Unlocking Developer Productivity: The Coder Journey with CEO Rob Whiteley and Co-founders Ammar Bandukwala & Kyle Carberry
June 12, 2024
Today, the Coder team announced a new $35M round a tribute to building products that developers love and that deliver significant value to Coder’s incredible rapidly growing customer list. I sat down with CEO Rob Whiteley and co-founders Ammar Bandukwala and Kyle Carberry to talk about the evolution of Coder, why they came to focus on cloud development environments (CDEs) and how boosting developer efficiency has always been at the heart of what they are building.
Listen to our Founder Real Talk podcast episode here, or read the interview below.
This transcript captures the conversation as it happened. We hope you enjoy the authentic voices of our guests.
Glenn:
I'm delighted to welcome a trio from Coder to today's Founder Real Talk episode. We've got Rob Whiteley, Coder CEO and Coder’s, two technical co-founders, Ammar Bandukwala and Kyle Carberry, with me today. We first invested in Coder back during the company Series A in May 2019 and also led the Series B in March 2020. My Notable Capital partner, Oren Younger, works closely with me on Coder, along with many other members of the Notable Capital team from our platform effort. Oren couldn't join us for this episode, but don't worry, he'll be back soon. We're excited that Coder has recently announced its next round of financing, a $35 million round led by Georgian Partners, with significant participation from our co-investors in the company, Redpoint and Uncork as well as our Notable Capital Funds.
I'm really excited to get into the Coder story with these three and I'll start with Rob. Rob, maybe start by letting us know, what does Coder do? You know, like high level TLDR, what does the company do? And maybe, what's the core value proposition that you bring to the market?
Rob:
Yeah, sure. I like to think of it as if you're a software engineer today, if you're a developer, programmer, you ship your code to the cloud, you build your code in the cloud, you run your code in the cloud, but you're still writing it locally on laptops. It would be like if we all had to give up our favorite office suite and just use old school word processors. It's just an archaic way of developing software.
And so specifically, the problem we solve is we shift to the developer so that they're writing natively in the cloud. And specifically, what that does is it unlocks the power, the security, the automation, to the developer workflow, which has sort of been missing. So that's why we do it. The product has been bestowed a Gartner category, so they're called Cloud Development Environments. And that's predominantly what we build and sell today, both an open source and commercial version. And I think the second part of your question just quickly, I think predominantly we're a developer productivity company, right? Like that is what the main problem companies are trying to solve by shifting them to the cloud. But there's definitely a security and governance angle to this as well. I think there's a fine line between, how do you empower a developer without having them introduce risk, and so an inherent thing we can do is be a system that sits between the developer and their tools, so we add an extra layer of security in addition to the productivity. So that's that would be my - I don't know where that clocked in - two minute answer I'm going to go with.
Glenn:
That's great. You know, maybe Ammar, I'll ask you to riff off that.
How does this mission that Rob just outlined resemble or differ from when you guys started this company, and what you were thinking when you built the first lines of code?
Ammar:
Yeah. I mean, surprisingly, the mission has been, overall the same, but we have had to make some pretty major product pivots to actually figure out the right way to do remote development. The broad idea of developers should be coding in the cloud, and Coder is going to make developers write more code has remained the same over all of these years.
Glenn:
And you talked about major changes you need to make to the product. Can you outline one or two of the big ones?
Ammar:
Yeah, sure. We began with this idea that we're going to make this consumer product. We're going to be bringing remote development to the masses via this SaaS application, but we very quickly learned early on in the business, that that product is really only useful for basically students and people in third world countries and basically people that didn't really have much money, and we weren't really going to make a credible business off of that. So that was probably the first pivot of the company. Think that happened at the end of 2018 beginning of 2019 and then we had another. We've had, you know, maybe more, smaller pivots, but sort of fewer degrees of a pivot since then.
Glenn:
Makes sense. Kyle, let me get you in the conversation. You guys opted to build Coder as an open source company. You know, curious what your decision path was there? Why? Why start with open source? And Ammar alluded to this, you know, initial product. You built an open source project called Code Server. Maybe you could talk a little bit about that and its origins, and then we can take it from there.
