Building Meter for decades, not an exit | Anil Varanasi (Co-founder and CEO)

Anil Varanasi: I believe in businesses that own the entire thing. For the long term, if you're trying to build something for 20, 30, 40 years, you want to own the stack.

Brett: For today's episode, I'm sitting down with Anil Varanasi, co-founder and CEO of Meter, a networking infrastructure company that integrates hardware, software, and operations. It took Anil and his brother, Sunil, almost five years to build the first version of the product. And most of the time, it was just the two of them living in Shenzhen for over a year figuring out how to design and manufacture hardware.

Anil Varanasi: We had to scrape 100% of the work a year in. You want to be able to waste anything when starting a company except time. You're okay wasting money, but we wasted time.

Brett: What stands out about Anil is his conviction. He's building Meter exactly the way he thinks it needs to be built to become a generational company.

Anil Varanasi: We've always thought about business model as part of the product because that should inform what hardware you build for us, how you build the software, how you build the SLAs, what customers can expect, how you sell, all stems from that.

Brett: This is reflected in the unique approach he's taken in all areas of the business, from sales to how the company runs internally.

Anil Varanasi: 90% of networking is actually sold through the channel, but we deliberately did not sell through the channel until we knew the product was dramatically better in every way.

Brett: Let's dive in. How do you think about time horizons when building Meter? In chatting with people that have worked at the company or know you a little bit, I think one of the sort of themes that bubbles up is there's few people that have a longer time horizon than you. But obviously in the nature of the business that you're building, you have to balance that with what you're doing basically hour by hour, given the degree of difficulty. I'm curious about the arc of the company, or, at any given point in time, how do you think about managing against time horizons?

Anil Varanasi: I think roughly, as I've gotten older and done more work, for most things, my answer is a barbell approach is the right approach. Whether you think long-term versus what do you care about day-to-day every hour versus can you be ambitious and can you be kind at the same time? All these things, I think a barbell approach is where I think I'm gravitating toward more. Even on this time horizon question, I think to do what we want to do, we know will take a really long time, and we can get into the reasons why. But every single day, if you ask the same people, I'm sort of insufferable to work with because everything should have been done for me a second ago, a minute ago, et cetera. I've found for me, particularly, and the types of people that gravitate toward working with us, that cadence of, yes, the overall thing we're trying to do might take some time, but the particular day, there's always something to drive it a little bit forward. I don't care about where Meter ends up in five. I care about where it ends up in 25. But at the same time, the next few hours also really matter to me. I think all sorts of things of understanding exactly where all the folks that report to me, where their time is going, then getting a view from them, where the time is going for all of them. I try to keep a mental note of all those people. Where is time going? Because what happens as a company grows, and I'm sure founders realize this too, you actually don't even know what's happening in your own company a lot of times. And how do you grip that together and put that sense is what I'm trying to do a lot more. But day-to-day, there's so much I care about. And we should finish in 24 hours, a week, et cetera. But the overall, are we going to win to the standard that we want, I think that'll take a decade or two.

Brett: How would you articulate what the multi-decade view is of what you're trying to do, how it's changed, and then ultimately how does that translate into 10, five-year, year, six-month, three-month? How does it all link together?

Anil Varanasi: I don't think I have great answers there because one of the things with Meter is we actually don't even do planning much. We don't do OKRs. Hunter Walk actually wrote this great blog post in 2015 or 2016. I've never talked to the person, but I read his blog of how OKRs are good for Google. Why are you following them? If you have a money printing machine, you should have that kind of stuff, but for everybody else, it's different. One good thing, I think, about doing hard things is they're very easy to say but very hard to do. For example, if you and I decide today to start a company, put man on Mars, you immediately get it. You can picture your Mars. You can picture a man there, but it's so hard to actually make that happen. Using that as an example for Meter, we just want to process all the packets in the world through our hardware and software. Now, that is remarkably hard to do when we say all the packets. But to boil that down, there's a bunch of software and hardware we need to build today to go deliver it to people to go do a little bit more of the networks that are out there, a little bit more, and then different types of networks. Over time, how you get to that point is being fully vertically integrated. Where you not only build the hardware, write the software, we're the ones that go deliver the hardware in the real world, but over time we can go even further down the stack where we should go make our own ASICs or our own chips. And that's another way to capture all the packets, et cetera. But going back from those 10, 20 years things down to a six-month, three-month, one-month things is precisely knowing what is the next step it takes that we believe to get there. If you read Julia Galef's book called Scout Mindset where you sort of have, as you're going in, there's this fog of war that gets clearer and clearer. I roughly think of that where you know what the destination is, but you might not know all the treacherous paths that are there in between where there might be mountains, there might be snakes, there might be wars, et cetera, that will happen. But every day, are you uncovering a little bit of that fog? We try to bring it back to where are we today, and what is the clear next step? And are we doing that as fast as possible at the highest quality as possible? And that's the plan.

Brett: Maybe talk a little bit more about that. If you don't do sort of more traditional long-range planning or annual planning or goal setting and that type of stuff, what goes in place of that? And how do you figure out what the correct next thing to do and/or how you're winning and losing? And maybe you could go back to 12 months ago. What's the next thing you decided to do as a company?

Anil Varanasi: This is the real advantage of building infrastructure and particularly networking. We're an industry that's been around for 40 years. Along with building PCs themselves, this is one of the largest markets that's been around for a long time. Initially what we're doing is, because we're building all of the stack, there's a bunch of things we need to build to first become on par. If you look at our industry, Cisco has a rack like ours where they have 10 different pieces of hardware, but majority of that was done through acquisition. They bought their switching business called Crescendo in the '90s, et cetera, et cetera. Meraki. All these different things. We decided to build that whole thing from the ground up. Power. Routing. Switching. Wireless. Security. Cellular. All those things. First, there were a bunch of things that the world expects each of these things to have. Initially, it's actually relatively easy when building an infrastructure business because you have to get to on par to what everybody else has. The question whether you're winning or not actually comes down to the fact that what's the quality at which you're doing? Is the pace getting faster than before because of the choices you made? For example, how you decide to build operating systems, how you decide to build your APIs, how you decide to build your backend, how you set up the pipelines for QA. All these things. Are they helping you get higher velocity? And then how you actually track the quality of the business is two things. One is both very subjectively on using the product yourself. I think another thing that I found very surprising, but that I'm pretty sure of, is most people in technology don't use the products they help build. And this is a big revelation for me in the last five years. No matter what, people actually don't use the thing that they build. Sunil and I try to use the entire product end-to-end every weekend. Every feature. Everything. And that gives a lot of subjective thing. And then objectively, what you actually understand is tracking two things there. One, how many customers are unhappy with the product? And that could be any reason. That could be a hardware reason, a software reason, an operations reason, a billing reason, whatever. That should be coming down as a percentage of your customers every day and every week. And then, two, when you are using the product yourself, what is the brittleness on how slow is it to add features and how slow is it to add products onto it? That also you can easily measure from velocity of things. Both of us being engineers, we roughly have a sense of how long something can take, what's the size of things, and we can feel when velocity has come down in the company, and we've had to sort of parachute that and try to fix that at different parts, but that's also something you can feel as well. And then the customer one, anytime any customer issue happens, I try to be incredibly aware of it. It could be a customer that's very small for us that might be paying us just $20,000 a year or something. But knowing exactly why that happened, I think it's the most serious way of knowing what the velocity and quality are.

Brett: How did you figure this out?

