AI transcript
0:00:04 He opens a closet and there’s like all the bananas falling off because there was one guy
0:00:05 is only eating huge bananas.
0:00:09 He opened another closet, there’s another mattress with other guys sleeping in a second
0:00:09 closet.
0:00:11 I said, okay, this is real.
0:00:12 We had no money.
0:00:18 We just take 600 bucks plus left to go to a United flight and we had 90 days to just
0:00:20 make it or break it.
0:00:24 We knew that if we couldn’t race, we wouldn’t go back to Italy broke and that was it.
0:00:30 I think a lot of people don’t know or maybe don’t appreciate how fast Kong grew when it
0:00:30 actually happened.
0:00:33 So there was seven years of starvation, right?
0:00:35 I mean, it was just basically wasn’t working.
0:00:37 Every year we do the Founders Award.
0:00:43 The Founders Award is 2,555 stock to the best employee of the company.
0:00:44 Why that?
0:00:47 It’s 255 days of struggle.
0:00:48 It’s just symbolic.
0:00:52 But to remember seven years of struggle every year is a ritual.
0:00:57 What if the backbone of modern software was forged on $1,000 a month in a borrowed couch?
0:01:03 Today’s guest is Augusto Agui Marietti, CEO and co-founder of Kong.
0:01:09 He joins A16Z general partner Martin Cassato to trace an improbable path from a garage in
0:01:12 Milan to building one of the world’s leading API platforms.
0:01:17 We get into the seven-year grind before breakout, the near-death moments that forced reinvention,
0:01:20 and how APIs became the assembly line of software.
0:01:25 Agui also explains how Kong sits in the flow of everything, from microservices to AI agents,
0:01:30 and why the next wave of autonomous systems will make APIs more essential than ever.
0:01:32 Let’s get into it.
0:01:52 So Agui is the founder and CEO of Kong, which was previously Mashhape, and we’re covering his background from a garage in Milan to now being the CEO of an at-scale company with, I dare say, IPO ambitions at some point.
0:01:55 Long way to go, but that’s one of the steps along the way.
0:01:59 So you’re doing this kind of API thing.
0:02:02 You come to the U.S. on a tourist visa?
0:02:03 Tourist visa, yeah.
0:02:04 And the idea was to raise-
0:02:04 90 days.
0:02:05 Is the idea to raise funding?
0:02:06 Yeah, we had no money.
0:02:12 We just take 600 bucks, last left to go to a United flight through Cincinnati.
0:02:14 United flight through Cincinnati.
0:02:15 We went through secondary room.
0:02:17 And we landed up.
0:02:18 Sorry, Atlanta first time.
0:02:19 Cincinnati was second, secondary room.
0:02:23 And then we went, we arrived to San Francisco, and we had 90 days to just make it or break it.
0:02:27 We knew that if we couldn’t raise, we would go back to Italy broke, and that was it.
0:02:29 So did you raise in those?
0:02:30 Yeah, we raised two weeks before departure.
0:02:32 You raised in those?
0:02:33 Angel rounds.
0:02:35 We’re talking about a decade ago, right?
0:02:35 Small checks.
0:02:37 It was 50K angel rounds.
0:02:37 Who was it from?
0:02:39 It was the funding YouTube teams.
0:02:40 Oh, really?
0:02:40 There we go.
0:02:41 And here’s the funny story.
0:02:42 How did you get introduced to them?
0:02:45 So there’s two interesting things that you say, can you redo it again?
0:02:46 I won’t be able to redo it again.
0:02:46 Yeah.
0:02:49 So number one is, we went to the Stanford Entrepreneurship Week.
0:02:52 At that time, Stanford was doing the Stanford Entrepreneurship Week in February.
0:02:53 And it was cool.
0:02:55 You made all the entrepreneurs, all the VC were coming there.
0:02:58 And there was this entrepreneurship mixer, big party.
0:02:59 We arrived.
0:03:00 We left late.
0:03:03 At that point, it was all paper with all the email and the registration.
0:03:07 We steal the things with all the email and the registration.
0:03:08 And we walk home with that.
0:03:13 And that night till 5 a.m., I write all the 400 emails about,
0:03:15 hey, you need to know about Masha.
0:03:18 We didn’t have time to catch up at the mixer, but I’m happy to give you a pitch tomorrow.
0:03:19 Wow.