Kyle:
Yep. So thanks for having us first of all, Glenn, but yes, when we first started Coder as a consumer company, everything wasn't open source on day zero. And essentially what we had is kind of like what Ammar talked about, we have this “oh crap” moment where we pivoted the company. And the best way to see what's going on in the market when we have no marketing and no sales and no concept of any of that is to release it into the world and see what people think of it. And so that ended up being Code Server, like Ammar alluded to, which is essentially VS code but distributed as through the browser. And now that's pretty common, but back then, it was the first time where there was any form of a thin client for an IDE for developers, where you would kind of just be able to plop a binary on any server and start coding on it, just through your browser. And so that's still super popular today, and a lot of people and a lot of developers, hundreds of thousands a month, use Code Server to write to write software on remote machines. And then the second part of that, which is now called Coder and open source as well, really does that for teams. And so we allow individual, single player to multiplayer movement for remote development. So, you know, whereas Code Server is more like you Glenn when already have your computer and you want to just access it remotely. You just code server. If you want a bunch of developers to be able to spin up, you know, development environments consistently for a team, and then code on them remotely, you would use Coder. Really, like I have a lot of strong fundamental beliefs on open source that I could rant about. But, you know, I don't know how much of interest that is.
Glenn
We'll get to your ranting a little later in the episode. Kyle, perfect. But, you know, you glossed over something I want to double down on a little bit this, this decision. You know, you started with one open source Code Server, very, very popular product still out there today. You know, hundreds of thousands of people using it, probably millions of downloads. You guys can share the numbers, but incredible number of stars and lots of monthly active users. But, you know, discovered it wasn't really a commercially viable product. What was that decision like to kind of realize, okay, let's, let's do another open source. Let's build, let's build an open source that you now call Coder, which you know is kind of informed by what we learned from Code Server. But you know, more, perhaps commercially viable. How did you guys come up with that idea? And, what was that sort of search like to get to the answer that that is Coder?
Kyle:
Well, it's funny because, obviously you, Glenn, were along with the whole journey with us through this process. But yeah, we launched code server, and it immediately blew up. It was the fastest growing project ever on GitHub at the time, I think by a pretty large ratio too.
Glenn:
That's incredible. And, you know you guys were all of what - what age were you at that time?
Kyle:
I think 21. Ammar was 20 or maybe I was just 22 and Ammar was 20 times.
Ammar:
Yeah, good times.
Kyle:
And yes, we launched that. And then, you know, you obviously raise capital, and we try to build a business around it. And essentially what happened is we're like, oh my god, we can't figure out how to make money around Code Server. And, you know, we really, you know …
Glenn:
That part of the story. I remember.
Kyle:
Of course, you remember that part, yeah, very distinctly in my memory. And we have board meetings, and everyone's like, if we could juice even just a little bit of money, we're like, I wish. But, but, yeah, we kind of honed it on the value that – and I'll even step back one thing, one thing further. When we launched Code Server. We put up, actually a fake page on Coder.com a fake enterprise page that just boasted about a fake enterprise product that did not exist at all, but people could reach out to us to try and a lot of people did. And so really, how it started this whole evolution of commercialization from our open source was purely customer driven, and we maintain a lot of those ethos today. And at the time, they weren’t customers. They were all just like prospects, or people that were vaguely interested in the space. But I would say we had a lot of early people that reached out to us, some of which are companies that use Coder today and some of which don't, that were like, hey, something in the remote development space. Seems. Be interesting for us to pay for. And so then we eventually, you know, kind of ended up making this, this closed source product, which you aware of, which now we hide under the rug as kind of a graveyard and something that no one will ever hear of. But then eventually transformed it into what is now our open source, which a lot more companies now use and pay for.
Glenn:
Awesome. Well, kudos to you guys for having the vision and the fortitude to stick with it.
