The way people work, communicate, and collaborate has changed dramatically in recent years, with chat tools that mirror texting taking off. But these consumer-friendly solutions haven’t always been so developer- or security-friendly. Enter Mattermost, which brings the principles of open source to workplace collaboration with its enterprise-grade messaging platform that serves the needs of everyone from Bungie to the Department of Defense. Redpoint led the company’s Series A in 2019, and it’s grown rapidly since then.
Tomasz Tunguz sat down with Ian Tien, co-founder and CEO at Mattermost, to chat about open source, ensuring that the way we communicate in our personal lives feels consistent at work, lessons from gaming, and remote work trends.
On the move? Check out our new Founders Series podcast format — now you can listen to the conversation as well as watch. As always, the full transcript is also below!
Tomasz: Ian, thank you so much for joining us. I was thinking back on how we first met and I realized we first connected when you were working for Andy Grove, the CEO and the founder of Intel, at the Stanford Graduate School of Business, when he and I were discussing his seminal book, High Output Management. We got back in touch about 18 months later when you were starting your gaming company, SpinPunch, which eventually led to you founding Mattermost. So why don’t we start with you telling us a little bit about what Mattermost is.
Ian: Mattermost is an open source alternative to Slack and Microsoft Teams. As you mentioned, we pivoted from being a video game company — we ultimately realize that in games we do a lot of collaboration, but it’s really on the consumer side. What if we move this over to enterprise and had that sort of same sort of quality of engagement and that polish? For us, it was about questioning how do we really collaborate in workplaces the way we would collaborate in the consumer world, which is a lot of texting.
We started building a business that was pretty much bootstrapped. And then about a year ago, we raised a Series A of about $20 million with Redpoint, super exciting. And then months later we raised a $50 million series B with Y Combinator Continuity and Battery Ventures. And we’ve been really accelerating along the way. We’ve been transforming from a bootstrap business over to being a real enterprise scale company.
Tomasz: One of the things that we’ve been super excited about for a long time is open source. And the reason that we’re really excited about it is there’s lots of different advantages of open source software. And it started with one of our partners Satish, who founded Zimbra, which is an open source email client and maybe one of the first open-source collaboration applications. Could you tell us a little bit about why open source is so powerful in collaboration?
Ian: Open-source has really changed everything. People don’t learn how to code in school anymore, they learn by doing, with open source — this is the number one delivery of education. So when developers are educated on how to do their craft using open source, you know that’s the first place they go to when they think about tools and infrastructures. Like what can I find that’s already built? And it’s this massive leverage, which is if one person solves a problem in open-source, that’s made available to the entire community.
These amazing opensource technologies that actually create new challenges and opportunities when we create another layer on top and another layer on top of that.
So Mattermost is bringing open source to that collaboration layer. We enter orgs through developers that says, “Hey, we will connect all your dev ops tools together. We will give you the workflows to be more productive.” And then from there it flows into the rest of the organization. It’s really about open source moving up and up and up the stack as open source is built on top of more open source.
Tomasz: So classic open source has always been in the infrastructure, like open source databases, and then now what we’re starting to see in the last couple of years is really open source moving into the application. Why is that happening? Why all of a sudden are particularly technical buyers willing to use applications that are open source where for the last 30 or 40 years of software they’ve all been closed.
Ian: I think it’s interesting — on one hand you’ve got engineers that are really into open source and then designers that tend to not like to give things away. But I think that’s really changed. And you see innovations like Bootstrap, a lot of WordPress themes, and so on. You’re seeing a lot of designers contribute to open source — and then once that started to flip, you’ve this opportunity. If you’re a designer, you might think, I can either continue to work in the closed source world or I can contribute back. So more and more disciplines are discovering what engineers know, which is that with open source, the more you give away, the more you keep. And when you are the designer who built Bootstrap and sort of gave it the world or built these different controls or icons or emojis or whatever it is, it’s a race to carve out that place in the world of design and say it’s your own.
