CEO reflections on five years of start-up growth

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There are many areas we couldn’t have predicted five years ago when we founded Chronosphere. CEO Martin Mao discusses the five unpredictable elements in Chronosphere’s start-up growth journey. Those include how Chronosphere learned or benefitted from the global pandemic, changing market and competitive landscape, the growth of kubernetes and cloud-native applications, and the company’s enduring culture.

Martin Mao Martin Co-Founder and CEO of Chronosphere
Martin Mao Co-Founder and CEO

Martin is a technologist with a history of solving problems at the largest scale in the world and is passionate about helping enterprises use cloud native observability and open source technologies to succeed on their cloud native journey. He’s now the Co-Founder & CEO of Chronosphere, a Series C startup with $348M in funding, backed by Greylock, Lux Capital, General Atlantic, Addition, and Founders Fund. He was previously at Uber, where he led the development and SRE teams that created and operated M3. Previously, he worked at AWS, Microsoft, and Google. He and his family are based in the Seattle area, and he enjoys playing soccer and eating meat pies in his spare time.

13 MINS READ

Rob and I never could have imagined when we were building M3, the time series database for Uber, that it would lead us to starting a company together. Let alone celebrating our fifth anniversary of that company. There have been many curves in the road over the past five years, from a pandemic to the biggest change in market conditions since 2008 to a fast-evolving competitive landscape.

One minute, we were on a rocketship and scaling accordingly, and the next minute we were redirecting investments to respond to tightening technology investments. However, through it all, one factor has remained constant. It’s always been about the customer and the culture. In fact, it was never about building a company as much as building something to help organizations and engineers solve the problems we ourselves had faced.

Every day, I want us to walk in the footsteps of who we are serving. I truly believe that if we provide value through the insights and actions that allow organizations to deliver great experiences, then we will, in turn, also gain economic and market value.

In hindsight, it’s easy to believe that each step was intentional and planned. However, as any start-up CEO will tell you, there are always events and circumstances you can’t possibly predict. It’s more about how you react, pivot, and evolve quickly when faced with changing dynamics.

Five unpredictable elements over five years of startup growth

These are five critical elements that we could not have predicted, but I would claim have made us stronger on the other side.

  1. Global pandemic and becoming a remote first organization
  2. Market downturn and increased economic pressures
  3. Fast-changing competitive landscape and consolidation
  4. Organizations of all types accelerating their cloud and digital transformation
  5. How important the company culture would be

Let’s take a moment to dig into each of these.

Global pandemic and becoming a remote-first organization

From day one, we built for a distributed workforce. We didn’t like the concept of a main headquarters office, as we saw how satellite offices at big companies were often ignored. We started with offices in Seattle, New York City, and Vilnius (Lithuania). In the beginning, we asked everyone to work from one of those three offices. Teams could be distributed across any of the sites.

Not long after we established those three satellite offices, the global pandemic hit. As with everyone else, we shifted to remote work. While more established companies struggled with this shift to remote, we were still so young in our lifecycle, so it was mostly business as usual. As a result, a remote-first workforce became who we were as an organization. Today, as many companies are forcing employees back to the office, we continue to take a remote-first approach, leveraging shared work space in key cities as needed.

The upside of this is we can hire the best people wherever they are in the world. The downside is, I believe, we miss some natural collaboration that comes from being together physically. To attempt to cross this chasm, we invest in more face-to-face meetings, offsites, and conferences, investing the money we would have spent in facilities on bringing our teams together.

I think an organization needs to be remote-first from the beginning and have an organization designed for this model as opposed to organizations and cultures designed for in-person work attempting to morph into a remote-only or hybrid model, which seems to be failing.

Market downturn and increased economic pressures

We’ve all seen the economic cycles and the impact those have on the tech industry, so I guess we should not have been surprised to see another market downturn. As a young company experiencing an initial rocket growth rate, the market contraction required us to shift priorities. We had been on a scale-fast path, hiring for the scale we were tracking before the economic hit.

