Abhinav Asthana in Conversation with Nexus — takeaways from the webinar

Even before the three co-founders had assigned titles for themselves, they had a designated Chief Happiness Officer, Cooper, their pet dog. From three guys and a dog in a house in Indiranagar, Bangalore where we first met them six years back to a multi-billion dollar multinational company today– it has been a fascinating journey for our partner company, Postman. Reminiscing this, Jishnu Bhattacharjee, (MD, Nexus Venture Partners) welcomed Abhinav Asthana (Co-Founder and CEO, Postman) to our very first Conversation with Nexus webinar held on 7th August 2020, attended live by over 190 attendees.

We have jotted down some key areas covered during the session in this article:

1. Introduction — an overview of Postman.
2. Movement from code-first to API-first approach — what does it mean and how is Postman accelerating it?
3. API network effect — what is it and how is it changing developers' lives?
4. Explaining Postman to a non-tech person — how do developers use multiple APIs to build something?
5. ‘Product-led’ motion — what does it mean to Postman?
6. Self-serve and sales-serve — when and how do you define the distinction between end-user and buyer?
7. Monetization for API developers — how does it work and how to build a model for scaling up monetization?
8. Community, marketing, and customer success — how did Postman crack these in their initial days?
9. Community evangelists — how to identify them and align their incentives?
10. Bottom-up and top-down approach — how did Postman transition from a B2C developer community to a B2B enterprise business?
11. Postman’s view on GraphQL — how is it impacting Postman?
12. Company culture — how to maintain culture in a cross-border organization?
13. Going global —should one think of it from Day-1? When is the right time to make that decision?
14. Fundraising queries — how to set fundraising targets? What parameters should the founders use to select their investors?
15. Tips for investors — how to enable them to help startups better?

Introducing Postman

For all our readers, here is an overview of Postman in Abhinav’s words that kick-started our webinar — Postman is a collaboration platform for API development on which over 11 million developers, and more than half a million companies build and consume APIs. Postman had started as a side project that Abhinav created in 2012. A developer himself, Abhinav built Postman to solve the issues that he faced with API development. He soon discovered that developers worldwide faced similar issues and started adopting Postman. Since then, Postman grew rapidly along with the growth of APIs. Today, Postman is a complete platform of all things API. The company is 250 people strong across offices in Bangalore and San Fransisco and also boasts employees based in 8 other countries. Postman has raised a total of more than $200M across three rounds of funding. Nexus led the Seed and Series A rounds, followed by CRV and Insight Partners in subsequent rounds.

Code-first to API-first

The movement from code-first approach to API-first approach of software development has been one of the core tenets of Postman’s foundation. To elaborate on this for our audience, Abhinav gave a little background of his experience while shedding light on how software development has evolved over time. Abhinav had started coding in school when software development primarily centered around writing code, compiling and shipping it. The advent of APIs in the early 2000s accelerated in 2010 with the growth of the web as a delivery model for applications. Applications, though, still remained self-contained. In the interim, as Abhinav observed, a majority of code that people were building was actually consuming somebody else’s code through API calls built over a network. Mentioning examples of AWS and Salesforce, he highlighted how these are all APIs available for developers to consume and add much more power to their applications. This trend has exploded over time. Code-first focuses on the development activity, primarily on writing code. Abhinav explained how it’s far easier to build large scale powerful applications by combining APIs because in that case, the primary focus is not on writing code but on thinking of the modularity of applications or the capabilities developers can reuse in their application. This is called the API-first approach where instead of thinking of starting from a line of code, developers start from thinking about an API that they will be creating or using — whether they are architecting an application just from the very beginning, or they are building a composite application by combining multiple APIs together. Every piece of software today is either an API or is consuming an API, hence making it imperative for every developer to be aware of that. Abhinav added that smartphones, SaaS applications, the move to the cloud, microservices, serverless technologies have accelerated that trend — all of that put together is called API-first.

