Merge Co-Founder, Shensi Ding and Ben Fletcher, partner at Accel sat down at Collision 2023 along with Milin Desai, CEO of Sentry, and Bernadette Nixon, CEO of Algolia for a panel conversation about how to build successful developer focused companies. This is a lightly edited transcription of the conversation.

‍

Developers, Developers, Developers

Ben: What did you do early on to make sure that you were focused specifically on developers and building a great experience for them?

Shensi: I studied computer science in college, but I hadn't worked as a software engineer in my professional life. I actually got back into coding for Merge – I had to relearn how to code and my Co-Founder invested a lot in me so that I could help build the products, build the integrations, and really understand developer pain as they were going through the same exact problems that we were going through with our own products.

That helped a lot with really understanding the pain from an eng perspective and also knowing the product inside and out. There's no better onboarding than understanding the codebase.

One other thing that we focused a lot on was investing in product quality.

From Building to Selling

Ben: You’ve built an incredible product at Merge, but the next step of going to market isn’t easy. Walk us through your journey and some of the things you did to go from building to selling.

Shensi: It was a lot of blood, sweat and tears. Gil and I had 120 sales meetings that summer and it was really, really busy. But, it was good for us to personally experience what worked and what didn't. We experimented with different pricing. We tried transaction-based. We tried flat rate. There were so many things that we personally experimented with and it helped us learn about our own product.

We also learned a lot about objection handling, like what we needed to build, what was missing, and what people were concerned about. By the time we hired our first sales team member, he had tons of notes from what we had seen. We even had Gong at that point, so he was able to look at videos.

Technical founders and companies that are for developer tools have to learn to sell. Even if you have the best product, if you don't know how to sell, it doesn't mean anything. The best product doesn't always win.

Pricing and Packaging as Product

Ben: At Accel, we’ve found that pricing and packaging is always evolving and improving. Bernadette, having a bottom up PLG motion and an enterprise top-down, how do you get the two to mesh with pricing and packaging?

Bernadette: You've got to recognize that pricing is part of your product. In order to do the kind of experimentation that Shensi was talking about, you have to have a usage and billing system–and team–that enables you to do that. Viewing it as part of your products and your development process is absolutely critical.

And then keep it simple. Make sure you're charging for what delivers value to your customer. I came from the open source world, so I believe in differentiation of packages as you traverse that spectrum from PLG, a build, or a free plan, which should be generous all the way up to enterprise. You need product differentiation, and that can't just be on price.

Advocating for Builders

Ben: I love the point around value. Building for developers, the focus is on productivity and providing a great experience. Milin, share a little bit about what you've done for developer experience–how you push it forward and measure it at Sentry.

Milin: If you look at the path ahead of us, there will be more lines of code written over the next decade–either by humans or humans assisted by robots–than ever before. Increasingly it’s important that those developers are productive. And to be productive, you need to be happy.

We’ve discovered there are a few facets to this. The most obvious is less meetings and more focused goals. That bucket is super important. The second bucket I would call the tooling side, which is, am I able to get work done quickly or efficiently.

When you talk about developer tools, a lot of focus has to be on the experience. At Sentry for example, when we tell you something's broken, we tell you down to the line of code that you need to fix. All of that is available to you at your fingertips, so you can resolve it, and move forward.

On the other side of less meetings–we're finding for every 50 to 100 team members that you add, you reduce productivity by anywhere from one to five percentage points. That’s a lot if you think about scaling companies. Instead of focusing on operations and keeping the lights on, I think organizations need to start thinking about productivity of developers measuring it and acting on it. There are capabilities out there that focus on not measuring how much time developers spend coding, but how effective they are. Are they happy? Are they delivering at higher quality? I think that's the future opportunity in front of us.

Signal and Noise: Maintaining Focus

Ben: There's a new AI product launch and announcement every week. How do you not get lost in the noise with everything going on?

Shensi: It's super tempting to say, “We're going to be an AI company! Now we’re going to get a billion dollar valuation!”

But being at an earlier stage, we only have so many people at our company. Therefore, when you're evaluating your current roadmap versus making some bets on new features or new launches, you really have to look at the ROI and opportunity costs.

My co-founder and I will get ideas for projects that might be good for branding or new features for our customers, and in the end we always have to do the right thing by figuring out what the customers really want.

It's not always fun or easy making that decision, but you have to do what's best for the company in the long term.

Ben: How did you come to that decision? Merge powers the AI ecosystem with integrations and you launched your own AI product. Was that directly from customers or what you and your co-founder decided?

Shensi: To be honest, AI companies getting built on us was a surprise. We saw a lot of SMB and mid-market signups and demo requests with different, unexpected use cases.

With respect to using AI at Merge, we kept generating ideas but a lot of the ideas didn’t feel authentic or like they were actually going to add value.

We finally came up with the idea of having our community contribute integrations to Merge’s platform. That was something that our customers were really excited by. We’re not always going to be able to add that Siberian HRIS or ATS system, but if our customers can help contribute to Merge’s platform, that helps us a lot. That’s where we really found something that resonated with the customer base.

The day we launched, we got amazing emails from customers that said, “This is really cool!” And I was like, “Yeah, I know!” And that was when we knew it was really worth it.

Parting Wisdom

Ben: Rapid fire, what advice would you have for a founder building for developers?

Bernadette: Experiment, experiment, experiment.

Milin: Know what you’re targeting. Know your target audience in terms of size and scale.

Shensi: Learn to sell. That’s it!