Dev Ittycheria returns as MongoDB interim CEO after Dev Ittycheria steps in as Meta poaches his successor

Speaker 2: Welcome. Thank you so much for joining us. How are you doing?

Speaker 4: It's great to be here, guys. Thanks for having me.

Speaker 2: Thanks so much.

Speaker 1: Memorable week in your career?

Speaker 2: Yeah. Never a dull day in the AI talent wars, I'm sure.

Speaker 4: It is interesting to say the least. Clearly, we didn't anticipate this, but the company is on strong footing. You know, I feel really good about the business. We had Investor Day yesterday where we talked about our long term outlook. I think it was really well received. And, you know, we talked about how the business is accelerating. We talked about how Atlas, which is the core kind of product area that investors really queue on because it's been the biggest growth driver, we raised our guidance. We also talked about the fact that we raised our guidance or frankly feeling good about our operating margin, our cash flow, and we also announced we're buying back a billion dollars worth of stock. So Wow.

Speaker 1: There you go.

Speaker 4: Fantastic. I mean, a period of time, not

Speaker 1: The

Speaker 4: all at point is that we feel really good about the business, and I think people, you know the challenge, I think, is many times CEOs get a lot of credit and sometimes too much blame, but in this case, there's a really strong team around the company, and the team has done a really good job, and I'm happy to, you know, step in. And to be clear, it's an interim role. We'll be focused on finding a successor, but obviously we're take our time and do it properly and thoroughly. But it's a very attractive role, so my phone's already been ringing and we already have a retained search going on.

Speaker 2: There we go.

Speaker 1: That's great. There's some debate earlier online about like executive poaching in an entirely different category and someone was trying to make the point that that this cycle is like different in some way. When you look back throughout your career, is the intensity around just just recruiting Talent. And poaching and Talent Wars notably more intense than, let's say, the cloud build out and mobile and and and sort of the the .com era, or is it just more of the same business has always been war?

Speaker 4: I would say people have always been very aggressive, but I think clearly with especially in the AI era, the money being spent on talent has has obviously been breathtaking, to say the least. This one frankly surprised me because it's not so much about AI expertise, but I think Meta really didn't have a lot of DNA around enterprise expertise. I mean, they've never really sold to complex, you know, global organizations like Goldman Sachs or JP Morgan. And so to try and organically build that would probably be challenging. And so I think they just felt they had a deficit on a certain area, and obviously, Zuck has not been shy about throwing money around, and and he did that again here. So, you know, CJ made a decision, and I'll let you pass judgment. But what I will say is, like, I got a note from a good friend who says, at the end of the day, no one's going remember how much money you make. They're going remember what kind of leader you were and what kind of person you were, and I'll just leave it at that.

Speaker 2: Yeah. You refresh everyone on on your journey, both in your career broadly, but also, with MongoDB specifically because, this is not a this is not a wild card that you're in this seat. Like, you are a very logical selection for this interim role. But if you could give us some background on on your journey in tech and then your relationship to MongoDB, I think it'd be really helpful to understand.

Speaker 4: Yeah. Sure. So I was a two time founder of a company that started in 2001. Mhmm. I was a company called BladeLogic, and it ended up going public in 2007, and then acquired by BMC and became the president of BMC Software for a couple of years. I segued into being a VC. I was at Greylock in a small firm out of Boston, actually led the b round of Datadog. I'm still the lead director of Datadog. I invested in Datadog when Datadog was doing only a million revenue.

Speaker 2: Wow.

Speaker 4: So sometimes it's better to be lucky than be good. Obviously, Ali and the team there have done a spectacular job.

Speaker 2: Yeah.