API-network effect

Moving on to the API-network effect, Abhinav explained, “when someone builds and introduces an API, they establish a network of people engaged in the production and consumption of the API. It could be a small team where a back end developer is building an API for a front end developer to consume or a bigger organization where a business unit is producing the APIs for other units to consume. This leads to a very natural form of relationships that people have to form with each other just because of the virtue of the technology that they are building. While APIs themselves enable machines to talk to each other, eventually they enable humans who are building these APIs — to collaborate and to function more effectively, whether it’s about the design or reliability or shipping or consumption of APIs.” Owing the growth of Postman to this effect, Abhinav mentioned how this network scales up pretty massively where the entire world is basically connected through a web of APIs talking to each other. Postman is being used across all of these different layers of APIs for a variety of use cases. Postman enables this whole network to function way faster in a smooth and simple experience by streamlining this workflow, first for individual developers and then for the teams and then for the company. This effectively creates an API network and Postman has been a big part of this movement and helping accelerate it.

Postman for a non-tech person

Addressing a question from the audience to share a real-world example of how developers use multiple APIs to build something, in order to explain how Postman works for a non-tech person, Abhinav took Twitter as an example. Check out the video to see Abhinav explain how a ‘reply’ or a ‘like’ to a tweet are individual API calls interacting with each other and how Postman helps in the process and enables using APIs without writing any code.

Product-led motion

“If there is any poster child, so to say, of building and running a product-led company, that is Postman”, commented Jishnu while asking Abhinav to share insights on what ‘product-led’ really means for Postman. Abhinav began by pointing out that it’s exciting for them to know that there is a term for it now, because back when they started, it was the only way they could think of building the company. “You have to be a little bit concerned but not too much about what the buyer is going to think, what the business model is going to be, how you’re going to charge. The first principle for us was basically making sure if a user encounters a product, they have a delightful experience and what they have come to use Postman for, is accomplished as quickly as possible”, said Abhinav acknowledging that this principle was based on the personal experience of founders being developers. They realized that to maintain that connection to the user, it percolates through “product design, engineering your product, your marketing website, and eventually even your sales motion. And that’s where it becomes product-led.” Further commenting that product-led nature essentially flips everything on its head, Abhinav mentions how Postman has an amazing distribution channel today where the product reaches the hands of the end-user very quickly with no gatekeepers in between. One can simply log onto the website and, in some cases, there’s not even a sign up for it. This gave them the ability to automatically showcase the product and make it reach as many people as possible and as quickly as possible. This is in contrast with what would happen otherwise, where one would advertise the product and then have a funnel, with a sales rep later selling the product, which may lead to a nine-month cycle for somebody to get their hands on the product.

Separation between end-user and buyer

The team at Postman has always consistently figured out who their end users are — what are they like, what are their needs and wants, and if there are bigger problems to be solved there? Abhinav says that as a product adds more and more value to the user with sufficient user engagement, at some point, the product would add enough value for a user to pay. While many of the paying users of Postman pay in a self-serve manner (without needing to talk to the company), for larger teams and organizations there is often a separation between end-user and buyers. He stressed that knowing the end-user first, and then understanding the buyer in the B2B context is what this product-led journey effectively is. A company should clearly distinguish and identify the self-serve end-user motion and sales-serve buyer motion (as he calls it) and bring salespeople in accordingly for the conversation.

Monetization

When asked how monetization works for API developers, Abhinav expressed having strong views on the topic. He remarked that it was a common notion, back when he started, that developers would not pay. Disagreeing on it, he pointed out that developers have a higher bar for value; this value bar needs to intersect with the broader needs of a company. While they may not pay for the product themselves in most cases, these developers and architects are the ones who lead the ‘say’ on buying the product with approvals in the deal through multiple departments. They are the ones who draw attention to the product as something that has added a lot of value in workflow and looks effectively cheap compared to what they might see elsewhere in the market. “So what people have to get right is their monetization strategy and designing for budget ownership. How much of your product you want to give out for free and how much of your product you want to charge for”, highlighted Abhinav. Postman chose a smoother ramp, with their user-based pricing which is very transparent. All key features of the product are available to every user, and pricing is based primarily on number of users. According to him, a model where one version with a set of ‘basic’ features is free and other version with a set of ‘advanced’ features is paid, typically hurts adoption.