0:03:21 I think 470 didn’t reply.
0:03:23 30 reply.
0:03:25 And 10 were kind of interested.
0:03:27 And then at the end, 5 or 6 went to meet us.
0:03:27 Wow.
0:03:29 And then this one person,
0:03:32 called Kevin Donahue, who was one of the VP or funding team of YouTube,
0:03:33 came to our-
0:03:33 What’s his name?
0:03:35 Kevin Donahue.
0:03:35 Kevin Donahue.
0:03:38 And then he started a company for baby books.
0:03:38 He sold it.
0:03:40 But he said, look, I think this is something.
0:03:42 So he wrote a $17,000 check on our earmatch.
0:03:43 17?
0:03:43 Thousands.
0:03:44 Yeah.
0:03:46 And for us, 17,000 was life.
0:03:47 Yeah.
0:03:47 Versus debt.
0:03:48 Yeah.
0:03:50 So we came from $600 and a few hundred bucks.
0:03:52 And so then he brought two other funding team to write out of six.
0:03:55 It actually was $16,000, $16,000, $16,000.
0:03:56 We got $15,000.
0:03:59 The problem with $15,000 divided three was six, six, six, six, six, six, six.
0:04:00 It was too many six.
0:04:01 It’s like, we don’t want too many six in the captive.
0:04:06 So we rounded up $17,000, $17,000, $17,000, and we got $51,000 check.
0:04:12 Now, the second funny part is we negotiated and closed the deal at Travis Kalanick’s house.
0:04:14 Travis Kalanick’s house.
0:04:16 I remember there was an article about you sleeping on his couch.
0:04:17 Yes.
0:04:18 And Airbnb guys as well.
0:04:22 But what happened during the negotiation with these guys, we’re negotiating and they didn’t
0:04:22 want.
0:04:26 So Travis, at that time, was this house up in Castro called the Jampad, where everybody
0:04:27 would go.
0:04:28 Aaron Lee would go.
0:04:30 And Drew from Dropbox was the data.
0:04:31 We’re all going there on the weekends.
0:04:32 And I didn’t have a place to stay.
0:04:37 So actually, Travis gave me his place to stay a few weeks, as long as I would cook carbonara
0:04:39 for his better half once a week.
0:04:40 And I did that.
0:04:41 And then we need help.
0:04:42 They said, come to my kitchen.
0:04:42 We negotiated.
0:04:44 So we sit on the table.
0:04:46 It was myself and Travis Kalanick.
0:04:47 And they were the three YouTube investors.
0:04:50 Negotiated these convertible notes at like 50% discount.
0:04:51 Something crazy.
0:04:51 We were desperate.
0:04:54 And so I said, okay, well, I don’t want to take this deal.
0:04:55 Screw that.
0:04:57 I said, okay, okay, we’re going to leave.
0:04:59 And I was very naive, 20 years old.
0:05:00 Okay, okay, give a comeback.
0:05:04 And Travis come to me, put the hands and say, if this guy leave, you’re never going
0:05:04 to see them again.
0:05:05 And nor the money.
0:05:06 Wow.
0:05:07 So let me do something else.
0:05:07 Wow.
0:05:10 So you guys stay here and figure it out, the counter offer.
0:05:12 Aggie and I go to the bathroom.
0:05:14 We close the salary and we come back in 10 minutes.
0:05:18 So Travis brought me to the bathroom, locked the door of the house so these guys don’t leave.
0:05:26 Went to the bathroom and we sit there 10 minutes, go back, another round of negotiation, back
0:05:26 to the bathroom.
0:05:27 So three, four times.
0:05:29 At the end, we handshake on the deal.
0:05:29 And what was it?
0:05:32 It was finally better, like 42% convertible.
0:05:33 It’s kind of instead of 50.
0:05:34 And it was a higher cap.
0:05:36 And that’s it.
0:05:37 And then we shake the hand and that was it.
0:05:39 That’s crazy.
0:05:45 So I remember you had the Quora, like the top Quora post for living on like 14,000 a year
0:05:47 in San Francisco.
0:05:49 You had raised 51,000.
0:05:49 Yeah.
0:05:52 And now you had to make that last as long as possible.
0:05:56 So maybe talk about the next stretch.
0:05:58 What happened is obviously we got 50,000.
0:05:59 We got to go back.
0:06:00 We are illegal in two weeks.