Speaker 4: And at the same time, being a VC, I was doing a lot of work on next generation databases. In fact, I looked at some competing investments to MongoDB, but when I did my diligence, it was clear MongoDB, even at that time, was way ahead of everyone else. I wouldn't say way ahead, but ahead of everyone else in terms of developer mindshare and even financial momentum. But ironically, about six months later, I got a call from a search firm saying, hey, MongoDB is looking for a CEO, would you consider it? And they in fact strongly said, you should definitely take a look at this job, Dave, it's ready made for you. And being an you know, usually you get calls, and what's interesting is when you get a call for a CEO job, I've trained myself to ask what's wrong, because no one calls you when things are going spectacularly well. No one says, you know what, let's just change things up and, you know, make a change of the CEO role. So, and the challenges then are the changes or the problems you have to fix, are they fixable or are this really essentially so fundamental to the company that it's just going be impossible to change. When I looked at MongoDB, what was interesting is that I was not that impressed with how the organization was run. The engineering team and product teams were good, but the go to market organization was a bit dysfunctional. The culture of the leadership team was dysfunctional. And so, and then there was really three knocks against MongoDB. One, open source at that time, no one had really made money in open source, Red Hat was the only company that had created any real value. Databases, a lot of companies had died on the line of being the next Oracle and the landscape was littered with dead database companies. And deep tech out of New York was not something that was proven because at the time it was more of an ad tech and kind of consumer space for tech companies. And so, when I went through that, one, I thought open source 2.0 was going be much it was really better technology than open source 1.0, so that addressed that question. Two, databases I felt like I could see the developer momentum with MongoDB, and I said if developers really love MongoDB, you don't bet against a product that people love. Yeah. And with New York, you saw Google and Amazon and Meta really investing in the New York area, and we recognized that we didn't have to only hire in New York, but there was definitely a lot of talent. Whereas, like, ten years earlier when I tried to start BladeLogic, Actually, fifteen years earlier, it was much harder to, you know, do a start up at that time in New York. I actually start end up moving BladeLogic to Boston.

Speaker 2: Yeah. So yeah. Can you talk about your time as CEO of BladeLogic? I have this

Speaker 1: Also, let's let's I wanna note, like, the timing there. You you start the company post correct post March correction or or in q one?

Speaker 4: Oh, in terms of yeah, yeah. It was it was 2001, so it was actually five days before 09/11. It's my first sort of financing. At that time, it it was pretty crazy to start a company because one, you know, customers want to deal with .coms because that'll blow it up.

Speaker 2: Yeah.

Speaker 4: Employees don't want to work at .coms because they're all blown up. Have lot of worthless, you know, stock certificates. Yeah. And raising capital was super expensive, right? And so but we had conviction that because the previous company had started ended up being a first generation cloud computing company, actually I ended up competing with Market Ben, they had started a company called Loud Cloud.

Speaker 2: That's great,

Speaker 4: yeah. And then when I started BladeLogic, they pivoted Loud Cloud to Opsware and then I started competing with them again. And if you read Ben's book, he talks about going head to head with a pretty formidable competitor called BladeLogic, So, it's funny how this world is so small. But, yeah, it was a pretty tricky time to start a business. And the thing that you learn, which I worry about with a lot of the founders today, is that we had to build the business the hard way. There was no tailwinds on our back. It was a tough economic environment, large companies, our first customer somewhere we luckily closed Sprint and Priceline, but it was a slog to convince, you know, these large organizations to get bet on this new fledgling company when they've seen so many other startups quickly die.

Speaker 1: Well, and now you look at look at how many different, you know, unicorns provide infrastructure for other companies to be able to scale really quickly and and you know things like Work OS, right? Like I imagine there was nothing close to that at the time that would allow you

Speaker 2: to Work go buffer browser based.

Speaker 4: We had to do everything. We had to build So my

Speaker 1: last So you're building like 40 startups at once just to build one company.

Speaker 4: Exactly. And I only raised 29,000,000 in total and had had seven in the bank when we filed our s one. Wow. So essentially, I funded the company through through customers.

Speaker 1: That's amazing. Seven in the bank when you filed as one is just

Speaker 2: it's actually incredible. Like we burned a trillion dollars.

Speaker 1: Trillion live. How have you open source AI or or open weights AI

Speaker 2: You mean open source SI?

Speaker 1: Yeah. Yeah. We're calling it SI as of yesterday apparently. The the sort of economic model could potentially feel much more straightforward with with some of some of the Chinese AI labs just saying, hey, we're gonna make this model, but if you wanna host it and serve it, have to pay us back a some type of rev share. Yeah. Is that the like, given your experience, you know, with with Mongo, is that going to be do you expect that to be, like, the the primary economic engine for for open weights? Or do you think it's something that looks like more like Red Hat or or MongoDB where you're building you're making an open model and then you're building, you know, more infrastructure and products around it?