Tomasz: Right, so all of a sudden you’re building credibility. One of the reasons engineers started contributing to open source was just to show their prowess technically — someone’s GitHub profile is basically their resume if you’re an engineer. And that’s why a lot of open source communities can recruit from the community. You can kind of see with their open source contributions, how good are they, how effective are they going to be? It’s an incredible trend.
So let’s shift gears a little. Let’s talk a little bit about you. Tell us a little bit about your childhood, maybe one or two memories that influenced you today as a business leader.
Ian: One of the things about me as a kid is that just had this immense curiosity. I was always so curious about people. I didn’t really have a clique of friends — I’d have different friends all over the place, kids that are interested in this, in that — I’d always want to eat lunch with someone different every day just because I was so curious and I want to find out about them and who they were and what they’re interested in and what we had in common. And growing up to lead a business, that sort of curiosity and that ability to develop relationships across sales and marketing and engineering and finance and HR is so important.
And when you have lots of people from diverse backgrounds, your job as a leader is to bring everyone together. So I think at the center of that is curiosity and the ability to build relationships across people who are very different. And I think that’s been something that’s been really core to how I operate.
Tomasz: That makes a lot of sense to me, and especially given Mattermost is a distributed company. You have an unusual challenge in that you have many people who speak different languages, who come from different cultures. Even at a really early stage, the company was distributed. So I imagine that curiosity must be a superpower even now.
Ian: Yeah, we’re super lucky to have people from such diverse backgrounds. Everyone’s worked from home. And we have an employee NPS score that’s in the 90s. So people really love working here. They love being empowered. Statistically, the most difficult thing about working anywhere is the commute. So if you can take that out and we can build an organization that has clarity and purpose and autonomy and mastery and you get to do it from wherever you are, people are super happy and then they’re able to build, really great relationships in spite of rarely meeting the other person face-to-face.
Tomasz: Yeah, there was a great interview of Sid from GitLab — he was talking about how remote-first or distributed companies have to do things earlier that later stage companies typically do that to bring a lot of the disciplines like the HR disciplines, the values, the communication effectiveness. That’s something I’ve always admired about you from our very first one-on-one. You are super organized, on time, hit every point and it’s just incredible to see a company grow with amazing operational discipline from the very beginning.
And you got to study operational discipline from one of the all time greats, Andy Grove. Tell us a little bit about what that was like. What was the context and what did you learn from him?
Ian: Yeah. Andy was amazing. I was his last teaching assistant before he retired from teaching a business school. And he had the most amazing focus and willpower. His backstory is he came over here from Hungary, didn’t speak English, got himself through graduate school, started Intel and was able to really build the business. He had an engineer’s mind, and he really applied that to operations and saw the whole organization as systems. And Andy was very much a teacher. This was something that was super important to him. And when he would write and he would have all these systems and he’d share them inside Intel and they’d put them into that and they put all that into the book, High Output Management. It’s the operating manual for technical people that want to understand how to build organizations and lead them. I actually emailed Andy asking him for a Kindle version so I could share it with my team, who were distributed at the time. And he’s like, well in 1982 yeah, when I negotiated the deal I asked about digital books and my agent said it’ll never be a thing.
Tomasz: Come on. No way. So is there a digital copy version today?
Ian: So there is, but so what I did is I went to Andy, and I asked if I could help negotiate them because I was his teaching assistant I didn’t realize… I know nothing about books, but I’m like, okay, I’ve negotiated contracts so let me go negotiate that. It took me a year to get the IP rights to be renegotiated. We had Ben Horowitz write a new introduction, and we relaunched the book. But the whole reason to do that was like I needed it on Kindle.
Tomasz: What did you take from that book and from your experience with Andy that you are applying it Mattermost today?
Ian: Oh gosh, there’s so much that I learned from Andy. I would say frameworks are really important. I think training is the manager’s job is one of the best chapters. If you do the math and if you invest 20 hours and you do a training session for a certain number of people, the ROI is just immense. If you can improve their productivity by like 1 to 5 percent for a whole 2,000 hours they spend the year, it’s amazing the leverage you can have with training. So I think that was one of the key things I took away.
