How To Start A Dev Tools Company with Nicolas Dessaigne | Startup School

Nicolas Dessaigne, YC group partner and former Algolia CEO, defines dev tools as software that helps developers build products across the entire development lifecycle.

Dev Tools Cover Every Aspect of Development:

• Coding - Writing and editing code

• Testing - Validating functionality

• Debugging - Finding and fixing issues

• Documenting - Creating technical documentation

• Deploying - Publishing applications

• Running - Operating applications in production

The Diverse Dev Tools Landscape:

1. IDEs - VS Code for code editing
2. APIs - Stripe (payments), Twilio (communications), Algolia (search)
3. Libraries & Frameworks - React, Node.js, LangChain
4. Infrastructure - AWS, Vercel cloud services
5. Development Tools - Docker, Terraform, Datadog, GitHub

"A dev tool is software that is used by developers to help them build products. And that includes a lot of aspects. From coding, testing, debugging, documenting, deploying, running. It's all of the gamut of aspects of their job."

YC has supported hundreds of dev tools companies, with notable successes including two public companies: GitLab and PagerDuty.

Timestamp: [0:09-2:08]

The fundamental requirement for dev tool success is having developers on the founding team. This isn't just a nice-to-have - it's essential for building products that truly serve the developer community.

Why Developer Founders Are Critical:

• You're building technical products for developers - deep understanding required

• Most YC dev tool founding teams are entirely composed of developers

• Daily user experience - developers use dev tools constantly in their work

Self-serving advantage - you're solving problems you personally experience

The Unique Dev Tools Advantage:

1. Built-in market research - You experience the problems firsthand
2. Authentic user empathy - You understand developer pain points viscerally
3. Product validation - If it helps you, it likely helps other developers
4. Credibility with customers - Technical founders speak the language

"The great thing about dev tools is that developers are actually using dev tools every day. So when you're building a dev tool, you're basically helping yourself in your action of building a product."

This self-serving aspect creates a powerful feedback loop where improving your own development experience directly translates to customer value.

Timestamp: [2:13-2:42]

The LLM and AI revolution has fundamentally altered the dev tools landscape, making previously impossible ideas potentially viable while creating new categories of opportunities and challenges.

AI's Impact on Dev Tool Ideas:

• "Tar pit" ideas of yesterday may now be achievable with LLMs

• Traditional "bad" ideas could become successful with AI assistance

• Difficult to predict what will work in this new paradigm

• Exciting opportunities to help companies building with LLMs

The Challenge of Obvious AI Ideas:

1. LLM Observability seems like an obvious great idea
2. Everyone thinks the same thing - creates crowded markets
3. Dozens to hundreds of companies pursuing identical solutions
4. Clear differentiation required to succeed in obvious spaces

"With the advent of LLMs and AI in general, it's actually very difficult to know for sure today what's a good or bad idea. The bad ideas, the tar pit ideas of yesterday, could actually be possible to make successful now, thanks to LLMs."

Key Question for AI Dev Tools: If you're entering an obvious AI space like observability, you need a clear answer: How will you differentiate and win against numerous well-funded competitors?

Timestamp: [2:48-5:54]

Certain categories of dev tool ideas naturally attract many founders because they address universal developer frustrations, but this obviousness creates oversaturated markets.

High-Noise Idea Categories:

• Documentation tools - Everyone hates writing docs

• QA and testing tools - Universal developer pain point

• Build-time development tools - Daily friction points for developers

Why These Ideas Create Noise:

1. Universal pain points - Every developer experiences these problems
2. Obvious solutions - Many people think of the same fixes
3. Low barrier to entry - Relatively easy to start building
4. Crowded marketplace - Hundreds of similar solutions exist

The Critical Question:

"Do you really want to build the next, yet the next QA tool for other developers? Hmm, I don't know."

Better Approach - Build vs. Runtime Distinction:

Build-time tools (docs, QA, testing) = "Nice to have"

Runtime tools (APIs, infrastructure) = "Must have"

Runtime criticality creates stronger business fundamentals

Usage alignment - customer growth = increased product usage

Timestamp: [3:06-3:34]

The distinction between build-time and runtime dev tools reveals fundamental differences in business viability and customer dependency.

Build-Time Tools Characteristics:

Used during software development process

Generally "nice to have" - you could build without them

Examples: documentation, QA, testing tools

Lower criticality for customer operations

Runtime Tools Characteristics:

Mission-critical for running applications

"Must have" - failure breaks customer's business

Examples: APIs, databases, infrastructure services

Higher customer dependency and stickiness

Why Runtime Ideas Create Better Businesses:

1. Criticality Factor: • If runtime tool fails, customer's product stops working • Creates strong customer dependency and urgency

2. Aligned Growth Incentives: • As customers grow, they use more of your product • Revenue scales naturally with customer success • Win-win business model

The Stripe Example:

"Think about Stripe, for example. If their customers sell more product, they make more money. Everyone is happy. Much better idea."

This alignment creates sustainable, scalable businesses where customer success directly drives vendor success.

Timestamp: [3:34-4:40]

Libraries and frameworks represent a unique challenge in dev tools - they provide immense value but face significant monetization obstacles due to open source expectations.

The Open Source Reality:

• Market expectation - libraries and frameworks are typically open source

• Developer adoption requirement - closed source frameworks face resistance

• Monetization challenge - direct revenue from code is extremely difficult

The Pandas Problem: Libraries like Pandas demonstrate the monetization challenge:

• Massive adoption and ecosystem value

• Critical infrastructure for millions of developers

• Nearly impossible to generate direct revenue from the library itself

The Viable Monetization Strategy:

Hosting Services Model - Successfully demonstrated by:

• Next.js + Vercel - Open source framework + commercial hosting platform

• React + Vercel/Netlify - Framework ecosystem + deployment services

• Framework as marketing - Open source drives adoption of paid services

"Very difficult to make money out of that. The one way you can monetize these ideas is by offering a hosting service. Think about Next.js and Vercel, for example."

Key Takeaway: If you're building libraries/frameworks, plan your hosting or service layer from the beginning - the framework itself is likely your marketing, not your business model.

