From Startup Battlefield to IPO with Matthew Prince (Cloudflare)

Ah Back on the disrupt stage I feel we've Done this before once or twice it's uh I Think I am the first person to speak at San Francisco New York London Beijing And now Berlin you've done more than I Have it's about this I love disrupt this Is such an incredible you know launching A company is such a sacred thing and the Fact that all of the companies that were Part of Battlefield launched here Walking around start a ballet it's just It's just this great energy and did it Feel good or did you get PTSD from that No it felt really I mean it was really Again it's uh I remember in 2010 we Launched it at the first disrupt San Francisco and I remember being backstage And looking around and seeing like Mike Arrington and all these other Tech Founders and being like wow this is like Celebrity startup world and Um and what I now know is that you know They're all just as scared in clueless As as I still am so thank you I Appreciate it We try to you know not be totally no Right you me I mean it was very well it Was good I wasn't there at the time yeah Um When you when you launched at Battlefield you didn't win No you don't want to I always I always Rub that in that's it's um you know I

Think that to I mean there were some I I Got to see some of the the battlefield Presentations and I mean there's some Amazing companies and and uh someone's Gonna win in a few minutes and that Obviously Um you know feels really good I'm sure But uh but it turns out you can be Pretty darn successful even if you if You don't don't win so to all the people Who who aren't the winners Um don't worry uh it gets better did it Feel like that I don't know we were really I mean I Remember I mean first of all we you know You you enter this you have no no idea What's gonna happen Um and and it was such this just you Know Wonderful awesome experience and And you and I watched the videos which Um for a while when you guys did disrupt In New York it would play in the back of Every taxi and it would show us losing Every taxi ride that I I went on and Um and we were I mean we were bums uh But and I remember we all went out to Dinner at this little Italian restaurant In San Francisco afterwards and uh and And and Michelle who's who's my business Partner she's like guys we should be Really proud like we came in second and Um and I I think we actually used that To really motivate ourselves and uh and And and and and sort of kick into a

Higher gear and and continue building The company yeah teams that come in Second seem to be doing better than the Winners so so if you're coming second Congratulations if you win I'm sorry no No no it's it you should be you should Be I mean again just having been invited To be able to present on this stage is Something that you should be again it's It's something you'll remember the rest Of your life totally now you've gone on For a few years since then and uh built A lot more products and you just IPO This September we did we yeah was that Something you were always thinking about You know I think we we knew when we Started cloudflare That cloudflare was was either going to Be a one or a zero it was either gonna Completely fail Or if it worked it was going to be a Pretty big thing um because there was no Way to sort of do it halfway you had to Have enormous scale in order to make the Business work and um and so you know When you when you raise money from Investors there are only three possible Outcomes uh you can either fail and go Bankrupt uh thankfully we didn't do that You can get Acquired and actually not Once over the last nine years has a Single company ever tried to acquire us Really which makes me feel kind of like The ugly kid at the dance that nobody

Like wants to ask out why do you think That is because you were pretty Successful I I don't I mean I guess I to Answer your question we were never Building it to be acquired and I think That you know we From the day that we launched Um on the stage We've we've just been so focused on Building a great service for all of our Customers and we've been just running to Keep up with it that I think a lot of The things that if you're if you're sort Of building a company to sell it we Never did so we didn't do a lot of Business Development we didn't do a lot Of Partnerships with other companies Until much much much much much later on And Um you never had dinners with M A people From Google and like myself I mean we I Know we just didn't we were we I mean it Was it was so crazy uh you know we had a We had a thousand customers that were Sort of early beta customers when we got On when we stepped on stage we had 10 000 Um within 24 hours of uh stepping off Stage and it's just been like how do we Keep up with the volume of that that we Haven't had the time For Better or Worse To go you know Foster those those Relationships and and I don't think you Know I can't imagine any job that's more

Fun than the one that I have Um you know I get to be Doing something that I really believe in Which is you know defending the internet Uh and you end up in so many interesting And fascinating places and so I think That from the beginning you know the Third outcome is if at some point if You're not going to go bankrupt and You're not going to sell to someone else You got to go public and so I think that We knew we were on that path Um starting in 2015 we actually started Running the company like it was a public Company so we would do quarterly Earnings calls fully scripted on a Recorded line would get people to write You know call in and and ask us hard Questions we wrote press releases up That we never actually put on the wire And and so if you actually want to go Public in 2015 or no I think we wanted To go public in 2019 about exactly when We did but we knew that it that practice Makes you better at these things and so Um you know by the time we did we just Did our first public earnings call A little over a month ago and it was our First one as a public company was Actually our 13th that we had ever done And it felt very familiar and it didn't Feel like it was it was a big change and I think that that was that was something That was really important to me was you