0:06:03 So we went back to Italy and we came back with a B1, which you could be there.
0:06:05 We can be here six months.
0:06:06 But how?
0:06:07 We have no social security number.
0:06:09 We have no credit score, nobody.
0:06:12 So you have into this American system, very different than Italy’s system.
0:06:17 You have to enter into a new system and we had zero anything.
0:06:20 So we couldn’t pay our salary because we didn’t have SSN.
0:06:23 We didn’t have a legal visa to pay ourself, all that.
0:06:24 So the company.
0:06:25 Did you have employees at this point?
0:06:26 No.
0:06:27 It’s just you two.
0:06:28 It was three of us.
0:06:30 It was Michele was the third co-founder back then.
0:06:35 But we did about a thousand and a hundred monthly promissory note that the company would
0:06:38 give us and we would have to leave in three with a
0:06:39 thousand dollars a month.
0:06:42 So you were living off a thousand dollars a month?
0:06:43 In three.
0:06:45 Three people were living off a thousand dollars?
0:06:46 Yeah.
0:06:46 Yeah.
0:06:47 In San Francisco.
0:06:47 Yeah.
0:06:48 How do you do that?
0:06:49 It was cheaper.
0:06:50 Now what year was this?
0:06:51 2009, 2010.
0:06:54 Even then, it’s as impossible.
0:06:56 A thousand dollars a month for three people?
0:06:57 I’ll tell you how we did it.
0:07:03 So we live in an Airbnb somewhere else at a hundred bucks and all in the same mattress.
0:07:04 Wow.
0:07:06 And we were going to Valencia.
0:07:08 I don’t know if you do this in Valencia.
0:07:09 Did you have an office?
0:07:11 No, we were working out of Starbucks.
0:07:18 And we were living in Valencia and we were buying rice, beans, and tuna and pasta.
0:07:23 And the reason is that we had to find the right amount of carbs and product the cheapest way
0:07:23 possible.
0:07:29 And that was the combination of, I guess, amount of carbs and product the cheapest way
0:07:29 possible.
0:07:30 And that’s how we made it.
0:07:32 Like, we never eat out.
0:07:32 We never buy it.
0:07:33 We did everything in-house.
0:07:36 We cooked in the kitchen Airbnb, rice, beans, or tuna pasta.
0:07:41 In fact, we had so much tuna pasta with tomato that Marco and I, when we seen our tuna
0:07:44 pasta, we almost threw up because we’re just running on tuna pasta every single day.
0:07:48 So how long did this last?
0:07:53 That last, so March, April, 2010, a year, a year and a few months.
0:07:55 And what were you doing this time?
0:07:57 I can, I know what Marco was doing this time.
0:07:57 He’s writing code.
0:07:58 What were you doing?
0:08:03 I was writing blog, building the website, calling the sign up, talking with every sign up on
0:08:05 the website that was talking to us and trying to figure out.
0:08:11 I was doing a mix of B devs, HTML, CSS, slicer, talking with investors too, as you start
0:08:16 to build the seed rounds, trying to do some recruiting that never worked because nobody wanted
0:08:18 to work for illegal Italians that will disappear.
0:08:24 So a lot of mistakes and this, yeah, figured things out.
0:08:25 All right.
0:08:27 So take us to the seed round.
0:08:30 So somebody decided to give you a proper round at some point.
0:08:32 So then a year later, we re-architected.
0:08:36 So we went to Honolulu, on the beach, Moana beach.
0:08:38 And we thought about, okay, all these APIs were aggregating.
0:08:43 I think the word is, actually, we see now, finally now, but 10, 15 years ago, it wasn’t
0:08:47 ready to work to build apps on the fly through APIs with drag and drop.
0:08:48 We were too far ahead.
0:08:49 We’re missing pieces.
0:08:51 But I say, hey, we are wrapping a lot of APIs.
0:08:53 Actually, that assembly line visual still hold.
0:08:59 We just have to pivot it and build an API marketplace where all the APIs, producer and consumers, they
0:08:59 can come together.
0:09:01 And so we pivot that.
0:09:03 We re-launch it.
0:09:05 We then crunch all the stuff.
0:09:10 So you originally were doing this kind of drag and drop composable apps builder thing.
0:09:12 So funny how many companies go through this exact journey.
0:09:13 And then you’re like, okay.
0:09:14 With HTML5.
0:09:15 Wow.