Timestamp: [4:40-5:05]

Three critical mistakes can derail dev tool startups before they gain momentum, each stemming from perfectionist tendencies or misplaced priorities.

Mistake #1: Waiting for the Perfect Idea • The trap - Endless analysis without action • The reality - Perfect ideas don't exist • The solution - Start with imperfect ideas and iterate • LLM example - Even crowded observability space worth starting in

Mistake #2: Sticking with Wrong Ideas Too Long • The shocking statistic - 50% of YC companies pivot from first idea • Applies to dev tools - Technical founders also need to pivot • The balance - Know when to persevere vs. when to change direction • Learning mindset - Treat initial ideas as experiments

Mistake #3: Believing You Need a Business Co-Founder • The insecurity - "We don't know how to sell" • The data - 74% of YC dev tool companies had only tech co-founders • The contrast - Only 45% of other company types are all-tech teams • The reality - Selling to developers is easier than you think

"Let me go back to these LLM observability ideas. I would actually encourage you, if that's the idea you have, just start. That's okay. Even if you don't differentiate yourself right away, that's okay. You learn as you go and eventually you'll be able to pull it off or you'll change your idea."

The Core Lesson: Action beats analysis - start building and learning rather than perfecting plans.

Timestamp: [5:59-7:13]

After addressing team composition and idea validation, the path forward for dev tool startups is elegantly simple and focuses on the two most essential activities.

The Two-Step Success Formula:

1. Build your product • Create prototypes and iterate quickly • Focus on solving real problems • Don't over-engineer early versions

2. Talk with users • Get feedback on what you're building • Understand real pain points • Validate market demand

Why This Formula Works: • Eliminates complexity - cuts through analysis paralysis • Creates feedback loops - building gives you something to show users • Drives iteration - user feedback improves what you build • Focuses energy - prevents distraction on secondary activities

What This Formula Excludes: • Extensive market research • Perfect business plans • Complex competitive analysis • Premature scaling decisions

"Well, there is only two things you have to do. Build and talk with users."

The Power of Simplicity: This approach acknowledges that everything else - marketing, fundraising, hiring - becomes easier once you have a product that users actually want and are willing to use.

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• Dev tools encompass the entire development lifecycle from coding to deployment and operations
• Developer founders are essential - 74% of successful YC dev tools had only technical co-founders vs 45% for other companies
• AI/LLMs have changed the game - previously impossible "tar pit" ideas may now be viable
• Runtime tools (must-have) create better businesses than build-time tools (nice-to-have) due to criticality
• Libraries/frameworks are typically open source - monetize through hosting services like Next.js + Vercel
• Three deadly mistakes: waiting for perfect ideas, sticking with wrong ideas too long, thinking you need business co-founders
• 50% of YC companies pivot from their first idea - be prepared to change direction
• Success formula is simple: build your product and talk with users - everything else is secondary

Timestamp: [0:09-7:19]

Companies/Products:

• Algolia - Search API for developers, Nicolas's company
• Y Combinator - Startup accelerator supporting dev tools companies
• GitLab - Open source GitHub alternative, YC public company
• PagerDuty - Alerting system used by Fortune 500 companies
• Stripe - Payment processing API
• Twilio - Communications API
• Docker - Containerization platform
• Heroku - Cloud platform service
• Supabase - Open source Firebase alternative
• Segment - Customer data platform
• Postman - API development tool
• Apollo - GraphQL platform
• Airbyte - Data integration platform
• VS Code - Popular code editor
• React - JavaScript library for building user interfaces
• Node.js - JavaScript runtime
• LangChain - Framework for developing LLM applications
• AWS - Amazon Web Services cloud platform
• Vercel - Frontend deployment platform
• Terraform - Infrastructure as code tool
• Datadog - Monitoring and analytics platform
• GitHub - Code hosting platform
• Next.js - React framework
• Pandas - Python data manipulation library

Concepts:

• Build time vs Runtime tools - Distinction between development-phase and production-phase tools
• LLM Observability - Monitoring and evaluation tools for large language models
• Dev Tools - Software used by developers to build products
• API - Application Programming Interface
• IDE - Integrated Development Environment

Timestamp: [0:09-7:19]

There's no prescribed sequence for starting your dev tools journey - both approaches offer unique advantages and can lead to success.

Option 1: Start with User Conversations • Validate your initial idea before investing time in building • Understand real problems developers are facing • Get market feedback on potential solutions • Refine your direction based on user insights

Option 2: Start with Building a Prototype • Create something tangible to show users • Make feedback sessions more productive with concrete demonstrations • Test technical feasibility of your approach • Give users something to react to rather than abstract concepts

The Key Insight: Both paths are valid - choose what feels more natural to your team and situation. The important thing is moving quickly between both activities in an iterative cycle.

"There is no specific order. You can actually start by talking with users because they are going to help you figure out if your initial idea is good. Or you can start by building a prototype so you can get easier feedback from users."

Best Practice: Regardless of starting point, plan to alternate rapidly between building and user conversations.

Timestamp: [7:24-7:36]

The biggest trap for technical founders is over-engineering initial prototypes. Your perfectionist instincts - while valuable in production - can kill early-stage momentum.

The Over-Engineering Trap: • Experienced engineers naturally want robust, scalable code • Pride in code quality conflicts with speed requirements • Perfectionist tendencies slow down iteration cycles • Time investment in code you'll likely throw away

The 90/10 Rule:

1. 90% of early code will be thrown away
2. 10% will prove valuable and worth keeping
3. Goal: Identify the valuable 10% as fast as possible
4. Then refactor only the proven valuable parts

Speed Over Quality Priorities: • Iterate as fast as possible - speed trumps elegance • Learn what's valuable before investing in quality • Avoid wasting time on features nobody wants • Refactor later when you know what matters

"Rule of thumb, I would assume that you'll throw away 90% of all the code you write. So your goal at that stage is just to identify the 10% of what you are building that's actually valuable as fast as possible."

Mindset Shift: Think of early code as learning experiments, not production systems.