Adding that building a monetization muscle is different than choosing your ultimate model for scaling up monetization, Abhinav mentions that he has tried all business models throughout Postman’s history. Giving an example that they got paid a couple of hundred dollars a month just for having a logo of a company present at a slightly smaller size than that of Postman, Abhinav points out how they could have easily gone into an advertising model. As Postman explored ways to make money they also kept a track of why people were paying them, to discover the repeatable motion. His suggestion to entrepreneurs is that they keep experimenting with the business model until they see a pattern that is very clear and distinct, in case their distribution of customers is pretty wide. “But if you have a customer that has 25% of your revenue, and everybody else is super small, then probably you don’t want to actually monetize with that motion”, he added. In that case, the early monetization will hurt — where the majority of the revenue is coming from a promise of one enterprise customer. In the case of Postman, they made more of their products free and lost that revenue during their early stage, to build a better model around SaaS subscription revenue that they have now.

Community, marketing and customer success

In response to an audience question on how Postman built the community in initial days, Abhinav said, “Communities don’t form around products, they form around unifying ideas which everybody inside a community can believe in. So this notion of APIs being important and critical to the work of developers in the future is the idea that we wanted to champion. My goal was that the product is a reflection of that idea and the people building the product are tied to that idea of who will be connected to the community.” So for Postman, GitHub became a place where the community congregated. Abhinav remarked that typically in B2B, founders don’t spend time on support as a function, whereas at Postman, the founders did support themselves until 2016. That helped them (and still helps them) in creating a cohort of people who actually are their biggest champions and they, in turn, bring people around a unifying idea. For Postman, building community is sheer hard work and a long term effort that they had to invest in from day one — it’s talking to people, listening to people, taking in their suggestion, and sometimes even hearing out their views.

Talking about marketing and customer success aspects on the business, Abhinav stated that in their case the first marketing team was just an extension of the community effort that they were doing. “We thought of marketing as how can we bring the community together? And how can we scale the organic work that the community is doing through certain efforts in marketing that we could do? So that involved hosting meetups, hosting events. For us, it was just this notion of bringing the community together and having a message around the product experience, that would resonate with the community.” Similarly, customer success, for Postman, was just an offshoot of support as they noticed that people often wanted to buy the product once their support tickets get resolved satisfactorily. They instrumented that out into a proper customer success motion. Core focus is on a great experience for the user all through the journey, starting at the entry-level.

Another question on community that came up was on identifying evangelists within the community in the early days — how did Postman align their incentives and if it was organic or they had to build it out? Responding to this, Abhinav joked how he would, like a vacuum cleaner, suck in and read through all the things about the product and about APIs, as much as he could. He always kept an eye out on who was talking about the product and had spoken to everyone in the community very early on. Repeating that “communities are formed around the key ideas and you can easily find out who is driving those ideas”, he also said it was both ways in their case — sometimes people reached out, sometimes they reached out to people. Reading through everything, from mentions of the product to support queries, while answering those queries himself, helped Abhinav identify the people most passionate about the space. He added, “you have to engage with them at a level where they see you as peers, and that’s when you know them.”

Bottom-up and top-down approach

Taking a question from the audience on the key ingredients that enabled postman to make the transition from a B2C developer community to successful a B2B enterprise business, Jishnu also asked Abhinav to elaborate on the bottom-up and top-down motion. Check out the video clip here to know how Postman successfully runs both B2D (business to developer) community and B2B enterprise business.

Postman’s views on GraphQL

Another interesting question from the audience asked Abhinav his views on GraphQL and if it’s impacting Postman, given that GraphQL is becoming more and more famous and the fact that it doesn’t need documentation. Abhinav mentioned that he finds GraphQL a great technology and probably the biggest trend that has come up in the last decade with respect to publicly available APIs. “There are a few rules about API’s that we have learned. First of all, an API never dies if it is in production. There are APIs that were built 40 years ago and they’re still in existence. In fact, if we were able to, theoretically, calculate the value of SOAP APIs, it might be actually more than REST APIs in just sheer dollar terms with the business transactions that go through those. That’s one. The second is that APIs mirror architectural considerations. REST is more free-flowing, which is what a lot of people use and GraphQL is something that prioritizes the needs of front end developers. And that architectural style can be used by some people, but the thing is that no API is self-documenting.”, said Abhinav. In continuation, he explained, “somebody who believes that an API is self-documenting is actually a worse situation to be in than writing any form of thin documentation. It’s something that companies encounter over time. And with GraphQL technologies, people are discovering a lot of challenges. But you can design middleware, whether it’s security, whether it’s caching a lot of things. In fact, GraphQL was one of the biggest feature requests for Postman and now we support it.” In conclusion, he mentioned that API lifecycle is the same across all APIs across all technologies.