Speaker 4: Yeah. So the classic open source model where you get some part of the core free and then you pay for, like, say, the adjacent features around it, I think is somewhat challenging because I'll give you our example at Mongo. We had an open source product, and we provided So anything that developers needed free, but any management tooling and so on and so forth was paid for. The challenge was, like, you know, defining that paywall between what's free and paid is always difficult, because if you give away too much of the product, you know, you can't monetize anything. And if you give away too little, it's very hard to drive adoption because people need time, soak time, to kind of really use the product. Frankly, the breakthrough for us, so we found that, you know, that paywall, but we were growing the business more slowly, the breakthrough was really open source as a service. Because when you offer open source as a service, you charge for every little bit of usage. And so we could have customers that are paying us $10 a month, and you could have customers paying us a million dollars a month. And frankly, have that, right? But the fact that you conditioned pay for something just made the economic it wasn't like a debate of what's free and what's paid. Now, customers still have the choice to download and run it on their own, and then we have our self managed proprietary product as well. So I think to use that analogy, I think if it's offered as a service, I think that's much easier for people to handle. Now, recognize with these models, a lot of people are concerned about IP rights and they want to run it on their own on prem. So there, you know, rev share model is tricky because, you know, how much how much do you share? And that becomes just a judgment call, and, you know, different customers will have different opinions about how much they think they need to share with with a third party.

Speaker 1: And you're running running it on prem and then what? Do you have to open it up to like some do you have to basically be do you as as an open source, you know, lab, do you have to be auditing all the users of your model?

Speaker 4: Let you do that. Yeah. There's there's no way that's gonna happen. So then it's a trust model which becomes also a little challenging.

Speaker 1: Mhmm. Totally.

Speaker 2: I have I have a question. Sort of going back to the emotional roller coaster that CEOs go on, particularly founding CEOs. I've noticed at the early stage there's the founder CEO is like, oh, I got to get my board aligned. I need super voting. I don't want to be thrown out. And then after a while it can sort of flip around and I've talked to some founders in the CEO role and I'm like, I think the board needs to worry about you leaving. And that psychology of having enough control over the company as the CEO, the tension, I mean, we're seeing it with companies that are about to go public, how to set up the right corporate governance for the modern era. How did you confront that in partnership? There's various firms that are known for, oh, yeah, if you're not performing, they will throw you out. There's others that will say, yeah, no matter what, we always back the founder. How have you grappled with that on both sides of the table throughout your career?

Speaker 4: Yeah. It's a great question. Frankly, I'm a little old fashioned. I have a very simple rule. If the company's performing, management's in charge. If the company's not performing, the board's in charge. It becomes very simple that way. Right? And yes, you know, you've seen some public companies where the founders have still total control, but the stocks are tanked because people just say there's no governance here and, you know, why am I investing?

Speaker 1: Yeah. It's it's a discount rate. Like I I think Meta has been going through this where like you have to apply some discount on Meta right now because you don't know even like in in in my psychology on it is like, let's say Zach gets AI working like really well, frontier models, leading consumer applications and enterprise business. To me it's like you as soon as he gets the next thing working, he's gonna bet another $500,000,000,000 on the next thing Yeah. And you're not gonna know if that's gonna work. And so for me I've always been I just always mentally

Speaker 2: Eric Soufried calls it tilting at wind windmills.

Speaker 1: Yeah. Yeah. Yeah. But but to me, I'm like, okay. If this if this was run-in a more kind of like stable way where where where there was some shareholder influence, it would probably trade higher. But who knows?

Speaker 4: Yeah. Exactly. And then I think the other on the other side of the coin, I I have to remind founders that no investor wants to go and replace the founder. Yeah. There's no incentive for them to do so. Yeah. So only if things are really going poorly will they ever contemplate such an action. Like, they will do everything in their power to make sure the company's successful. And it's really up to the founder to live up to their obligation to kind of, you know, do the best they can. And there are many founders who, like, decide, you know what? I'm not the best person to be CEO. Gotta bring in someone else. Yeah. Or sometimes they say, I'll be CEO, but I need a strong number two to run a certain part of the business that I just am not good at or I have no passion about. And to me, those are the founders that, you know, are more mature, but someone who's just always paranoid. I mean, if you're worried about the people who are giving you money that's gonna, you know, basically take you out, then you got the wrong partners.

Speaker 2: Yeah.

Speaker 4: And I've been fortunate to have some great investors. I'm also, only a couple weeks ago, joined Sequoia Capital. Know, they have a great track record of thinking long term. And, I, you know, I know you just had Ruloff earlier, but he was on my board for eleven years, you know, while I was CEO. He's still on the board, and actually I was just with him yesterday in New York, and there were times when he would push me, there were times he would challenge me, there were times when he but then when I needed him, he would always be there to support me. And I think these founders who get so worried about control and like someone can take me out, I you think have to look at yourself in the mirror and say, Why if that were to happen, don't you feel like you have some obligation to perform? Otherwise, if you don't have any obligation to perform, then something's broken.