Timestamp: [7:36-8:25]

Many founders delay user feedback until their product feels "ready," but this perfectionist approach costs valuable time and learning opportunities.

Show Prototypes Early Because: • Users provide meaningful feedback on incomplete products • Early feedback guides development in right direction • Saves time by avoiding wrong directions • Builds relationships with potential customers from start

Don't Wait For: • Perfect user interface • Complete feature set • Bug-free experience • Polished documentation

What Users Can Evaluate in Prototypes:

1. Core value proposition - Does this solve a real problem?
2. Workflow fit - How does this integrate into their process?
3. Priority assessment - Which features matter most?
4. Usability patterns - What's confusing or intuitive?

"It's completely okay to show them a prototype. Please don't wait to have a perfect product. Just show them a prototype and start gathering feedback as early as you can."

The Path Forward: Early prototype feedback naturally evolves into MVP development with real user guidance.

Timestamp: [8:25-8:39]

The "Viable" in Minimal Viable Product is the most critical component - your MVP must deliver genuine value, not just demonstrate features.

The Viability Principle: • Must provide real value to actual customers • Better to be 10x better at one small thing • Than mediocre at many things • Niche focus is acceptable - even preferable

Why Niche Focus Works:

1. Easier to achieve 10x improvement in narrow scope
2. Passionate customers become advocates
3. Clear differentiation from competitors
4. Foundation for expansion once proven

The Growth Strategy: • Start with customers who love your focused solution • Expand from there with proven foundation • Much easier than trying to please everyone from start

Success Metrics for Viable MVP: • Customers actively use the product • Users recommend it to others • People willing to pay for the solution • Genuine enthusiasm from target audience

"It's much better to be 10x better on a very tiny thing for someone who cares about it. Working for a niche is completely okay. Once you have real customers who love your product, it will be very easy to expand from there."

Timestamp: [8:39-9:04]

Algolia's origin story perfectly demonstrates how minimal but superior solutions can attract paying customers, even with extremely basic demonstrations.

Algolia's Evolution: • Today: Comprehensive, full-featured search engine platform • At launch: "Just a glorified autocomplete" - very minimal functionality • Key difference: Dramatically better than existing alternatives

The Minimal First Demo:

1. No API clients - Command line interface only
2. No admin UI - Basic webpage for search display
3. Core functionality: Index content via command line
4. Simple output: Basic search results page

Why It Worked: • 10x better performance than available alternatives • Solved real pain point for developers • Clear value demonstration despite minimal interface • Passionate early adopters cared about the improvement

The $2,000 Contract: Despite the basic demo setup, this minimal solution was compelling enough to close a significant monthly contract.

"Actually, I still remember our first customer, that first meeting, when I did demo using a command line to indexed content. We didn't have any API client yet. We didn't have any admin UI yet, just a command line and then a very simple webpage to show the search. That was enough to close a $2,000 a month contract."

Key Lesson: Customers pay for value and results, not polished interfaces.

Timestamp: [9:04-9:54]

Many technical founders fear sales conversations, but building dev tools provides unique advantages that make user interactions more natural and effective.

Common Developer Fears: • Introversion concerns - Don't like speaking with strangers • Sales anxiety - Uncomfortable with "selling" • Rejection sensitivity - Fear of negative feedback • Imposter syndrome - Feeling unqualified to lead conversations

Your Unique Developer Advantages:

1. You know your audience - They're developers like you
2. You ARE the audience - Personal experience with problems
3. You speak their language - Technical credibility and terminology
4. Unique qualification - Deep understanding of developer challenges

Why It's Actually Easier: • Peer-to-peer conversations rather than vendor-to-customer pitches • Technical discussions feel natural to developers • Shared experiences create immediate rapport • Problem-focused rather than sales-focused interactions

Conversation Advantages: • Authentic empathy for their challenges • Technical credibility in proposed solutions • Real understanding of workflow implications • Natural problem-solving approach

"You may not realize, but as you are building a dev tool, you have a huge advantage. You know your audience. You are the audience, you are a developer yourself, you speak the language of your customers, you are uniquely qualified to understand them."

Timestamp: [9:59-10:24]

Delaying user conversations until your product feels "ready" is a costly mistake that prevents crucial early learning about market viability.

What You Need to Learn ASAP: • Is this a real problem? - Do people actually care about solving it? • Will people pay for it? - Is there genuine willingness to spend money? • How urgent is the need? - Does this solve a critical vs. nice-to-have problem? • What's the real workflow? - How would this integrate into daily work?

Costs of Waiting:

1. Time investment in wrong direction
2. Resource waste on unwanted features
3. Opportunity cost of better alternatives
4. Delayed market validation and course correction

Early Learning Benefits: • Avoid building wrong thing - Save months of development • Understand real priorities - Focus on what matters • Validate payment willingness - Confirm business viability • Build relationships - Create customer pipeline

The Urgency Principle: Every day you wait for "readiness" is a day you could be learning critical information about your market and refining your approach.

"Please don't wait for the product to be ready. You want to learn ASAP right away if you are solving a real problem that people will be ready to pay for."

Action Item: Start conversations with your first prototype, however basic.

Timestamp: [10:24-10:38]

Finding your first users requires a two-pronged approach combining direct outreach and strategic launches to build awareness and gather feedback.

The Two-Channel Strategy:

1. Outreach Approach: • Direct contact with potential users • Personal relationship building • Targeted conversations with relevant developers • Network expansion through referrals

2. Launch Approach: • Public announcements to broader audiences • Community engagement in developer spaces • Content sharing about what you're building • Feedback collection from wider groups

Why Both Channels Matter: • Outreach provides deep, personal relationships • Launches create broader awareness and validation • Different user types respond to different approaches • Multiple touchpoints increase overall reach

The Bottom-Up Reality Check: Many founders envision organic discovery and viral adoption, but there's a harsh truth to face first.

"Dev tool co founders often plan to have a bottom up adoption model where individual developers are going to come inbound, try the product, and convert. Or maybe become their champions at bigger companies. Well, I have some bad news for you. Nobody knows you yet."

The Bridge Strategy: Use outreach and launches to build the awareness that enables bottom-up adoption.