0:09:18 And then you’re like, okay, no, we need to build a marketplace.
0:09:20 Exactly.
0:09:22 Because, okay, the economy, this API economy will come.
0:09:23 It’s not just apps.
0:09:24 It will be APIs.
0:09:25 And we build a marketplace.
0:09:26 We launch it.
0:09:28 We got these attractions on long tail.
0:09:30 And that was already the summer of 2011.
0:09:31 Yeah.
0:09:32 After a pivot in Hawaii.
0:09:33 So we launch very fast.
0:09:34 Boom, boom, boom.
0:09:35 And then we raise.
0:09:37 Was the Hawaii on the last of the money from?
0:09:38 No, no.
0:09:42 Because San Francisco, Tuono, Lula, I think at that time, it was like 300 bucks.
0:09:43 So it’s like with our 51K.
0:09:49 We’re living like on tuna pasta, rice and beans in Valencia, in Mission, in this historic
0:09:50 building, middle of nowhere in Mission.
0:09:53 And you guys, same mattress.
0:09:54 Same mattress and things.
0:09:58 It’s like, at some point, I remember, as I remember, a couple of mornings, I need to
0:09:58 go to Onolulu.
0:10:02 We could do our walk on the beach and thinking about our future or no future because we knew
0:10:03 this was going to the future.
0:10:06 Our money were starting to drain and we needed to pivot.
0:10:09 And that’s where we had the idea, let’s go for the pivot.
0:10:10 And then we come back.
0:10:11 We did crazy.
0:10:12 I remember us building the website.
0:10:13 Marco was going crazy.
0:10:17 The third co-founder was building all the Java backends and the launch it fast.
0:10:19 And I’ve got a little bit of TechCrunch press.
0:10:21 At that time, it was read, write, web.
0:10:23 This other one was mashable.
0:10:27 And so, somehow, we got covered by all of that, which is now like, Chris.
0:10:28 And then, boom.
0:10:30 And then, let’s start a seed round phase.
0:10:30 From who?
0:10:35 So, at that time, we went through a lot of iterations.
0:10:42 where we ended up was NEA leading the seed round and then Index co-leading to NEA.
0:10:43 And then, we got a bunch.
0:10:44 In the seed.
0:10:45 So, Volpe did the?
0:10:46 Yeah.
0:10:50 So, what happened is, actually, the first checks were George Zachari from CRV back then.
0:10:52 He didn’t lead the round, but he was the first 100K commit.
0:10:54 So, with that, he said, we have CRV, 100K.
0:10:55 At that point, they had a seed program.
0:10:57 Very unusual back then.
0:10:58 So, we went to NEA.
0:10:59 And he said, we’re going to lead this round.
0:11:02 At that point, also, they started a seed program, 500K.
0:11:06 And then, I met Mike Volpe that just moved to San Francisco to launch Index U.S.
0:11:08 It was like him and Danny Reimer through there somewhere.
0:11:12 And they also started out Angel, a seed program, and they wrote on other big checks.
0:11:18 And then, we got a long tail, which was, likely, Jeff Bezos and Eric Schmidt into the funds.
0:11:20 And so, we got this combination.
0:11:21 How did you get Bezos and Eric Schmidt?
0:11:25 So, again, that’s his serendipity that I don’t know we can replicate.
0:11:29 So, what happened is, Jeff Bezos.
0:11:34 So, Jeff Bezos, I knew he was special about Marketplace as a business, APIs, and developers.
0:11:36 AWS was just starting to take off.
0:11:37 It was this hidden secret.
0:11:39 This is 2011?
0:11:39 Yeah.
0:11:44 So, Amazon was maybe a $50 billion company then, $80 billion company.
0:11:54 So, what happened is, I hired the lawyer of his family office for call, for mesheque.
0:11:59 And after we hired for doing the seed round, as the seed round was going along, I said,
0:12:03 by the way, since you are also the lawyer of the family office and Bezos expeditions,
0:12:04 can you introduce me?
0:12:06 Can you introduce me to Jeff Bezos?
0:12:07 That’s what we do.
0:12:08 So, it’s a PG co-co.
0:12:12 And then he was on the road with his brother, going around with his brother on the road in
0:12:12 Texas.
0:12:16 And you actually really want to put more and invest.
0:12:17 Boom.
0:12:18 So, that was Jeff Bezos.