Anil Varanasi: Paying a lot of it. We went through a period in 2020. Apple moved from using Intel silicon to their own silicon. When they did that, usually hardware had three separate radios for 2.4 gigahertz, five gigahertz, and Bluetooth. When they moved, they were using with this thing called software-defined radio which is using two radios for all three of those things. Anyway, there ended up being some issues in how they implemented it. All of our early customers were tech companies. They were all early adopters of the M1. And I'm not joking. Every single one of our customers hated us for a period of about six to eight months. We thought it was us. We started rewriting the entire stack. Rightfully so. They're paying us for an outcome. We're not delivering that outcome. It turned out that it wasn't us because once we fixed this thing with how Apple implemented thing on Mac, next day went back to everybody loving us. But during that time is when we formulate a lot of this, which is if this is starting to happen again because of some other reason, how would we catch it next time before it became that 100% of customers are having a trouble with you?

Brett: And a lot of it is rooted into the way that you use it yourself and being just unreasonably close to customers?

Anil Varanasi: I think if you help people understand that anytime a customer is having an actual issue, you should be at least CC-ed on it for every single customer. You can actually drive a lot down. Not a day or night goes by that we try to figure out who's exactly having trouble with the product. Every day, we try to go look at it. A lot of times, there's not much we can do. There's other smarter people at Meter that are doing something, but knowing that this problem exists is really important. Maybe it's hardware choices we made three or four years ago that were the wrong choices that are stifling us from actually being able to make progress. Any number of these things. Then next time, can you make a different or better choice? But that part, knowing at any given point who are the customers that are having a bad time, I think it's something that I deeply care about.

Brett: Starting in the middle of the story, if you go all the way back, what was the first moment that the early inklings of an insight for Meter were born?

Anil Varanasi: I think this will sound very prosaic, but usually when people look at these things ex post, they somehow want to romanticize this that it was a Newtonian moment where an apple fell on their head, and they knew what to do exactly from there. But ex ante doesn't really work that way. Or certainly didn't for us. I studied networking in college, something we were really interested in. It was so cool to figure out how does the internet work, where do packets flow, things like that. And then we had kept up with a bunch of research that was happening in the industry. The last great networking company was a company called Meraki. Sanjit and John had done some great research when they were PhD students. We read that. Then Martin Casado who's a GP at A16. As a PhD student, he did phenomenal work himself on software-defined networking. We were following those things. And then as these things were coming together, we were running another business ourselves before, and we were trying to use networking products ourselves and thought all of them were just remarkably subpar. Quality of the hardware. Quality of the software. And then the pricing model. What happened with the industry that's really interesting is in hardware businesses, you're trying to build hardware for as cheaply as possible and sell it for as much as possible because that gap is your margin. S Then the networking industry started doing something really interesting is they started saying hardware is commoditized. Everywhere. And then that also gave them license to actually commoditize the hardware. We felt even the hardware quality wasn't there. The software quality wasn't. I think Meraki had done some tremendous work. But after that, 15, 20 years, nothing was happening at all. Then we started looking into ... There's all these great research that's happening. Because YouTube was happening. Twitch was happening. FaceTime was happening. All of that was because somebody made networking much better. Then we started looking into why is that not applied to networking everywhere?

Brett: And you were doing this exploration to start a company, or you were just curious as to what was going on?

Anil Varanasi: Curious. I hadn't studied networking for four or five years. I'm running this other company. What's going on in networking? Let's go look into it. Let's see how it is. Then we started formulating ideas about, what if we did hardware this way? But then we hit this wall that said, to be able to do hardware this way, how are we going to get over the margins? Then that actually pulled us into doing a different business model where we don't even sell hardware at all. What that enables us to do is, because the hardware is for us to manage and us to make sure it's great, we maybe might choose components that are 20%, 30%, 40% more expensive than a traditional vendor might, but that is only marginal for us compared to the entire margin for them. We were just exploring, then we had some ideas on how to take some of these new things that were happening and apply it to networking today. Then that led to thinking about maybe we could do hardware differently this way, but to do that, how are we going to get over the margin thing? And that's where the business model came up too.

Brett: How did that come about?

Anil Varanasi: A lot of just discussions with me and Sunil. We would go on long walks and try to think about what happened in other industries. One of the things, the way we grew up is, weirdly enough, we grew up studying 8Ks and 10Ks around the dinner table, and that was the fun part.

Brett: Why is that?

Anil Varanasi: Our father used to run a public company. These were sort of the discussions around the house. What are the nuts and bolts about a business? And if you look at between 2000 and 2015, all the rage in Silicon Valley was SaaS. How do you get to recurring revenue businesses? How do you do SaaS businesses higher margin? But we maybe looked at it and said, where did that actually come from? Turns out it actually came from security and alarm industry. They were doing one-time sales and one-time revenue. Then there's this analyst, consultant-type person named Ron Davis in the security and alarm world. He started writing about this concept called RMR, recurring monthly revenue. And today, if you go look at alarm.com or ADT or anyone, more than the gap revenue, this is the number that people care about. It's not even a gap metric. But what is the RMR? And then I think software businesses ended up taking that and then pushing it that way. We were really interested in finding out is why is networking not that way? And then another thing that sort of was a thing that opened up in our mind is this is the easiest way to align incentives between us and customers, which is don't pay us unless the network works. And that's easy way to sell as well, to say, "We are responsible for the network being great. We will take on all the risks for the hardware. You don't have to, but you pay us when the network is great. If it's not, don't pay us." That's how it sort of all came together. And then I don't remember actually how it happened that we came up with as a square footage pricing model, but I think as these things happen, I think now the rest of the industry will move there in the next five, 10 years is some scribbles and notebooks of me and Sunil where we came up with this.

Brett: And you figured all those things out before you started working on the company? Did you spend a lot of time thinking about what are the differences between the opportunity in a small business or a 10,000-square-foot office versus the problems that Coca-Cola has with networking?

Anil Varanasi: Yeah, and it's actually one of our fears in networking that if we ended up going too far down that path, that we would get into the same trap everybody else did. What happened in the networking industry for the last 40 years is it's one of the only industries that has multiple $200+ billion businesses, yet no new companies come in. It's probably the most scathing review against the efficient market hypothesis. One of our hypothesis on why that happened is ... Let's say you're interested in networking. Maybe you start building firewalls. Maybe you start building switches. Maybe you start building access points. Because precisely what you're saying, which is maybe I'll just build Wi-Fi access points, sell that to small businesses, or maybe I'll build switches and sell that to data centers, whatever your entry point might be. What we understood what happened with all the companies in the last 20, 30 years that tried to compete with Cisco was that they then end up selling that. Then the best companies actually start having success. Then they never go out and build the rest of the thing. Then they always just end up being a point solution, and the only exit out of that is getting acquired by one of the big folks. We did explore what you're saying of what does this mean for a 10,000-square-foot business to a Coca-Cola or to a massive stadium or all the complex networks. And the conclusion for us was to actually ... Maybe a little bit counterintuitive. We said, precisely because of that reason, we should go build a whole thing.

Brett: But start down market?

Anil Varanasi: Yes. Start down market where they don't need complex features and complex reporting and all those things first, but do the whole thing for one customer and have a couple of customers in mind. And the way we thought of these couple of customers is we used to have this small office on Townsend Street in San Francisco. And after coding 'til about 2:00 PM, I would go do door-to-door sales. And I mean literally knock on doors and say, "What are you guys using for networking? Can I speak to the IT person?" And just keep going back and learning what are the exact features that they use. And we would just prioritize those in the beginning.

Brett: Did you find that when you thought about your first 10 or 15 customers, and you were obviously talking to dozens and dozens of customers, did the promise in the abstract instantly resonate, and they're like, "Please, God, give me this," or they're like, "It's kind of a pain in the ass. I'll try it out,"? How much pull for the promise before there was a product was there?