Timestamp: [10:38-11:01]

Effective outreach requires strategy and personalization, not spray-and-pray tactics that alienate the developer community.

Smart Outreach Strategy:

1. Start with Your Network: • Previous colleagues - People who know your work • Classmates - Shared educational background • Professional contacts - Industry connections • Warm introductions - Highest response rates

2. Expand Systematically: • Friends of friends - Second-degree connections • LinkedIn targeting - Platform for professional outreach • Community participation - Developer forums and groups • Conference connections - Industry event networking

3. Personalization Is Critical: • Don't copy marketer templates - Developers hate generic messages • Research your recipients - Understand their background • Reference specific work - Show genuine interest • Ask targeted questions - Demonstrate thoughtfulness

The Developer Empathy Test: Before sending any message, ask yourself and test with others:

1. Would YOU be excited to open this message?
2. Would you read the entire email?
3. Would you be likely to respond positively?
4. Does it feel authentic rather than sales-y?

"Actually, you're developers, I'm sure you hate these messages. So don't do the same. Just ask yourself, would you be excited to open your message? Then ask your co founder, ask other developer friends, would they be excited to open your message, and then read your email, and then possibly act on it? Well, you simply iterate until they do."

Iteration Approach: Test your outreach with trusted contacts and refine until it resonates.

Timestamp: [11:08-11:54]

• No prescribed order for starting - choose building or user conversations based on your preference, then iterate between both
• Expect to throw away 90% of early code - focus on identifying the valuable 10% as quickly as possible
• Show prototypes early to users - don't wait for perfection before gathering feedback
• MVP viability means providing real value - better to be 10x better at one small thing than mediocre at many
• Algolia closed a $2K contract with just command line demo and basic webpage - customers pay for value, not polish
• Developer founders have unique advantages in user conversations - you are your target audience
• Can't wait for product readiness - need to learn ASAP if you're solving real, payable problems
• Bottom-up adoption requires initial push - nobody knows you yet, so outreach and launches are essential
• Smart outreach starts with your network and requires personalization - avoid generic marketer messages
• Test your outreach messages with developer friends until they'd be excited to receive them

Timestamp: [7:24-11:54]

Companies/Products:

• Algolia - Started as a "glorified autocomplete" and grew into a comprehensive search engine
• Nicolas Dessaigne - Co-Founder of Algolia (YC W14)

Concepts:

• MVP (Minimal Viable Product) - Emphasis on the "viable" aspect providing genuine customer value
• Bottom-up adoption model - Strategy where individual developers discover and champion products within organizations
• Prototype - Quick and dirty initial version focused on rapid iteration rather than code quality
• Outreach - Proactive method of finding and contacting potential users
• 10x better principle - Being significantly superior at one specific thing rather than broadly adequate

Platforms:

• LinkedIn - Professional networking platform for finding potential users and making connections

Timestamp: [7:24-11:54]

Hacker News stands out as the premier launch platform for dev tools, offering access to a community of intellectually curious people, many of whom are developers themselves. The Show HN section provides the perfect venue for gathering feedback and building awareness.

Key Launch Principles: • Explain plainly what's new and interesting - avoid marketing speak • Focus on the innovation, not selling the product • Engage with all comments, including negative ones • Stay classy when responding to critics - you're performing for other readers

"Please don't do marketing, don't try to sell your product. Just explain plainly and simply what's new and interesting in what you are building. That will be very engaging for the community and they'll share comments to you."

Success on Hacker News requires authenticity and genuine engagement with the developer community rather than traditional promotional tactics.

Timestamp: [12:00-12:56]

Two compelling success stories demonstrate Hacker News's power for dev tool validation and growth:

Segment's Experiment:

1. Launched their next idea as an experiment on Hacker News
2. The post exploded with hundreds of votes and extensive comments
3. The overwhelming response confirmed they were "onto something"
4. This validation became their core business idea

Ollama's Organic Growth:

1. Started as a simple comment on another Hacker News post
2. Generated initial interest from a few people
3. Launched their LLM deployment product shortly after
4. Achieved hundreds of upvotes, confirming market demand
5. Continued launching every few months with new features
6. Each launch fueled continued growth and community excitement

"They simply did an experiment by launching their next idea on Hacker News. And it blew up. They got hundreds of votes and so many comments that they knew they were onto something."

Both examples show how Hacker News can provide rapid market validation and ongoing momentum for dev tools.

Timestamp: [13:02-13:56]

Early-stage dev tools companies should embrace unscalable activities that accelerate learning and customer satisfaction. The goal is gathering invaluable feedback as quickly as possible, even if the methods aren't sustainable long-term.

Stripe's Unscalable Approach: • Personally visited small startup customers • Sat side-by-side with developers at their computers • Helped implement Stripe's product directly • Coded together with customers in real-time

Benefits of This Approach:

1. Guaranteed satisfaction - Customers succeed with hands-on help
2. Direct feedback - Real-time insights during implementation
3. Product improvement - Understanding actual usage patterns
4. Customer excitement - Personal attention creates advocates

"Early on, the Stripe team were going to their customers, small startups, and they helped them implement their own product. Sitting side by side in front of the computer, coding with them."

These unscalable activities provide learning opportunities that no amount of analytics or surveys can match.

Timestamp: [14:07-14:52]

Several common mistakes can derail early-stage dev tools companies, all stemming from losing focus on rapid iteration and learning:

Tech Stack Mistakes: • Choosing technology because it's cool or trendy • Selecting tools you want to learn rather than what you know • Prioritizing novelty over speed of development

Feedback and Building Mistakes: • Not talking with users early enough • Overbuilding before getting user feedback • Misunderstanding developer feedback patterns

Hiring Mistakes: • Bringing on team members too early • Hiring before proving product-market fit • Expanding team when direction isn't confirmed

"Please don't choose a tech stack because it's cool, because you want to learn it. No, you should took it because of your expertise with it so that you can iterate as fast as possible."

