Founding story of AppDynamics

Jyoti Bansal is the co-founder and CEO of Harness, the software delivery platform used by thousands of engineering teams, and previously founded AppDynamics, which he led from inception to a multibillion-dollar acquisition by Cisco. In this episode, Jyoti unpacks what it really takes to move from mid-market to enterprise, why he thinks in terms of “product-market-sales fit,” and how he structures Harness as a collection of “startups within a startup” to launch multiple “best-of-breed” products.

In today’s episode, we discuss:

• Why companies get stuck in the mid-market and struggle to move up into enterprise
• Why Jyoti deliberately lost Netflix as their customer
• The difference between product-market-sales fit, and product-market-fit
• How to build a scalable, capacity-driven go-to-market machine (instead of chasing deals)
• Diagnosing whether you have a product problem or a distribution problem
• How to hire and evaluate your first head of sales and top sales leaders
• Why Jyoti sold AppDynamics three days before IPO
• The “binary differentiator” rule for launching new products into crowded markets
• Why Harness runs 16 product lines under one roof

Where to find Jyoti:

• LinkedIn: https://www.linkedin.com/in/jyotibansal/
• Twitter/X: https://x.com/jyotibansalsf

Where to find Brett:

• LinkedIn: https://www.linkedin.com/in/brett-berson-9986094/
• Twitter/X: https://twitter.com/brettberson

Where to find First Round Capital:

• Website: https://firstround.com/
• First Round Review: https://review.firstround.com/
• Twitter/X: https://twitter.com/firstround
• YouTube: https://www.youtube.com/@FirstRoundCapital
• This podcast on all platforms: https://review.firstround.com/podcast

References:

• Amazon: https://www.amazon.com/
• AppDynamics: https://www.appdynamics.com/
• Barclays: https://home.barclays/
• BIG Labs: https://www.biglabs.com/
• Carlos Delatorre: https://www.linkedin.com/in/cadelatorre/
• Charles Schwab: https://www.schwab.com/
• Cisco: https://www.cisco.com/
• Citi: https://www.citi.com/
• Cloudability: https://www.apptio.com/products/cloudability/
• Datadog: https://www.datadoghq.com/
• Dynatrace: https://www.dynatrace.com/
• Harness: https://www.harness.io/
• Jeff Bezos: https://x.com/JeffBezos
• Microsoft: https://www.microsoft.com/
• Nasdaq: https://www.nasdaq.com/
• Netflix: https://www.netflix.com/
• New Relic: https://newrelic.com/
• Salesforce: https://www.salesforce.com/
• Splunk: https://www.splunk.com/
• Traceable: https://www.traceable.ai/
• Unusual Ventures: https://www.unusual.vc/
• VMware: https://www.vmware.com/

Timestamps:

(01:48) Why do companies get stuck in the mid-market?

(05:09) Designing a product for enterprise and mid-market

(07:19) Why Jyoti lost Netflix as a customer - on purpose

(10:18) Becoming a scalable GTM organization

(12:32) The real signs of product-market fit

(14:04) Have you delivered the value?

(15:46) How to hire your first sales team

(19:59) The four signs of excellent sales leaders

(23:16) How to interview a sales leader

(27:51) Where Jyoti developed his commercial taste

(29:37) Why early founders need to learn sales

(32:02) How AppDynamics began

(36:36) Why Jyoti sold three days pre-IPO

(41:55) What does a healthy board look like?

(44:23) How Jyoti perceives competition

(46:18) Why you need a binary differentiator

(49:53) How to launch multiple products

(52:00) “We need to be best of breed”

(57:38) Why PMs are like mini-entrepreneurs

(1:00:20) The startup within a startup

(1:02:45) A culture of continuous improvement