Anil Varanasi: I think there wasn't that much pull initially.

Brett: And did that concern you?

Anil Varanasi: For sure. And I think the reason there wasn't pull that I only understood later, I didn't understand at the time, was because new companies don't come into this industry, the buyers actually did not have a muscle to evaluate new vendors all the time. Whereas in other products, you might be seeing a new business trying to solve that problem 10 times a year. And anybody that works in IT or procurement or software or anything in a tech company, they're getting emails all the time about a particular thing that somebody's trying to solve. I only realized that about a year, year and a half, later after starting on why was this pull not happening? Because once we gave it to someone, they were incredibly happy, but there was this resistance in the beginning. And my conclusion after many months of looking at it was they're just not used to evaluating new products. And the best analogy I've come up with there is very similar to the car industry. If anybody is trying to buy a car, none of us would go to Google and say, "What are all the new car companies?" We only end up buying a car because maybe we saw it or saw a friend or a colleague or somebody mention it. I think networking is a lot similar to that. It did concern me, but it took me another year, year and a half, where discussions with Sunil to try to understand why is that most of these buyers are not evaluating new products ever for networking.

Brett: As you're doing all this work before you actually start to build anything, what was the output of it? Did you collect all of these different ideas and theses, and it turned into a memo, or you were sketching this? You were chasing down a bunch of different things, and then a bunch of the things crystallized. Business model. Full stack. Start down market. No point solutions. Et cetera. Et cetera.

Anil Varanasi: It was just a one page that we ended writing over the course of three to four months. We were trying to figure out where do we start? First, we started with software because it's easiest to start there. We started writing some rounding algorithms and figuring out how to do operating systems and some unit kernels, for those in the audience that are deep into networking. We tried all these things. Then we hit a big roadblock.

Brett: You did this without design partners or your first three ... You just started building?

Anil Varanasi: Yeah. First, we just wanted to process packets. Are we going to be able to even process packets on some generic virtual software based on virtual hardware, essentially, and do it on that? Is this actually going to work at all? Then we started hitting some pretty decent roadblocks where we realized we need hardware. And I think the old LMK quota people that care about software builder on hardware turned out to be entirely true. Then immediately we felt that bottleneck a lot being in San Francisco because we would try to design PCBs and get them manufactured, and the cycle was waiting four to six weeks. That was just incredibly painfully slow. We just said, "Where's all the hardware in the world made faster?" And everything and everyone pointed us to Shenzhen. We just decided to just go to Shenzhen and go live there, and we're like, "We'll go for a month or two. We'll figure it out." And turns out we were wrong. We ended up living there for a year, year and a half.

Brett: What was that like?

Anil Varanasi: Brutally hard but also fun at the same time. The reason it was hard is less on the products things or anything like that. It's just Sunil and I were vegetarian. Living in Shenzhen, it's probably the best diet program I've ever been in my life. I lost 15 pounds. But the people were awesome. You could design a circuit board in the morning, and some kid would run over to your office by nighttime. I know there's all this US-versus-China rhetoric, but what I've learned over time is people everywhere are just trying to live their life, and they're just friendly and nice and things. Ended up visiting a lot of factories, working with folks that would work with us. Because a lot of times in hardware, nobody works with you unless there's a minimum order quantity because it's not worth it for them. We got really lucky. Some of the folks were with us for a little while. Then we sort of graduated. Then as we were getting into real production stuff, moved it all to Taiwan where all the whole things are made. And then that was a whole process of trying to convince people in Taiwan that, yes, we're ordering 500 units, but one day we will order 50,000 units and 100,000 units and five million units. But some of those folks ended up taking a chance on us that we still work with, which is really cool. But the China experience, I don't know what we were thinking when we decided to go there. I went back and looked at some of our notes. And it was really naive. We just said, "Hey, we'll go for a month or two." And that was the thing we told our friends and our family. I went and looked at old text messages. Looking back, probably one of the best things I've done in my life where you end up learning so much of how everything in the world is made. There's probably not an object in this room that I can look at and not know how it's made. And even just putting work aside, that was just a great experience.

Brett: When you thought about building the first version of the product, was it basically, "We're going to go back to first principle, start with a blank sheet of paper, and just build the perfect stack hardware software for X shape of business,"? Or was there a lot of customer collaboration and design partnership, and you had a set of ICPs of companies that are between X and Y, and there was an iterative process between early customers or what might be considered design partners and be one of the saleable usable product?

Anil Varanasi: We had that partnership with customers on the software. But on hardware, it was mostly just compromises because you set out on a blank sheet of paper, and you say you want to build the best hardware. But cost, MOQ, supply chain, which vendors will work with you, which chips you have access to, those all start narrowing your choices down to maybe just okay hardware. And even the first piece of hardware we held were just, "This is okay." And then the hardware piece was mostly on compromise of what is the quality that's achievable today because all these other avenues are not available for us.

Brett: How much of, on that point, was the optimization function cost?

Anil Varanasi: We were fine with crappy margins, but the bigger challenge was who would even work with us? Even if we said, "We will give you money," or we said, "We don't care about making money," there's just a subset of folks that would work with us at that time. Just our size was so small. Tiny. Hardware, it was more compromise on what's possible, but software was a lot of iteration. But that's only on the management plane. The dashboards and things like that. The rest of it-

Brett: The software infrastructure?

Anil Varanasi: Yeah. Packet processing. Wireless. All of it. The job there is just get it working first, then make it fast, then make it secure. You don't need design partnership there. Can you actually process packets? Is it actually working? Is it fast, and is it secure? Because no customer actually understands that part. They do understand the management part. That we went back and forth and sort of figure out what's the right design, what's the right user interface, down to the colors, and all these things matter. And we spent a lot of time on those. But majority of it, and maybe this is the other reason why we were able to do it much faster, we didn't have to wait for that loop of we think something, ask a customer, they tell us. 80% of it was just, can you get it working?

Brett: The time you finished your research, you started to work on software. You quickly pivoted to hardware. How long did it take you to get to a sales-ready product?

Anil Varanasi: Took us four years. Four and a half years. Four years. We ended up going down this path on operating systems that we had to scrape 100% of the work a year in. It was one of the most painful times that ... Because you want to be able to waste anything when starting a company except time. You're okay wasting money. You're okay wasting so many other things, but we wasted time. We wasted a year of time going down this wrong path of how to build the operating systems and packet processing. That lost a year.

Brett: How did you screw that up?

Anil Varanasi: I think we tried to do the perfect version of, if every technology worked perfectly, we would build this mirage of a great operating system. And that was just entirely wrong.

Brett: How did you know you had to scrap it versus just keep trying?

Anil Varanasi: We went to this meetup down in Santa Clara because that's where a lot of the operating systems meetups happen. It was 20, 30 people. Everybody sort of brought what they're working on to show, "Hey, this is the operating system I'm working on," or, "This is the packet processing," whatever.

Brett: And these are companies or hobbyists or everything?

Anil Varanasi: Combination. We ended up sort of showcasing ours. Then this older gentleman came about, and he's like, "I understand what you guys are trying to do. We've been trying to do it 10 years as well or seven years." It's one of the largest companies. I won't say who but one of the largest companies in the world. And they're like, "We're going to try to open source it. All the stuff you were trying to do the last two years is not only worse. We're just going to give it away." And it was this important library on how to take packets and process. That was only about 20% of what we were going to do and what we're doing, but it changed our entire framing in what's possible. Somebody else had thought about a better way of doing it. And that changed our mind.