As we watched one tech company after another do layoffs and cutbacks, we slowed down, but hoped we would not have to follow suit. As a first-time CEO, this was the hardest decision I’ve had to make, letting some people go. You could argue the reductions were minimal and had no impact on our customers, but we pride ourselves on our relationships and care for each other. In fact, one of our core values is “Ensuring Camaraderie and Care.” Based on that, we made sure we did everything possible to care for the employees impacted, but the best intentions don’t change the situation.

On the opposite side, the economic challenges presented an opportunity for us, as organizations needed to reduce costs and increase efficiencies. More than ever, technology investments needed to align to clear business value and help the bottom line. This pressure aligned with our pricing model and how we built our platform to give customers more control over their data. Companies that might not have reached out previously gave us another look. I think our numbers over the past five years tell us that our customers are realizing value.

Giving customers control of their data and costs

From the beginning, we decided to take a different approach to the way we managed observability data and how we priced for that data. This came from us living the pain of having to wade through and pay for all of our observability data, which at Uber, was a lot. Anyone working with an observability tool will tell you that most of the data is garbage and never used. However, none of the existing tools at the time were incentivized to help you figure out what data was valuable and what wasn’t.

This was frustrating to us and forced us to solve this problem in a better way. Our platform uniquely provides the analytics to show what data is useful and what is garbage. And, you only pay for the observability you use (the useful data) to get the insights you need. In other words, we help you cut through all the data and find the stuff that helps you make better decisions and remediate issues. This vastly reduces costs and data volume — by 60% on average. We were the first ones to take this approach, and we did so from day one, as that’s what we wanted as customers.

The economic situation both validated our differentiated approach and taught us how to emphasize our value proposition to the market at the right time.

Fast-changing competitive landscape and consolidation

Market corrections and technology shifts, like the move to cloud-native, typically bring vast change to industry categories, and this was definitely true for the observability space. In a matter of just a couple of years, we’ve seen major consolidation through M&A activity, as well as numerous new entrants joining the ranks. For Chronosphere, this meant a fast-changing competitive landscape and potential new threats.

Fundamentally, the observability market quickly evolved from products to a platform. For efficiency and simplicity, customers wanted more of a consolidated approach across what was infrastructure monitoring, application performance monitoring (APM), and log management. The big dogs achieved this through aggressive M&A, acquiring start-ups in the space that were once a best-of-breed in one of those categories.

These acquisitions continue at a blistering pace. For example, ServiceNow first acquired Lightstep in 2021 and then just recently bought Era Software. Competitors are entering this space from many different entry points — databases, search, developer platforms, application monitoring, and more — and then augmenting their core capabilities mostly through acquisition.

Chronosphere quickly moved from products to a platform through a combination of strategic partnerships, acquisition, and fast innovation. We are fortunate to have a rockstar engineering team led by a former colleague of mine from Uber, who understands how to move fast and address a customer’s requirement.

Differentiating through innovation and open standards

I still believe we hold a differentiated space in this market as a technology leader and observability-first platform. Observability is our core competency; we are not adding capabilities to check a box. Also, we have remained true to our competitive advantage around how we process, visualize, and charge for telemetry data. Key analysts in this space, I think, capture our differentiation well, which include:

  • Control Plane for data ingestion and control: Our Control Plane really is our magic sauce, as it enables customers to create and implement key rules against their telemetry data and usage. This capability is really core to how we provide observability you control — and it directly impacts a customer’s goal around data governance, volume reduction, and cost optimization.
  • Support of open source, including Prometheus-style collection for metrics and OpenTelemetry for metrics, logs, and traces: Our Calyptia acquisition also brings us native support of Fluent Bit. In fact, we want our customers to work in open source, as we don’t believe in building black boxes with proprietary lock-in. But we also support all the proprietary protocols from many of our competitors, which we typically convert to open source for our customers so they have more control on the movement of their data.
  • Single-tenant architecture: This was another intentional architectural decision based on our experience, and customers love being provisioned into their own tenant from a resource management and scale perspective as well as data security.

These key differentiators, and how we built from the start for cloud native environments, has quickly expanded our customer base from those large born-in-the-cloud companies, like Uber or DoorDash, to enterprises across all industries and stages of their cloud journey.