Tomasz: Awesome. Let’s talk, your distributed team cultures. The way I think about culture is as a company grows, you can’t be in every room. You can’t be in every meeting, you can’t look over your people. You start being a manager of individual contributors and then you’re managers of individual contributors and then managers and management managers, individual contributors. And the way that great CEOs ultimately influence every decision in business and being in every room is by setting the right culture and the right kind of values. Can you talk a little bit about Mattermost culture and how you thought through that?
Ian: Yeah, absolutely. I think you’re exactly right when you spoke about how distributed companies have to figure out culture and values early. You have to sort of set those leadership principles early on, recognizing that doing one thing means you aren’t doing the other. So we have six principles. Customer session is one. And the trade-off of customer obsession is, well, what if I really want beautiful architecture, or revenue focus? We’re saying, we are customer obsessed and thinking about how to orient the entire company around customers.
The second one is ownership. That’s really important in a distributed company because the cost of coordination is higher. But ownership also means we have a lot of transparency. So you can actually see into all the different areas.
Then you’ve got high impact. Earning trust is another one, that’s sort of like a North Star.
Tomasz: That’s so core to your brand.
Ian: Earning trust doesn’t mean you have to be perfect. It means like things are always going to go wrong how do we go fix it? How do we iterate and how do we earn back that trust? Because it’s like there’s always going to be bugs, there’s always going to be setbacks. And it’s about resiliency, not perfection.
And then the final two are self-awareness which is really the foundation. We thought about the word growth, or growth mindset, but self-awareness is the foundation.
Tomasz: So do you interview for these values at the beginning and then do you also put them in your performance evaluations and that’s how you create an operational cadence around them?
Ian: Yeah, absolutely. So we do performance reviews that you get your peers will sort of assess you. And self-awareness is one of the hardest ones to assess.
Tomasz: What’s a great interview question to determine if somebody has self-aware? Do some come to mind?
Ian: One thing we do in interviews all the time is ask about your chapters of your career. And we’ll ask, for a chapter, what were you hired to do? What were the low lights and challenges? How would your manager rate you out of 10 and why?
The people that come in that say, “Well I was a 10 or I’m always a nine or a 10” have less opportunity to get better.
Tomasz: Tell us a little bit about the origins of the business. So it sounded like it started while you were at Stanford with Andy, but you were at Microsoft before. How did you start a gaming business? Where does the SpinPunch name come from and then how does that all evolve into the Mattermost story?
Ian: My whole background has been in collaboration. So coming out of even undergrad at Waterloo I worked a lot of companies, doing a lot of front-end and collaboration tools. I started at Microsoft in the SharePoint and business intelligence group, so Excel, SQL Server, SharePoint. So a lot of collaboration tools. I ended up in Outlook.com and OneDrive, which were 400 million-user consumer brands and experiences. And when I went to business school, I started a company doing essentially social games.
So these weren’t single-player, these weren’t puzzles. These were massively multiplayer online games. There were people cheating and there are people harassing each other and all this drama going on. And when I started open source as like an open source community and I’m like, “Hey, let’s build things together.” It was still like this, this online collaboration piece, but like using a completely different light. So it was really great to use all the things I learned about consumer dynamics and online games and sort of group dynamics and use this to say, “Hey, let’s, let’s build things together.”
So that’s how we got over a thousand people contributing to our open source project. We’re translating 16 languages and that sense of community is really what drives Mattermost as a company and as a business, as an open source project. So how that’s all those things aligned together.
Tomasz: Were there a lot of lessons when you had this rebel hoard 50 people competing with another. Were there were a lot of lessons in managing a gaming group that apply to managing an open source community?
Ian: What I learned from the video game business is how groups self-organized. So they would actually create multiple alliances of different levels. And when you started you got in the lower level and then you had resigned your tasks and did your things and then the best of those would go to the second level and the third level. And then the fifth level would be the most elite people that would call the shots and be super dedicated. But in open source, everyone wants to belong and everyone wants to know what they’re supposed to do and this are the standings. So as a community we’re like, okay, “Here’s easy tickets. And if you do an easy ticket, you can go and you can do more difficult tickets and you can contribute in different ways.”