Know this is just another step in the Journey it was never the goal it was but It but it was a step along the way and I Think the process of going through that Has made us a you know a much much Better company as a result why is that Well you know I I think that whenever You talk with investors Um you learn more about your business And There was a there's actually a window of Time where we hadn't raised money for Four years and we actually kind of got Out of practice of telling our story and I remember when we started and actually When we started getting ready for the IPO process Like there's a there's a organizational Meaning where you bring kind of all the Bankers and lawyers and accountants and Everyone in the room and you present What your business is and at the end you Know the everyone was like that was Really great except from our team and we Were like that sucked because we just Had lost that that practice and I think That you know a lot of Founders complain About Like how difficult it is to raise money Um and and I I have sympathy and empathy For that and it is hard but but why it's Hard is because you've got to find a way To tell your story really clearly and That will make you a better company and

So the IPO process is just like that on Steroids where you are meeting with People who have never heard about you Who have no idea you know the what what A reverse proxy or you know what what The OSI model of the internet I mean all This stuff they're not that and yet you Still have to be able to communicate What it is that you do and um and and I Think that that was that was really that Was really good the other piece that was Really powerful was even internally at The company We'd not done a great job of saying like Here's here's the vision here's how it All fits together and we sort of talked About it here and there we hadn't Communicated it and so we um and so we We took the S1 which is basically a Marketing document and um and we handed It out to as soon as we were allowed to By the SEC we headed out to all of our Employees bookmarked on the part that Was the business section and what's been Really amazing since then is we've just Been able to go faster because it you Know it was it was this time that really Everyone got got organized behind Um and so I think if you can do that Right uh you know I I if you ever have The opportunity to work at a company That goes public I I highly recommend it It was a it was just an incredible Experience so but telling your story is

Probably it's probably hard because You're doing kind of a CDN you're doing Security DDOS protection right that's Hard to explain to to a banker it well So first of all I mean Bankers are there There were they're really smart I'm not Under a selling Bank Um and and uh and and again I think that They were they were really helpful for Us in in telling that story but I um I Think it is a tough story Um and you know what exactly cloudflare Is doing is I mean we're not we built a CDN because we had to not because we Thought that that was an interesting Market we've been giving that away for Free since the beginning what what we Really think of cloudflare is doing is Like Fundamentally what we're competing Against is Facebook all right because at The end of the day if you don't have Cloudflare out there helping defend the Internet giving you the tools that are There there's no way that an independent Business can run a website run a mobile App do those things and so inherently That is all going to migrate to the big Platforms like Facebook and so we Internally think of our business you Know it's we are to Facebook as Shopify Is to Amazon right if we can provide Those fundamental tools that allow an Independent vibrant web to exist like

That's an amazing thing and Unfortunately it's getting so hard on so Many different fronts to do that on your Own that that you do need some some sort Of something like cloudflare to help Help you help you survive and so like I You know I was it was really fun to walk Around and see how many you know of our Customers are here in in the startup Alley and you know before cloudflare Existed if you wanted the sort of Protection and security and everything That we offered today I mean that was it Was a hundred thousand dollars a month And we made it free sure and that's um And and and yeah I think that's a hard Story to tell the investors but at the Same time you know the business sort of Speaks for itself now right as you were Going through that process you were you Know turns out you were also defending Some sites that weren't you know maybe Deserving of your protection it's uh you You didn't shut it down but you shut Down your protection of of a Chan at the Time because you know do you want to Explain a little bit why that was the Case yeah so you know cloudflare Um it's about 10 of all internet Websites are behind uh our our Network And that means 10 of the amazing Wonderful things but also means 10 of The sort of horrible awful things and And you know we've we've been very

Reluctant To impose what are our values and morals On how the internet works from the Earliest days we would always ask the Question you know if cloudflare ran the Internet what would the right policy be And that was pretty absurd when it was Eight of us over a nail salon in Palo Alto California what's your answer at The time though what was really similar It was it was it was we don't want to be The one saying what is good and bad Online and I think that that is probably The right thing because if there are Going to be a relatively limited number Of companies that provide this sort of Edge protection uh and we all operate on A massively global scale Um you know I'm not sure you want my Morals deciding what is and is not Online and that works pretty well for Most cases Um except in certain cases uh the the Sites themselves are Inherently Lawless they inherently have Structured themselves in such a way that They don't respond to regular legal Societal Requirements and so while I think in Most cases it makes sense for the site Owners to be deciding what it is in some Cases when the site owners just Basically you know flip off the the the Rest of society well I don't think we

