When Sam Kroonenburg’s brother, Ryan, was turned down in the final round of interviews from a job with Amazon Web Services, he was pretty disappointed. His despondency didn’t last long; instead, it became the catalyst for a business idea to solve an important problem: Learning new technologies is exciting, but education and training for them is boring and feels like a chore. In a nutshell, that’s A Cloud Guru’s origin story — we’ll get to more on that later.
A Cloud Guru went from a phone conversation to a global business, then a very large acquisition in a very short period. It’s the definition of a rocketship. When Sam joined us for an Open Source VC meetup, we were treated to an hour of power, unpacking the wins and challenges throughout his journey. From how you build a community and translate that into a business outcome to hiring a party bus to scout office locations and the single best decision he made in the business.
It was clear right from the start that we’d all be furiously taking notes from his stories and advice so that we could go back and think about how we’d apply them to our own business. In case you missed it, we’ve done that for you!👇
A Cloud Guru has just been acquired — what has the last month been like for you?
Selling your business and going through an acquisition is a super emotional thing.
Before an acquisition closes, it needs to be approved by Government regulators, so you have a period of a couple of months leading up to that where you’ve announced it, but it hasn’t happened yet. You have to ready yourself and your team, but you legally can’t talk to the team on the other side. It’s a weird kind of limbo state that everybody is in, and then suddenly you hit the close date, and everyone is scrambling to get things together.
How did A Cloud Guru start?
I started the business with my brother Ryan. He was living in London, and his background is in the IT infrastructure space. I was living in Melbourne, working in the software development space.
We both started seeing the same problem from different angles. Ryan witnessed the cloud disrupting everything he did, so he wanted to get in on the action. He went for a job with Amazon Web Services, and throughout the interview process, he found it hard to get good training in this area. Most of the training at the time required you to take a week off work, spend a few thousand pounds, and was likely about six months out of date from where the cloud was currently at. He went through a gruelling, 3-month interview process and got turned down at the final round.
Out of all of this, Ryan thought he could take the notes he made from the process and turn them into an online course. He put it up on Udemy.com without thinking too much about it. It started getting a lot of traction, and people wanted to take it and learn AWS.
During this time, I was in Melbourne working for a software consultancy firm as a Development Manager. I was hiring graduates into a grad program, and I noticed that these grads were super bright, had 4 years of university education but very few industry applicable skills. They didn’t know what the cloud was. I saw the education problem from a different perspective.
I still remember the phone call I had with Ryan where he was telling me how thousands of people were taking his course on Udemy.com. And we thought, there’s something in this — training isn’t aligned to the needs of the industry.
We wanted to build a school for the industry, by the industry, crowdsourcing feedback about what’s out of date, what they want to see, and use all of that as inputs to constantly iterate and improve in the same way that agile software development works.
For the past 2 years, I’d been trying to build another startup that had launched but wasn’t working. My wife was sick of not seeing me, we had young kids, and I was burnt out. But after I got off that call with Ryan, my wife said to me, “You seem really amped up about this idea.” She encouraged me to build it, but I didn’t know when I would be able to find the time; we were about to take a few weeks off and go on our first solo family holiday. My wife said, “Hey, let’s give up the holiday. If you don’t do this, and this could have been something you’ll always regret it. We can always take another holiday.”
What was the decision process like going into business with your brother Ryan?
They say you shouldn’t mix personal with business, but it worked incredibly well for us. I think our formula for success has been that we’re very different people and have very different ambitions.
Ryan is interested in the teaching side of things and engaging with the customer base. I was initially more interested in building the tech stack; then, I transitioned into running the internal side of the business. We divided and conquered in a way that was really fruitful.
What were the early signals that made you feel like you had something that was growing quickly?
When we started the business, we weren’t in the startup community. We didn’t know all the terms like product-market-fit. We focused on: do people want to buy what we have?