Brett: And you leveraged that open source or no?

Anil Varanasi: Yeah, because the awesome thing about open source, you can just read the code. And this happens with models all day today. Once you read an open-source model on how it's trained and how it's set up and what's the architecture, now you know how to do it yourself. Somebody else had taken this other approach. It really opened the ideas for us up. And we knew, I think instantly, but we probably didn't tell each other for about a week that we had to scrape it. And I think after a week, we kept talking about the same idea of maybe we should have gone down this path and this path. And we kept making the steelman case for why that was better, and we couldn't make the strawman case at all. And I think both of us probably realized this is bad, but we should scrape.

Brett: That's a year of the four and a half that was lost?

Anil Varanasi: Yeah.

Brett: Now, you're at three and a half years of at least moving in a directionally correct way.

Anil Varanasi: Glacially.

Brett: What is it like running a company where the path to that real sense of market pull and product market fit is years away, but you're also not iterating toward it? It seems like hunkering down to build the thing you knew you needed to build.

Anil Varanasi: It was a lot like that. And it was just two people until we got first customers. It was just Sunil and me.

Brett: For the four and a half years?

Anil Varanasi: Yeah.

Brett: When you think about those first handful of years of really building the foundation of the company, whether it be the way that you thought about the market and why it was the way that it was or how you landed on full stack, business model, your first few customers, when you try to sort of abstract it and bubble it all up ... We talked about a couple of the things that maybe the decisions and the dead ends that you had to sort of change direction. What are the most important things that you are convicted in were correct that are useful to other people who are doing those foundational things for the first time?

Anil Varanasi: Ratcliffe's law is underappreciated. Great markets are great. I think we can all convince ourselves this is a market that this is going to happen, or that's going to happen. But when you're talking about building something for decades, which is how we thought about where our time should go, having a really great substantial market that touches everyone, there is not a human in the world today that packets are not impacting them. Having that sort of market and believing in that market I think was one of the best things we'd ever done. Maybe I agree with the adage, or maybe I don't, that you want a small market that's growing, but I think I prefer a much larger market that's also growing. And I think we got that part right. I think what you mentioned on the full stack, I think that was the right thing to do.

Brett: But that's the right thing to do in the context of Meter. What's the bigger idea there? For other founders, what is their version of full stack-

Anil Varanasi: I think owning the entire thing. I believe in businesses that own the entire thing. For the long term. And if somebody's trying to build a business for five or 10 years, I'm finding [inaudible 00:31:11] fault in that. But I'm saying if you're trying to build something for 20, 30, 40 years, and you want to own the stack, what's ironic to really think about is there is not a single large company in the world today that is not vertically integrated. There's just none. But what's ironic is if you start a business today, there's some sort of great filter happening that most of them don't make it if you start vertically integrated. But if you do start a great point solution or something where you own horizontally one part of the stack, I think the chances of making it to a certain level are higher, but the chances of building a very large business I think are very slim chances. If people are interested, I think, in doing that, maybe if I had to extrapolate into what it means is, you have to be vertically integrated. I think it's also so much fun to build a vertically integrated business. You get to control so much, and your business actually tells you a lot more. You understand almost every part of it. Today, we are vertically integrated in every way except building our own chips. Everything else Meter's vertically integrated in.

Brett: But your hope is to eventually do that as well?

Anil Varanasi: We have plans underway. We think we can do some great work there. But by the time we realize that, it will take another eight years, I think, from now before this will even be fruitful at all. But I think actually owning the entire stack is probably really important. And then the last thing that's probably applicable to everyone ... If you look at businesses in the modern sense in the last 50 years, the three times businesses are usually rewarded is when they innovate on product and technology, or they innovate on how they deliver that. Somebody figured out SaaS. Before that, somebody figured out CDs. Somebody figured out USB. Whatever. The delivery mechanism is also rewarded a lot. How does that change? Apps are another ways. People figured out how to do apps. But the third one that is rewarded that's severely underrated is business model innovation. We have always thought about business model as part of the product because that should inform what hardware you build for us, how you build the software, how you build the SLAs, what customers can expect, how you sell, all stems from that. Maybe another thing, if I did have to extrapolate out, very few people I meet seriously think about business model innovation.

Brett: Why do you think that is?

Anil Varanasi: It's probably one of the hardest things to do. How are you going to charge in a new way? And it's uncharted territory. And it is scary.

Brett: You're seeing a renaissance in that a little bit in AI when people are getting away from per-seat pricing is an example of it today-

Anil Varanasi: 100%. But think about how big of a shift that is.

Brett: It's 15 years in the make.

Anil Varanasi: And if it does end up working, we're probably going to see some amazing companies built that figure that out.

Brett: Right. That then are competing against per-seat company.

Anil Varanasi: Exactly. And you can then sell against the per-seat companies, but I think that's happened so few times.

Brett: Do you think that it's underexplored, or it's just it requires a set of scarce magic that every now and again sort of comes together?

Anil Varanasi: That might be true, but maybe it's not true because none of us even talk about it.

Brett: Mainly in Silicon Valley is product and technology.

Anil Varanasi: I'm convinced that all these smart people, if they end up spending time on it, that there would be new business models. It can't be that we've achieved 100% permanence on what business models should be.

Brett: The sort of meta thing that you did is move from buying hardware to wrapping hardware and software together in a bundle and paying monthly on a per-square-foot basis.

Anil Varanasi: Including delivery. We go and do the installation and all of it too.

Brett: There's this kind of important concept of path dependence which is that it's very counterintuitive, but so many times you start with a point solution that you basically just become a slave to sort of the point solution. You just briefly talked about that, but so many times you follow up with a company seven years later, and they're still kind of a one-trick pony. What can you explain about why that exists and maybe, importantly, how that maps to where you start matters maybe more than people might think it does?

Anil Varanasi: I think this actually boils down to what you were asking at the beginning, which is what happens every day, every week too. When we all decide what we're going to do in a given day, there's a path-dependent thing we could go do, and there's likely this harder thing if we finish that day that the trajectory of our work would change. But most of the time, we end up doing the former rather than the latter. But the latter of doing something really great, the difficulty is only a little bit. If the normal thing to do is 100% difficult, but the really hard thing to do is 120% difficult, most people look at it as 120 rather than just that 20. And every time I look at exactly what you're saying on businesses that end up being the same point solution a long time, I think you're absolutely right in the fact that if they had decided at the beginning that the scope was a little bit larger, generally my rough intuition is it's only 20% more, but it actually ends up enabling you to capture a lot more. A lot, lot more. And I don't know why that is, but I have a worry that actually, particularly in Silicon Valley, that this sort of thinking has accelerated, which is make a point solution as fast as possible to get to some revenue as fast as possible. And everybody then ends up optimizing for the local maxima because if you end up giving smart people a problem, they will go as deep as possible on it. And I think that happens over and over. Then when you meet founders, I'm sure you hear this, which is, "This market turned out to be way bigger than we thought it was. The problems are so hard." And then almost invariably, every company tells you what they're working on is the hardest problem in the world. And I just don't think that's categorically true at all. But, because you end up becoming either a slave of your own success or end up having some sort of reverse Gell-Mann amnesia of, because you know the problem deeply well, you think it's the most important problem and the most difficult problem, you sort of end up missing it. But I think that's constantly there. And networking has been littered with that. And we got very afraid of that because there were so many great companies that did just one part. But our estimation was if they spent 20% more effort, 20% more time, 20% more capital, they could have done the whole thing.