Kyle:
Still trying
Glenn:
I know, yeah, for both you and Ammar lots of trying moments through that process. But you know, you've come out the other end with quite a bit of momentum. And Rob, I wanted to ask you about that, what are you seeing? You know, Coder has lots of customers today. Maybe you could talk about who some of them are and what they use Coder for. Why are they adopting Coder so quickly? Why is it spreading in organizations and what’s your take on all that activity in the market?
Rob:
Yeah, I was kind of smiling, because when I entered the picture, the product was actually quite rounded. It didn't have rough edges. Customers loved it. It was growing, and so I hear about the challenges. I'm not convinced they exist. I think Kyle and Ammar made them all up as some sort of war story, but Glenn, you independently verified it, so I guess it is all true. But no, I joined at a time where, you know, I think the pivotal moment in any early startup is this vaunted product market fit. How do you make sure that you've achieved it? And I don't think there is an industry standard definition, but what I experienced was that happy customers would buy more of it and would often double or triple the amount they would buy of it in the first 12 to 18 months. And so that tells me you have product market fit. And part of what you were alluding to, Glenn, is these are not early adopter customers. These are Fortune 50 banks. These are large tech companies that are infamous for not even buying software. And so that gave me the confidence to say, okay, we have good fit, we have a good go to market engine, what we really need to do is just build it up and put more fuel through it. And so that's really been kind of the last year. And to be a little more specific, right, I would say, over half our customers or more like 60% are these large institutions, Vanguard, Progressive Insurance, Goldman, Morgan Stanley, and then we have about another third or so that are these large tech companies like Netflix, Dropbox and Canva. And interestingly enough, they both buy for the same reason, developer productivity, but they justify it very differently, and I can explain if that's of interest. But those been our two really core customers that are that are driving the business, and then we have sort of a random smattering of others, and so we're always looking for signal to see if there's going to be another major cohort.
Glenn:
How do those guys justify the investment in Coder that sounds like it's different for each of those ICP groups?
Rob
Let's just say you're a large, heavily regulated entity, you have thousands, if not tens of thousands of developers. And so for you, moving developer productivity by even just a point or two can literally be millions of dollars. And so you'd think, oh, that's a no brainer business case, but it's actually security is how they justify it. It’s that we need to get source code off of laptops, or we need to roll out a generative AI tool like Copilot with controls in place. And so that particular customer really uses security as the justification, whereas, let's just call them the cloud native, the kind of the high tech companies, it is developer productivity. It is developer salaries. I mean, they're paying million- dollar Bay Area salaries to those developers. So moving a point of productivity, there is an even larger deal than it is inside, say, a large bank. And so I think developer productivity is why they came in, and then how we get through procurement is either a soft dollar savings or a security savings.
Glenn:
Got it. Sounds very compelling, and those are some awesome brands. But you know, you alluded to the fact that when you joined, things were already in motion. Ammar, I want to ask you about that, like you engineered the decision to bring Rob in as CEO and as a founder, you know, sometimes that can be a difficult moment. What was your and Kyle's thinking behind bringing on a CEO? How has it changed your day-to-day, and what do you think it's done for the company? And Rob, I'll put earmuffs on if you say anything too nice about him.
Ammar:
Yeah, it's a great question, as you alluded to, Kyle and I have technical backgrounds. We love programming, we love software, and we don't really love go-to-market the same amount. And we learned very quickly, as we were doing our first couple million in revenue, that you needed to be as good, and in the enterprise space, specifically when you have these longer sales cycles, these larger ACVs, you have to be pretty much just as competent and go-to-market as you do in product to really build a well-rounded and successful company. And so I don't know, it was kind of an easy decision after we came to that realization, because I didn't really want to be a full time go-to-market wizard. Kyle didn't want to be that. And we figured it would just be simpler if we focused on what we loved, and we brought in someone who, for some crazy reason, loves go-to-market the same amount that we love products and engineering.
