Matthew: Hi, this is Matthew Wise at FounderLY. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn about building products and starting companies. It is with great pleasure that I’m here today with Lewis Cirne who is the founder of New Relic. Over 12 thousand companies use New Relic to monitor the performance of their web apps. With that said, Lew, we’d love for you to give our audience a brief bio.
Lew: Sure. My name is Lew Cirne. I’ve been in software ever since ’82 when my mom bought me a VIK20, and she said she hasn’t seen me since. But I’ve always been a passionate technologist who loves building software. It started off professionally at Apple in ’93 in between the tenures of Steve Jobs. So, I learned a lot about building products that people love. But got the bug for being an entrepreneur, I think just by being in Silicon Valley in the early ’90s.
So, in ’98 I founded my first company called Wily Technology. And Wily is the first company in now a very large market called web application performance management. And Wily is a leading company in that space providing visibility and performance monitoring for live production web applications. And Wily was acquired in 2006 by CA, a company sometimes known as Computers Associates. And that was a great successful outcome for all the stakeholders, and Wily continues to do great business for large enterprises today in monitoring production websites.
New Relic is my do-over at the same problem space. Learning everything I learned in my first startup and the eight years I put into that. I thought, what can we do to address web applications performance today? And focus on a new model that is delivered as a service rather than on-premise software. Supporting newer applications in frameworks running in the Cloud and running on languages like Ruby on Rails or PHP or Python as well as Java and dotnet. And being just a lot easier to use. So, you hear a lot about consumerization of IT, and in my mind that primarily means software that’s easy to use that you don’t want to inflict pain upon people when they have to open up their enterprise software applications.
So, we try to build software that our customers fall in love with and want to buy without even having to talk to a sales rep. And New Relic is basically succeeding very well in that model. And as you mentioned in the beginning, we now have over 12,000, I think about 12,500 customers using our software to keep their web applications fast.
Matthew: What makes New Relic unique? Who’s it for, and why are you so passionate about it?
Lew: Well, I think what makes it unique is, we’ve got software that a developer can get up and running with in literally a couple of minutes. And instantly have visibility that they had honestly didn’t think was even possible. So, by installing a little bit of code provided by us, we call it our agent, just installing that library inside the web application and then restarting that web application on its server, within a minute you’re going to see deeply how fast your app is running, and what is the code that is contributing to any performance problems you might have.
It’s like x-ray vision for your live web app. And what amazes our customers is just how easy it is to get going and how little pain is involved in setting up or seeing the data making sense of the data and making your website faster. That’s why we’ve got such strong business tractions because the product delivers so much value that people just try it out and they like it, and they want to become paying customers.
Matthew: What are some of the technology and market trends that currently exist, and where do you see things developing in the future for your space?
Lew: Well, there are a couple of big trends that are exciting to me. Obviously, virtually everybody is talking about Cloud computing and for good reason. The fact that people can get infrastructure on demand at any moment in time allows them to rapidly roll out web applications and not have to think about procuring servers, etc. And the layer above that platform is a service that’s obviously very interesting as well if you look at companies like Salesforce’s Heroku acquisition or EngineYard or what VMware is doing. And while there is, at least, 20 players now doing platform as a service, basically what that’s saying is the application server is really going in the way of history and is being replaced by live platform as a service.
All this means is that people who can write software have fewer and fewer barriers to publishing that software immediately and scaling it as needed. But what’s in the way is the visibility in the performance monitoring that tells them whether or not their application is actually servicing the end user, whether there are performance problems and when to add more capacity and what you need to do to make your site service the demands that your customers are putting on it.
That’s where we come in. So, virtually every platform is a service provider integrates with New Relic, provides New Relic to the end customers. For example, we have thousand of Heroku customers using us to monitor their applications running with either Ruby or in Java or we just announced Python last week. We can go through the list of all, virtually all of the platforms of the service providers who provide that as well.
There’s a second trend that I’ll speak to briefly and that is that you know, kudos have to go to Salesforce for really pioneering the whole idea of software as a service, and businesses shouldn’t be wasting their time and resources managing software. They should be pursuing their business objectives. And if you look at why Cloud computing is so popular, it’s because people could just get the infrastructure they need right away.
Well, the same should be true for your monitoring software. If you want resources to be available right away and you don’t want to worry about installing machines to run your application, then you certainly don’t want to be installing software to monitor your application. You don’t want to be delayed in launching your application because you’ve got to install and maintain the monitoring software. You want that to be just as available and ready to use as your infrastructure on demand is.
And so, we think that providing application monitoring as a SaaS model and we’re the first company to do it and by far the dominant leader. That’s really a game changer. It means that people can just focus on running their business not managing their management software.
Matthew: We covered your background and a review of your market. We’d love to get into the story of how New Relic started, as I understand you’re a single founder.
Matthew: How is like to be a single founder, and how did you know you wanted to start New Relic?
Lew: Sure. Sure. Well, really to answer that you’ve got to first take into perspective my first company that I was also the sole founder of Wily Technology. So, I’ve always been a passionate technical person, but I had a broader set of interests than that. When I was an undergrad I had a computer science degree, but I also pursued classical studies. I almost double majored in CS as well as the likes of Latin and Greek. So that breadth of interest, I think, led me to wanting to be involved beyond just the core technology and to really thinking about what does it take to build a successful business.
