How WP Engine CEO Jason Cohen grew WP Engine to $400M revenue and 120K customers 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 we got to 100 million in a little less than 7 years and we hired a CEO and the second best decision I've ever [Music] made hey folks if we haven't met yet my name is Nathan ladka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling 50 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer all right let's jump into the interview all right my name is Jason I started WP engine 14 years ago we have hundreds of millions in ARR I'm going to share with you some lessons that I learned along the way in uh in doing that you probably know me online though as a smart bear so hence that so we got to 1 million AR R in our first 18 months which is pretty good I thought maybe already the company could just grow like that but then in 2012 our growth rate shot up again we went from 1 million to 5 million in one year and as you can see it never ended we got to 100 million in something like a little less than seven years and uh this little flat part at the beginning that was that previous chart right just to give you a sense of scale of what happens and so I want to take 20 minutes and talk about stuff that I learned from this part where the company is growing faster than people can grow so the first thing is that you know it's going to be different but it it's dramatically more different I think than uh you expect if you had never done this before because before product Market fit you're exploring you're trying to figure out yeah everyone here knows this who's the customer and how do we get there and what's our unique thing and blah blah blah so this is all experimentation and unknown stuff so there's all these techniques you should use like trying crap and pivoting fast and nonsense like that but after you have product Market fit you know those things and so the things that you do dramatically change and so just saying things like we'll keep experimenting is not how you scale something that's already working so for example you're not just building stuff you're hiring and managing humans quite different from finding a marketing channel or building software you have something to lose like there's growth there's customers so defending that becomes a a whole uh thing to do that you didn't you not only shouldn't didn't do before but you shouldn't have there was nothing to nothing to uh to do um you built a kind of a crappy product because of course so now it's time to fix it which you you again you didn't do before nor should you have but now it's time that's different again different mindset before if you had a bug that affected 1% of your customers that might be zero or one people so whatever but now you have a bug that affects 1% of the customers you get 30 support tickets in a day and now everyone's behind and you get 30 negative tweets and that's really bad so that means the rare things which are now common you have to do something about and it's hard to detect and deal with rare things just in general totally different processes and mindset right also if you're let's say doubling in a year what's what does that mean in terms of how many people you need let's say in support and how long does it take you to find and interview and hire and get people up to speed in support especially since you have no processes and docum ation because you're new so what does that mean I don't know it'll take like 6 n months okay so you need to know how many people you need in six or 9 months that means your business has to be more predictable another new thing that didn't exist before so there's this stupid phrase It's not stupid it's a tired phrase what got you here you know right uh in this case it really is apt the stuff the activity that got you here won't get you there because there's these other types of behavior which are now correct and it's a lot of stuff and I guess the point I really want to make is that this changes who you are and what you are even proud of cuz you were proud of that you experiment and did it you're and you're like that's why we're different that's why we're better and big companies are stupid and we're smart and here you are having to change that that is the difficult not only from a skill set point of view but from an emotional point of view that is difficult and I think we don't appreciate how hard that is enough so that's the first thing this this fundamental difference okay another obvious thing that happens with scales now there's a bunch of people we all know that's going to be hard there's no way that's good so fun question I have a lot of people so we go faster you already know well okay let's say I have 30 people and some competitor has three people so we should go 10 times faster we have 10 times as many Engineers we may have hundred times as many customers we can learn more about customers that part's true right we all know this is not true uh we'll go faster but not like that much faster so there's no Silver Bullet to fix this as you probably know but there are things to do to be more effective in leveraging the scale which now should be an advantage of yours that you have extra people in time should be but of course it gets it gets pulled down so what can we do to take more advantage of that so observation is when you add people you tend to add more stuff you can do just heard that in the last talk at first you're just making features and trying to sell it of course but then you start hiring people and maybe you expand the market or do other fun things more people more stuff makes sense maybe creative stuff like micro projects you created a YouTube channel hooray the YouTube is fun um everyone goes up Market to the Enterprise right that's what we all do because they have money don't they they do anyway so this is what people do and what I'm going to argue is that this is not what you should do that you should instead still have only a couple of things that you do and focus everybody all the scale that you have on just a few things instead of this and the reason is that if you cut up everybody into all these different initi IES then each initiative is not at scale doesn't have that many people doesn't have that many resources in terms of things like money and so isn't very good so you've taken what should have been this advantage of people and diluted it so if you have a YouTube channel and you have two people working on it and some little startup is good at YouTube and also has two people on it you're not better at them than at YouTube so that's not so good whereas if you put 10 people on that and lots of investment maybe you could dominate YouTube in your area that actually sounds pretty good so instead of splitting it up you want to not dilute your scale across a bunch of projects but still have just a few things that way you're using your leverage to win now of course this begs the question if I'm only going to do a few things what do I pick how do I pick just a few things since I have so many options here's what I actually do with teams at WP engine um and sometimes groups of teams at WP engine the first thing is we sit down we do this once a quarter and we say okay if we weren't encumbered by by problems challenges constraints how would we advance our strategy right now so like could be anything maybe there's a feature you know we all know would be great because customers talk about it we've invented it competitors don't have it we know it's good like it' be so strategic it's how we're going to win you guys so maybe it's that or you there could be this is just some ideas right there could be all kinds of things it's time to open a new sales Channel whatever would be the best way for you to win now this is obviously something where you can brainstorm lots of things and then come together on a few things right and it's it's good to get as many people in the room for that kind of brainstorming as possible cuz it means everyone's contributing to the answer which ultimately means they'll be more on board with the final answer okay I know objectives is a crappy word so pick a different one anyway so but then what's stopping us from doing that by the this is not Revelation right duh like you have goals and then what's that this is not like a but going through this I'm telling you is is is great so again there could be anything yeah we'd love to do that except our children rate is 5% per month people are just fleeing and not only is that bad from a financial point of view it means the customers don't want our crap...