Glenn:
Awesome. Well, one of the things Rob has mentioned is a big reason why he joined Coder was the culture that he saw that the talent level and standard that you had instituted, and you and Kyle really built into the fabric of the company. You know, as we mentioned earlier, you guys were very young when you started this, this business, and there's a whole history behind that, maybe that's, that's episode number two. But how did you have the foresight, wherewithal, barely 20 somethings to build the company with the kind of culture that attracted Rob? What was that like?
Ammar:
Yeah, I don't know. I don't think we ever really were intentional about the culture. I think Kyle and I are really good at failing, and we just failed a lot with bad hires, bad product ideas, bad cultural ideas. And we would talk to each other, be like, oh, wow, we made a huge mistake. And, yeah, we just, we just had a lot of learnings, I guess, and then the type of culture we want to build early on. I think the things that really attracted Rob when he joined was, first of all, we were pretty efficient. I think we've always been really good at connecting pretty much every employee to some results on a business level. And we were extremely customer oriented, to the point where engineers were just as involved with customers as, say, our salespeople, and they're still today there’s basically no panes of glass between engineering and customers. So yeah, I think, I think there's just generally a lot of efficiency, a lot of energy and a lot of care for our end user.
Glenn:
That's, really incredibly insightful for, you know, two very young, young folks who'd never built a business, really, of any size, certainly one selling to enterprise to come up with. But your, your concept about, you know, we failed a lot, but we learned from those failures quickly. I think that's, that's a trait we see in great entrepreneurs across the Notable portfolio, is that, you know, ability to learn, learn fast, because nobody knows everything you need to know when you start a company. Kyle, what's your what's your take on Ammar’s view. Do you agree. How's it been for you to bring Rob on and allow you to get back to doing what you love?
Kyle:
Yeah, I would say culturally, the biggest thing is I just don't know what I shouldn't tell people ever, and neither does Ammar. And so we put everything out in the open, and that includes failures. And so if we make a bad hire, we tell everyone. When we do something that's great, everyone sees it in the public Slack channel, also awesome. I think it just empowers people to be their own leaders, and feel more in charge of their destiny. And every engineer at Coder, if there's a customer issue and someone doesn't get on it, it's like, what are you doing instead? Because the business needs help, and so we definitely make sure that's very well known. I would say, for me, my job actually has not changed that much. Crazy enough. Since Rob joined, Ammar was the CEO of the company. I would say, I yell at Ammar a lot less, which is probably I yell a lot less in general. So Ammar used to be the CEO of the company, and he kind of gave up the throne to Rob. In that time, I was mostly just coding. I technically “manage” the engineering team for a little bit, but my management style is maybe about as loose as it possibly gets. My day to day is actually the exact same. In the last 12 months, I'd say the main things that have changed are probably just more customer calls, or more prospect calls, primarily just because firing up the go-to-market engine more, which is good.
Glenn:
Well, let's, let's talk about that. Rob, you've added Josh Epstein as CRO since you joined and several other execs. Have you thought about building out team? And how much of your time you spend on go-to-market?
Rob:
Is over 100% a fair answer? Well, okay, so let me take you back to June of last year. I just joined the company. I was a month in I was we were all together, the entire Coders leadership team in Austin. And I remember very clearly in that event, one of the things we decided was we are proudly focused on large enterprise, and it takes a lot of conviction and clarity in the product you're building but it gave me the confidence to say, okay, I know what that means from a go-to-market perspective. It influenced why we went and got Josh, because he had done that at HashiCorp, and so he knew how to take an open source and go into large enterprise, which is both art and science, and then complement it with kind of a nice inbound marketing edge. And one of the things that Ammar said, and I completely agree, is the efficiency at which Coder operates is sort of our hallmark. And so how do you go large enterprise which is notoriously inefficient and still maintain some efficiency in the engine? And it's because we're open source and because we can be smart about how we sell into with a really solid business case. So for us, it's been with that clarity. It's just been adding the pieces, adding the team that knows how to kind of foster a bottoms up motion, with developers with a top down motion that can talk to a CIO or a CTO around the business value bring. And I think that's a lot easier said than done, but once you see it in motion, it's actually quite magical.