Developer Feedback Red Flags:

1. "You should build your product differently" - Focus on usage intent, not architecture advice
2. "I could build this in a week" - Let them try; you're solving the problem now

Timestamp: [14:52-16:06]

Open source has become a dominant go-to-market strategy for dev tools, with proven success across multiple billion-dollar companies. However, the decision depends on your specific product category and market positioning.

When Open Source Is Required: • Libraries and frameworks - Market expectation; developers won't adopt closed-source foundations • Data-sensitive products - Databases, CRM integrations, EHR systems need transparency • Security-critical tools - Enterprises require code inspection capabilities

When Open Source Is Optional (But Beneficial): • APIs and applications (like bug trackers) • Could still provide competitive differentiation • May accelerate adoption among developer audiences

Major Benefits of Open Source:

1. Developer preference - Your target audience naturally favors open tools
2. Community awareness - Organic marketing through developer networks
3. Differentiation positioning - "Open source version of X" strategy
4. Enterprise trust - Transparency shortens enterprise sales cycles

"Take the example of Medplum, for example, who is building a open source EHR. The fact that they are open source, I would argue, probably help them shorten their sales cycle with enterprises by a year or more."

Timestamp: [16:12-18:28]

While open source offers significant benefits, several challenges require careful consideration, particularly around community contributions and long-term sustainability.

Community Contribution Reality: • Quality concerns - Contributions may not meet your standards • Management overhead - Dealing with contributors takes significant time • Unreliable expectations - Don't count on community contributions for core features • Rare quality - Good contributions are actually uncommon

The Airbyte Example:

• Received many community-contributed connectors
• Demonstrates potential for community involvement
• Still requires careful quality management and contributor relationships

Critical Monetization Consideration: The biggest challenge isn't technical - it's business sustainability. You must have a clear path to monetization, because without revenue, you don't have a company.

"Most cases, you shouldn't count on them, because the quality of the contribution may not be up to your standards. And then you have to deal with the contributors. And that could be more actually more difficult than you think."

Key Takeaway: Open source is powerful for distribution and trust, but requires disciplined thinking about business model and community management from early stages.

Timestamp: [17:40-18:41]

• Hacker News Show HN is the premier launch platform for dev tools - focus on explaining what's interesting, not selling
• Launch multiple times with new features to maintain momentum and community engagement
• Do unscalable things early (like Stripe's hands-on customer implementation) to accelerate learning
• Choose your tech stack based on expertise, not coolness - speed of iteration trumps everything
• Don't hire anyone until you've proven you're working on the right idea
• Open source is required for libraries/frameworks and data-sensitive products, optional but beneficial for others
• Community contributions are rare and often low-quality - don't build your strategy around them
• Enterprise trust from open source can shorten sales cycles by a year or more

Timestamp: [12:00-18:41]

Companies/Products:

• Segment - Used Hacker News experiment to validate their core business idea
• Ollama - Started as a Hacker News comment, helps companies run LLMs locally
• Stripe - Did things that don't scale by coding side-by-side with early customers
• Databricks - Example of successful open source business model
• Elastic - Example of successful open source business model
• HashiCorp - Example of successful open source business model
• GitLab - Example of successful open source business model
• PostHog - Open source alternative to Amplitude
• Amplitude - Analytics platform (proprietary alternative to PostHog)
• Supabase - Open source alternative to Firebase
• Firebase - Google's backend platform
• Airbyte - Open source alternative to Fivetran, received community connectors
• Fivetran - Data integration platform
• Medplum - Open source EHR that benefits from trust in enterprise sales

Platforms:

• Hacker News - Community platform, best place to launch dev tools
• Show HN - Specific section of Hacker News for product launches

Concepts:

• Things that don't scale - Early-stage activities that provide learning but aren't sustainable
• Open source - Software development approach with transparent, accessible code
• Go-to-market (GTM) - Strategy for bringing products to market
• Business model - Framework for generating revenue
• EHR (Electronic Health Records) - Digital health record systems
• CRM - Customer Relationship Management systems

Timestamp: [12:00-18:47]

Open source dev tools must eventually generate revenue to survive as businesses. Three primary monetization approaches have proven successful, each with distinct advantages and challenges.

1. Hosting/Cloud Offering: • Free self-hosted open source version available • Paid hosted service - customers pay to avoid maintenance • Additional cloud features - team management, enhanced capabilities • Value proposition - convenience and reduced operational overhead

2. Open Core Model: • Basic open source version remains free • Enterprise features behind paywall or different license • Typical enterprise features:

• SSO (Single Sign-On)
• Audit logs
• Disaster recovery
• SLAs (Service Level Agreements) • Target audience - larger organizations with compliance needs

3. Support and Services (Not Recommended): • Revenue from consulting and support contracts • Why to avoid - creates perverse incentives • Problems:

• Incentive to build complex products requiring more support
• Customers churn if product works well (needs less support)
• Conflicts with goal of building intuitive products

"I would actually discourage you to follow that monetization path, because your incentive becomes to build the most complex product possible, so you can charge for support and services, which is a bad incentive."

Recommendation: Focus on hosting or open core models for sustainable alignment between product quality and revenue.

Timestamp: [18:46-19:57]

Non-open source dev tools typically follow two proven pricing strategies that align with different customer segments and usage patterns.

Strategy 1: Usage-Based Pricing • Examples: APIs like Algolia, Twilio, Stripe • Billing method: Charge based on actual usage/consumption • Benefits:

• Scales with customer growth
• Low barrier to entry
• Aligned incentives (customer success = vendor success) • Enhancements:
• Volume discounts for larger customers
• Enterprise-specific add-on options

Strategy 2: Tiered Plans (Good/Better/Best)

Good Tier - Developer-Focused: • Target: Individual developers • Price: Very low, self-serve • Goal: Solve core developer problems affordably

Better Tier - Team-Focused: • Target: Engineering managers • Focus: Collaboration and team features • Still self-serve but higher value

Best Tier - Enterprise-Focused: • Target: CTOs and senior leadership • Features:

• Security controls
• Audit logs
• Disaster recovery
• SLAs • Sales approach: Sales-led, not self-serve

"Good is going to be the self serve option. Um, that's going to solve the problem of developers for a very low price. For the better options, usually are going to be interacting with engineering managers, who are going to care about collaboration."

