The following interview is a conversation we had with Derric Gilling, CEO of Moesif, on our podcast Category Visionaries. You can view the full episode here: $15 Million Raised to Build the Future of API Analytics
Derric Gilling
Glad to be here and discussing, I guess, Moesif.
Brett
Yeah, no problem. So before we begin talking about what you’re building there, let’s start with a quick summary of who you are and a bit more about your background. Sure.
Derric Gilling
So, fellow University of Michigan grad moved over to San Francisco back in 2011, was actually at intel for a number of days, and then eventually found myself in the startup ecosystem. We started Mosa back in 2017, and our main focus is around AP Analytics and Monetization. So these are folks who are thinking about treating their APIs as products, trying to grow their developer or their API business. Really great to see all the different companies out there that are trying to ship and productize APIs.
Brett
And did you go straight from intel to Moesif, or was there something else in between?
Derric Gilling
There was something in between. In fact, this is the second rodeo in terms of launching a startup. We actually started a company before this called Probe Market that was in the ecommerce space. And that’s really where we saw firsthand the power of APIs, but also some of the challenges around getting metrics, understanding the value that customers get or partners get from some type of API or developer platform. Got it.
Brett
Very cool. And two questions we’d like to ask just to better understand what makes you tick as a Founder, is there a specific CEO that you really admire the most? Sure.
Derric Gilling
So Edith from Launch Darkly, that is a feature flagging platform, and she mostly sells to developers and engineering leadership. The reason why we love Edith is for a couple of different reasons. Number one, she’s very transparent on what works for her and what doesn’t work for her in terms of go to market. For example, anytime you’re selling to a developer or technical audience, a lot of times you’ll hear discussions around build versus buy. And she actually wrote a couple of different posts. And we talked a few times around how to overcome those challenges, how to actually empower developers to say, hey, you can build this, but does it actually make sense for you to build it? She also likes to talk about how to layer in sales for a strong inbound content engine. And lastly, just a great person to get to know, and very down to earth.
Derric Gilling
We got to get connected through her, through the heavy bit ecosystem.
Brett
Very cool. I see there are billboards all over SF. They seem to be making a very big push indeed. Indeed. And what about books? Is there a specific book that’s had a major impact on you and this could be a business book or just a personal book that’s really influenced how you view the world?
Derric Gilling
Yeah, so I mean funny enough, since all that intel and things like OKRs and all that was a big deal. I would say high output management from Andy Grove. It goes into detail around how to manage efficient teams, everything from goal setting to defining metrics and OKRs. And it’s really focused on the operator side of things. So it’s not going to really teach you around things like Product Market Fit or anything around startups. Again, it’s mostly focused on the operator side but that is also important area that a lot of startups forget about a lot of startup founders. They focus so much on Product Market Fit and they realize there’s still people, there’s still a team that you’re trying to build and make sure they’re as efficient as possible. Nice.
Brett
Great book. What did you learn outside of that? Just at your time at intel? Were there any big takeaways that you learned from your time there?
Derric Gilling
Sure. I would say one of the biggest is around management. How do you make sure you have an efficient team? How do you plan a good roadmap and strategy? For example, you don’t want to ever over promise delivery of a feature. When it comes to product management and project management, you always have to have a budget for bugs and fixes and everything. And this is something that intel does very well. Right. They have a lot of data points on how many bugs are expected to occur in a project. How do you actually manage project to make sure your engineers are working on the right bugs and right tickets and everything funny up. They actually used to have a Jira like clone that we use at intel. I don’t know if they still have that. Maybe they just moved to Jira at this point. But great to see kind of how a large company operates for good and for bad.
Derric Gilling
I mean there’s things that we learned at intel around politics and other things that could get in the way from innovation. But I always recommend a Founder to always start at a large company, see how it operates, see what works, what doesn’t work. And that way when you launch your own company, you can pull in a lot of those learnings.
Brett
Nice, I love that advice. And now let’s dive deeper into what you’re building there. So I know you touched on it a bit there at the start, but let’s start with the origin story. What’s the origin story behind the company? Sure.
Derric Gilling
So we started in 2017. And funny enough, the product was quite different than what it is today. We were actually focused on distributed tracing and how to debug APIs in a better way. This was mostly from a personal grievance of mine. With all the microservices and APIs out there, it’s been a big pita to figure out what the issue is. We quickly recognized that everyone from datadog and new relic to the cloud vendors are going to go after this space. And so we realized around 2019 that we wanted to go after more of a blue ocean, a market that we could grow into and become a new category. And so that’s where we pivoted towards product analytics for APIs. How do you understand the usage growth metrics and really make sure you can sell the API? And the big insight here is we realize these API products are no longer just something that a developer is talking about in the background.
Derric Gilling
When we talk about microservices now, you hear about founders and C suite and executives talking about an API based product strategy. Keep in mind, in 2015, Twilio was only $500 million in valuation.
Brett
Right.