Glenn:
Great. It feels like you guys are really doing, as you say, marrying kind of a strong value proposition for that bottoms up developer experience, while at the same time crafting, kind of the solutions that really appeal to business decision makers and budget holders in organizations. You know, as you look into your crystal ball, how tight is that connection today and what other things you need to do to keep driving those two together to find more ways to solve problems for customers?
Rob:
For me, part of what I think is our secret sauce is when a developer is in Coder, they're having a better experience. Things are faster. Things don't take as long. There's not as much cognitive load on them. This whole shift left has been a real resource tax on developers, and we help eliminate a lot of that tax. So now you have developers happy. But at the same time, we put these controls in place so that you can operate in these heavily regulated, these large back-end platforms and developer tools, who, by the way, actually have the budget, are happy. And so right now it's modulating that right? How do we keep adding at a pace where developers love the experience, and that's often going to be free and open, and how do we continue to create controls and remove friction so that the operators are also equally getting value? And so that's kind of what roughly breaks out how we're going to guide the company for the next year is really making sure we continue to invest in equal parts for those two parts of the equation.
Glenn:
You mentioned earlier that, like all the code generation tools, there's a play for Coder there. Do you want to talk a little bit more about that, because that's obviously a fairly new thing, but it seems like there's a lot of customer interest in having you help them with as they as they roll out.
Rob:
Yeah, to me, every company gets helped a little bit by some serendipity. And I think we've been the beneficiaries of two serendipitous things. One is these Gen AI tools, Copilot, Gemini and others, have really delivered a tremendous amount of value. But how do I realistically scale them? How do I roll them out? How do I make sure my developers have the right version, that it's at the right level of patching. And so it's a, it's another huge task on the developer. We are a provisioning engine at heart. And so we make the rollouts. We have companies that have rolled something like Copilot out to 2500 developers, and they're now on their way to 5000, 7000 right? Because they can ensure that it's the right version, always available, etc. So that's been kind of serendipitous, number one, and then the other one, and I don't take pleasure, but the other one has been the implosion of the VDI market. One way companies tried to solve this in the past was just, let's virtualize the desktop and put it in the data center, and that led to a terrible developer experience, and so now we're seeing a large amount of refresh that's driving interest in a new generation like Coder so those are kind of the two areas, Glenn.
Glenn
That's awesome, because VDI is a huge market, and it's an existing market that you can disrupt, and at the same time you have a greenfield market in the co-generation tooling opportunity that's growing fast, that you can play in. So, kind of double Bonanza, which puts the pressure on you guys to keep growing revenue as fast as you have been.
And obviously, let's talk a little bit about the fundraise I mentioned earlier that you guys just raised and are just announcing a $35 million fundraise. Congrats on that. Oren and the team and I at Notable Capital are extremely excited to be participating in the round and really believe in your future. But I want to give you guys the chance to look at the crystal ball a little bit. Ammar, what's your take on the role Coder can play, you know, with your customers longer term, and how they build and ship software?
Ammar:
Yeah, I’ll answer that with an anecdote. So we have this one customer. It's a financial services customer, and according to them, before Coder, 5% of their developer time was actually spent coding, and after Coder that became 15%. Now both numbers are still pretty small, but that's still like an immense, I guess, magnitude of effect. And I would hope that Coder would do that basically across the Global 2000 and that's kind of broadly what we have to do for our customers over the next few few years.
Glenn:
Small vision. I like it. Kyle, how about you? What are some of the product areas you see, innovating in going forward, to continue to build out the Coder value prop?
