Billion-Dollar B2B: How Confluent Commercialized Apache Kafka

Not too long ago, open-source technology projects were pursued in large part for altruistic reasons—they were “almost religious,” and not viewed as businesslike or potentially profitable, says Jay Kreps, the founder and CEO of newly public data company Confluent*.Today, companies like Confluent have changed that perception. Confluent—which commercializes the Apache Kafka open-source project and specializes in continuous, real-time data processing—went public this past June and just reported its first financial quarter with more than $100 million in revenue. On this episode of the Billion-Dollar B2B podcast, Battery General Partner Dharmesh Thakker talks with Kreps about the company’s journey from a small project developed inside business-networking site LinkedIn into a large, public technology company.Jump straight into:00:00 - Creating Apache Kafka and Jay’s start at LinkedIn - “The idea behind Kafka LinkedIn was that it could be like the central nervous system that would have those real-time impulses of what's happening.”05:03 - How to monetize an open-source company? - “You try and build a successful open source product and then build something that is unique to the company and completes the picture.”12:17 - Partnering with cloud providers and handling competitors - “When we do something it's accessible to everybody in the world, and that just makes it easier to build that community, and that kind of takes on a life of its own.”16:27 - Enterprise sales: Upgrading to bigger customers - “If you're able to do cloud only, which is easier, then I think it is better to start with self-service and get that going.”20:07 - Best practices for cloud or on-premise enterprise setting - “You need this very low friction self-service usage, which is how you can attach to developers. And then you turn it into part of the architecture that's used across the company.”26:19 - Confluent’s visionary consumption model - “Customers can decide to do more at any time, they can spin up the next application. It's very low friction and I think it's a really powerful thing.” 31:17 - Successfully managing your roadmap and going public as a company - “The key thing for us was less about the scale of the business. It was just about getting to a point where we felt we could operate predictively.”36:16 - Confluent’s major inflection points and Jay’s final words of wisdom - “We felt very strongly that over time the bulk of the business was going to be in the cloud and if we could master that it would be a huge competitive move.”The views expressed here are solely those of podcast guests, not Battery.The information provided in this podcast is solely intended for the use of entrepreneurs, corporate CEOs and founders regarding Battery Ventures’ potential financing capabilities for prospective portfolio companies. The information is current as of the date it was published. The contents are not intended to be used in the investment decision making process related to any product or fund managed by Battery Ventures. Battery Ventures provides investment advisory services solely to privately offered funds. Battery Ventures neither solicits nor makes its services available to the public or other advisory clients.Investments identified above are for illustrative purposes only. No