Derric Gilling
So the API economy has gone a long ways, but we’re nowhere done with where APIs can really generate a lot of wealth and a lot of value for different industries.
Brett
And to zoom in on something you said there in terms of category, can you talk me through what the category strategy looks like and how you’re positioning this category against some of the other maybe established categories that exist? Sure.
Derric Gilling
So our focus is on Ape analytics and monetization. We sell mostly to the product. A lot of times it’s a VP of product. Maybe it’s a director product, depending on how that company is structured. Sometimes we’ll go after engineering leadership, especially if there’s not a well defined product. But when you’re creating a new category, it’s really important to really hone in on your customer persona, because you need to explain your solution really well and educate them. What are the benefits of using this new tool or this new framework or technology, or whatever it is? The way we do that is actually through a lot of our content strategy. We have content that focuses on top of funnel. We have content that is mostly focused on our existing customers. How do you use a new feature or how do you leverage it for this particular use?
Derric Gilling
Case things like case studies can be also very helpful for this type of stuff. But again, when we look at our category, there really wasn’t much tooling that focused on API products for the product management side of the business. And when we look at our marketing material, everything we focus on is around the business, the product. How do you make a better product? When it comes to API based products, the other thing that I would say we think of is just around our go to market we like to lead by example. And given that how you sell an API is drastically a new concept for a lot of people, we share a lot of that material. How do you think about developer activation? How do you think about things like Time to first Hello World or Time to first API call, which are metrics that we like to speak on and we present at different conferences just to, again, keep educating the market on the framework that we’re creating here makes a lot of sense.
Brett
And for you, how do you define success in these category creation efforts? Do you need Gartner or Forrester or someone like that to validate it? Or the peer to peer platforms like G Two? How do you define success there for category creation?
Derric Gilling
I don’t think it’s necessarily a G Two or Gartner or anything like that. It’s actually listening to your customers and seeing the results that they get by adopting your solution.
Brett
Right.
Derric Gilling
And so one of the cool things that we see is we get to work with a lot of different product engineering leaders from a lot of different companies. Some of these are B2B SaaS platforms. We see folks like PandaDoc and Tomato Isler, some of our customers. But to other industries like logistics, ups one of our customers and we get to see firsthand their API strategy, how do they leverage analytics? And then it’s pretty cool to see a technical leader’s eyes light up when they get to some interesting insight, something that could completely change the trajectory of their product or the growth strategy. The other success I would say we get is work with a lot of founders and CEOs. A lot of our customers happen to be other startups, and it’s a CEO that is in some ways defining and trying to figure out that product and growth strategy, especially at the series A, B and C stage.
Brett
And are there any numbers you can share in terms of growth and adoption that you’re seeing?
Derric Gilling
Sure, I mean, we definitely have hundreds of different customers, a lot of different industries, fintech, health, tech. Actually, more recently we’re starting to see NFT and Web three companies use us. A lot of different picks and shovels companies who are thinking about, again, trying to either sell their API or treat it as a product in itself.
Brett
And what are some of the other categories that are maybe adjacent to API analytics?
Derric Gilling
Sure. So we almost sit between two different worlds. On one side we see traditional web and mobile analytics players. So this would be companies like Amplitude Segment that focuses more on B to C or mobile platforms. On the other side of the business, we see a lot of Ape Gateway or Management players. They don’t usually sell into business teams, they instead sell into DevOps SRE, deeply technical teams that are mostly focused on the infrastructure side of delivering an API product. The way that we like to work with these different areas is we actually partner, right? So we have plugins and partnerships with a lot of different API gateway vendors, large cloud vendors, gateways like Amazon and Azure to open source ones like pike and Kong. And we see that as a great way for us to have a one plus one equals three relationship. We refer customers to different gateways, they sometimes refer customers to us, and by using both solutions together, our joint customers can get a lot of value and make sure they’re delivering a great API product.
Derric Gilling
Same thing on the analytics side, we have plugins with HubSpot and Segment and all these different tools to make sure you can unify all that data together.
Brett
And as I’m sure you’ve experienced and you’ve seen, there’s a lot of startup funding these days, or I guess it’s maybe declining a little bit now, but for the last few years there was a lot of startup funding. If you had to really boil it down to one thing, what would you say is the single biggest move you’ve made to allow you to really break through the noise and capture the attention of the market?
Derric Gilling
Sure. So I would say there’s three things. Number one, don’t boil an ocean. Right? And so I’ll give you an example. When were focused on the AP analytics use case, we always had this vision for doing monetization, because if you want to do any type of use based billing for an Apf product, you need to build out the analytics store and somehow figure out the users for each of those customers. We actually did not ship that for quite some time. We purposely delayed this because we want to ensure our analytics has robust that integrity and governance features before it’s used for billing purposes.
Brett
Right.