Timestamp: [20:03-20:54]

The timing and approach to building a sales team for dev tools requires careful consideration, as premature hiring can be both expensive and ineffective.

Why Wait as Long as Possible:

• You're the only person who can sell your product initially

• If founder can't sell it, nobody else can

• Deep product knowledge required for credible conversations

• Developer audience requires technical credibility

The $1M ARR Rule:

• Wait until approximately $1 million Annual Recurring Revenue

• Proves product-market fit before scaling sales

• Validates sales process works with founder selling

• Provides resources to hire quality talent

Hiring Strategy for Dev Tools Sales:

1. Hire technical salespeople who understand developers
2. Look for people who can speak the technical language
3. Avoid traditional sales backgrounds that developers reject
4. Consider alternative titles that developers find more acceptable

The Algolia Example: • Sales team changed titles from "Account Executives" to "Product Specialists" • Required deep product knowledge to earn the title • Better door-opening with developer prospects • Incentivized product mastery among sales team

The PostHog Approach: • CTO also serves as sales leader • Engineering mindset applied to sales problems • Technical credibility with developer buyers

"I actually remember our first sales people at Algolia. They decided to change their title on LinkedIn. And instead of like being sales, well, account execs, they called themselves product specialists."

Timestamp: [21:01-22:51]

Dev tools sales requires a fundamentally different approach than traditional B2B sales, focusing on demonstration over persuasion and technical merit over marketing.

Key Differences in Dev Tools Sales:

1. No Sales Decks Required:

• Developers hate wasting time on sales presentations

• Show, don't tell - demonstrations are everything

• Algolia example: No sales deck until $10M ARR

• Account executives relied entirely on product demos

2. Technical Focus Is Essential:

• Lean into the technical aspects of your product

• Technical buyers are your ideal customers

• Non-technical buyers often lead to lost deals

• Technical influence in decisions increases win rates

3. API vs. Turnkey Positioning:

• API positioning appeals to technical buyers

• Turnkey solutions attract non-technical buyers (harder to win)

• Know your positioning and target accordingly

• Find your ICP through technical vs. business buyer preferences

The Algolia Learning:

When selling to e-commerce companies:

• Technical buyers = higher win rates

• Non-technical buyers seeking turnkey solutions = frequent losses

• Technical influence in decision = much better outcomes

"You shouldn't build a sales deck. Developers don't want to waste their time reading through a sales deck. You should show, not tell. Just do demonstrations."

Success Formula: Product demonstrations + technical positioning + technical buyers = dev tools sales success.

Timestamp: [23:03-24:18]

Most dev tools follow a bottom-up adoption model, which fundamentally changes how you approach enterprise sales and account management.

Bottom-Up Adoption Characteristics:

• Self-serve adoption even within large enterprises

• Individual developers start using the product

• Organic growth within organizations

• Management discovers usage after adoption begins

Sales Strategy Adjustments:

1. Check for Existing Usage:

• Before pitching new enterprise accounts

• Investigate current employee usage of your product

• Identify internal champions already using the tool

• Map existing adoption patterns within the organization

2. Focus on Expansion:

• Help management understand current value being delivered

• Quantify existing impact of the product

• Identify expansion opportunities:

• Additional seats/users
• Premium features
• Increased usage limits
• Enterprise compliance features

3. Champion-Based Selling:

• Work with existing users as internal advocates

• Amplify their success stories to management

• Provide tools for internal evangelism

• Support champions in making the business case

The Enterprise Sales Evolution:

1. Developers adopt organically (bottom-up)
2. Usage spreads within teams
3. Management notices value and impact
4. Sales helps formalize and expand the relationship

"Sales should also check if some of the enterprise employees are already using the product, and they should then focus on helping management understand what the product is already doing for them and how much more it could help them if they were to pay for more."

Timestamp: [24:24-24:58]

Developer marketing for dev tools has one primary objective: creating awareness that drives inbound interest from your target audience.

Primary Marketing Goal:

• Create massive awareness for your product

• Drive inbound leads and organic discovery

• Build developer community around your tool

• Establish thought leadership in your space

Why Inbound Matters for Dev Tools:

• Developers prefer discovering tools organically

• Bottom-up adoption model requires developer awareness

• Self-serve model depends on inbound traffic

• Technical credibility builds through community engagement

Marketing Strategy Foundations:

1. Content-driven approach - educate and inform
2. Community engagement - participate in developer spaces
3. Technical demonstrations - show real value
4. Developer-first messaging - speak their language

Setting Up for Inbound Success:

• SEO optimization for technical searches

• Developer community presence in relevant forums

• Technical content creation - tutorials, guides, examples

• Open source contributions and thought leadership

"Your goal is to create a lot of awareness for your product because you want inbound."

The Awareness-to-Adoption Pipeline: Awareness → Interest → Trial → Adoption → Advocacy → Inbound referrals

Timestamp: [24:58-25:06]

• Open source monetization works best through hosting/cloud offerings or open core models - avoid support-based revenue due to misaligned incentives
• Non-open source dev tools should use usage-based pricing (like APIs) or tiered plans targeting developers, engineering managers, and CTOs respectively
• Wait until $1M ARR before hiring salespeople, and hire technical people who understand developers - consider titles like "Product Specialist" instead of "Account Executive"
• Dev tools sales is fundamentally different - no sales decks needed, show don't tell through demonstrations, lean into technical aspects
• Bottom-up adoption means checking for existing usage in enterprises and helping management understand current value before pitching expansion
• Developer marketing's primary goal is creating awareness to drive inbound leads since developers prefer organic discovery
• Technical buyers have much higher win rates than non-technical buyers seeking turnkey solutions

Timestamp: [18:46-25:06]

Companies/Products:

• Algolia - Example of usage-based pricing and demonstration-focused sales approach
• Twilio - Example of usage-based pricing model
• Stripe - Example of usage-based pricing model
• PostHog - CTO serves as sales leader, treating sales as engineering problem

People:

• Tim - PostHog's CTO who also leads sales
• Pete - Referenced for enterprise sales talk in Startup School

