in record time which minimized the distraction. The main debate was whether to do a direct listing vs traditional IPO which I've covered elsewhere.

We sold about 25% in the seed, another 25% in the Series A (cumulatively 45%), 18% in the Series B, and then 10% in the Series C, D, and E, and 5% in the Series F. We also did a lot of employee grants along the way and were more generous than the median company. It adds up! It's not so much about fairness, it's about what sets up Amplitude to win. You can see the full cap table in our S-1: https://www.sec.gov/Archives/edgar/data/0001866692/000119312...

I wouldn't have done much differently- you can see my reply in some of the other threads for mistakes in not talking to customers enough or with people.

Thanks again.

Congratulations Spencer! Had a question about the early days. How did you keep everyone motivated during the early days of heads down building before you had real customers? Did you talk to customers during that time, and what best practices can you share? How did you communicate your vision to your team / investors?

We're more about execution than vision at Amplitude because that is my personal bias. The vision part has gotten clearer as we've grown.

Even before you have any customers or a product, my #1 recommendation is to get engineers regularly talking to people who could be your customers. They will get so motivated to build something that will solve their problems (at least if you have the right engineers). Potential customers love talking to engineers as well as they're the ones who can actually solve their problem. Once you get a win with an engineer solving a potential customer problem, that starts a virtuous cycle where the team wants to get even more wins. I always tell people our best salesperson at Amplitude is actually our best engineer- my cofounder Jeffrey.

Congratulations Spenser!

From the YC article

"But, in fact, they rather quickly settled on a different problem space that they understood deeply and which immediately resonated with their batchmates. It was also a problem for which the market had not yet, in Spenser and Curtis’s opinion, come up with a great solution. Their chosen target was, of course, mobile analytics. This, it turned out, was precisely the right idea for the team. "

How did you come up with/converge to this idea? what was the thinking process? TIA

Tell us about your first enterprise sale. How far along were you? How did you find the customer? How long was the process?

Also, congrats!

Our first sale was to an ex-Zynga founder of a casino gaming company (hey Bret!). We walked in, introduced ourselves, and went through the demo (note to past Spenser: spend a little time up front asking about their problems first!). We got to the end of it and he asked "how much does it cost?" I was shocked as I had never been asked that question before. I had in my head some number like $50/month, but I remembered patio11's advice to charge more and so I threw out the biggest number I could think of at the time: $1,000/month! He responded with "wow, that's really cheap" and we made our first sale. Thank you HN for the assist in that moment!

Thanks, that made my day!

This is amazing. Thank you for sharing this story. As someone who failed a lot with B2B, I appreciate this. Also your bottom-up comment (startups rolls up into bigger customers over time through growth or acquisition).

Congrats Spenser & team!

I hadn't realised that you pivoted a couple of times before starting Amplitude. Do you have any advice for powering through in the early days and evaluating startup ideas to get beyond the dreaded 0 to 1 stage?

What I say here around not quitting is the most important one: https://news.ycombinator.com/item?id=28701942

You'll get better at evaluating what directions will result in traction as you go through more ideas and spend more time.

We went through 6 or 7 different ideas, including: outsourcing website, website for finding photographers, alumni map for MIT students, Sonalight voice recognition, before landing on Amplitude.

Here's our application to TechStars for one of them when we were very early on which is funny to watch now: https://www.youtube.com/watch?v=4PIM5wWut5Q

Thank you for your reply and for the links. Much appreciated.

What are your thoughts on the new idea of Product Led Growth [1]? Have you seen the role of Sales and Marketing in customer adoption change in recent years?

[1] - https://www.productled.org/foundations/what-is-product-led-g...

Yes- this is the wave we're riding at Amplitude! The revenue center in companies is changing from sales and marketing to the product organization. That's where all your customers are going and the pandemic is just accelerating this trend. As a result, we're seeing the Chief Product Officer becoming the most important role in the enterprise. We're in the very early stages of this trend and I'm excited about the long term potential.

Our SVP Product Justin is a member of the collective as well!

Just wanted to say thank you. We are still small and well within the free tier, your service is incredibly valuable to early startups and I look forward to returning the generosity as we grow.

I'm so glad to hear it!

Congratulations @sskates!

My team has built a tool which can automatically add analytics/reporting to a code base (through code generation).

I have heard that Amplitude tried this as well, but didn't succeed. I find that hard to believe. Is it true? If so, did it not succeed for business reasons or technical reasons?

It's possible to do and we've tried a few variations but it's so unwieldy that for 98% of cases we strongly recommend against it. Instrumentation isn't actually the hard part- it's managing your taxonomy. You're going to do that work at some point, and trying to sort through auto-generated events is much more difficult than manually instrumenting upfront. Maybe the technology has changed enough to make it possible though! I'll have my head of product reach out to compare notes as we'd love to talk more.