It’s human nature to really want to get better at things and do you recognized for your skill and recognized for your contribution? So I think there’s definitely parallels to the interactive entertainment and open source.
Tomasz: That’s pretty funny. It’s all about building trust with your peers. So you start doing the basic work and then you show skill and competency and then people trust you more and it increases with time.
Ian: The thing that’s human nature is this something called Bartle Quadrants. Bartle quadrants are like, everything we do in social groups, it can be competition, it can be achievement, it can be social interaction or it can be exploration. And when you build games, there’s going to be elements of each of those and some are going to bias towards ones or the others. And in open source and everything we do, it’s the same thing. So think about competition, achievement, exploration and social engagement. And those are the things that drive those endorphins
Tomasz: Yeah, totally. What an awesome framework. I’ve never heard about it, but I’m going to have to go spend some time learning some more. So after you started Mattermost clearly it was a huge success within the dev ops community. What was the story? How did it start? What was the first couple of threads and how did the snowball keep getting bigger and bigger and bigger?
Ian: It was really about listening. Sid from GitLab looked at what I built in the gaming company as a messaging platform and he was like, “You should open-source this.” And he gave me a list of 10 things I should do. And I just did them and they were very reasonable and we had a business.
Tomasz: That’s amazing.
Ian: That’s just honestly what happened. And what happens is this open core model is so powerful. It’s like if 20 years ago someone said, “Okay, build a SaaS service.” The open core business is really about thinking how to align the open source distribution model with enterprise value through commercial offering. And that’s it. So there’s sort of 10 things we did and we had the business model lined up. And the engine for that is we’re just listening to your customers. So developers wanted this, developers wanted this, and we had a lot of systems. We had feature requests forums, we had people up vote. Like we had a lot of systems just like in the game business to have people self-organize and give a signal.
Tomasz: And so it was the community that was initially guiding a lot of the roadmap that kind of thing and contributions from them.
Ian: Oh it was crazy. So we had one guy on Twitter just came into us and he’s like, so I’ve never contributed open source before, but I’d like to offer you a 10,000 line pull request.
Ian: It was to add translation infrastructure to every string of our user interface and localize it to Spanish. 10,000 line pull requests.
Tomasz: So he’s just taking it upon himself?
Ian: Yeah. So what happened is this, he worked at a company that was Spanish speaking, that was using our code to offer a hosted version of Mattermost. But he had translated it to Spanish and every time we released a new release, it took him like a week to merge his localized version to our new changes. So he just said, “Well, why don’t you take my changes and I don’t have to do this extra work?”
Tomasz: That’s amazing.
Ian: And then we hired him.
Tomasz: Awesome. So that’s a fantastic history of the business. Tell us about where Mattermost is going, what’s in store for the future of the business?
Ian: So what I’m really excited about is $3 trillion being spent on enterprise workloads across hardware, software and services. And I see the amount of spent on open source technologies increasing. It’s that you’re building a stack from operating systems to networking, to virtualization and now to applications. So I see us continue to grow in that segment.
Tomasz: Tell us a little bit about the fundraising history of the business and how you chose the people that became your financial partners.
Ian: When we started the business, we were profitable as a video game company. And we had a little bit of funding from Y Combinator. Will Smith became an investor as did the founder of Guitar Hero, and it was really great, but we didn’t really spend the money because we’re so careful with money — running the business profitably and being really efficient, and we ran it that way for three years. And then we picked up a little money when we went through the pivot and we went to enterprise software. But we continued to really be thoughtful about cash. We would get the revenue and then hire someone and they get the revenue and then hire someone.
And then when we met, I was really just starting to see what the business could be. And I was hugely appreciative of all the folks you introduced me to and they looked at the business they were like, “You should scale this. Your metrics are off the charts.” But I had no comparables. And then when we did our Series A financing with Redpoint, it was really exciting. It was really transformational for the business. And the biggest thing for me was for the first time I could hire executives. And I had gone from this small business owner with just middle-level staff to getting these people who had been on rocket ships and could see how big the business could be and brought in those folks.
