Michelle Zatlyn, the co-founder of web-performance and security company Cloudflare, shared her tips for receiving funding for your crazy ideas at the virtual Disrupt event at TechCrunch last week.
Many believe that their start-up should be clear-cut and simple. Cloudflare’s Michelle Zatlyn discusses the way their go big or go home approach to building their Business succeeded, and how they got their success, especially in finding investors and funding.
It is extremely difficult for a start-up to find sufficient funding and resources, but the launch of Cloudflare 10 years ago demonstrates that investors can think an idea is crazy and yet they will still receive funding.
Cloudflare began 10 years ago with a free product that had a paid tier that could build on that original idea of providing security and speed to services and products. Their business has now grown to nearly a $12 billion market cap.
At Disrupt, Michelle Zatlyn discussed the way Cloudflare’s business was conducted when they were a start-up and what they did to gain investors.
Co-founder Zatlyn expresses that “sometimes I think back and I think, what were we thinking? But really, I hope – as other entrepreneurs listen – that you do think, ‘hey, how can I be more bold?’ Because actually, that’s where a lot of greatness comes from.”
Zatlyn understands that no everyone can be ready for the crazy ideas – especially those in which sell products that completely democratise a service once only available by internet giants. The world was not ready for Cloudflare when she and her team took their idea to the Bay Area in 2009.
“A lot of eyes glazed over.”
“They kind of brushed us aside because we really had a big vision – we certainly did not lack in vision. So that was a lot of the conversations, but there were some conversations where people really leaned in and they’re like: ‘Oh, wow, tell me more.’ And maybe they knew a lot about cybersecurity or maybe they were really worried about the democratisation of the internet and going beyond guarded walls. And those people really got excited. And that’s how we found kind of our initial investors or initial teammates.”
It wasn’t easy, and it took time, but eventually, Cloudflare developed a team and found investors. “It was bold then and not everyone thought it was a good idea. Some people looked at us like we’re crazy, but I’d like to say that when people look at you like you’re crazy, you’re probably onto something big.”
Cloudflare was intended as a security product that required the CDN to run, despite a lot of customers believing that they were a CDN when they first launched. Sometimes the team at Cloudflare joke that they were an “Accidental CDN” due to this. Cloudflare had a very specific market that they believed was something everyone could relate to – web spammers. At that point, web spammers were a focus of the industry.
“We literally had a slide in our pitch deck that had quotes from real-life IT administrators from some medium-sized businesses, small businesses and developers, explaining in their own words – and their very hard-hitting words – how much they despise like these cyber threats that were online…Even if you knew nothing about cybersecurity or global performance, you could all understand wow, there’s something here, right?’”
And this was extremely true – Cloudflare has helped fill the gap where there was no protection against threats.
Zatlyn notes that it was really difficult to get customers when they first opened.
Not many people understood the intentions behind the company and what they were actually doing. However, the company used this as feedback to improve and reinvent their business and how they explained themselves.
“Early on as an entrepreneur, you got to try a lot of things. And you don’t need to know every single corner of your business, but you need to really have a high rate of learning. Actually, that’s an entrepreneur’s best friend. How fast can you learn, how fast can you take the feedback and iterate on it?”