Agreed re: taxonomy. Static analysis (at a massive scale) is the key to this - you can understand what code does by the code it calls, the code that calls it, and similar code available on public GitHub, Gitlab, etc. All these things induce a taxonomy on reported user actions.

Sounds good re: talking. Would love to speak. Email is in my profile.

Congrats on the IPO - Amplitude is a great product and the team behind it seems genuinely awesome.

I had a question about your view on the enterprise software sales process? Currently I am avoiding upgrading from the free tier of Amplitude due to fatigue with negotiations - the whole "contact us for higher volumes model" is a bit exhausting.

As someone who does this pricing model, I wanted to ask if you think it's optimal? Have you ever considered making your volume discounts transparent and allowing users to quickly understand how Amplitude pricing will work at scale? Are you just going along with the crowd on opaque pricing or do you genuinely think it's a better model?

Appreciate your thoughts!

Thanks for the feedback. Yeah, it's not ideal today, particularly for companies in your situation. The problem is we're applying the same GTM motion across everything. It works very well for the enterprise but to your point a heavy sales approach doesn't make sense for SMB. We're going to be making some changes here to improve it in 2022 and break out how we organize our SMB business from the other parts.

Can you send me a note at spenser@amplitude.com with your thoughts on what you'd like to see? Thanks!

Hi thanks for doing this. I've been very curious how the roadshow process is in the "covid era"? Any Golfstreams? (I also saw you did a direct listing, I'm not sure how that process differs from an underwritten IPO either.)

The roadshow is all virtual now. We talked to 32 different investors in 4.5 days. I tried to push for in person but almost everyone preferred Zoom and it was probably for the best because we could meet more people. The downside is it feels more transactional vs building a relationship. We still had to pay the bankers the same amount even though there was no private jet provided. What a rip off!

RE traditional IPO vs Direct Listing, you hit my rant!

The traditional IPO process sets you up to massively underprice your stock. Instead of selling your stock directly on the open market, investment bankers sell it for you. They're incentivized to give public market investors a "good deal" by advising you to price your stock low (because they do repeat business with them even though we're the ones paying for their services!). As a result, on average in 2020, companies that went through the traditional IPO process underpriced their stock by 50%.

As a CEO I could never sell a dollar for 50 cents. It's against my fiduciary responsibility to my shareholders. I once heard one public company CFO call it "the largest arbitrage opportunity in all of finance". Why would I want to be on the other side of that?

I strongly encourage all other CEOs at taking their companies public to go through this path.

IPO underpricing data: https://site.warrington.ufl.edu/ritter/files/IPOs-Underprici...

What a rip off!!!! I'd demand a free jet ride regardless.

re: TIPO vs DL, points taken - the advantage in theory is that they're also basically incentivised towards market stability for your stock, and a return over time for their retail investors? (Not saying I agree, just, in theory)

> the advantage in theory is that they're also basically incentivised towards market stability for your stock, and a return over time for their retail investors? (Not saying I agree, just, in theory)

Post hoc justification garbage IMO. It's not like the market isn't littered with the remains of tech stocks that went through a traditional IPO and still crashed.

Yes, exactly. I always joke that once you're out they won't even pick up your call as they're onto the next IPO. (I know that Morgan Stanley still has our back though!)

Congrats on the IPO, I've been using your product for ~3 years and absolutely love it. It's hard to scale adoption in the enterprise but you've done impeccably well, happy to say I'm now a shareholder.

Huge congrats to you and the crew, Spencer! Well deserved. It was always a pleasure working with your product and the people behind it at prior companies, and lobbying for more adoption as a result.

1. What are you most looking forward to (product/tech-wise, impact, financially for you, financially for the organization, etc.) that may not have been possible just a few years ago?

2. What do think are the greatest challenges you will have to face in your role as a founder-CEO and as a company in AMPL's next phase?

3. If you were starting over today, what ideas might get you excited enough to go at it again for the next decade?

Hey Spencer, congrats on going public! I’ve been a happy Amplitude customer at several companies now. If you were starting a company today, what would you do differently from how you approached starting Amplitude?

That's so great to hear. Please keep us honest as we continue to grow!

Ask for money for your product, even if it's incomplete. We didn't start asking for money until a year in because our egos felt we needed to have a fully functional product before charging customers. You'll get a lot of no's initially which is great because it allows you to focus on the very few yes'. If you're an engineer, make sure you're spending 50% of your time talking to customers because you'll always lean towards building product.

Hey! i still remember when i was your TA a long time ago, mad props on IPOing :)

Derp, I’m mixing people. Either way congrats.

Now that you have gone to the public markets for more capital (congrats on what look to be a good liquidity event), where do you see the company going from here, how do you get there without private equity incentives for employees (ie continuing to get good talent) and what are the greatest challenges going forward?

Best of luck on the next stage of the journey in the public markets!

