How Stack Overflow CEO Prashanth Chandrasekar grew Stack Overflow to $125M revenue with a 660 person team in 2024.

quick context this was recorded March 28th and 29th so a couple weeks ago at my live event SAS open.com we had a thousand software CEOs there if you missed it we hope to see at the next one September 5th and 6th in New York City SAS open.com but for now let's jump into the recording Microsoft was customer number one yeah over 100 million in Revenue so far yes that is over 150 can't say that over 125 can you say um [Music] how many of you have used sack overflow all right awesome of those of you who have who even knew that they had a SAS product one person literally one person it's good be a long way to go meanwhile what percentage of Revenue is it now it's now about 60% of our company's revenues and the SAS product so for those of you who didn't raise your hand stack Overflow has a collection of sites that every developer you know goes to to figure out the problems that they're wrestling with Fair y question and answer other developers helping each other what is the the SAS product then yeah so I think you know our community which is about 100 million people that show up every day uh to our website uh come because we have about 60 million questions and answers on every possible technology topic so many of you who have used uh the platform over the past 15 years contributed to that or consumed content from that and it's become the most trusted destination for all things technology knowledge uh so that is I think a very very important foundation the SAS business very early on in 2018 late 2018 some very large companies like Microsoft came and said we love using stack Overflow but we just want to use it inside our company because the same mechanisms really we would love to have internally for PR proprietary information Etc so we want a private version of stack Overflow for our company to use so that really what in you know initiated the SAS business uh oddly in the Enterprise with one of the world's largest companies today Microsoft was customer number one uh and then we went from Enterprise down to where we are today which we've now got 15,000 customers uh leveraging stack or for team so employees of Microsoft get to ask questions of each other and they they are the only ones who get to see the questions and answers that is correct and how much should they pay for that they pay I I won't say specifically Microsoft but generally speaking it's it has multiple tiers so the Enterprise tier is anywhere it's close to about $18 $19 or so per seat per month so it's just like any other SAS software that you would establish so before we got started I walked around I met as many of you as possible to get a sense of what you're here for what I understand that you're here for is two things one is to meet people which uh you're going to get to do throughout and the second one is actual tips techniques that you can use to grow your SAS your company's Revenue before we do let's talk about um what revenue is now is this is this accurate what we see up on on the screen no it's a couple of years old uh so you know this is uh you know you folks uh you know you're you're good researchers and folks who actually like went and pulled it from any public information but we're you know we're growing pretty quickly I think in the context of our forgive me over 100 million in Revenue so far yes that over 150 can't say that over 125 can you say um wow that's backing me into a corner uh it's certainly over 100 million that's fair to say over 125 though right um maybe maybe yes yes right so if it's over oh yes if it's over 100 million what percentage comes from this new new SAS product so over 60% uh we have about probably close to now 70% of our companies's revenues are recurring and they were actually nonre they were not recurring revenues when I started in 2018 meaning advertising we would go to to these different sites there'd be an ad at the top that's where the revenue was coming from now it's subscription mostly correct it's from the SAS product the internal question and answer site that you developed partially from the uh AI stuff that we'll get to later yes that's correct yeah so the for the first 11 years the as Andrew mentioned we were almost entirely an ads business and a talent job listings business some of you may have consumed that product in the past uh and then in 2018 2019 uh the whole goal was to Pivot the company to focus on just on SAS and for various reasons let's talk about why what was the company going through that made you say hey we've got a successful business we got a shift there was a challenge what was it yeah I think you know the uh you know we've got iconic set of Founders Joel Joel SP and Jeff hatwood who built sa go an amazing uh platform but you know if you think about the audience the audience actually doesn't care about ads I mean nobody loves ads period but especially for a technical audience it's actually extremely annoying to have ads floating around plus we all have ad blocker of course so in that context I don't think it was ever thought as thought of as like this kind of you know Perpetual uh Revenue model in the future and it was extremely episodic depending on the economy you know people obviously cut down an ad spend when the economy is not doing that well and so on so I joined in 2019 and immediately you know the pandemic in early 2020 hit and then we saw that very directly you know we had Talent job listings people stopped hiring so why would you actually put job listings and then why would you actually advertise on the platform when you're ad spend and marketing budgets are the first things to go so that gave us kind of this moment of you know realization that maybe don't let this crisis pass uh and let's actually double down on what we came what I came here to do basically which is to convert and transform the company into a sasco and my fear was anytime you have a Content based site that makes money from advertising it's so easy for it to go to trash to up the page views to create ads that get more and more pushy and the combination of all that would have ruined things and so you said it's got to be SAS how did you figure out what the SAS product would be well I think it was primarily based on the user pull I think a lot of the customers like the the the Microsoft of the World when they came and said hey this is what we care about the early version of the product was literally a copy of of the public stack Overflow but obviously completely uh a private version of it and just sort of tested in the context of these big companies and then we said okay now actually we need to go build a proper SAS product and so let's actually go do all the things that is necessary to to accomplish that uh which all of you I'm sure uh know of so that's that was the that was that was the impetus it was straight from our users straight from company saying we love the platform thousands of people within companies use stack Co flow uh all your companies if you came from big companies use stack C flow every day so so uh it is it is sort of already present in people's workflow so the idea was why don't we actually exist in the context of the company's workflow yeah all right so we're going to talk about how you got your first customers and then we'll grow on from there but what I'm showing up on the screen is what you're charging is in the middle graph over there that's the price per seat and you still do have a very healthy advertising business I'm a podcaster been one for years I actually wrote a book on interviewing which na Nathan kept up here but you have podcast ads you have banner ads you have all kinds of ads throughout the network okay the very first customer you said was Microsoft where did you figure out how did you get the first customer well I think the the it was the the notion of them actually coming to us so I think it was completely a user pull a customer poll you can't underestimate the power they weren't coming to you and saying how do we spend money with you what were they saying the users basically said look we love to do this but the thing was that when people were posting content on public stack Overflow that started getting people's attention on you know what we actually want to make sure that that this content is not posted publicly with a regular basis they would say we want to ask questions but we can't have people outside of our organization give us the answer okay or or post it externally by accident as an example because you know if you're posting a piece of code from within Microsoft on public stack oldf flow because you want feedback Etc that would be I think obviously a problem here's my understanding from the conversation we had before we got started you looked at the people who are using the free version of the site you said what organizations are we seeing come up a lot let's go talk to them right mhm just put it in a spreadsheet or database in the context of like Post customer one and two I think at that point we started saying okay let's actually think about every possible customer that is using stack Overflow so we actually had that very specific list of the largest users company-wise and we go typically went into companies and we said you know you've got 2,000 users using stack cflow and by the way here are all the tags that they're using they're using python they they're looking up content on python...