Doug Hanna, Grafana Labs COO on Open Source at $3B (Pt 1)

Michael Koenig: Hello and welcome to Between Two COOs, where phenomenal Chief Operating Officers come to share their knowledge, advice, and crazy stories. I'm your host, Michael Koenig, and this is part 1 of a special 2-part episode featuring our guest, Doug Hannah, Chief Operating Officer at Grafana Labs, the company behind the leading open source projects in the observability space, Grafana and Loki. Grafana Labs recently added to their war chest with a $220 million fundraise at a $3 billion valuation. So why a 2-parter? Doug is leading Grafana Labs through explosive growth, both in headcount on the team and and customers and revenue. In this episode, we focus on the former. What goes into scaling an organization from 70 employees to over 500 over the course of just 18 months? Part 2 focuses on the commercial side of scaling their go-to-market for their enterprise SaaS. Prior to joining Grafana Labs, Doug spent 4 years at

Doug Hanna: Yeah. Thanks for having me.

Michael Koenig: So tell me about your path. How'd you end up as COO? Everyone's got a different one.

Doug Hanna: Yeah. And I think mine is probably non-traditional in a group of people, non-traditional paths. Uh, so I, I started my early career doing technical support. Uh, and that's actually how we met a long time ago when I was at Automatic. And I spent most of my early career in the web hosting industry and kind of companies around it. Doing like technical support leadership and then some consulting and eventually kind of worked my way up through a couple of companies and started running one. So I ran this company called A Small Orange for about 4 years and we sold it to a private equity-backed conglomerate called Adherents International Group. They went public while I was there. And I stayed kind of for my 2 years for the earnout and being part of a bigger company as a kind of basically a GM of the company that I sold to them. And then started a new company called help.com, same investor that I did with my web hosting company. Uh, we did that for kind of 18 months or so, and then realized it wasn't quite the right team fit, uh, space, time, like all those things that can lead to a company, uh, early stage company, not quite working out, but, uh, built a really great team there. And actually one of the people that I worked with is the person who eventually introduced me to Grafana Labs. Uh, so I'll get to that in a second. After Help.com, the startup, I went to

Michael Koenig: What was it that drew you to Grafana after spending so much time at

Doug Hanna: Yeah. Yeah. Like, candidly, I was not familiar with Grafana before my former colleague and friend went to go work there. I hadn't even heard of it, which was shame on me because it was actually super popular and I clearly was just not spending time around the right people because when I started talking to the company and then talking to engineers that I knew and SREs and people like that, they're like, oh yeah, I use Grafana all the time. I get a lot of value from it, which was super encouraging. But I think what drew me to Grafana was Like when evaluating a company, you think about, like, I've heard it described as tech, TAM, and team. So the tech for Grafana, the product itself, widely loved, widely adopted, growing really fast, popular in all kinds of organizations. One of the things that really initially interested me was, was Graham, who's on our sales organization, he's telling me about all these big deals the company was closing with really like large marquee customers. I'm like, wow. For at the time, a 30 or 40 person company to do big deals with like Fortune 50 companies. And like, they, they must be onto something. And then TAM, the observability space is enormous. Uh, pretty much every company, uh, that has any sort of infrastructure needs observability, uh, and all the like kind of tailwinds of cloud containerization, et cetera. Like all of those are favorable to what we're trying to do at Grafana and have been really beneficial to us for the last couple of years. And then hopefully we'll be for some time. And then the team, I really enjoyed spending time with Raj, our CEO and co-founder, his other two co-founders, Anthony and Torkel, some of the go-to-market people that had been in place, uh, at the early days of the company. And I was like, I think this is a group of people I could work with. So it kind of checked all the boxes along with this, like, hey, I think being a part of a 4,000-person company is less exciting to me than being a kind of a bigger part of, at the time, a 70-person company.

Michael Koenig: Sure. That makes sense. Tech, TAM, and team.

Doug Hanna: Yeah. And there, there's like 3 or 4 variations of basically the same thing, but I heard someone describe it that way and it just stuck with me and I've thought about it that way ever since.

Michael Koenig: That's good. T-cubed. And it, it's also worth noting you're back in open source. So coming full circle back to your days at Automatic with WordPress and now with Grafana, what's drawing you back to open source and is it a, you know, what's your passion around it?

Doug Hanna: Yeah, I think open source is an interesting way to go to market. Uh, it has its pros and cons. Like people that work with me will know that I'm, I'm like relentless about describing pros and cons of things. And open source is not all pros and it's not all cons, but I especially think for software adopted by developers, like definitely true of Grafana, probably previously more true for WordPress than it is now as it's gotten so mainstream. Like open source is a great way to get kind of community, like popular community growth, kind of mindshare, all these different things. And then to build a business on top of that, because really our business model at Grafana Labs is like, take this huge community, about 750,000 active instances of Grafana, and monetize like a low single-digit percentage of those customers, uh, and build hopefully a very large sustainable company on top of that. And MongoDB, Elastic, uh, they've kind of done it a similar approach to us. Automatic is kind of more moved into like managed services is my understanding of kind of their current business model, but, uh, where, where they're really about hosting it and providing the value add on top of that versus, an open core model, which is like what Mongo or us do.