And Wily was a great learning experience along the way for that. I was learning on the job as a first time manager and CEO there. I brought in a professional CEO after the company was about 40 or 50 people in four years into the job and moved to a CTO role. And that was great and a wonderful experience. After Wily was acquired and that was for about $375 million, it was the largest acquisitions CA has done in the last ten years. So, there’s certainly no regrets about how Wily turned out.
I took a year off, and I asked myself what would I do different learning everything I’ve learned? And there are a few key things that I’ve learned. One was in the first time around, like almost all enterprise software companies, when you’re selling a product for hundreds of thousands or millions of dollars, you end up often modifying your product almost for every customer that you bring on because they’re paying such a large ticket price for the software.
You try to accommodate the requests, and what you end up doing is just continuously modifying the product until it becomes not very cohesive. And you’re trying to serve all, everybody. And in the process you do a mediocre job of just being good at core. Whereas prices are designed for tens of thousands of customers instead of a few hundred customers have to be scaled and therefore simple to use.
So, my inspiration actually for New Relic was, this was just after the iPhone came out, and the iPhone was the first phone that I had ever seen where you could set it up in the comfort of your own phone, in the comfort of your own home, I should say. You didn’t have to go inside the AT&T store, wait for somebody to press a bunch of cryptic keys and install a sim card and go away behind the desk and come back to you and say, OK your phone is ready.
Because Apple invested in how does somebody take it out of the box and fall in love with the product without any help. And I said, I thought to myself, enterprise software should be that way, too. We shouldn’t need to hire people to go on-site to our customers to tell them how to get going with the software. The software should educate the customer on their own. If we don’t have to hire all those people to go on-site to educate the customer, we could, in effect, reduce the cost of sales and reduce the price of the product.
So, we can build a better product like the iPhone was better than its predecessors, but we can distribute it for less money. And therefore, we could reduce prices by 90% and still have a more profitable company. And that was where the whole combination of technology, product and business model got me really excited about New Relic.
Matthew: From idea to product launch, how long did that take, and when did you actually launch New Relic?
Lew: It’s pretty funny that story, just a sec. I started working on New Relic really when I was taking that year off. And honestly, I was just looking for something interesting to do when I wasn’t golfing or playing around with my daughter, who was only one at the time. And so, I just got curious about technology again, and I started playing around with this then new thing called Ruby on Rails. And the funny thing about it is when people learn new programming languages, usually you write, after you write Hello world, you try to write a little bit of an application that has some complexity to it.
Well, the first app I wrote Ruby on Rails was New Relic. And it monitored itself. So, this was really started off as really me just trying out a new technology and because my background is in application performance management, I’ve been doing it for 13 years now, I ended up building something that now is used by all these companies. But at the beginning it was just a research experiment.
So, the first lines of code were written in between rounds at golf in August of ’07. But I got serious with it when I had a prototype that was kind of meaningful and interesting to some people in the Rails community. In about November, December, got a Series A term sheet from a good friend of mine, Peter Fenton , over at Benchmark. I’ve worked with Peter before my last company. He’s an excellent VC, and so we decided to try to make a company out of this, and so I raised Series A in January of ’08 and we launched in June of ’08. So, really, we got to market pretty fast after we decided to make a business out of this.
Matthew: Are there any unique metrics or social proof about New Relic that you’d like to share with our audience?
Lew: Sure. Well, I’ve mentioned a number of people using the product and that’s obviously important. We collected an enormous amount of application performance data. We measure the performance of two billion page reviews a week across thousands of websites. The likes of which include Groupon, Airbnb, Zynga, as well as more established companies, like Comcast or AT&T.
We collect over 22, 24 billion metrics a day of the performance of these web applications because we’ve got our code sitting inside, every Java process, every PHP process, every Python process. And sending hundreds of metrics continually to say this is how long the database time took. Or this is how long the page rendering time took and many open more granular metrics than that. So, being to collect tens of billions of performance metrics a day and be able to show that information to our customers so that up to the minute they can say how fast is my site now and how is that occasional time breaking down.
And being to do that really fast while you’re collecting so much data at the same time is no small technical feat. Let’s see what are some other pretty impressive things? So, we support those 12,000 customers with one support rep. And how do we do that? Well, and they get timely support, too. I mean, their questions are answered, etc. So, there’s sort of, how does that happen? Well, we’ve been pretty disciplined about building software that not only works, but is easy for the customer to operate on their own.
Again, kind of like the inspiration in the iPhone where you don’t need to call technical support to activate your iPhone most of the time. We’re trying to do that for enterprise software. And if we have way too many support cases, then the first question we ask is why isn’t the product easier for people to use without having to call support? Not, why don’t we hire a hundred more support reps?
We also put engineers on a good number of the support cases. So, our dedicated support rep does handle the inbound requests but works directly with engineers and our engineers would rather be running code. So, it’s further incentive for them to write high quality code that is easier for the end user to use without having to contact support. And that’s a way to incent our engineers to keep doing what they love doing. And also, when they’re on support tickets when you’re hearing from the engineer who owns the product as an end customer, you tend to have a better experience with support. Because you’ve got very technical answers to your questions and the customers are very technical.