Speaker 1: That's the same it's the same advice you'd give to, like, talent at a company. Let's say, like, basically become you know, I've seen people join a company become so important to the company that at some point, like, you can just tell, like, 50% of the enterprise value is tied to this one person who's not actually a founder and maybe not even on the management team. Right? And so Mhmm. And then you end up having enough leverage that you can go and get whatever you want economically, but then also rise up to to to to pretty and actually have more control over the company. So

Speaker 2: Yeah. Last question for me. Can you give me some color on how you think about the various buckets of skills that you're looking for in a really talented CEO who's going to go the distance? Is it the Rolodex strategy in ability to engage with the financial markets?

Speaker 1: Understanding of the customer.

Speaker 2: Golf handicap. What's important?

Speaker 4: To me, it's the fundamentals. I'm actually not not a big believer in Rolodex because because people come and go. To me, it's the fundamentals of knowing how to build a business. One, you know, being very clear about what your strategy is. Two, like, lot of people ask me, what is the job of a CEO? To me, the job of a CEO comes down to three things: being very, very clear in your strategy. Here's where we're going, so by definition, here's where we're not going. So that makes decisions easy. You know what to prioritize because the strategy is so clear, you know, it makes decision making easy. The second thing is, you know, assembling the right team around you, right? So who's on the bus? And sometimes as you grow, sometimes some people have to get off the bus because it's not scaling, and then you bring new people on the bus, but you have the right people who are really complimenting you to build this great business. And obviously, if you have the right leadership team, they're going to build out their teams respectively. And the third thing is really create a culture and remove all the obstacles that prevent the team from being successful. And, you know, you can create a mercenary culture, which has its own second order effects. Or you can create a culture where people are really connected to the mission, they're really connected to what they're doing. You really develop And we think of culture as like another product in terms of how do you attract and retain employees, right? And so if people feel like it's a great culture, they feel like they're learning, they're growing, they're developing, and there's a meritocracy, if they perform, they get more responsibility, You know, that's ultimately what a CEO's job is, right? I can do a thousand things. Like, I can do this interview, I can go meet with customers, but if I don't do those three things well, nothing else matters.

Speaker 2: Scratch offer is more of like a nice to have. That's what I'm hearing.

Speaker 1: How should I know I know we're over time and you probably have more important things to do. I do have one more question. How do you think a CEO should balance sort of like a sort of capitalist versus communist approach? Capitalist being like, you know, bottom Oh, yeah. Entrepreneurial, letting

Speaker 2: A thousand flowers blue.

Speaker 1: Come up with ideas and run things down versus like, you know, central planning top down. This is our this is our approach.

Speaker 4: Yeah. Think it's a mix of both, but I think like, you know, when you seek feedback, you have to seek feedback from people you trust and who have a, you know, certain point of view, right? When someone disconfirms my beliefs, you know, when I was younger, I kind of completely ignored them saying they're basically bozos, but it caught me flat footed and I've tried to train myself. When someone I trust is giving me feedback that just disconfirms my beliefs, the first question I ask is what do they see that I don't see? What do they hear that I don't hear? And what is the persuasiveness of their logic, right? And in a market that's moving so quickly and you have a set of core beliefs, sometimes those beliefs could be challenged and changed. And so to that end, you have to start rethinking your strategy. If you don't have people who challenge you, then, you know, like Steve Jobs famously didn't like board members who agreed with him because he wanted to be challenged. And I think too many people want to hear the kumbaya, oh, Dave, you're so wonderful, you're great, and all that. But that's not really that helpful to me. What's helpful to me is, hey, have you thought about what's coming around the corner? Have you thought about like, are you really is the scale of your ambition as aggressive as it should be? You know, are you thought about like what potential new technologies could disrupt your business? I mean, that's the way you should operate, and you should have a team who thinks that way. The lesson I've learned a lot is the ability to tell a really strong team is the ability to have hard conversations. There's so many people who are very passive aggressive, You know, they'll nod politely and agree, and then they'll go back to the desk and roll their eyes. But if you create a culture where people can feel like, hey, it's not my idea, it's the senior person's idea that wins, it's the best idea that wins, and people feel comfortable challenging you, that creates a great environment where people feel like, you know, we're really focused on what's right for the business.

Speaker 1: Well, I'm gonna have to disagree with you there. I'm kidding. No. Great great point. And I wish we had more time.

Speaker 2: Yeah. This is fantastic. Thanks so much. Good night. Luck. What a wild time. When you

Speaker 1: when you figure out the right

Speaker 2: Yeah.

Speaker 1: Person for the job Yeah. Luck to have them on the show. Them. It's great to meet with you.