Michael Koenig: And so the COO role isn't one size fits all. Yeah. Describe some of the areas you filled as VP of operations in

Doug Hanna: Yeah, so I basically run all our revenue teams, so that's sales, marketing, our post-sales teams like customer success and support and professional services, uh, and recently customer education. Solutions engineering, uh, and then our different ops functions as well. So we have like a revenue operations team. I took over IT, uh, all of our rhythm of business, kind of biz ops sort of things as well, special projects. So, uh, it's, it's kind of revenue plus some ops things. Kind of not in my scope is product engineering. Uh, our CEO is super involved in that side. Uh, and then we have senior leaders for G&A functions like finance and HR.

Michael Koenig: That's very interesting because usually you have the GNA situated under a COO and sometimes you tack on in addition to that, the go-to-market functions. How is that separated differently at Grafana? And it almost sounds like you are a chief revenue officer.

Doug Hanna: Yeah, my, my role practically is more similar to a CRO plus some other operational functions. I think though, What distinguishes me from a pure CRO besides background, like I'm not a career sales leader by, by any means, is that I do have some of these other operational pieces that I'm responsible for. And like, I think a lot about kind of how our company works holistically, what our goals are, how we communicate those, how we operate as a business and a team. That's definitely a part of, part of the role. And I try to think about it beyond just the go-to-market teams, but I spend a lot of my time and my team spends a lot of their time Talking about revenue, helping customers, uh, helping kind of grow our customers as well. So that, that is, that is the bulk of the role and the bulk of where I spend my time. And I think to your point, like every CEO role is different. I've met a lot of CEOs with scope kind of similar to mine. Um, and then I've met some that are more like G&A focused. Uh, it really depends on the company.

Michael Koenig: So at

Doug Hanna: Yeah. So at

Michael Koenig: It rarely is. And I suppose you, like every other COO out there, has those moments where you have a new problem and you think, well, Never thought I'd see that. Do you have one that comes to mind that you can share with us?

Doug Hanna: Yeah, there's definitely like plenty of challenges associated with scale and with growing. But honestly, like when I have the, like, never thought I'd see that, I'll turn around a little bit and make it kind of an optimistic note of like, if you had told me a little over 2 years ago, I guess 2 and a half years ago now, probably started talking to the Grafana team. It took me a little while to get over the line. They were very patient with me, but. If you had told me, oh, fast forward 24 months or 30 months and your company will have 500 people, the go-to-market team will be whatever, 200-something people, you'll have raised $350 million and like be on, on this like really incredible path. I would've been like, there's no way like that, that would just be like exceeds all expectations. And that's really, really exciting. It's really humbling to be part of that. But I think it's like, oh my God, I would not necessarily have expected that. And I was definitely taking a chance on a space I didn't really know much about. And in a product area that I knew I had to learn a lot about. And it was super overwhelming, especially initially. Now I can at least like pretend that I know a little bit about observability, but 2 years ago I was like, I didn't know what Prometheus was barely. And now, now I have to talk about it all day long.

Michael Koenig: So 24 months, crazy growth. What are some of the challenges that you face, particularly as a leader, when you're raising all of this money and the team is growing so quickly? How do you manage those transitions and what are some of the tricks of the trade that you found really help you?

Doug Hanna: Yeah, I think I try to spend most of my time and mental energy and emotional energy focused on the things that are kind of within my scope of control and, and my span of control. So really thinking about like, how do we make great hiring decisions? Like overall, that's probably the most challenging thing is like we've added over 400 people to the company on a net basis since I started. And hire, making sure all those are good and they're culture accretive and business value accretive and all these other things versus dilutive is like so, so, so important and has such a big impact. So I built up most of my team. A lot of those people did not exist or weren't at the company before I started. And they're running new functions that we're really building out. So I've spent so much time there. And I think for any new leader, like taking stock of your team, Understanding kind of where, where the people are today and where they need to be 12 months from now, 24 months from now, 36 months from now. And then in this, in the context of so much growth and change, like also setting expectations of like, hey, you, you're going to have to do A, B, or C to like kind of scale with this business and at the pace that we're scaling. Or we might need to bring in additional leadership. And that's not a bad thing for anybody. It's just part of a quickly growing company and how that happens. So I've had, A lot of conversations like that with a number of people on my team and just being sensitive to like, hey, it's a new company basically every 6 months. And with that comes new people that we need to bring in, new experience sets we need, new skill sets we need.

Michael Koenig: It's rather remarkable. 400 people met in the 24 months that you've been there. You essentially went from a company where pretty much everyone knew everyone, I'm assuming.