We're going big after the Chief Product Officer in the enterprise. We're in 26 of the Fortune 100 today and are going to figure out how to get to a majority.

The levers you have available as a public company are different and I'm still learning them. Employee stock purchase plans are one thing we've already implemented that helps align incentives with company success. You can also be more aggressive about rewarding top performers with cash which is great. Sidebar: I've never met a great account executive who couldn't use more cash. If you want to make a lot of money in the next few years, come work with us as we take the market!

I feel good about the massive market as well as our differentiation. The #1 challenge is getting the right team in place to execute successfully against the opportunity. When you're growing 50-60% YoY, you have an entirely new company every 2 years. There is such a high degree of variation between people that just because you're a high functioning organization today does not guarantee you will be tomorrow. My biggest lever on it as CEO is the leaders we bring into the business and so I spend a lot of time thinking about how to get that right.

Sounds like you guys have been thinking about this a fair bit.

Thats a good point. I would agree that having more cash available works very well for enterprise level AEs. My thought was how do you retain or engage the core product engineering team especially those with deep company knowledge who sometimes are hitting a wall of engagement/personal growth by the time companies are going public.

I've just seen focus veer off path as companies go public and stocks unlock on the product/engineering side. That said though, there is a natural inertia with companies growing quickly like yours that can counter some of those challenges.

I'd agree - the right leaders make a big difference, aligned incentives, and a good organization. Sounds like you are thinking about all the right things. Look forward to watching you guys grow.

Follow-up question on your comment "my #1 recommendation is to get engineers regularly talking to people who could be your customers".

Do you maintain this direct connection between customers and engineers today, and if so, how?

How does the interplay with product/growth teams work?

Yes! It looks different when you're scaled as a company than in the early days.

Product managers drive a lot of it, I expect that group to be spending at least 50% of their time talking with customers. They'll then bring in engineers when you have a higher priority or more technical issue as it's appropriate with customers. For particular features we have what we call "Customer Development Partners" who are the alpha/beta users for a feature as we develop the feature before we get to general availability and they'll interface with engineers. Shadi, our SVP of engineering, is also working on more ways to make this happen!

- when did you stop coding (was it deliberate or natural as the co grew)?

- do you feel people started treating you differently as the co grew and is now publicly traded?

- what did you like to do when growing (sports, books, activities to call out)?

Btw, this has been fantastic, thanks for your time!

Congratulations, I'm a user and big fan of your product! Three questions:

1) What was the hardest part of your journey to IPO?

2) If you could give just one piece of advice to early-stage founders, what would it be?

3) Of all the common startup mantras you hear repeated, what one would you would advise people to ignore?


1) It's not talked about much but this is an AMA so let's do it. Having to change our management team as we scaled. You have so much loyalty to people who made you successful it is brutal to have to hire a different set of people as you change as a company. This is true for almost every founder CEO scaling a fast growing business. Here's Larry Ellison talking about it: https://www.youtube.com/watch?v=HzZOfoHzju4

2) Set your life up so that you can stick with building a startup for a very long period of time. If you're not ready to make that level of life commitment then I recommend you don't do a startup! One of the things I found when I was researching what it took to be successful was almost every great startup would go through a period in the first few years where rationally they should give up (eg Airbnb founders selling cereal). For whatever reason they didn't and went on to find massive success as through sheer persistence. We spent a year on voice recognition app Sonalight and it didn't work out. There was no question though that we would keep going with Amplitude. It doesn't matter where you start out as a founder, by sticking around enough you end up learning so much and getting more formidable over time. Eventually you outlast most other founders who quit and go on to find success.

3) I need to think more about this one. Most of the stuff I agree with, the challenge comes in understanding what it means in practice. What mantras are you curious about?

Wow, I really appreciate you taking the time to thoughtfully answer these. Thank you!

There's no particular mantra I had in mind. Some examples would be to "do things that don't scale" or "fail fast" or to not focus on what your competitors are doing.

I understand there's no one-size-fits-all of course.. and I suppose that's the reason I'm asking. I'm curious what in your experience has turned out maybe counterintuitive or where you went against the grain. And what standard wisdom you may look back on and say: "Wow if we had done what everyone had advised us to do.. I don't think we would've ever gotten here."

Thank you and congrats again! Best wishes to you and Amplitude moving forward.

I think part of it is the foundational wisdom is by and large correct. The hard part is knowing which applies to your situation. One place I got tripped up on was thinking the answer to every problem was working harder, preparing more, and being more disciplined. It took me many years to figure out some problems needed a different set of skills (eg listening, setting expectations, running a meeting).