Maintaining culture in a cross-border company

Shifting gears from the technical aspects, a question posed to Abhinav on company culture was — as you continue to grow across different geographies, how do you maintain your culture and uniformity? Saying that he is optimistic that company culture can be maintained while also respecting cultural nuances that exist, Abhinav points out that there is a global shared culture with product companies that people subscribe to. To make it work, he mentioned, it requires a lot of reinforcement and very clear and direct communication to set the stage on how the company operates. They have been watchful around this and had to articulate well on what the culture is, even more so because, in their case, people are in distributed environments. They have seen more success with individual contributors. As a word of caution, Abhinav remarked that it’s the middle management that can break or make the culture and that’s where things often can go wrong.
You can also watch this video to know more about Abhinav’s views on building a culture in a cross-border organization.

Global mindset for your company

With more queries related to cross-border organisation coming in from the audience, Abhinav was asked by an entrepreneur attendee whether or not they should think of going global from Day-1 and if yes, when do they decide to do that. Responding to this, he said that for Postman the answer lied in a set of simple questions, “do we want Postman to be a category-leading global company? And the answer was yes. Then the second question is how do you maximize the probabilities of success to get there? And, for us, the answer was that we have to come to the Bay Area, at a certain point in time.” He commented that if an entrepreneur believes that local-market is the way to success for them, then that’s what they should do. In Postman’s case, they had started getting feedback on their product early-on from the US market and they had realized that their highest success probability was going to be in the Bay Area. He said that there is no particular formula to “when” of it, and entrepreneurs should keep discovering and meeting great founders and company executives to learn more from them to know better when to make the right decision.

Fundraising queries

When asked if Postman had monthly growth targets or specific tactics to hit their Series A funding, Abhinav shared that one cannot have their business model driven by investor expectations and that it has to be driven by customer expectations. Further adding, he said that “in the interest of raising money, investor expectations often become a proxy for a business model which actually brings down both the investor and the founder because then nobody knows who the customer is.”

Another interesting question asked by an attendee was, “what were the parameters that you used while selecting your investors? What did you look for in them apart from capital?” Underlining that if a product is doing well capital is always available in different forms, Abhinav stressed that vision alignment with the investors should be one of the first things. To entrepreneurs looking for investors, Abhinav advised they should have it well-set that their investor sees the space the way they do, along with having enough confidence in the founders and in the way they want to build the business. He also acknowledged that looking at different complementary capabilities and the overall network that the investors bring are important parameters. Though he remarked again that having the alignment on “what we are building, for whom we are building and how we are building” was something they always looked for, which they would gauge with their extensive pre-fundraising meetings with the investors before they would even go into a fundraising process. Agreeing with him, Jishnu based on his experience as an investor in the company, added that the founders of Postman always focused on understanding the person (investor), the firm, and how that would fit in into their long term vision of building the company.
You can also watch this video where Abhinav has previously talked about “thinking through fundraising”.

Tips for investors

As a final question, as we came towards the end of the webinar, Abhinav was asked what his tips would be for investors that can enable them to help startups better. Confessing that he doesn’t think about it enough, he puts it well that while investors are good at pattern matching, they can forget that the whole purpose of a startup is to break a particular pattern. Further adding that good investors have that balance with the knack to sense when the pattern is being followed and when the pattern is breaking, Abhinav said that “giving entrepreneurs that chance or that freedom and that confidence helps them”. As a concluding remark, speaking for the entrepreneurial community, he added “we care more about our customers” and that empathy from investors would really help entrepreneurs who are in a tough fight.

You can watch the full recording of the webinar here.

— Nexus Venture Partners

Follow Conversation with Nexus for regular updates.
Visit nexusvp.com/content for more insights from the Nexus team.