“And the biggest thing for me was for the first time I could hire executives. And I had gone from this small business owner with just middle-level staff to getting these people who had been on rocket ships and could see how big the business could be and brought in those folks.”
And very shortly we realized, the opportunity is so big. We have such an amazing team of execs. We can now really scale the business. So we went from a $20 million series A with Redpoint to a $50 million Series B months later. And that growth was amazing. And I’m so glad we did it because we’re getting even stronger execs now. Because they see the signal from the company, we have these amazing players coming in and the most important thing is that the customers see it and the customers are paying attention to get the attention of these Global 2000 to be able to take the bet on us. This funding and the investment partners and the signal was really, really important.
Tomasz: Well, one of the things that I’ve admired about you is your ability to recruit incredible executives. When we first met, it was the business was you and Corey, your cofounder, and basically a handful of account executives, but mostly engineers. And then within the span of six to nine months, you had recruited a world-class team that’s now helping you scale the business. And it’s a rocket ship of your very own. Congratulations.
Ian: Thank you. It’s great.
Tomasz: As the company evolves and becomes a rocket ship, there are lots of stresses that are put upon a CEO. In fact, a company that’s growing through hyper-growth is going to go from one to 10 to 50 pretty quickly and all of a sudden the company’s 150 and then 300 and you as the founder and leader of the business, you have to change because the business demands that you change. How do you manage that stress and what have you found to help you to guide you through some of those difficult moments.
Ian: Two thoughts. One is when you’re bootstrapping, you’re working like hundred-hour weeks. The holidays the worst because that’s when your staff goes on holiday and then you and your co-founder have to do everything
So after three years of working hundred-hour weeks, that’s where I’m coming from, now I’m kind of on this enterprise software boat, I’m like oh my God, there’s recurring revenue. We have great net dollar retention rates and great renewal rates. For me, running a bootstrap video game company was like playing basketball with like 20 pound weights — when you take them off, you’re like, this is enterprise software, here’s like $70 million. I’m like, wow. That’s why I’ll always love people come from video game backgrounds because it’s so intense. But it’s hard because they’re creatives and it’s hard for them to work anywhere.
I think the second thing is really having kids.
Tomasz: Okay. Tell me more about that.
Ian: I was in was my second year of B school when I had my first kid and I actually wanted to get all my work done. So I overloaded in courses, I did like seven all-nighters. Having kids is like, you can put me in an economy class seat next to the bathrooms, and I love it because I don’t have like a three-year old punching me in the face for five hours. And so I think that one’s great. The other one is before family you’d have to go out with my friends and party and things like that.
And now if I ever need endorphins, I just pick up one of my kids and squeeze them and I’m good.
Tomasz: What’s the first thing you do in the morning?
Ian: Brush my teeth.
Tomasz: Do you do yoga? Do you like to meditate or do you do something else to relax?
Ian: Well, not to relax, but to be incredibly frustrated about how little willpower I have, I’ll do 10 minutes of meditation on this app called Waking Up. And I try to do it every day just to like focus
Tomasz: What’s your favorite book?
Ian: Walt Disney. Triumph of the American Imagination.
Tomasz: Wow. I haven’t heard that one. Is that about the rise of the Disney Company?
Tomasz: If you could have a dinner with any famous person, dead or alive, who would it be?
Ian: It’d have to be Andy again, since he passed away.
Tomasz: What’s one piece of advice you have for other founders?
Ian: Get a really great CEO coach.
Tomasz: That’s a great piece of advice. What is your spirit animal and why?
Ian: Spirit animal. Oh gosh, a fish.
Tomasz: Okay. Why fish?
Ian: Because I’m allergic to everything else.
Tomasz: Awesome. Ian, thank you so much. It’s been wonderful having you. It’s also a privilege to help you build this rocket ship of a business. We’re really grateful that you could be here. Thank you.