Derric Gilling
And so we stayed focused just on the analytics use case. Once that was perfected and were able to see a lot of customers getting value out of it, then we started layering in these other integrations. So in the last few months, we shipped integrations with Stripe and Chargeb in different billing providers. So now you can leverage the data that we have in Mosa for different use cases such as billing purposes. But again, it’s not something that we started off overnight. We mostly focus on our customer persona. I think that’s a really important piece. We don’t waver in terms of going after Apf products or companies that think about Apf product strategy. And again, that can be different industries, but we’re always focused on the product engineering leadership of those type of companies.
Brett
And what was the journey like for making that decision to focus on that persona? Was that difficult? Were there a bunch of different options that you were evaluating? Because that’s what I see a lot of times at startups is they have a lot of options and a lot of different ways they could go. And sometimes it seems like it’s a bit scary for them to say, okay, this is the one segment that we’re going to focus on, or the one type of persona that we’re going to focus on. So what was that like for you as you were making that decision?
Derric Gilling
Yes, when you’re looking at different personas, I would say going after the product and the product persona became more of a natural fit for us. Initially, we saw a lot of product managers were the ones who were advocating for most of at the organization, telling the VP, hey, these are the benefits we can get by stealing a data driven or analytics driven culture. In addition to that, though, we see product persona as being the center across a lot of different teams. And when you think about analytics, a lot of times it’s cross functional.
Brett
Right.
Derric Gilling
So we might start with the product, but then we can expand into the engineering use case, into success and support use cases, to sales, to marketing and so on. And so that’s really important when we think about our go to market where it is a land and expand. We start with product, we don’t necessarily end with the product team.
Brett
And in 2017, when you started the company, did you start off with the idea of we are going to create a category or at what point did that come up or did you make that decision?
Derric Gilling
Initially we thought distributed tracing was going to be a category, but then it got really crowded and we got out of that space as quick as possible. I would say it’ll be around 2019 when we identified this new opportunity, a much larger opportunity, given a lot of these budgets can be quite large and go after all the different teams. I just mentioned products, CSM and so on, but yeah, it was around 2019 when we started shifting focus.
Brett
And did you have any investors push back? Because category creation obviously comes with a lot of benefits, but it’s costly and it takes a lot of time. And what I’ve seen is some investors aren’t really on board with supporting those types of journeys all the time. So what was that like for you, pitching this idea to investors on creating a totally new category?
Derric Gilling
Luckily, our investors have been on board. In fact, investors like Maris and Kraft are very focused on different categories that are out there that are being created versus investing in the next 10th version of the same SaaS product. The other thing that helped is we raised our seed round, 2019. So I guess as were defining this, we’re also raising our round and all that stuff. But yeah, I mean, for the most part they’ve been on board and it may take a little longer for you to create a new category and it’s definitely harder on the operator team. It requires a lot of stuff around CSM, content, strategy, everything to just educate why you could adopt this new technology that didn’t really exist before, but the benefits far outweigh the initial investment, right? And we can now start reaping the benefits or the fruits of our labor there.
Brett
And last couple of questions for you. What excites you most about the work you get to do every day?
Derric Gilling
Yeah, I would say going back to what I mentioned earlier, which is seeing executives eyes light up when they get a new insight. I’m working with a lot of very cutting edge companies. We work across Fintech, health Enterprise Software, and if you’re building out an API business, you’re going to have a pretty robust engineering team, right? I mean, APIs are definitely deeply technical in nature. And so you get to work with a lot of individuals with different engineering backgrounds and such. And these customers are, these are engineers that could also build this themselves, right? Again, because they are cutting edge companies, but they also know what they should be focusing on. So a lot of the folks that we talked to, their engineering leadership, their director, product architecture or whatnot, and they care about the business side of things too. Right. It’s not just about build and assume customers come.
Derric Gilling
They have understanding of the importance around product strategy and analytics and all that other stuff. And that gets us excited too.
Brett
And if we zoom out three years into the future, what’s the future of the company look like, or what’s that vision for three years? Sure.
Derric Gilling
So we definitely want to be the number one growth and experience platform for any API business out there. The way we’re doing that. If you look at companies like HubSpot, they did a phenomenal growth model where they have a free CRM. But then if you need particular module like the newsletter plus email automation module, you can buy it. Same thing. They have like a sales module for sales sequencing, emails and all that stuff. And we see something very similar for us, which is we have the analytics that’s your source of truth for a lot of different things at the company. And then you can layer in additional automation that can actually help the company, whether it’s monetization or different customer lifecycle, emails and that type of stuff.
Brett
Amazing. Unfortunately, that’s all we’re going to have time to cover for today before we wrap. If people want to follow along with your journey as you continue to build, where’s the best place for them to go?
Derric Gilling
Definitely check out our website, www.moesif.com. We also have a pretty advanced blog that walks through a lot of different things around how to build out your APS strategy, especially if you think about being developer first or some type of go to market.
Brett
Amazing. Well, thanks so much for taking the time to chat and share your vision and talk through what you’re doing on the category side. It’s always fun talking with the category creator. So thanks so much for taking the time.
Derric Gilling
Definitely appreciate being here.
Brett
All right, keep in touch.
Derric Gilling
Our channel.
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