Organizations accelerating their cloud and digital transformation

This relevance and resonance of our approach to a broad set of the market was something I did not predict would happen so quickly. Coming from Uber myself, I think I assumed the move to cloud native applications and kubernetes would be slower for the enterprise. However, the need to build and deliver cloud native applications, services, and experiences is just the way business is done today.

Sure, not all digital transformations have been successful, but nearly all companies realized they needed to disrupt themselves with technology to both survive and grow. We knew it would happen eventually, but the disruption of cloud native technologies, and you could add AI today, moved much faster than we predicted, which is great for us.

Infographic showing Chronosphere benefits: 60% reduction in data volumes, $100M+ savings annually, 99.9% uptime, 2 billion end users served, and thousands of hours returned to development organizations.

A couple of months ago, this point really hit me when I looked at our logo slide of customers. While we’ve been heads down building an observability platform, acquiring a telemetry pipeline company, and partnering with other technology companies, our customer base has completely evolved. It’s no longer just the Ubers or tech unicorns of the world. It’s big banks, airlines, hyperscalers, and enterprises from across all industries.

Customers realizing strong value of productivity, cost savings, and uptime

If I was just to look at our top 10 customers, we are helping these companies:

  • Deliver cloud services to 2 billion end users
  • Save more than $100 million dollars each year
  • 60% on average reduction in costly data volumes
  • Never miss an incident reported in our system, with 99.9% uptime.
  • Give back hundreds if not thousands of hours back to their developers

It’s hard not to be proud of this team when we look at those numbers and how, every day, we are out there helping other organizations take back control of their observability data and costs.

That impact is not just because we have been able to build a comprehensive observability platform and pipeline with cutting-edge software components; it’s also because of the culture we intentionally created. When customers select us to be their observability partner, the technology and pricing matters, of course. But so often they tell me what really makes the difference is our people, and how we are willing to truly stay by their side through the entire process. Engineers talking to engineers. Perhaps this is cliche, but it is all about our people.

How important the company culture would be

Which brings me to my next big learning. To be clear, we were intentional about the culture we wanted to build. This was, and is, as important as the technology. But if I’m to be honest, we did not fully grasp how critical our culture, versus perhaps the technology, would be for our success. Nor did I expect we would be winning awards for our culture and consistently be ranked as a top company to work for. We have received 37 company awards over the past five years.

I did not walk into this thinking being a “Chronaut” would carry so much meaning and so much pride. I understand when founders compare starting a company with becoming a parent, as there are many times when this feels like a child you are helping find their way and be successful in this big world.

One of our core values is “No Egos.” This means we leave our egos at the door. We display a fierce resolve to advance the company coupled with personal humility, and we are aligned in our quest for the best solution, acknowledge when we are wrong, and focus on the direction forward — both internally and with our customers and partners.

Startup growth metrics in miles, meetings, and babies

Proof of this selfless commitment to our customers shows up in some fun metrics we pulled together about our employees.

Over the past five years, we have:

  • Worked from 18 countries and 171 cities
  • Chatted over 7 million Slack messages internally and with customers
  • Attended nearly 170,000 Zoom meetings
  • Gave over 4,000 kudos (our internal “great job” program)
  • Welcomed 39 new babies (aka “Chronotots”) into the world
  • Flown over 10 million miles

My team will also tell you I’m a hugger, and they believe I have given over 4,000 hugs in the past five years. While hugging may not be for everyone, I can tell you that this reflects how much we care about each other. This enduring care, another core value, is what keeps me going every day.

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Learning from the past five years to succeed over the next

Every CEO will tell you they simply can’t predict everything the market, investors, or competitors will throw at you. However, there is one thing I believe you can control, and that’s your core values. As a first-time CEO, I know I’ve made mistakes over the past five years. But I believe I’ve learned from those mistakes and relied on my colleagues who share these core values to stay focused on what matters: our community. No matter what happens, you can’t lose your core values.

At Chronosphere, the past five years have solidified our belief in the value of data, the value of fair and transparent pricing, the value of fast innovation, and the value of living as if nothing is impossible.

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