Concepts:

• Hosting/Cloud model - Monetization through managed services
• Open core - Free open source with paid enterprise features
• SSO (Single Sign-On) - Enterprise authentication feature
• SLA (Service Level Agreement) - Enterprise support guarantees
• ARR (Annual Recurring Revenue) - Key metric for hiring decisions
• ICP (Ideal Customer Profile) - Target customer definition
• Bottom-up adoption - Individual developers driving organizational adoption
• Self-serve - Customer acquisition without sales interaction
• Inbound leads - Prospects who discover and contact you
• Account Executive - Traditional sales role title
• Product Specialist - Alternative, more technical sales title

Business Models:

• Usage-based pricing - Charges based on consumption
• Good-better-best pricing - Tiered pricing structure
• Volume discounts - Reduced rates for higher usage
• Sales-led approach - Human-driven sales for complex deals

Timestamp: [18:46-25:06]

Finding your developer community is the foundation of effective dev tools marketing, but engagement requires a strategic approach focused on value, not selling.

Where to Find Your Community: • Hacker News - Premier developer discussion platform • Relevant subreddits - Specialized developer communities • Discord servers - Real-time developer conversations • Platform-specific forums - Related to your technology stack

The Right Engagement Strategy:

1. Focus on Being Helpful: • Don't sell your product initially • Provide valuable insights and solutions • Answer questions genuinely and thoroughly • Share knowledge without agenda

2. Establish Expert Authority: • Demonstrate deep knowledge in your domain • Offer thoughtful perspectives on industry topics • Build reputation through consistent valuable contributions • Become a trusted voice in the community

3. Build Trust and Recognition: • People will remember your helpful contributions • Brand recognition grows through consistent value • Trust development leads to future consideration • Top-of-mind awareness for relevant problems

"Your goal is not to sell your product just yet here. Just be helpful. Just establish yourself as the expert. And of course people are going to start knowing you and trust your brand, your company. That will help you down the line."

Long-term Payoff: When developers encounter problems you solve, they'll think of you first.

Timestamp: [25:11-25:36]

Frequent launching is a crucial growth strategy for dev tools, maintaining momentum and visibility throughout your company's lifecycle.

The Power of Frequent Launches: • Continuous visibility in developer communities • Regular feedback collection from users • Momentum building for your product • Community engagement and excitement

Launch Strategy Examples:

1. The Ollama Model: • Multiple launches over time with new features • Each launch generates fresh interest and feedback • Builds on previous launch momentum • Sustains community attention and growth

2. Launch Weeks (Supabase Example): • Quarterly launch weeks - bundling all news into one week • Maximum noise generation from consolidated announcements • Particularly effective for open source companies • Creates anticipation and scheduled community engagement

Benefits for Different Company Types: • Open source projects - Community rallying and contribution spikes • SaaS tools - Feature announcement and user acquisition • APIs - Integration showcases and developer adoption • Enterprise tools - Thought leadership and sales pipeline

Launch Frequency Recommendations:

1. Major launches - Quarterly or bi-annually
2. Feature launches - Monthly or bi-monthly
3. Community updates - Weekly or bi-weekly
4. Bug fixes/improvements - As they ship

"Launch often. That's very important. We discussed about, uh, the example of Ollama before. But that should also be done for the life of your company."

Timestamp: [25:36-26:08]

Documentation serves dual purposes as both product experience and marketing tool, making it essential to treat as a first-class product component.

Documentation as Marketing: • First interaction after homepage and pricing • Primary evaluation tool for developers • Represents product quality and company competence • Drives adoption through ease of implementation

Why Documentation Quality Matters: • Stripe raised expectations - developers now demand excellence • Competitive differentiation through superior docs • Developer satisfaction directly tied to documentation quality • Adoption barriers reduced through clear guidance

The Algolia Documentation Philosophy:

1. Feature Completion Standard: • Features aren't done until documentation is complete • Documentation requirement built into development process • Quality gate for feature releases • Prevents documentation debt accumulation

2. Developer-Written Documentation: • Developers write their own documentation • Technical accuracy and real-world applicability • Documentation team's role - help developers write better docs • Not outsourced to non-technical writers

3. Enhanced User Experience: • Automatic API key insertion for logged-in users • Copy-paste code works immediately out of the box • Reduced friction in getting started • Immediate value demonstration

"At Algolia, we decided that a feature was not ever done until the doc was done. And documentation should be written by developers."

Investment Priority: Treat documentation as product, not afterthought.

Timestamp: [26:08-27:22]

Developer support should be handled by engineers, not traditional support staff, creating superior customer experiences and valuable product insights.

Why Engineers Should Do Support:

1. Customer Satisfaction Benefits:

• Developers speak to developers in their language

• Technical credibility in problem-solving discussions

• Real-time bug fixes and immediate deployments

• Impressive response times that exceed expectations

2. Product Development Benefits:

• Engineers experience customer pain directly

• Better understanding of real user needs

• Faster feedback loop from problem to solution

• Product improvements driven by actual usage patterns

The Algolia Support Example:

• 20-minute bug fix and deployment during support conversation

• Customer amazement at rapid resolution

• Developer-to-developer communication effectiveness

• Support as competitive advantage and marketing tool

When to Build Dedicated Support:

• Wait until hundreds of employees before delegating

• Best engineering manager should build support team

• Support never becomes second-class citizen

• Maintain engineering-led approach even when scaling

Support Team Structure:

• Engineering background for all support staff

• Product knowledge requirements for support roles

• Technical problem-solving capabilities essential

• Developer empathy and communication skills

"I have examples where someone would reach out to support, and then the developers, like the person doing the support, was able to actually fix the bug and deploy in 20 minutes. And so that kind of like blew the customer away."

Key Insight: Support is marketing - exceptional technical support creates passionate advocates.

Timestamp: [27:22-28:43]

Marketing hiring for dev tools requires extreme caution, as traditional marketers often fail to understand developer audiences and preferences.