Brett: What about the first thing that you mentioned which is how critical it is to be in an excellent market? You talked a little bit about it, but what is your definition of this is a market worthy of going after, or, all things equal, a market has these properties will increase the chance you can build an important company?

Anil Varanasi: I think growth is incredibly important. You want to be in a market that is rapidly growing, not rapidly shrinking. I think that's fundamentally core. Second, personally, myself, and I don't know how much this should be rooted into other people's businesses, but personally, I appreciate markets that have purchasing power, whether in a great economy or a bad economy too, both, especially if you want to build a long-term business. And then three, I like markets that sort of affect everybody in the world. Cars. Rockets. Networking. Banking. These types of really large things that affect everybody in the world. But those would be my criteria of thinking about great markets, but it has to start with the market that's growing because that's usually a place to go sell to that excess new demand is how you get in.

Brett: So many of the markets that would satisfy that set of criteria I think tend to be monopoly or oligopoly structures where you end up having companies that are very large that, for a lot of the reasons that you mentioned earlier, are set up in a way that makes it hard for a software or software and hardware startup to penetrate it. Some of it is that they're so monopolistic that just nobody gets up to the plate. And I think this is more often than not if there is actually a reason why the structure is the way that it is. And I think most founders begin by ... Going back to what you were saying a second ago, they begin with the product's not good enough, and that's why. But they miss that there's actually power in these businesses. Is there anything else you can say about most of the biggest, most interesting markets tend to be dominated by incumbents and, by definition, make it hard for a new company, and so then what does one do?

Anil Varanasi: I think they make it hard only in the beginning is my new way of understanding these markets in the last five to 10 years, which is, in a market where incumbents like that don't exist, the initial ramp is easy to get in, but so many people get in. Then it becomes really difficult. But with markets like this with large incumbents, the initial ramp is really hard. But once you pass that chasm, there's almost nobody else there along with you. Then it becomes much easier. If we ask people in 2021 how strong is a search monopoly for Google, I think you would've got an unequivocal answer that this is the end, that it's not going to happen. Or if you asked seven or eight years ago is anybody else going to be able to challenge the primes in defense, I think the answer would've been, "No way." The primes are the primes. That's set right there. Or if you go even 20 years ago, is there going to be an American car company? The answer would've been, "No way. Here are all the structural reasons." But I think the initial part is incredibly hard, like you're saying, because you have to go build things that are on par with a much larger stack that already exists by the incumbents because maybe they built it over decades or did acquisitions. And you have to figure out how to do something new in there. And you have to figure out how you can still price it better than them. Yes, the initial challenge is much higher, but my estimation is, if you cross the first part, it's actually much smoother sailing after that because very few companies are willing to actually cross that first part.

Brett: On all the other parts of the business, do you see problem, fix problem, or you also are more deliberate? Meaning everything outside of the technical details of a product.

Anil Varanasi: I'm still see problem, fix problem on if something wrong with customers and then a sales deal as well. If there's a deal that probability drops 5% or 10%, I still try to fix it as soon as possible.

Brett: And that's generally the correct thing to do.

Anil Varanasi: I don't think so. I don't think so on enterprise sales. I think enterprise sales actually have their own ebb and flow because that company might be doing their own thing. If they're deciding to pay you $10, $20 million a year, there's other things they're considering and doing, and pushing is not always the right answer. And I've made a few mistakes there, too, where that was also in enterprise sales. I'm still not sure if it's not the right answer everywhere else. But enterprise, I don't think it's always push, push, push, push, push. I think there's some give you have to have.

Brett: How did things unfold? You're four and a half years in. You have an early version of a usable product. Then sort of what happened in the company's story?

Anil Varanasi: We ended up talking to some friends' companies and others where we would go power their networks. And it was just a few spaces at a time. A couple of them didn't even work. We would stay at their office, try to fix it. One time it was super funny because we ended up sleeping over in the office because we were fixing it the whole time. And then they sort of came over the next day, and they said, "Our snacks are gone, and you guys are wearing the same clothes. What's happening?"

Brett: And did they have Wi-Fi?

Anil Varanasi: They did.

Brett: They did. It was worth it.

Anil Varanasi: It was working. But it took us the whole night to do it. We're like, "No, no, you caught us on a laundry cycle," and this whole thing sort of thing. But it was just then a drumbeat of just who are the customers that don't need every single feature in the world, but they would benefit from having the full stack from us and just getting down to them.

Brett: And when you were doing that, did that feel easy? People started to line up? Or every marginal customer, every next customer, you were fighting for?

Anil Varanasi: In tech, it was easy once we'd acquired a few customers as it happens. But in every new market, it was just as challenging. You go from tech to warehouses to then to manufacture-

Brett: Was that your second?

Anil Varanasi: Warehouses.

Brett: How did you decide that?

Anil Varanasi: We actually did not want to do anything other than offices for a long time because even though to the point on selecting something small, office is actually one of the smallest segment of real estate, but we felt like there was an immediate fit because there were so many tech companies to be able to do it. What actually forced our hand was COVID. 100% of our customers went to zero starting March 12th. Then, for about six to nine months or however long, I think it took a bit longer, the struggle was two things. One is all of our existing customers, nobody's going into offices. And then, two, we couldn't get hardware out of Taiwan because supply chain was so bad, and we were such a small company. All the availability of production was for the larger companies, and we were sort of way down the rung to be able to do it. We always knew one thing true to be about networking and Meter is we're some sort of index on the economy. And what happened was e-commerce was growing from 12% of all of revenue in the economy to 24%. Then you had this proliferation of all these warehouse companies and manufacturing companies. But because it was COVID, they themselves couldn't get people to go work there. Spaces that previously were never automated were entirely getting automated. And if anything is automated, it has to be on the network. Then that happened to be a segment. Actually, that segment actually would propel a lot of our growth during a time when everybody ... I think even Bloomberg ended up writing a cover story on us that was something else. And then because this whole COVID thing was happening at the top of mind, I think the cover story was The Thrill of Office Wi-Fi or something like that. And I think in so many people's mind, it was like, "If offices are not," ... I didn't think they understood that it was such an index on the economy that this other segment, which we knew we would get to later, but macroeconomics pushed us toward.

Brett: What was the feeling of running the company during that period of time?

Anil Varanasi: It was only 10 people. I wouldn't say it was a company. When you have 10 people, it's a small group. We're all sitting around a table. It was hectic. Chaotic.

Brett: But did it feel like, "Well, we had a good run,"? Or was it like it was, "We'll find a way past. We'll find a way through this. We'll get on the other side,"?

Anil Varanasi: This is the one question so many people ask Sunil and me, even the people that know us really well, that we don't have a good answer for. To even get to production hardware, we had self-funded the business. We didn't raise outside capital. It never even occurred to us that we would do something else. I don't know.

Brett: Is that how your personalities have always been?

Anil Varanasi: I think so because in another life we used to make film a lot, and we would have ambitious way we would set up shots to music to who we wanted in it and et cetera. And I think we were always unreasonable that way. Somehow we were convinced that we should always do the highest-quality thing. It's one of the hardest things to explain because so many people ask us that, even the folks that know us, our friends, and other things. And people sometimes think we're not being genuine and, "Were you afraid, or were you sad or anything?" We're like, "No, that was not the thing. We're sad at the fact that we're not making progress."

Brett: But it shows that you're wired differently.

Anil Varanasi: Thank you.

Brett: There was the Free Solo film with Alex Honnold who does the-

Anil Varanasi: Right. Right. Right. Yes, the scaling.

Brett: And they did an MRI of his brain. It's just different. Being scared isn't a thing that registers in his brain. It may just be that you have a different position.

