I'm writing a blog post a week. Here's #3.

Many dev tool companies start by selling to individual developers and eventually move up-market to make more $$$. Enterprise vendors who sell big $$$ contracts never move down-market to sell to individual devs.

Except $MDB

Thread https://twitter.com/moritzplassnig/status/1303387335942270977

MongoDB started as a traditional open source enterprise vendor. From their S-1

They made 99% of their revenue from downloadable, self-managed software (companies running MongoDB themselves, either on-premise or in the cloud). Their growth was solid

Interestingly, their customer growth was faster than their revenue growth. Digging into the avg. $/customer, it looked like this(decreasing!)

Very odd. Didn't make any sense. Especially because the number of >$100K customers was increasing. How is this possible?

"Simple" answer. $MDB disrupted themselves. They knew SaaS was inevitable. Without it, their growth would plateau. So they started MongoDB Atlas.

Their SaaS grew like crazy
• FY17: <$1M
• FY18: $11M
• FY19: $60M (!!)
• FY20: $162M (!!!)

Not just the revenue, also the number of customers exploded. Resulting in the lower avg. $/customer.

SaaS = many small customers
Self-managed = few large customers

$MDB was disrupting themselves. Necessary but incredibly hard to do (resulted in losing self-managed customers)

Avg. $/customer actually went up for both products. But overall, it went down because of the influx of thousands of smaller SaaS customers

That's not all. MongoDB was winning, and consolidated the market by acquiring one of their competitors - mLab. Small acquisition (only $68M), huge impact.

Turbo-charged the Atlas SaaS business

+ 4,300 customers
+ $7M in revenue

Q4'FY19 is still the best Atlas quarter ever.

What lesson can you learn?

Moving down-market is rare. Nearly nobody does it successfully. $MDB achieved the unachievable and is the most successful open source company right now ($13B market cap). They avoided getting disrupted from bottom-up players

Kudos to them