Jon Walker is Chief Technologist and Founder of AppFolio, an industry leader in cloud-based property management software. Prior to AppFolio, Jon led engineering development and quality assurance teams as the CTO of Versora (now part of Kaseya) and for Miramar Systems. The software developed under his direction has since been deployed to over 20 million computers worldwide. In addition to being a CTO, Jon teaches computer science courses as an adjunct professor at Westmont College and the University of California at Santa Barbara.
JW We started in 2006 basically.
LR I remember when we had just kind of gotten going, we went out to lunch. This was what, 10, 12 years ago, something like that?
We do a lot of information sharing. In fact when we went public, that was one of the big discussions we had, is how are we gonna continue to share all of the information that we want to share with employees so that they can make great decisions for the business. We've done a lot of that. We have a monthly company meeting where we share a lot of key information about the business. We've always been very transparent internally. I think that makes it attractive. Entrepreneurially, we do things like, I love to tell the story, like in engineering, we still today work in teams of about six or seven people.LR With, you were saying a couple hundred engineers?
JW I think for engineers, they really want to work with other smart people that are gonna challenge them and give them new ideas, and then also, they want to have impact in what they do.
I'm still involved in the technology, but it's a different role. I think one thing that I've been very comfortable with over the years is kind of just always obsoleting myself out and getting someone else in there. I can tell you, we've had a lot of success with that where we've given people opportunity to have a new role. Maybe even if they didn't have the experience and they could just grow into it, and they brought new ideas and new thoughts to it, and it was very, very successful. That's what I'd encourage someone to do, even with five people, is be thinking, "How do I get someone else to take over some of the stuff that I'm doing, that will be a real challenge for them and where they'll bring new thinking to that."LR Totally. Entrepreneurs, we're also worried about things falling apart and our employees not doing things the way we would, or as good as we can. How do you get comfortable ... You've now let go of job after job, after job, how do you get comfortable with taking your hands off the reigns?
I have to fight that, I think, a little bit, myself, just to make sure that I'm doing the right thing there, but I've had so much repeated success with it, and I can tell you, when I kind of gave up ... My title was never VP of engineering, but when I stopped being in the role of VP of engineering, the VP of engineering that came along after me was 100 times better than I would ever be, so I've had that experience over and over again and that always reinforces it. I think I would take a risk and try that with someone. Give them a challenge.LR Yeah, and then to learn over time that you can get people that are better than you at role after role, after role.
I'm a part of one of those groups. It's a really interesting book, Radical Candor by Kim Scott. It basically talks about how to challenge people very directly, but in a way that you care for them. It's really about how to be a really good manager, but also here and at Pfizer and all these things. I'm only a little bit into the book. The first half of the book tells about how you do this and why you do this, and the second half is a lot of specific how, and I haven't gotten to that part yet.LR So that's the cutting edge?
If you're an entrepreneur and you say, "You know what, there's five more things I know that we can try to go that way," keep going. If it's like, you're really stretching like, "I'm hoping this works out and it's gonna take a real long shot to make this work," then you know something's not going quite the right way.LR Yeah, hope is a good sign.
LR It would have been nice to avoid that. What could you have seen, do you think, in advance that would've ... How do you avoid that?
JM You know I'm a big believer in this idea of market validation. Market validation, the real simple way to explain it is, the way most startups happens is, someone comes up with an idea, and this works for kind of any business, someone comes up with an idea, you start to build a product. You go, "Oh, you know what, we're gonna have to start selling this thing soon," so you get some marketing people, sales people, then you get to a later phase, like maybe a beta, and you're like, "We're really gonna have to sell this thing." For technology companies, a lot of times, you hire a PR firm there. You hire a couple marketing people, more marketing people, more sales people. Then you launch the product, and that's when you learn everything. Sometimes, unfortunately you learn that no one wanted that product. That's why a lot of startups, they run out of money at that point. They have a product no one wants and the startup fails or kind of limps along forever.
JW The idea of market validation is, instead of design, build, sell, you try to move the selling up front. Obviously it's tricky and a little subtle because now you're selling something you don't have. There's definitely some subtleties to that, but I think that that was something where we had done that with this product that I was talking about, and we didn't listen to some of the things we heard.
JW For example, one of the problems with the product was, individual landlords, it was a screening and payment service for individual landlords. Individual landlords do those kind of activities about once every year, once every two years, depending on, if they've got one or two units, people aren't moving out that often.
LR Right, right.
JW By the time they go to do it again, they've forgotten your product.
LR Forgotten all about it, yeah, yeah.
JW So you have to sell to them over and over and over and over again, which is an expensive proposition. We heard that in market validation and kind of had some thoughts of, oh well maybe we can convert them to ... They're gonna grow and they're gonna convert into our customers of our property management product.
LR Oh, right.
JW I think we heard that, but we still kind of, it was a little wishful thinking thing. I'm a big believer in the idea of market validation, and it doesn't guarantee you success. It basically helps you get a lot of the bad news out up front.
LR Uh-huh (affirmative).
JW Before we started, we had 10 customers who said, "You build that, I'll buy it." We heard a lot of things. One of the things we heard was, there's a lot of pain in the industry. One of the very early customers we talked to said, "Here I'm gonna send you a document." We said, "What do you think of your existing solution?" They said, "Oh, I'm gonna send you a document." We're like, "Okay." They sent over the document, and they were like, "That's the list of 300 things that are wrong with my existing software."
LR Holy smokes.
JW Yeah, that's what we were ... We were like, "Wow, I've never made a list of 300 of anything." I mean, you really are in pain. Another thing we heard, for example, is after a while we were starting to nail the problems. We'd hear, "Oh yeah, those are my problems. Oh that would be so great if you delivered that," and then on our not to do list, we actually had accounting. One of the reasons was, we thought, oh, there's Quick Books out there and accounting's hard. I don't know that we understand it super well.
That's the key. I always explain that to people. I have a little analogy I use where I explain that to people where I say ... Most entrepreneurs have had this experience. You know? I may come to you and I may say, "Landon, we're really good friends, I'm super excited. I'm gonna build a teleporter. I've talked to a professor at UCSB and the technology is there. They're already moving mice back and forth, and I know we can do it with people. I'm really passionate about this idea." If you're my friend and not an investor or something, your feedback, what's it gonna be if I'm really passionate and excited?LR Awesome. Do it man.
Or you might go, "You know what, oh, you want me to pay $500 for it? Great. I spent $1,000 on my current teleporter," or, "No. I wouldn't pay more than $250 for a teleporter."LR Right.