The following interview is a conversation we had with Jonathan Schneider, CEO & Co-Founder of Moderne, on our podcast Category Visionaries. You can view the full episode here: $20 Million Raised to Build the Future of Code Remediation
Jonathan Schneider
Thanks, Brett. Good to be here.
Brett
Yeah, not a problem. So I was doing some research on your background before the interview, and I see that you spent more than eleven years in the US military. So first off, thank you for your service. And second off, talk to us about that experience. And what, did you walk away from that experience?
Jonathan Schneider
Yeah, absolutely. It’s a strange thing. I actually went to school on a violin performance scholarship. It was majoring in computer science. You know, I went to school originally in 2002 and 2003, the Iraq invasion happened. I think, like alongside a lot of other people my age, we joined up, then I wound up leading convoy escort for some years. So we ran gun trucks, these like Humvees that would provide fire support for convoys up and down the road in Iraq and tiny little bit in Afghanistan as well.
Brett
What was that experience like for you? Like, what did you learn? I’m sure there’s a long list of life lessons that came from that. But if you had to pick like one big life lesson, what do you think that would be?
Jonathan Schneider
The army is a very decentralized organization. I think it doesn’t seem that way. People think of it as a classic top down organization. But even as a platoon leader, I had three squads, and those three squads could be in three different areas of the country at any given moment. So you really have to lean on subordinate leaders to do the right thing. And the army emphasized quite a bit too, this elite from the front, first up in the morning, last to eat. Just kind of don’t ask your guys to do something you’re not willing to do yourself. And that was a really important, I think, way of thinking about leadership in general.
Brett
I’ve interviewed a lot of israeli founders and of course they’ve all served in the military and the IDF there. And one thing they’ve told me consistently, is just, you know, once you get out of that war zone environment, when it comes to starting a startup and building and growing a startup, the common stresses, the pain that comes with a startup, it doesn’t feel as bad when you can compare it to the fact that you were in a war zone, and it kind of puts things in perspective. Is that something that you’ve experienced as well in your startup building journey?
Jonathan Schneider
I think that’s true in general, yeah, you hate to compare everything to that experience, but things don’t seem quite as serious.
Brett
I can see how that probably helps deal with the day to day stresses of startup life. Now, another question we like to ask, and the goal here is really just to better understand what makes you tick behind the scenes. And that question is, what is a quick book for you? So how we like to think about a quick book. We got this from an author named Ryan Holiday, or called Ryan Holiday. He calls them quickbooks, or books that, like rocky to your core, really influence how you think about the world and how you approach life. Do any quick books come to mind?
Jonathan Schneider
I’m going to give you answer that’ll be a bit disappointing to the audience in one way, because it’s a book that you can’t get. But I remember a class I took from a mathematics professor who started a class called higher geometry, which is really kind of unnecessarily vague. He dropped a book on our desk that was spiral bound, as if he had printed it himself. Turned out he did write the book himself, and the whole book was really a lie. He had us developing a geometry system from two very simple seeming assumptions, and we worked the whole class on this, building up this system just to watch it crumble. At the end of the course, you know, the system wound up being inconsistent. So were all completely incredulous. We did all this work, and it was all for nothing.
Jonathan Schneider
And I think the point was really to drive home that even very simple assumptions can sometimes not be as unassailable as we think. And I kind of love that. Challenging these assumptions, trying to find a creative way to think about problems. No set of assumptions is unassailable.
Brett
In the end, that’s like the meanest troll you could ever do. At the start of the podcast, tell us a book, and then we can’t find it anywhere. It doesn’t exist.
Jonathan Schneider
Terrible, isn’t it?
Brett
I love it. It’s unique. I think it’s the first time we’ve had that happen in 500 episodes. So hopefully some listeners will go and try to dig and find it somewhere.
Jonathan Schneider
Yeah.
Brett
Now, what about founders who have really inspired you along the way? Do any founders come to mind?