Why Traditional Marketing Fails: • Don't understand the developer persona • Lack technical credibility with developer audiences • Use approaches that developers find insulting • Missing context for developer decision-making processes

The Founder-Led Marketing Approach: • Founders should lead marketing for extended periods • Maybe forever - even at later stages • No successful dev tool companies happy with traditional CMOs • Developer founders understand the audience intimately

The Algolia Marketing Hack System: • Every engineer did one marketing activity monthly • Marketing hacks included:

• Writing blog posts
• Speaking at meetups
• Building demo applications
• Creating technical content • Best marketing efforts came from developers • Authentic technical voice in all marketing

Building a Developer-Heavy Marketing Team:

1. Hire developers for marketing roles
2. Avoid traditional marketing backgrounds
3. Prioritize technical understanding and credibility
4. Focus on authentic developer communication

Why This Approach Works: • Developers hate being marketed to traditionally • Technical accuracy in messaging and positioning • Authentic problem understanding and solution framing • Credible communication with target audience

"I don't know a single dev tool company that is happy with their CMO when they have a traditional marketing background. Why? Because traditional marketers, they don't really understand the persona."

Timestamp: [28:49-29:54]

Developer advocacy can be valuable but requires careful timing and hiring approach to avoid fuzzy expectations and measurement challenges.

The Appeal of Developer Advocates:

• Developers in marketing team - ideal for dev tools

• Technical credibility with developer audiences

• Community engagement and relationship building

• Authentic representation of developer needs

The Challenges: • Ill-defined role with unclear boundaries

• Fuzzy expectations making performance evaluation difficult

• Hard to measure impact and ROI

• Difficult accountability structures

Recommended Approach:

1. Start with Existing Team:

• Leverage current engineers for advocacy work

• Test advocacy activities before dedicated hires

• Understand what works for your specific audience

• Build processes and measurement frameworks

2. Timing for Dedicated Advocates:

• Wait until Series A or later funding stages

• After proving advocacy value with existing team

• When scale requires dedicated resources

• With clear role definition and success metrics

3. Hiring Strategy:

• Hire from within your engineering team first

• Recruit from your community - contributors, Discord members

• Look for organic advocates already engaged

• Prioritize authentic community relationships over experience

Best Candidate Sources:

• Open source contributors to your project

• Active Discord/forum community members

• Existing customers who evangelize your product

• Internal engineers with community interests

"My recommendation here would be to wait and first leverage your existing engineering team. and ask them to do some form of marketing or dev advocacy."

Timestamp: [30:00-30:51]

The fundamental principles for building successful dev tools companies center on speed, user focus, and leveraging your unique advantages as developer founders.

Core Action Principles:

1. Start Now - Don't Wait:

• Perfect ideas don't exist - start with imperfect ones

• Building provides reps and learning opportunities

• Iteration leads to better ideas

• No action = no progress - paralysis by analysis trap

2. Build Quickly:

• Don't over-engineer early versions

• Fast iteration pace enables rapid user learning

• Quick and dirty is acceptable initially

• Refactor only what proves valuable

3. User Engagement:

• Spend time with users - no substitute for direct interaction

• Learn from them continuously

• Do unscalable things - visit offices, hands-on support

• User feedback drives product direction

4. Launch Early Strategy:

• No shame in early launches

• People won't remember if first launch doesn't work

• Invaluable feedback from early exposure

• Course correction opportunities

Strategic Considerations:

5. Open Source Evaluation:

• Consider as go-to-market strategy

• Observe competitor approaches and success

• Don't dismiss without careful analysis

• Hard thinking required for decision

6. Founder Advantages:

• You're the best salesperson for your product

• No one knows product/audience better

• Learning to sell easier than learning developer communication

• You're the best marketer - speak developer language naturally

"Please don't wait for the perfect idea because as you are going to build your product, even if it's not a perfect idea, you'll do the reps. You'll learn. And that will lead you to the best idea."

Timestamp: [30:51-32:38]

• Find and engage your developer community through helpful contributions, not sales pitches—establish expertise and trust first
• Launch continuously throughout your company's life; consider quarterly "launch weeks" like Supabase for maximum impact
• Treat documentation as a core product feature and marketing tool—features aren't done until docs are complete
• Use engineer-led support as competitive advantage; developers hate talking to non-technical support staff
• Founders should lead marketing long-term; traditional CMOs consistently fail to understand developer audiences
• Leverage existing engineering team for marketing before hiring dedicated developer advocates
• Start now with imperfect ideas—building teaches lessons that lead to better opportunities
• Build quickly and embrace "crappy, quick and dirty" early development with rapid iteration
• You're the best salesperson and marketer for your product due to technical credibility and audience understanding
• Consider open source as go-to-market strategy after studying how competitors have used it successfully

Timestamp: [25:11-32:44]

Companies/Products:

• Supabase - Conducts quarterly launch weeks bundling announcements for maximum impact
• Stripe - Set high expectations for developer documentation quality
• Algolia - Required features to be complete only when documentation was finished; engineers did monthly marketing hacks
• Ollama - Example of continuous launching strategy on Hacker News

Concepts:

• Developer community - Platforms where target developers congregate and engage
• Launch weeks - Concentrated periods bundling multiple announcements for impact
• Documentation as marketing - Treating docs as primary customer interaction tool
• Engineer-led support - Having technical team handle customer support directly
• Marketing hack - Monthly requirement for engineers to contribute marketing content
• Developer advocate - Marketing role focused on authentic community engagement
• CMO (Chief Marketing Officer) - Traditional marketing leadership role
• Series A - Funding stage when dedicated dev advocates become viable
• Level-one support - Basic support staff without deep technical knowledge

Platforms:

• Hacker News - Primary platform for developer community engagement
• Subreddits - Reddit communities focused on specific technologies
• Discord servers - Real-time chat platforms for developer communities
• Meetups - In-person developer gatherings for networking and learning

Strategies:

• Community building - Long-term engagement strategy for developer audiences
• Open source as go-to-market - Using open source as primary customer acquisition strategy
• Things that don't scale - Early-stage activities providing learning despite inefficiency

Application:

• Y Combinator - Apply anytime if building a dev tool

Timestamp: [25:11-32:44]