Anil Varanasi: Maybe. Because a lot of our friends, too, and some of our investors that have become very close to us ... One time, they even asked us, "You're not being genuine and telling us what you're thinking." And we're like, "We're really not worried. We know this is the thing we'll do." It was really hard to convince people of that. But it wasn't like we're saying that to people, and then Sunil and I are like, "Holy shit. This thing is going to be-

Brett: Freaking out. Exactly.

Anil Varanasi: No, we're like, "Cool." Yes, it's going to be tough. There are multiple moments, COVID, this Apple thing, supply chain, whatever. Studying businesses now the last two decades, I think, for any business, I think there's about 1,000 days of really bad time. Any business. We just happen to have all 1,000 at the beginning consecutively.

Brett: And now it's just roses.

Anil Varanasi: The thing that is true now is we would actively have to mess it up on purpose that it won't be a decently large business. What I think we still have a lot of work to do, and we have to do great work to happen, is are we going to be one of the largest businesses in the world? And I truly mean that. Are we going to be one of the largest businesses in the world? That we have a long way to go, and I suspect there'll be a lot of mistakes we'll make and et cetera. But whatever baseline you think of as a large Silicon Valley company, that we would have to actively mess up from this point.

Brett: That point around credibility and trust in a new market. How did you end up cracking that? Do you have to find a particular first few customers that are buck the trend and are on the classic early adopter or some other?

Anil Varanasi: On this, though, what I am sure of is I do think it's no matter what size of the business. Now, I've not run a business that's very large yet. I will. But I'm pretty sure that no matter the size of the business, if it's a brand-new market, the founder has to do it, or it has to be part of it to convince the first few people to take the chance because I think they're buying the person rather than the product. And they want to know who the person is that's behind it. Usually when we go to new markets, even now when we go to gigantic markets, Sunil and I try to understand as deeply as possible who that actual buyer is. Can we talk to them? It's one thing watching Fathom and Gong calls or notes and other things but another thing to be able to actually ask this person a question, ideally in person, because you can actually tell a lot more from their body language what they're going to buy or not, and 90% of communication being nonverbal and all these things. I do think every new vertical we've gone to, and maybe this is different for other businesses, I think it's just as difficult.

Brett: As you've been telling the story of the company, it's clear that the company was predicated on rethinking the end-to-end product, rethinking the business model. What about actually how you physically sell it? Is that pretty conventional, or is that done in a different way?

Anil Varanasi: I think it's conventional now. We did take a divergent approach before. 90% of networking is actually sold through the channel. And majority of Silicon Valley trade doesn't even know what the channel is. But we deliberately did not sell through the channel because how legacy companies stifled new entrants another way is when a new entrant was making progress, they would incentivize the channel to say, "We're okay losing money for a quarter or two. Sell our thing." Until we knew the product was dramatically better in every way in the hardware, in the software, et cetera, we were not going to touch the channel because also with the channel is channel folks are amazing, but what they're doing is they're selling their reputation, not the product. You want to have a product where they feel comfortable selling the reputation along with it, but we want it to be so good that any marginal incentive a legacy vendor might give that doesn't stifle our ability to do it. Originally not doing channel and doing direct sales for networking is really odd. But now that we've established that, that also enabled us to get hundreds of customers first then take those hundreds of customers' case studies, take that to the channel, learn from that, build a better product, and then make that all available to the channel. Because one of the other things that's advantageous to us is because we're the company that helps build the hardware, the software deploys it and helps maintain it, we ended up building a lot of tools that are the same tools that a channel partner might want, giving that all to them at once. Now, we sell very traditionally. Even though our business model is different, our delivery is different, our hardware is different, incentives are different, the path to selling is a very known one.

Brett: Was there anything you had to reinvent as you transition over to channel sales, given your business model is different? Was that tricky to sort out?

Anil Varanasi: People.

Brett: Just the education component?

Anil Varanasi: Yeah. I think if you take traditional great people from great Silicon Valley companies that are PLG and that type of folks, I just don't think that's a fit. I do think there's a seller market fit, too, which I also did not appreciate in the beginning. I was in this first principles thinking of you take any smart person, put them in anywhere, they'll achieve it.

Brett: Why is that not the case?

Anil Varanasi: I think in sales, you need to be able to actually iterate to a win really fast. A seller only gets really good if they're confident in a sale. And you want to get to that sale as fast as possible where they've handled things. And I think if you have to learn a market because you have to go learn networking, then you have to learn how to sell differently. Learning two things that are brand new at once, that's hard. I think if you only have to learn one thing, I think people can do it so that you can still have a 90-day ramp or 120-day ramp or whatever you want to do. But otherwise, if you have to learn two things, you might have people that don't sell anything for nine months to a year. Not that that's bad, but they will lose confidence entirely.

Brett: Did you find it difficult to train the channel to sell your product given the business model was different, or no?

Anil Varanasi: No, it was not as difficult as I thought it was going to be.

Brett: Why do you think that is?

Anil Varanasi: If we were the first people to bring any product that had recurring revenue, I think it would've been tough.

Brett: But there was enough early-

Anil Varanasi: Zoom and whatever. Call center stuff. SaaS software. You sort of had cloud move that way too. I think they had enough of an understanding of how this would work. The thing that I also underappreciated is that us, Meter, bringing recurring revenue, how much they would like that because it now actuates their business based on recurring, high-quality, predictable revenue. And because most of channel grew through networking, almost 50% of the channel is networking revenue. That has been one-time sales, and their businesses have been actuated lower. And that actually is one of the things that draws them, too, which is, "If I do this, my business is more valuable because of it."

Brett: I wanted to pivot the conversation slightly. One of the things in knowing a little bit about Meter is there's a lot of things that you do differently, whether it be how you're in office, a lot of the manufacturing stuff you talked about, full stack, starting a company with your brother. I think you have many, many, many direct reports, or at least you used to. And I'm sure there's lots of other things that you do that other people would say are weird, don't make sense, go against best practice. You talked about we have no OKRs, goals, long-term goals. Maybe you could walk through a few of those things. Maybe how you think about management as it applies to who you are as a person and Meter as a company. And maybe we could take a couple of those things and explain what is the origin. How do you figure out the way that you're going to do things in terms of organizing, managing, hiring, et cetera? Because it feels like you do more things that are different than the average scale-up company.

Anil Varanasi: I think maybe it's rooted in the fact that both Sunil and I, when we started our first company, we were super young, and you end up making a lot of mistakes. And the one mistake we ended up becoming very allergic to that we made sure we don't want to do ever again is talking about the work more than doing the work itself. As a company starts to scale, the meta work ends up being way more than the actual work. If you look at people's calendars, if you look at where people's time is going, one of the things I try to tell people when they onboard onto Meter, I do a session with them, Sunil does a session with them, as a class is that Meter's buying two things from all of us. Meter's buying our brain and our time. How do we make sure both of those are the best versions that we're giving to Meter? But if you look at most people's calendars as a company starts to scale, majority of it ends up being a coordination meta-work thing, and the amount of time they get to do real work starts dwindling and dwindling down. That's what we're allergic to the most, and that's what we're fearful the most. I'm actually still not sure if any of this meta stuff even matters.

Brett: Why is it the way that it is?