Doug Hanna: Yeah. Yeah. I had this moment. A couple of weeks ago, I was like, oh, I used to meet like all of our new engineering leaders when they started. And I was like, oh, like I would introduce myself and be like, hey, I'm Doug, I do these things. And now like, I don't even know who their bosses' bosses are in a lot of cases, just because they've grown. We've grown so much. And it's not like, it's not because I'm totally disconnected from that organization. It's just, there's so many new people and I haven't really had a chance to interact with them as much as I'd like. And like apply all this to like global pandemic and people not being able to meet each other in person and things like that. It kind of just amplifies it.

Michael Koenig: That's really interesting. So let's talk about the people not being able to meet each other. And you and I both had a lot of experience working in distributed companies. For a lot of people though, this is new uncharted territory. And how are you creating a sense of community within your teams for people who have never met before?

Doug Hanna: Totally. So one thing we're trying to do now is we are starting to get together. So if you're vaccinated and you're comfortable traveling, like we're supporting that, uh, and we're in enabling that. And we plan to, knock on wood, in May of next year, 2022, I guess, we're going to bring everybody at the company together in Whistler in Canada for basically a week. And we're going to call it GrafanaFest and just like let everybody get to know each other and build some bonds. But like my team has started getting together. My direct team has gotten together twice now in the last 6 months and really investing in that and leaving space in the agenda for just getting to know each other as people has been valuable. And then I think pre-getting together, in between getting together, just kind of reminding people of like, there's probably some additional tension and other things that wouldn't be as true, or maybe there's less empathy than would be the case if people had met each other in person. So we have those conversations every now and it's like, so someone will be saying, oh, I'm frustrated with this person or this team or whatever. But it's like, I need to step back and remind myself, I haven't met them in person. I'm sure it would be better if we were. If we were getting together in that way. So it's, I think, reminding yourself about it, obviously being intentional about like time zone friendliness and meeting schedules and doing things asynchronously. Like there's kind of some brass tacks of like working in a distributed environment that we try to keep in mind. But I think assuming not, not just assuming, but knowing that it's a real life person on the other side of that

Michael Koenig: Yeah, definitely. And it's interesting within open source how you find companies that are rooted in open source are really great at asynchronous communication. And that being because that's how open source projects get done. So on the engineering front, there's certainly a more natural comfort with asynchronous communication. How do you help folks not on the engineering teams get used to asynchronous? Because it's not something that people are necessarily used to doing outside of just emailing and responding when you can.

Doug Hanna: Yeah. Some of it is like figuring out the right cadences to talk live. Like I, I'm actually kind of a broken record at work where I see like a 40-message Slack thread. I'm like, can someone, can you all just get on a call? Like, it will be easier to like talk about it live instead of going back and forth over this over like 2 or 3 days. And that's actually super productive. But I think what we do is we do try to have a culture of writing things down, having transparent notes, like for all, pretty much all of our customers, we have a Slack channel, like with the customer name. And like, if I want to see what's going on with Customer A, I go into that Slack channel and like, I can ask questions of the account team or, or just scroll back up and see what's been happening. So doing things like that, that just make it easy for where even if you miss the meeting or you're not there for it, or there is no meeting, like you can know what's happening. Uh, we tried to implement a couple of processes like that, but ultimately I still think we are like trying to get people talking to each other live, making sure people have local management and kind of a friendly time zone as possible and that they're, they're able to have these kinds of connections with other people.

Michael Koenig: So nothing really is replacing the power of live in that case then for creating those connections.

Doug Hanna: I don't think so. I think like, at least for me and the people I work with, we really benefit from talking live and spending, spending our time in conversations like these where you're chatting with somebody and hopefully you can see them as well. Like async is great. I love asynchronous stuff. We trade a lot of docs back and forth. There's a lot of kind of debate and discussion and docs and Slack and stuff like that, but I couldn't imagine being at like a purely async, everything's written out sort of memos. We're not, we're not quite as like post-geographic in that sense of where we can just totally do all of it asynchronously. We haven't figured that out yet.

Michael Koenig: It's not without challenge. GitLab seems to have done a pretty good job. I mean, they, they pretty much default to async and then have a similar sort of escalation pattern to synchronous communication that you described as well. But definitely agree with you that there's something to be said for just hopping on a call, seeing someone's face and, and understanding and hearing the intonation, right? Versus just reading text chat, which can— the meaning and intention behind it can really get lost. So in terms of some of the advice that you got along your path, we've all been fortunate to have those opportunities where we have someone like you had at

Doug Hanna: Yeah, I think some good advice for CEOs in particular is a pre— my previous boss at

Michael Koenig: There you have it. So everyone, thank you so much for listening. Doug, thanks for coming on the podcast. Where can people go to keep up with you?

Doug Hanna: Yeah, I'm on Twitter, not very actively, but I'm there. Doug with Hanna. Grafana is pretty active on Twitter and you can check out our website. It's just @grafana or grafana.com. And yeah, I'd be happy to connect with other, other CEOs that are kind of in a similar spot, trying to grow companies, trying to grow teams. I've really enjoyed those conversations when I've met other people and appreciative of people that are a couple steps ahead of me and making the time. And it's really nice to see a community that's so open to that. So also, thanks for doing this, Michael, and, and giving people an opportunity to learn from others.