Should be the first line of defense There might be times when we should be The last line of defense and so right Was we were in the middle of we were in The middle of the IPO quiet period and Otherwise Um Han which was this Um Really pretty designed to be vile uh Organization Um it turned out that there was a mass Shooting in El Paso that the uh that the Shooter had posted kind of his plans and A Manifesto on and this wasn't the first Time that it happened and it was Actually the third and Um and it it caused us to really sit Down and think Okay we we don't we if we don't want to If if if if Facebook were a customer and Um and the manifesto have been posted on Facebook We know that Facebook is actually trying To do the right thing and they're trying To take down you know what is this Reprehensible content or illegal content And they have a trust and safety team And they're not just sort of thumbing Off the the Um society as a whole whereas this other Organization was and and we we said Listen We're we don't really want to have them On our Network even though it's not

Something that uh that it was from a Financial perspective it didn't matter But um but it it just it just wasn't Someone we wanted to do business with we Fully predicted that the next day they'd Pop back up and what was what's sort of Scary Is it's now four months later and They're still not back online And what and they've tried And what that what's what's what's Frightening about that I think as an Internet Community as a whole is that Then does really mean that us making a Determination that someone's not online Means they're not online doesn't mean You need to have your own policy at this Point and do you actually have one oh we Have I mean yeah we have we have we have Tons of policies on this we think about This and have thought about it Um since the earliest days this is what I mean these are the conversation if you Were sitting in cloudflare these are the Conversations we have all the time it's One of the conversations I have with Michelle all the time because you know Michelle says listen I get it we Shouldn't be the one picking what's good And bad but maybe you should be Well I don't know do you try I mean do You trust do you trust that my Sensibility is sitting in San Francisco California should pick what is and is

Not online And that that makes I mean if if even Even you know if there was someone else Doing that from that position I I would Make me really nervous that you had Effectively you know someone who was I I Wasn't elected That have no political legitimacy and Yet for I I can make a choice that Someone is or is not on the internet That makes me really spooked and so Again I think if you have organizations That just defy society's rules Actively thwart that then yeah maybe we Are the last line of defense but I think What's more important is we should be Providing the tools to help other Companies make smart decisions going Forward you know I one of the things That that Um you know we think about a lot Is Like for for us things like gdpr super Easy because we we think of personal Data as a toxic asset we get it off of Our Network as quickly as possible we Don't make money as selling ads and so Complying with that regulation is really Easy but what's hard is that's Incredibly hard for our customers and so As you have more regulations as you as We keep raising the bar on the Googles And the Facebooks of the world what I Worry about is how do we make sure that

The folks who are out there who are Building the next Google who are Building the next Facebook have the Tools to be able to succeed and I think That's that's very I mean that's a place Where I think we might be able to do Some good where we can say listen we Don't want to be the ones who make the Decisions but here are the tools that Can help you make smart decisions on Your network but isn't there a point Where you could be proactively going After child pornography for example we Do I mean we just actually last week we We published a blog post on you know Know when you have sites forums that are Entirely devoted to child porn if if That's like what you do don't put it up On cloudflare because the minute you do That we reported the national Center of Missing exploited children reported to Law enforcement and we kick you off our Network those are the easy cases the Hard case is Imagine The Next Generation Facebook so someone's building a new Social network and let's call it xyz.com And so xyz.com launches and it takes off Like crazy and then the next day Somebody somewhere in some dark corner Of this sprawling new Social Network Posts child exploitive material what's Difficult in that case is they haven't Had the time to build up the same Systems and processes and procedures as

Facebook in fact the tools that you need To use to have the hashes that have you Know Microsoft's photo DNA and all those Things you can't get access to those as A new startup because part of the Problem is that they're afraid that if Child pornographers get access to the Tools to send child porn then they'll Defeat the tools and so that's a real Chicken and egg problem and what I worry About is that as we hold tech companies Responsible as we should for policing More and more of the content we might be Pulling the ladders up and making it Harder for startups and if cloudflare Can say let's make those tools available To our customers so that you can Hopefully comply with regulations as Well as Facebook does then I actually Think that's a really positive role for Us and it's something that we're we're Thinking about in you know a number of Different areas including including Child pornography sure trying to turn This back into a positive discussion at This point but we're pretty much you Know Nazis and child porn and yeah and IPOs yeah so Um Battlefield have you did you watch the Battlefield You guys have run me around all day this Is you you signed up for that I did I Did I was and so but it was and it was

Great so I was doing it I was on the Q a Stage so I missed a handful of them but I saw I saw a couple of them and again You know it's it's such a privilege to Be able to stand up and launch here and It was such an incredible you know Experience for us as a company and and I'm uh you know I am I'm excited for Everyone who presented today Um I'm excited for who to see whoever Wins because you guys keep it pretty Secret backstage uh and but but Um you know again this is this is a Moment that everyone who got to present Here will remember for the rest of their Life and it's great that you guys are Helping facilitate the ecosystem and Startups um all around the world all Right see we turn it around there you go Anyway great to see you thank you Thank you

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