Anil Varanasi: I think in human tendency, it's the same thing why we all reach for sugar. It's the easiest way to feel good. You put a process in place. You write a doc down. You talk about how to do the work. You talk about how to set up your tracking system on Atlassian or Linear or whatever. Doing all that feels like real work. I just don't think it's real work at all. The real work is actually the work itself. And one of the things we're trying to do, and I don't know how successful we will be over the next five to seven years, is the other thing we disagree with in this vein ... Somehow people have bundled management and authority together in one. We're trying to decouple that as much as possible. We would like Meter to be a place where great people that have no interest in management for any reason still can have a lot of the power in how it happens. Most people, I think, ended up thinking that the only way for me to become important in my career is to become a manager. I think that's the other reason that happens is you take your best people, you fire them into management, and they learn that management does all this meta work. And if you give those problems to smart people, they're going to do them really well. We try to resist that as much as possible, whether it's on how we do direct reports, how we do one-on-ones, how we do OKRs, how we do planning, how we do any part of it. We try to at least be truthful as much as we can on the fact that we're just going to try to do the work rather than the meta work.

Brett: Why even have management at all?

Anil Varanasi: It's a great question. I do think we need it for coordination. If you look at management, Nicholas Bloom has great work on this at Stanford. Kayla Gorcelli, I'm probably saying her name wrong, at Berkeley. And then Raffaella Sadun at Harvard. What we know from longitudinal studies is that not only is management important. Management is actually a huge factor in what ends up driving outcomes. But again, management doesn't have to be authority. Management has to be coordination and context. Tyler Cowen has this great saying that he's been saying for a long time that is now getting popular, which is, "It is context that is scarce." I think management is really about being able to really think about what's the context that's missing from everyone, doing the meta work yourself rather than pushing that to other people, and then giving that context to other people. But we know unequivocally that management is not just important. Management actually works. We have really great RCTs and A/B tests, essentially, of same problem, same factories, half management, half without management, and outcomes being entirely different. Management is still incredibly important. It's just that you don't want to couple together, in our view, management and authority.

Brett: How do you, in the most specific way possible, define what management is at Meter?

Anil Varanasi: I think what management at Meter should be is making sure everybody understands what they have to do, what pace is expected of them, and what success looks like. That's it.

Brett: What about who should be on the team?

Anil Varanasi: I think that should be project specific.

Brett: What about should we fire someone?

Anil Varanasi: That should actually be only management partially. And I think it should be the other people that work with them too. A lot of times when you go to a team that's six or seven or 10 people, more than the manager, I think it's actually better to ask everybody else that works within that team who should be fired.

Brett: It's partially management's responsibility-

Anil Varanasi: Partially. The management responsibility is finding that out and knowing it. That's why one of the things we're trying to resist in the company as much as possible is having any people that are just people managers. And I don't mean to say just in a pejorative way. I mean the only thing they're doing is people management. We sort of have everybody that's a player coach, and I want to see how long we can push that. I suspect we'll hit some breaking point in the next year or two. But everybody does the work and helps others has context because otherwise I don't know how you know what the work really is.

Brett: What about providing high-quality feedback or coaching or that whole genre of stuff?

Anil Varanasi: I'm still back and forth on this. Because I think the thing that I don't like, that I still haven't figured out if this is right or wrong, so that's why I haven't unwound it in Meter just yet, which is a lot of times what happens is ... Let's say you and I work together. I have feedback for you. I'll say, "Cool. I have one-on-one with him three weeks from now, so I'm going to wait to tell him then. And then I'm going to tell him all the things that I have as feedback at that time." Rather than bottling it up like that, just like in any relationship, I suspect the better thing is instantly doing it.

Brett: But that's the modality of it. There's the question of when you think about jobs to be done of a manager, is giving feedback, spotting gaps, closing gaps, development [inaudible 01:00:39]-

Anil Varanasi: I don't think so. I think each other should do it. I think if you leave it solely on the managers, it's irresponsible to do so because if you're on a team, and let's say you're on a basketball team, and somebody doesn't have their hand in the passing lane, the coach is not going to be able to watch every single player on the field. But the player right next to him will know this person is not putting up their hand in the passing lanes. I think you should have a mature team that's able to do with each other rather than just relying on the manager. But I'm still working on how to operationalize this. I think there's so much of good in management that came in Silicon Valley. And if you look at what has America shipped to the world, management is one of the things that we have sort of shipped culturally. There's a lot of great things, for sure, but I'm just not sure if 100% of them work for a small company that wants to grow fast. I think maybe they work for a bigger company, or maybe they don't. But if you talk to CEOs of really large companies, they don't like it either. I don't know who likes the management but certainly something America has shipped to the world.

Brett: How many direct reports do you have now?

Anil Varanasi: Two dozen.

Brett: What is your working relationship? You don't have one-on-ones?

Anil Varanasi: I don't. I ebb and flow. Right now, we have this conference coming up on November 18th where we're releasing an entire new product line. I'm sort of ebb and flowing out of it right now. But I'm old school. I tend to call people a lot. I literally pick up the phone and just call them if I'm thinking about something and just talk to people. All the two dozen I talk to at least every two or three days.

Brett: If I were to listen or watch how Meter employees work together, is it mainly work focused?

Anil Varanasi: The other thing I think Sunil and I have learned in this vein, and I'm trying to articulate this sentence really well, so tell me if it makes sense, which is if you're spending your time thinking about the person instead of the problem, the person is the problem.

Brett: What about the sense of your job as a manager is to help this person have maximal impact and grow? And I think I tend to be more in your camp, to be clear, but I think conventional wisdom is much more people leave managers, not companies. And there's almost this nanny state dynamic that's been created, which it sounds is sort of the opposite of how you think about it.

Anil Varanasi: At least how I want Meter to be, whether we're there today or not is a separate question, I do think there is some benefit in a manager being a mirror to someone and saying, "These are all the things that you're not able to see that I see because I get to talk to everyone. It's my job to do so and show it." For the best people, what I've found is, as soon as they know that's the problem, they tend to fix it, and there's no need to linger on that topic much longer. I think what a manager could do well is if you're having to deliver the same thing for people consistently over and over again, that should be one of the things they go take action on. Maybe that person shouldn't be at a company, and it's not a fit. Where your job is a sort of a stenographer knowing how much of the same problem is happening over and over again.

Brett: Do you think an employee needs to ... It's important that they feel like their manager cares about them?

Anil Varanasi: Yes, but not as a friend or family or any of that stuff. I think it's a work relationship-

Brett: They're valuable to accomplishing the mission of the company?

Anil Varanasi: Not just that. That they're valued as a person because of the skills they have, how they think, how they work.

Brett: But that's a means to the end, no?

Anil Varanasi: Possibly, but I think that's the extent to which a business should care.

Brett: There's caring about me as a person, and there's caring about the value that I'm bringing to the company. But you're saying value that you bring to the company, right?

Anil Varanasi: I think so.

Brett: Not just, "Tell me about your weekend. And how's your kid doing?"?

Anil Varanasi: I do think those things matter. I think there's some sort of social contract that we're not going to be able to get past. And I do think those things are important, but I don't think I agree with those things are the most important. A lot of places, those things end up becoming the most important thing, and everything else becomes secondary. Maybe I'd switch the order of the work itself. The value. That's primary, and this is secondary. But at the same time, when a colleague has been sick or has a kid or does something, Sunil and I have done all sorts of heroics to help them. I think that's important too. Maybe I'm not articulating it properly, but I think both can be important where if you do need to do something you can help, you should do everything possible, but 99% of the time it should just be about the work.

Brett: How would you explain or teach your philosophy on fighting slowness?

Anil Varanasi: It has changed in the last couple years. I have come around on two topics on slowness. One is that it is impossible to be fast all the time, that you have to zoom out a little bit and look at the curve rather than any one intercept to know whether you're fast or slow. I think there are parts, there are times, no matter what you do, you are going to be slow. And second, I actually think slowness during some times is good, particularly for businesses like ours when we're making decisions on things like what hardware we build and how we build it that have ramifications for us for a decade. Doing that just a couple months faster, I have come around the fact that that's actually not the right thing there is.