We devised a series of low effort tests to validate product-market-fit. Our first test was launching a few courses on Udemy.com to see if there was an appetite for an engaging, exciting model of cloud education. Udemy.com gave us access to an existing marketplace, audience and platform that was there and ready to deliver, and it worked.
For the next test, we made another course on another certification to see if there was hunger for something more than just one piece of learning. From the response, we could see people were interested in a full suite of training offerings.
We then wanted to see if our customers would come to us directly and buy something. I used an off-the-shelf, rapid development tool for mobile and built the app in 3 days, and it worked incredibly well. We created a practice exam for people studying to get their Amazon certifications to revise for those tests on the go. We put it on the app store, and within a week or two, it was making thousands of dollars a month.
After all these low effort tests — building the most rudimentary thing we could to deliver a training course and take a credit card — that’s when we decided to build the platform. We launched that, and it took off like a rocket from there.
In the early days, were you very methodical about what you were doing?
We were intentional, but we hadn’t framed it as “devising a series of low effort tests”. In the past, I’ve called it ‘Follow the path of success’. You try something, it works, and then you think, what’s the next thing that makes sense from here? You might try two or three things, then one of them works, and you follow that and try again.
Everyone always says we should celebrate failure, and certainly, failure shouldn’t be something you’re afraid of. But I think success should be the thing that guides you. That’s where founders should focus: what worked, what’s working and what’s next.
At what point did you realise you had something that could be much bigger than AWS training courses?
When we ran the test to see if people would come and buy from us directly, we had a landing page that just said we exist and there was nothing you could do from there.
When we went to launch the first version of the platform, the plan was to do a private beta. We were going to be exclusive, put a rope around it, get some influencers and learn from them.
We had the site up without gating the private beta because we didn’t think anyone would go to the site, but people started signing up and buying the product.
We accidentally had our first customers, and we were getting a few more every day. I told Ryan, and he was like, ‘This is great. Why would we stop this?”. When we saw people buying it even though we hadn’t told anyone about it, that was a big moment.
How did you build community in the early days? And how did it fuel your growth?
We weren’t an existing set of educators sitting there asking: “How do we attack and break into the cloud computing market?”. We were cloud engineers — we were the target market. We were already part of the community, and we were coming at it from the perspective of how can we improve the way that people like us learn cloud computing?
I would go and speak at events, write blogs and attend every meetup and conference that I could. All of our first hires were people in those communities. Everybody got the problem and knew how to talk to this group. I spoke in Brisbane, and off the back of that speech, I met a guy on Twitter who had been there. He ended up becoming our Head of Product and Engineering and helped us build the business.
Some of these community engagements went nowhere. We’d always debate if it was worth going. When I look back now and see a map of all the incredible connections that led to great hires and deals, many came from those very early days where we worked really hard with the community for a long time.
If you want to build a community business, you and your team must understand that community and be part of it, not just try and engage with it.
What was your approach to setting up a team in the US?
Our approach was to start by questioning what we want and what we are trying to achieve by going to the US? The answer was to build a go-to-market workforce and capability close to 60% of our market and customer base.
We had around 100 B2B customers, roughly 5 who were enterprise when we started thinking about setting up a local team in the US. The US customers wanted more and more, and we needed a scalable enterprise-focused workforce. It made sense for that to be in the US, where our demand was coming from.
We needed to hire tech talent with SaaS expertise, particularly in the enterprise space, as that’s where we saw the company’s future going. We ended up basing ourselves in Austin, Texas, as it had a good mix of SaaS companies playing in the enterprise space that had created a good pool of available talent.
Who were your first hires in the US?
To start, we hired a Chief Operating Officer — Jon Meachin. I can’t recommend this enough: hire a single functional leader to oversee your presence in a new market. That was game-changing because we weren’t in the same time zone.
After we brought John in, he made our first finance hire — Kevin Mellor. Kevin had lived in Austin most of his life and knew it inside out. So he knew where people wanted to work in the city and would attract the best talent. Every location has its nuances, and in Austin, parking is important for employees because it’s so challenging. Having a person with local knowledge to say, “We need to do something about this,” is super helpful.
