Building Apache Kafka: Origins and Open-Source Decision

Neha Narkhede is a co-founder at Confluent, a data streaming software that raised at a $9.1b valuation in 2021. Neha later co-founded Oscilar, a no-code platform that helps companies detect and manage fraud. Before building these two companies, Neha was a Principal Software Engineer at LinkedIn where she co-created Apache Kafka. Neha is ranked #50 on Forbes’ list of “America’s Richest Self-Made Women 2023” with an estimated net worth of $520m.

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In today’s episode we discuss:

• The origins of Confluent, Kafka, and Oscilar
• How to become a successful second-time founder
• Advice for monetizing open source product
• Neha’s unique GTM strategies
• How Confluent ran two businesses within one company
• Neha’s path to founder market fit

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Referenced:

• Apache Kafka: https://kafka.apache.org/
• Confluent: https://www.confluent.io/
• Confluent Cloud: https://www.confluent.io/confluent-cloud/
• Jay Kreps, co-founder at Confluent: https://www.linkedin.com/in/jaykreps/
• Jun Rao, co-founder at Confluent: https://www.linkedin.com/in/junrao/
• MongoDB: https://www.mongodb.com/
• Oscilar: https://oscilar.com/

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Where to find Neha:

• LinkedIn: https://www.linkedin.com/in/nehanarkhede/
• Twitter/X: https://twitter.com/nehanarkhede
• Website: https://www.nehanarkhede.com/

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Where to find Brett:

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

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Where to find First Round Capital:

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

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Timestamps:

(00:00) Introduction

(02:14)The origin story of Kafka

(05:24) Co-creating Kafka at LinkedIn

(07:31) Why open sourcing Kafka was a masterstroke

(11:04) The unique nature of Confluent's Zero to One phase

(16:35) Building for a specific customer early on

(18:42) Inside Confluent’s successful launch

(20:12) Establishing Confluent as an enterprise company

(22:00) The role of developer evangelism in Confluent’s success

(23:49) Using developer evangelism in category creation

(26:41) Navigating early co-founder dynamics

(30:06) Leveraging complementary founder skills

(31:56) Advice for future founders

(32:45) Building Confluent with monetization in mind

(34:38) Monetizing open source products

(36:05) GTM for subscription Saas versus consumption SaaS

(39:48) The importance of founder-led GTM sales

(40:58) Neha’s order of operations for GTM sales

(42:33) When to build out outbound sales

(45:28) Adding SaaS to a software business

(49:48) Choosing what to license and what to open source

(53:32) How Confluent’s co-founders decided on SaaS offering

(57:58) Neha’s journey as a second-time founder

(59:48) Building Oscilar differently to Confluent

(64:15) Going from speculation to product realization

(70:00) Solving problems people are willing to pay for

(72:07) Neha’s “proactive research sprint” tactic

(73:48) How Neha has applied this tactic