Brett: And that goes back to see problem, solve problem?

Anil Varanasi: Yeah. And rather than ascribing fast and slow to the entire business, I now think about it discreetly on what the job to be done is and where should it be fast and where it should be slow, and that's actually different for different parts of it. For example, in sales, no matter what, I do think we should be incredibly fast on responding to a prospect. I don't care how big we are. Whatever. You hear all these tales of, as larger companies go, you can't even get somebody to tell you what the product is. That I think is pernicious. Same thing on a customer. If a customer reaches out for anything, that they're the ones paying the bills, that response should be incredibly fast. But I don't think we have to take that same philosophy and be so generic everywhere in the company. That's something I've changed my mind on, which is I think there's different pockets that are a different cadence. When we go build chips, for example, I actually think the right thing there is to go as slow as possible because taping out a new chip then building it is incredibly hard on ramifications on the mistakes you make. I've changed my mind because of that. The other reason I've changed my mind is there are extraneous factors a lot of times that you actually don't want to push purely for the sake of speed. We talked earlier about the fact that maybe the enterprise sales when you're selling really large accounts, pushing for speed, speed, speed all the time might not be the right answer. I think that's actually true sometimes in things like design and creative things as well. A lot of times, there's some magic that happens when you let it. And we're doing a lot of creative things that we'll announce, but I'm trying to be patient there where I'm not pushing for the same speed there that I might in software or I might in sales or I might somewhere else. I don't think we have to push there as much.

Brett: Do you communicate or set goal ... I know you don't set conventional goals. Set deadlines. There are deadlines.

Anil Varanasi: Yes.

Brett: Do you do any of those type of things in ways that you think massively speed the company up?

Anil Varanasi: I think a lot of times when we started doing this user conference that we're doing, that's been a great reagent to finish things on a certain day. I have now understood why Apple does it. September 7th every year, no matter what, it's a great thing. And the most important thing is not that I think people end up working hard or anything. If you have a great company, they're always working hard. What ends up actually happening is people end up not working on things that don't matter. They start cutting that because they don't have time for that. And those deadlines I think work really well.

Brett: What about if someone says, "We're redoing our website," and they're like, "It's going to take us three months,"?

Anil Varanasi: I do ask this question a lot is how is it that every problem in the world ends up being able to solve exactly 90 days for every problem? I haven't gotten a great answer. But anytime I ask that question, people then give me a much better thing.

Brett: Do you end up inspecting the timelines a lot and pushing, or no?

Anil Varanasi: No. I think with smart people, if you ask this question, you say, how is it that every problem, that could be a sales problem, that could be an engineering problem, it could be an operations problem, that could be a design problem, they can be exactly solved in 90 days, but it can't be that everything is solved in this exact thing. It happens to be on a Georgian calendar that happens to be exactly quarterly that has to correlate with how stock market does it. It can't be that that's the right formula. We don't have a universal truth everywhere else, but we do in this one thing? I just don't think I believe it.

Brett: One of the last things I wanted to ask you, I think that one of the dynamics in Silicon Valley where there's so many founders that start new businesses is you sort of watch the founder in year seven or nine and 11. In many cases, they're not particularly happy. The company's working. They're at 100 million or 200 or 300 million. They have 800 employees, but it's almost like they're begrudgingly running this company. And it feels on the other hand that this has the chance to be a real multi-decades pursuit for you where the goal is not to be done and sell the company. The goal is to figure out how to just run the company for as long as possible. Maybe you are living in misery, but it doesn't feel that way.

Anil Varanasi: I'm not at all. I have so much fun.

Brett: And you work at an incredibly high-intensity level. What did you figure out that makes it feel more like an infinite game for you than many other people that are in the first big chapter of building a company?

Anil Varanasi: I have talked to other companies that have this hardware-software operations component. And I do think you're right. There's something there that these companies' founders tend to be a bit happier than others. Because what you end up not liking about your own business sometimes is the way you do software or something else or some ... You can always find something exciting about a business when the scope is much larger. And a friend of mine, his parents had this 50th marriage anniversary, and they were having this little party. And I went, and I asked them. I was like, "What's the secret? How do you get married and stay married for 50 years?" She sort of mentioned something that's interesting. My friend's mom is like, "Neither of us wanted out at the exact same time from the marriage." I think there's something there for a company as well. As long as you can find really exciting problems to solve ... I think this is why in Silicon Valley for so much of the software businesses it's been true than the generation prior is if you look at all these SaaS and software founders, they're much more prolific investors than a generation before them. Way more prolific. I think they're trying to find some exciting things to be part of and do. And they try to do other things and bring it and investments and things like that. But I think if you have a business that constantly has something new that you can learn, I think that keeps it very exciting. I invariably in a given week learn about an entirely new topic at Meter that I had no idea about a week prior. I think that's one. Second, Sunil and I both have this tendency to not want out of anything at the exact same time. Life is sinusoidal, no doubt, and businesses particularly are sinusoidal, but there's never been a case I think that both of us have been down. The partner you have that you're doing this with I think is one of the greatest blessings of my life to be able to do it. And I think beyond that, I actually don't know the answer. I do really just love understanding how something works, and I think I have the best job in the world. I get to build hardware. I get to build software. I get to do physical world operations, and it just really keeps a lot of fun for me. But I suspect it has to do with the fact that it's the type of business I'm in but also who I'm doing it with.

Brett: It also sounds like if you weren't doing this, and the company vanished, you would go start another company. And why would you do that-

Anil Varanasi: And with Sunil.

Brett: And why would you do that? Because that's what you have.

Anil Varanasi: Yes. And I would do it with Sunil. This is year 19 of me and him working together.

Brett: I just want to wrap up where we always do which is sort of on a very similar vein which is when you think about all the people that you spent time with and have been involved in the business or that you've gotten advice from or studied, who has taught you the most? And what's the thing that they taught you? And maybe I'd say who's had that disproportionate impact? And what is the thing that they instilled in you?

Anil Varanasi: I ended up going to college when I was much younger than other people. I think I was 16 or 16 and a half. And I ended up going to this school called George Mason out east.

Brett: Tyler Cowen's.

Anil Varanasi: Cowen, Kaplan, Tabora, Kling, and others. And I don't know if it's one particular idea, but what was really interesting about the GMU econ department as a whole and how it's developed over the last two decades since even I started there is it is possible to actually understand the world if you just take a little bit of time. The world isn't that some sort of black box. And yes, they're the econ department, but they're sort of understanding everything in the world. And seeing people like that, that they were econ professors by title, but it was everything from music to film to economics, obviously, to businesses, to technology, to everything. And if you just take a little bit of time, you can actually just understand how the world works or at least attempt to. I think that had a profound impact on me because you sort of assume that you're just living in somebody else's world, I think when you're younger. Especially by being a kid, that's how it is. You're told when to wake up. You're told what to eat. You're told when to go to school. You're told when to do homework. Et cetera. Et cetera. And that gets instilled in all of us and particularly post the Dewey Decimal type education system where you're given a task to do. But expanding that horizon a little bit and saying it is actually possible to at least attempt to understand how something works, I think I just didn't fully grok how much impact that's had until in the last decade. There's nothing that I look at and say that's hard to understand. I think you can understand it. It just depends on are you willing to put in a little bit of time into it?

Brett: Great place to end.

Anil Varanasi: Awesome.

Brett: Thank you for spending all the time.

Anil Varanasi: Thank you.