It was probably a year after our Series A, that we hired a VP of Sales. We had a disparate band of salespeople working in London and the US that our COO was overseeing before that.
How did you deal with managing a distributed team when you were flying around to the various outposts in the early days?
Having a culture of documentation and asynchronous communication is key for a global company. You can’t solve everything in a synchronous Zoom meeting because there aren’t enough hours in the day.
Our Head of Product and Engineering, John McKim, has a saying: “Meetings are for the transformation of information, not the transmittal of information”. You transmit information through documentation, and it’s how you set up a session over Zoom. There should always be a pre-read, and everyone should know why they’re there and have read the information ahead of time.
Use the rare time you have together in those time zone overlaps to transform your ideas and move things through to the next stage.
What are your tips for people who are hiring and setting up a presence in the States?
Having someone on the ground who can be your eyes and ears. You’re not going to be able to get a lot of great hires through Zoom.
The past year has been different in that regard, but moving forward, the US is opening up, and you want someone who can represent you locally. That has worked incredibly well for us.
What were the advantages and disadvantages of building A Cloud Guru out of Australia?
Companies that start in the US can be disadvantaged by being too US-focused because they can succeed in that market alone. From day one, we had to be global, which helped us drive faster growth as we tried to hit all markets. And having a more global and diverse workforce when it comes to approaching problem solving and the ideas that get brought to the table is helpful for any company.
Being in Australia does make it harder to crack into the US and Europe. That doesn’t mean it’s not possible and that you shouldn’t do it. We need to have a thriving tech industry; we need to have more winners here who invest talent and resources back into the community. I’ve heard people say Australians are more entrepreneurial, but everyone is working really hard, if we’re being real. That means Australians have to work a little bit harder.
It is daunting for Australian founders to navigate the benefits and medical coverage when starting a company in the US. I remember the first time I was on a call, and someone asked what I wanted to do if one of our staff members got blindness caused by diabetes and whether we would cover them. I was like, why are you asking me these questions? Why am I making this decision?
The Aussie tax system is also not completely aligned with the US tax system, and options are treated differently. There’s a lot of nuance in share sales, and you have to consider it from day one.
Pay to get the right advice. Pay early. Spend the money — it’s worth it. You want advisors and firms around you in Australia that understand international accounting and tax rules.
What have you learnt about building company culture, and how do you maintain the quality of hires as the hiring pace increases?
We invested in culture early. Like super early. Earlier than I was comfortable with.
When I hired John as COO in the US, he said we will need someone to head up people and culture. We were about 25 employees at the time, and he knew we would need to gear up for fast growth and make sure we hire the right people.
It was one of the single best decisions we made in the business.
We hired Sara, who is ex-AirTree, and she has been an incredible partner to me in building the business. She could see we had a great culture in the team and was thoughtful about how we scared that so we didn’t lose it as we grew.
Sara pushed me to codify our values early. It was super important but really hard to do. The best advice I have is don’t try and build them by yourself as a founder. Involve your team to reflect the values and behaviours of the organisation that you are today and that you want to drive.
What’s been your favourite stage as you’ve gone along building A Cloud Guru?
Everybody loves the early building stage. It’s extremely rewarding. But it’s also hard, and I don’t yearn for it again.
When I think about the last 2–3 years and the skills that I’ve learnt managing a larger organisation and building an incredible team, I feel like I’ve grown much more as a person. Learning how to build organisational health and operational excellence is an important skillset and where a lot of my personal growth has come from in the past few years of the business.
How have you gone about developing yourself as a leader?
I don’t take courses. I’ve tried reading Harvard Business Review articles…sometimes, it can be helpful.
I do it through mentors. I’ve speak to people who’ve done it before and have sat in the same seat as me. Going to them with real problems that I’m dealing with and seeing how they would react, and what they’ve done in the past. That, to me is the best way of learning.