One other place where it was correct to not listen to- everyone hated our market, particularly investors. We didn't listen to them. It was very clear to me that there was a big opportunity: usage of mobile phones was exploding, apps and web 2.0 was so different it would require a totally new form of infrastructure and tooling. Zynga, Facebook, Netflix were already embracing this approach and it was only a matter a time before everyone else did as well. I remember one very prominent venture capitalist told us they'd fund us but IFF we stopped working on Amplitude. We didn't listen to them, thank goodness!

Thanks for doing the AMA!

How did you discover your repeatable distribution channel, and what did it end up being?

The key thing to understand is it is a sales-led motion. As much as a lot of HN is not a fan of sales people, it is necessary for any buying process where there are multiple stakeholders involved. As much as I'd like for individual product managers to decide to adopt Amplitude, the reality is it needs the signoff of a full team to implement and adopt. What I have found is that product-led sales people are much more successful than other types of sellers at Amplitude.

There's a lot of ways people find us: events, online search for our content, our free plan, partners, customer referrals. We're still figuring this out as we scale!

What do you mean by product-led sales people?

I'm curious about the timeline - how long from initial SEC filing to the S-1 and then to the actual IPO? I've heard the whole process takes about 3.5 months?

Is there something of a name conflict with Amplitude, the French studio who makes games like Endless Legend, Dungeons of the Endless and others?

They have our Twitter handle! We gotta fight them to the death for the namespace- there can only be one.

In all seriousness I love them although haven't had time to play any since Endless Space. I'm excited for Humankind though!

Congratulations! I'm curious about what equity management platforms have you used during your journey since 2012 and what platform you use now. I would venture to guess that the latter is Carta, since they have pre- and post-IPO support and relevant high(er)-end features, including private liquidity. Have you been offering liquidity in any form to your employees during the private phase of your company?

Congrats! Been keeping an eye on you guys for a while.

What kind of trade offs were involved in the direct listing? How confident were you that was the best way to list?

Congratulations! So happy for you. I'm sure others in this community are too.

Some Qs:

In as competitive a space that Amplitude operates in, what were some decisions the company took during tough periods or in anticipation of dooms-day scenarios that you think proved invaluable?

Consequently, what moments do you think would have killed Amplitude if not for luck or execution or vision or hardwork?

What is that unique insight the competition still doesn't get?


Overall success or failure rarely comes down to a single decision or single event. It's more about having enough compounding success and avoiding compounding failure.

Probably our worst failure was our 2016 outage where we were down for an entire week. I remember thinking we would lose a big portion of our customer base. What we did really well was our outage response and customer communication. We proactively reached out to customers, fully owned the mistake, and were very transparent about what was going on. As a result we didn't churn a single customer! I later heard that some investors passed on our Series B as a result of our outage. Which is so funny to hear that now because it's such a stupid criteria to evaluate a company. It just goes to show how much sheep mentality there is in the investing world. Here's the retro: https://amplitude.com/blog/amplitude-post-mortem

Product/product management is a new buying center in the enterprise. There will be a giant company built around selling to that function.

patio11's story on his idempotency issue which led to repeatedly calling customers' customers comes to mind [0]. He personally called all affected customers!

[0] https://twitter.com/patio11/status/1405704339969220615?lang=...

Congrats on going public! Would love to know what kept you going in those periods of times when things just weren't working out?

If I had a product page featuring either a horse-sized duck or 100 duck-sized horses, which would get the most clicks?

This is beauty of data driven product- your users will tell you!

I'm 60/40 on the duck, it's less confusing and more clear click target.

Obviously you have to A/B test it and try both.

Definitely the horse-sized duck.

Do one thing, and do it well.

Congrats! How did you convince a VC like Sequoia to invest in you? What was the experience like working with them?

I can never read any of your blogs without disabling my hosts[] filter, as it includes amplitude.com

Pity as they are great, so I often pass on them!

[] https://github.com/StevenBlack/hosts

What did you do to beat Mixpanel to IPO - when they had a couple year head-start?

Congrats! What do you think is the best way for software engineers to find early stage start-up doing impactful things?

Congrats! Any string views on how pricing changes over time? (Do what it takes to get early reference customers versus maximizing long term revenue later on)

What advice would you recommend to a current undergrad?

Congrats Spenser! Just curious to hear -- what do you expect to be the biggest differences in your role as CEO pre and post IPO?


I just learned from this thread that Amplitude has more generous free tier than Mixpanel. I shall try it in my product.

Would love to learn what were like three pivotal moments in the company's journey from startup to IPO

Congratulations, amazing product and kudos for continuing to offer the scholarship plan to startups!

Congrats! Through this journey from 0 to 1 to 100, what do you regret doing/not doing?

Please tell us the story of getting your first customer

Mixpanel is easier to use but I guess Amplitude has more functionality.

Are you gonna buy a lambo?

The bankers advised me that getting a private jet would be too much but anything else was cool.

Anne and I are not that flashy. Probably get a nicer house. Give some to family. Hermes handbags is as luxury as it gets for us.

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