Chetan Puttagunta – Go Slow to Go Fast: Software Building and Investing - [Invest Like the Best, EP.156]

Episode Summary

Executive Summary: Patrick O'Shaughnessy interviews Benchmark GP Chaitan Pudagunta on how enterprise software evolved, why MongoDB was a contrarian bet, and how to build durable software businesses through product empathy, patient capital, open source, and disciplined scaling.

Main Topics: MongoDB as a non-consensus bet (Priority: 5/5): MongoDB won by serving developers who needed speed and flexibility, not database purists. Database history and platform shifts (Priority: 4/5): Oracle’s relational era gave way to modern specialized databases as data and use cases exploded. Go slow to go fast (Priority: 5/5): Early software companies should focus on a few lighthouse customers and delay premature scaling. Services as a bridge to software (Priority: 4/5): Professional services can ease migration and build trust before recurring software revenue. People, recruiting, and culture (Priority: 4/5): Scaling software companies is ultimately a people business requiring structured hiring and strong culture. Cloud, open source, and infrastructure (Priority: 4/5): AWS, Azure, Google Cloud, Kubernetes, and open source have expanded the software opportunity set.

Key Arguments: Developers want speed and low-friction iteration; MongoDB fit that need before consensus formed. General-purpose databases are hard because they must handle security, auditing, scaling, and many use cases. Markets for software are much larger than early estimates; Salesforce’s TAM was dramatically underestimated. Early-stage investors should see present reality clearly rather than predict 10-15 years out. Lighthouse accounts help founders build generalizable products instead of one-off custom work. Services revenue can be a strategic bridge, as with Workday and Veeva, to convert customers to software. Premature scaling turns tech companies into spreadsheet-driven businesses before product maturity exists. Great software lowers CAC through product quality and customer experience, not marketing tricks. Recruiting is like sales: build a funnel, run a process, and treat hiring as a double opt-in. Open source and remote culture help companies recruit globally and learn from developer communities.

Data Points: MongoDB first code commit: 2007 - Chaitan says MongoDB’s first commit was in 2007 before product maturity arrived years later. MongoDB investment year: 2012 - He invested in MongoDB in 2012 after seeing the developer need for faster iteration. MongoDB maturity timeline: 10 years - He notes it takes about 10 years to build a truly mature database. Oracle founded: 1977 - Oracle is cited as the long-dominant relational database leader. Salesforce revenue: $13 billion - Used to show how much larger software markets became than expected. Cloud revenue growth: 59% year over year - He cites Azure’s recent quarterly growth on a large base. Global IT spend: on the order of a trillion dollars a year - Used to argue the cloud and software transition is still early. MuleSoft burn from $100M to <$200M revenue: $8 million - Example of capital-efficient scaling before Salesforce’s acquisition. MuleSoft burn from $200M to $300M revenue: $4 million - Illustrates improving efficiency at scale. Salesforce average customer revenue growth: 15% annual rate - Average revenue per customer compounded over roughly 15 years. Salesforce early average contract value: $12,000 per year - Compared with Siebel to illustrate different go-to-market motions. Salesforce average licenses sold: 15 licenses - Early CRM sales motion was small and product-led. Siebel average contract value: $400,000 - Shown as the incumbent’s large-enterprise, high-touch sales model. Siebel average licenses sold: 1,000 licenses - Contrasts with Salesforce’s lighter early customer motion. Benchmark new investments per year: 5 to 10 companies - Chaitan describes Benchmark’s pace of new investing. Per-partner new investments per year: 1 to 2 - Each partner typically makes one to two new investments annually.

Pivotal Quotes: "our job as early stage investors is to see the present very, very clearly and not predict the future" — Chaitan Pudagunta: On how investors should evaluate emerging software opportunities. "go slow to go fast" — Chaitan Pudagunta: Core principle for product development, services, hiring, and scaling. "you're building a solution that's solving a problem and not the other way around" — Chaitan Pudagunta: On product philosophy and user empathy in software design.

Implications: The unresolved challenge is how more founders will convert these principles into durable category leaders without over-scaling or over-customizing too early.