Kyle:
To me, there's, there's two areas that we're really getting into right now. One is actually just surfacing what people are doing inside of development environments. Even a lot of developers that like write code couldn't tell you what the majority of their time is spent on or areas to improve. And so that's one area, like a beautiful graph that's like, Hey, your team is, for whatever reason, spending a lot of time linting, you know, progressively over the past three months and like, let's maybe spend a week improving that. And then for two I think, with a lot of AI stuff, particularly as people are writing more code, you know, I think there's an interesting future where a developer will now become maybe more of a manager of development environments, managing, like multiple tasks that are happening at the same time and kind of being more of an overseer of these tasks. And I think that Coder is well positioned to provision these environments for the AIs to work in. And so I'd say those are two areas right now where I'm really focused and really excited about.
Glenn:
Awesome. Sounds like you're going to start two more Coders, two more companies the size of Coder, pretty soon, and have them all in one. Rob, as you think about the critical milestones for the company over the next few years, can you share what's on your mind?
Rob:
Yeah, I think. Let me give you a few stats just to kind of ground you. Right now, in our existing customer base, we're only 9% penetrated into their developers, right? So some meaning of all the developers they employ, only 9% are currently on the Coder platform on average. So there's a huge opportunity for us just to go wall to wall and getting more developers. I mean, there's no reason why we couldn't get 80-90% of a developer population onto Coder. So keeping our eye focused on what do we have to do from a product perspective, customer success perspective, onboarding, to really just keeping that motion as smooth as possible. And put equal amount of energy into the new customer acquisition. That's another area where I think this cloud development environment, CDE market, is going to really heat up, maybe even get won or lost in the next 12 months, because mainstream companies are going to clue into what the early adopters have done, and this market will flip quickly. And so for us, we want to be front and center, grabbing as much of that as possible. And so we really want to take advantage of our open source nature and our virality, and how do we just get as much bottoms up penetration? So that's kind of to the efficiency thing we've talked about, that's how we'll keep the hitting the revenue targets. And then what Kyle, Ammar and I spend a lot of time talking about is what part of that lies on product to do with product led growth, what part of that lies on sales to do, the sales led portion and marketing to get inbound traction. And so for us right now, we kind of have the pleasure of placing different chips on the board and different amounts to try to heat up different parts of the of the engine at this point.
Glenn:
Speaking of heating up the engine, I'm going to put you all in the hot seat. This is the speed round. I'm going to give each of you one question. Just answer with the first thing that comes to mind. Rob, you're a first time CEO. What's your biggest learning as a first time CEO?
Rob:
I think I would say ruthless urgency. I think it's very easy to confuse the things that we could go do with the things that we should go do so having the focus, but just a high sense of urgency. And I do really appreciate Kyle and Ammar helping instill that in me. I think was something was native in the company. And so I've kind of seen my job is to not f it up and to foster it a little bit
more.
Glenn:
All right, ruthless urgency, I like it. Ammar, what's what's Coders next big innovation?
Ammar:
I'm going to steal from Kyle here and say, AI workspaces, Coder workspaces are going to be managing all these different AI's and are going to be writing all of your code like it.
Glenn:
That sounds like a very juicy one. All right, Kyle, last one is for you. You can give a little bit of background.
Glenn:
How does one get a reservation at the hottest restaurant in New York?
Kyle:
So you can do it by emailing me. When I moved to New York about, I guess, six months ago now. And every restaurant that is worth, well, not worth going to, but every restaurant that is really hot, obviously you cannot get a reservation to. And so I made a really, really fast reservation bot for Resy, which I actually got banned from Resy a couple of weeks ago, but I have since, graciously, they've unbanned me, but yes, I can. I thankfully get reservations wherever I want, it at most of the best restaurants.
Glenn:
Okay, so for those who braved this podcast episode all the way through to the end, the little easter egg at the very end of the podcast is email Kyle for your next hot restaurant dinner reservation in New York Well, guys, thank you so much for spending time with me this morning. It's been it's been great hearing about both the history of Coder, where you are today and your vision for the future. Congrats again on the on the fundraise. Very exciting news. And really looking forward to continuing our collaboration going forward, I know that the future is quite rosy for Coder, and we're excited to be part of it. So thanks.
Rob, Ammar, Kyle
Thanks so much, Glenn.
Glenn
Awesome job.