Jonathan Schneider
I think, you know, I worked for Netflix for a time, and I really admired Reed Hastings, I think, for two reasons. He really knew what end state he wanted to get to and knew how to build it incrementally. So you think the whole course of that business, starting with DVD’s, by mail. But he always had that streaming vision in mind, like, well before the rest of the world saw it. Rather than start with streaming, he started with something he could ship immediately. He was super pragmatic and direct. I think the other thing I kind of admired about him, he could be a performer. I remember there was a quarterly earnings that wasn’t great, and he wore a BoJack Horseman sweater to it and to the, like, analyst briefing. And that’s all people could talk about, is this BoJack Horseman sweater.
Jonathan Schneider
But he wasn’t overly dramatic either. He didn’t perform just for the sake of performing.
Brett
Awesome. What is a BoJack sweater? Or what does that even mean? I don’t know.
Jonathan Schneider
That is getting a little bit old. There was this cartoon on Netflix called BoJack Horseman. Horseman is one of their originals, and he literally had somebody make, like, a Christmas sweater with BoJack Horseman on it. And he put that over his, like, business attire and wore it to his quarterly earnings call. And that’s what people were talking about, rather than the stats, which weren’t. Weren’t as great as they could have been that quarter.
Brett
That’s so funny. That’s awesome. I’m going to skip a few parts of your career just so we can get into the interview here. So take me back to 2020 and the founding of the company.
Jonathan Schneider
Yeah, absolutely. So, back at Netflix, I had worked on engineering tools. They had that freedom and responsibility, culture, so you couldn’t impose any constraints of what product engineers did. And I was trying to solve the problem of moving people forward, migrating them to the latest versions of things, getting them off of something else, fixing vulnerabilities, that kind of thing. And so I did a lot of reporting, and it basically got us nowhere because people would just say, nah, you know, I’m not going to do it. Do it for me. Otherwise, I got something else to do. And so that really left a mark. Our open source technology, open rewrite, started way back then, back in the Netflix days, but I had moved on to pivotal kind of vmware, and was working with large enterprise customers, doing something unrelated.
Jonathan Schneider
And I just kept hearing the same pain over and over again, like I’m getting stuck on old things, I’m spending a lot of time migrating things. And so we took that technology off the shelf and started in 2020.
Brett
What were those 1st 90 days like for you? Maybe six months.
Jonathan Schneider
It started off really well. I think we got an introduction to a pre seed investor, so we had a traditional safe note to begin with that let us hire the three of us. I think we even have four at one point. But then from there, I think raising the seed round for us at that time it was not easy. I think a lot of people think of these fundraisers as being easy, but we got a lot of nos that it was a roller coaster that first few months.
Brett
What about customer acquisition? How long did it take until you had your first paying customer? And what did you learn from that experience?
Jonathan Schneider
It took us a little over a year to get that first one. This is an enterprise product. When we’re dealing with source code, we’re asking basically a customer to give us either in whole or in part their intellectual property. So I think there’s a big like technical lift that you have to accomplish in order to prove that you can secure that. But the first customer for us, or one of the first customers came from a reference from VMware. And when we met them, they had a deck internally of the product that they wanted. And they had pitched this deck a couple times to companies that seemed like they were adjacent to the space. And so we came ready to pitch our product and they pitched us their deck instead. And it just kind of matched our vision.
Jonathan Schneider
When they pitched us that deck, they had forgotten to replace the name of the previous Founder they had pitched it to in a couple places. And so I was looking for my name. It seems somebody else’s name on this deck. Hilarious.
Brett
That’s awesome. How has that evolved now? And who’s the ICP today that you’re targeting?
Jonathan Schneider
I think we’ve always been an enterprise sale. So when I think about our ideal customer, it’s one that matches the tech stack segmentation of our product. Open rewrite is very strong in the Java ecosystem and we kind of expanded languages from there. So we like folks that meet like technology, the things that we can refactor today. We like to go deliver value in the first one or two days of a relationship.
