Jan 26, 2018 - Vincent Jong

Saas.CEO and Sid Sijbrandij talk key decisions, influential connections, and strategic vision when building a startup

Vincent Jong of SaaS.CEO sits down for a 'pick your brain' meeting with GitLab CEO Sid Sijbrandij.

GitLab CEO Sid Sijbrandij occasionally sits down for a 'pick your brain' meeting with people seeking advice on open source, remote work, or discussion of other things related to GitLab.

GitLab has become a leading provider in software development solutions, but it didn’t start out like that. Looking back, what were the one or two decisions that really made the company to the success it is today?

The first one is the decision to build a company around it, because GitLab started as an open source project without a company. As such a project gets bigger, you will have to pay people to keep the quality high.

Another thing was my co-founder Dmitriy tweeting "I want to work on GitLab full time," which led me to contact him and hire him, which was a great change.

This may be atypical advice on a SaaS CEO interview series, but one thing we did right was not to focus on SaaS. The demand for GitLab was coming from the self-hosted side much more than from the SaaS side, so we decided to focus on that first.

The final one was the decision to apply to Y Combinator. This changed our ambition level from just running the project to being a market leader.

Would you say that your focus on the self-hosted product also allowed you to focus on a different market segment than where players like GitHub were already capturing market share?

When we started, GitHub and Atlassian were already there in that market and it should have been locked up. But they left an opening in the self-hosted market and at the bottom of the market.

In the beginning our software wasn’t very good, but we were able to rapidly make it better and grow upmarket. This is a great thing because I think today most of the revenue is coming from those large accounts.

The way I see it, source code management is one of the last things to leave self hosted for SaaS. Where this happened much earlier for CRM for example, I think source code for various reasons is transitioning later. We still see that for companies with more than 5,000 employees, 95 percent is still self hosted.

Alright. Looking at a more general perspective, what would you say you understand about building a (SaaS) company that is often overlooked or underestimated by other founders?

What we do differently is that we write things down. We’re a remote-only company of 200 people working from 200 locations. We try to work as asynchronously as we can and we write down what we do. The output of that is a company handbook with over 500 pages of our processes.

For a fast growing company, it is important that new people know the customs and values of the organization. Spending a lot of time to verbally communicate this is time consuming and dilutive, because you are never going to be able to tell person 100 as well as you’ve told the first. However, when you write it down, which is very painful in itself, person 100 will have an even more detailed version than person 1. So it gets better over time.

Then let’s talk about the people you’ve worked with. For startups, connecting with the right people can be a game-changer. One person can provide a connection that changes everything. If you look at people who are not employed at GitLab – which person provided essential additional value and how did you get in touch with this person?

Joining Y Combinator has been essential for us. It opened up lots of doors that would otherwise have been closed. For example, the seed round of investors we have with people like Ashton Kutcher and Michael Arrington. I don’t think they would have even looked at us if it wasn’t for Y Combinator.

Then your board members are just very important. We got lucky with our first board member, Bruce Armstrong, operating partner at Khosla Ventures, who was very thoughtful with us and very hardworking in helping us every step along the way. That felt very empowering and it’s not always the case with venture capitalists, so that was awesome.

Sometimes it’s just reaching out. Like Matt Mullenweg who joined our board. He is the CEO of Automattic, the makers of WordPress. I just sent him an email saying “Hey, can we talk?” If you show you’ve done your homework, like mentioning why you want to talk and reference a blog post or something they tweeted, people are more likely to respond.

One of the things we do at SaaS.CEO is ask our audience beforehand if they have any questions for the CEO who is being interviewed. This time two questions came up. The first is coming from Michael Kamleiter, CEO of Swat.io and Walls.io. He asks "How do you go about positioning towards other players like GitHub, especially when you were still a smaller company?"

I don’t think we’ve figured it out yet. Where our competition was sometimes more focused on the needs of open source projects, we focused on those large customers and their requirements. For example, our competition has two levels of authorization and we have five, because our customers need more granularity.

Positioning to me is mostly marketing and I think we have lagged in that regard. Actually, the last two days I have been in a workshop to figure out our positioning. What we’re going to do is articulate that GitLab is an end-to-end tool. Where all the other applications are about assembling a toolchain and orchestrating that toolchain, we want to be "toolless."

If you have a toolchain, you end up having all these handoffs that create delays from working in serial. We want people with GitLab to be able to work in parallel. I think that that will be a big enabler of our future growth. But it’s a really hard thing to determine, to get everybody aligned on, and then to roll it out on all your channels, from product to sales to marketing.

The second question we received is from Florian Dorfbauer, CEO of Usersnap. His question is: "With the latest investment round, you've also revealed the bigger vision of GitLab: providing a complete DevOps experience. How much time do you spend on strategic vision building and what does the process look like to work on such strategies?"

I consider myself a Product CEO and spend most of my time on our product. The way I spend time on this is first of all by talking with customers. My call before this was with a potential customer, to answer their questions. It’s great to be able to talk directly with customers.

I also keep an eye on our issue tracker and Hacker News, which are important channels for me. Apart from that I work a lot with our product managers where we try to get the best out of each other.

It’s all driven by what you know about where the market is – what are the trends, what are the analysts saying, what are customers saying, what are users saying. All these things come together and you reflect on it with each other and choose a direction.

By sharing your experiences, you have given valuable input other to SaaS CEOs out there. Therefore, I want to give you the opportunity to ask something in return. Is there something our listeners can do for you?

I think it would be great that those who read this reach out to you to be interviewed so you will have more content and we can make this a bigger thing. Then when this becomes a famous podcast I can claim to be the first one ever to be interviewed.

Secondly, I would like to take the opportunity to say that GitLab.com is becoming a great product now, so I hope that in 2018 people will give it a shot and try it out.

Sid, thank so much for sharing your insights. I’m very happy to have had you as our first interviewed CEO and we do hope many of the readers and listeners will follow your request.

About the guest author

Vincent is a Dutch serial entrepreneur excited about advanced technology and Software as a Service solutions. While building his company, he noticed how many founders are trying to get in touch with the same people: CEOs who have already walked the path they are going. Facing the same challenge, he founded SaaS.CEO, a platform to make successful SaaS founders more accessible. His own company Thrive for Email is an AI-driven sales automation solution that helps sales reps increase their capacity by automatically entering all data into the CRM.

Cover image by Federico Beccari on Unsplash

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