Brett
How have you seen your messaging and your positioning evolve over maybe, let’s say like the last twelve months for messaging?
Jonathan Schneider
I think I’m always trying to find a way to make the messaging more direct to the business outcome we’re trying to achieve. So, for example, when you think about mass refactoring, you could think, oh, this is a developer productivity story. Developers have more time to do other things, but developer productivity is a bit indirect to the business outcome we’re trying to achieve. So now we talk about something like tech stack liquidity, the ability to get off of old systems, to consolidate vendors. Those are things that already have identified high level business objectives to them. And that’s the challenge, is always trying to get closer and closer to the business outcome you’re trying to achieve.
Brett
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Now back today’s episode.
Brett
What do you do to get closer and closer to that business outcome?
Jonathan Schneider
A lot of listening when we came up with this phrase, tech stack liquidity, I think this is in response to something we see in the market today, which is, you know, companies are trying to consolidate their software portfolio. They Are being confronted with increasing prices from vendors that they have long term relationships with. And so that phrase kind of strikes with their current set of priorities. I imagine if in a different buying cycle or a different economic cycle, that same messaging wont resonate as well and well have to be shifting it.
Brett
How do you think about your marketing philosophy? When I went on your website a couple of days ago, it doesn’t really look like a lot of the other websites that are out there. It looks like you’ve been very intentional with the branding. It just doesn’t look like everyone else. So I’m guessing that wasn’t an accident. Can you talk to us about your marketing philosophy and your just general approach to marketing and branding?
Jonathan Schneider
I do think when it comes to the visual brand, that’s really important to us in particular. First of all, the word modern is a nod to a specific kind of art deco called modern, which was the kind of prevailing architectural style of the place that I grew up in. So just this kind of like little connection. But one of the features of that architectural style was like a lot of stained glass. And so that’s a lot of color and these very geometric. And so we have that tie to that brand. We explained this to the brain designer. We were working really early on and just kind of really kept pushing. This is Kate at Siren and just kept pushing on, more color, more color. And I remember her taking this aside at one point and saying, like, look, we got to stop.
Jonathan Schneider
Like, if we had any more color here, it’s going to look like a kids brand. But I think I like having something visually distinctive.
Brett
How long did that process take and give us like a ballpark of what the spend was on this type of branding? Is it ten grand, 30 grand, 100 grand?
Jonathan Schneider
Yeah. Interestingly, this was one of the scarier things. We hired Kate, I think before we even had the pre seed check in the bank, were still waiting for enough time to pass for the company to exist where we could accept a safe note or term sheet on that. So we spent a few months and we did a whole comprehensive brand system. It was about $60,000 at the time. And I paid the first half of that out of my personal savings initially. I mean, it is a scary thing to, you know, a lot of the savings I had at that moment.
Brett
Where did that, I guess, understanding of the importance of marketing come from? And the reason I ask is a lot of the more tech founders that I’ve interviewed, a lot of them just hate marketing and don’t understand marketing and don’t really want to understand marketing. And they just say, this is way outside of my focus and it’s not a priority for them. How did it become a priority for you?
Jonathan Schneider
I think if you’re thinking from the beginning, you want this to be a lasting brand, you know, this is not a company we’re trying to flip. This is something we want to have a long term relationship with, like with our own brand. It just feels to me that establishing that identity early is really important because it takes a while for you to fit. It’s like just a part of how I see our brand now. But initially it seemed a bit foreign. So do that early and really kind of own it and learn how to use it so that when you’re starting to grow, its already just inseparable from you.
Brett
Trey, from a go to market perspective, what are some of the top lessons you’ve learned so far?
Jonathan Schneider
Robert, I think ill allude back to that 2020 fundraise. I think going back to 2020, part of what made it tough for us is we always pitched ourselves as an enterprise sale, and back in 2020, that was not popular. Firms wanted to hear, bottoms up, plg. Bottoms up, plg. Bottoms up, plg. All day long and if you said enterprise sale, it really had a chilling effect. I think we learned over time to the nuance here that we have an open source product that were PLG in the open source sense that the open source community helps us reach users, but then the enterprise sale is what we need to use to help us reach buyers.
Jonathan Schneider
And if you go just one way or another, like strict enterprise sales, you’ll reach buyers, but you don’t have the user strict PLG, you may get a huge community, but you don’t reach any buyers. So we’ve tried to find a way to straddle both over time.
Brett
Are you seeing that shift? I don’t know if this is just from my perspective, but it seemed like everyone was just going on and on about PLG like two or three years ago, and then now I keep reading all of these posts that are kind of reflective on, okay, here’s where went wrong with PLG while we’re going back to enterprise sales. Like, is that just my LinkedIn feed or is that something that you’re seeing as well?
Jonathan Schneider
I think I can almost remember week when that switch happened. I mean, it was early 2022 when there was that kind of real downturn in the market and enterprise software valuations in general or software valuations in general. And I remember talking to somebody, I don’t remember which firm, but I talked to them late 2021, and we had to catch up in 2022. And we just heard the exact opposite from the same person. It was like DLG at one point and then it was capital efficient enterprise growth just a couple of months later, which I think really gets to the point of you really have to know who you are and be true to that, regardless of the cycle.
Brett
What about your market category? How do you think about the market category that you’re in?
Jonathan Schneider
This is an interesting question too, because conventionally its are you a new category or are you redefining an existing one? I think, again, were going to sound like the most equivocal people in the world here, but we try to be a little bit of both when we think about the security market. The security market has been saturated for a long time with reporting tools that don’t help actually solve the problem. And so yeah, you can redefine that market to be one around auto remediation, but I also don’t want to be limited to just security as a buyer.
Jonathan Schneider
And so when we think about development tooling, there really never has been a product that’s about addressing or like making a change to code bases in a multi repository way GitHub, as amazing as it is still kind of a single player experience on a per repository basis. So in that sense, we’re defining a new category. I like having both because new category is where you have that opportunity to find a new price point. That’s what everybody really wants to be able to do. But if you’re a strictly new category, you’re going to struggle to fit into an enterprise budget line item that’s expecting you to fit into something they know.
Brett
When it comes to lessons learned from your fundraise, what would you say is the number one lesson?
Jonathan Schneider
I think back to that point about have a compass and stay true to it. We got a number of rejections. I remember at one point specifically, I had 230 minutes rejection calls, like the explanations for why they were rejecting the company scheduled back to back. So I went from one into the other, and the first one I’m listening, and I don’t remember even what the criticism was, but it was, you look like a square and you should look like a circle. And so you think, okay, yeah, I mean, I can take that feedback. And in the next call, it was like, you look like a circle, you should look like a square. I almost had a hard time not laughing on that second call because I just thought this is exactly the opposite of what I just heard 30 minutes ago.
Jonathan Schneider
And so whether you’re a circle or square, like at some point you just have to stick to that and find a firm that matches your, who you are.
Brett
And final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision that you’re building?
Jonathan Schneider
I think what we’re building is the ability to take software at large scale and transform it. So I think about our society being built on this substrate of third party and open source software largely, and it’s easy for that to get really kind of static and ossified over time. If we can mass fix the open source ecosystem upon which we rely, and we can mass fix the applications that depend on them, I think we can solve the technical engineering problems that confront our society more quickly. And that’s what gets me out of bed every day.
Brett
Amazing. I love the vision. All right, we are up on time, so we’ll have to wrap here before we do, if there’s any founders that are listening in that want to follow along with your journey, where should they go?
Jonathan Schneider
I think going to moderne.io.
Brett
Amazing. Jonathan, thanks so much.
Brett
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