0:12:20 What do you get from Jeff Bezos?
0:12:21 You get the brand.
0:12:25 So, we got a dinners, a year strategy, any of things.
0:12:27 But obviously, it was the big brand.
0:12:31 And then second, Eric Schmidt, we were working in this co-working space.
0:12:37 And what happened is we were the only startup that stayed the latest in the night after
0:12:39 this other startup that was doing Expedia for cruise ships.
0:12:44 They just raised from NEA and Eric Schmidt.
0:12:47 And at the end, they saw us working until 3 a.m., 4 a.m.
0:12:48 They would leave a chew.
0:12:50 They knew we were fundraising.
0:12:52 And the investor asked, who is the hardest worker they knew?
0:12:54 And they said, this guy is next to us.
0:12:56 And so, they introduced us to the Eric Schmidt Fund.
0:12:58 And that’s how Eric Schmidt invests.
0:13:00 Totally unrelated.
0:13:02 All right.
0:13:03 So, now this brings us to 2011.
0:13:04 A lot of luck.
0:13:06 So, what was your total seat fund you raised?
0:13:08 At that time, it was very big.
0:13:09 It was 1.5.
0:13:11 It’s like, wow, a huge seat drum.
0:13:12 I got to say.
0:13:13 In 2010, 2011.
0:13:15 I got to say, there’s a lot of optimism.
0:13:21 It’s an optimistic retrospective view to be like, there was three of you on a mattress
0:13:23 for a year, and then you say you were lucky.
0:13:24 Illegally.
0:13:25 That sounds pretty unlucky to me.
0:13:26 No longer jail.
0:13:28 All right.
0:13:29 So, now you have your seat fund.
0:13:30 Matt Shapes going.
0:13:32 So, then we raised the seat.
0:13:33 All right.
0:13:34 Now, it’s real.
0:13:35 We got to get these visas.
0:13:37 We got to meet them.
0:13:40 So, we went back to Italy, go to the American embassy, blah, blah, blah.
0:13:42 Do the letter of recommendations.
0:13:45 Actually, Sam Altman was one of the guys that wrote me a letter of recommendation when he
0:13:47 was CEO of Loopt.
0:13:48 No kidding.
0:13:49 Which I met.
0:13:53 We were going to the NEA retreat, and I sit next to him in the bus, and we went to Pebble
0:13:55 Beach to the NEA retreat, and we spent three hours together.
0:13:57 And I said, by the way, I’m illegal here.
0:13:58 Can you write me a letter of recommendation?
0:13:59 For my O-1 visa.
0:14:00 No kidding.
0:14:00 And he wrote me.
0:14:02 So, I have this big thing of how great I am.
0:14:04 From Sam Altman, that’s great.
0:14:05 From Sam Altman, that’s great.
0:14:08 You got to get this guy in the country, no matter what.
0:14:15 So, we got this five letters, and I get this O-1 visa, and finally, I got the visa.
0:14:16 So, finally, I can come here.
0:14:21 I can get a WeWork space, and we start to hire, and we got seven people, and Mark also
0:14:21 get the visa.
0:14:25 Mark has also, because of the love book, he never got to college or nothing.
0:14:27 So, it was the hardest visa to do.
0:14:31 So, we figured it out, more letter recommendations for him, and we brought him there.
0:14:32 We stay here, blah, blah, blah.
0:14:33 We build a year.
0:14:33 We grow.
0:14:38 But, you know, at that time, like, you needed, like, a million, let’s say, a million revenue
0:14:40 to take a good Cirrus A.
0:14:43 For a marketplace, you need a million in gross volume.
0:14:44 We were, like, at 50K.
0:14:46 So, a lot of traction, but not a lot of revenue.
0:14:55 But we went through a three, four-month Cirrus A race, and CRV led, and then indexed.
0:14:57 Was it DevDot that-
0:14:57 Yeah.
0:14:58 Yeah.
0:15:03 Yeah, because George Zachary was more a consumer, so he passed the thing to DevTag, just generally
0:15:04 more on the enterprise side.
0:15:12 I remember DevTag called me, like, Sunday at 6 a.m. to go for a walk to decide to invest
0:15:12 or not.
0:15:18 He knows I’m at Night Hall, and he just signed at 6 a.m. to go down to Palo Alto, which I
0:15:19 had to rent a zip car.
0:15:20 There were the zip cars.
0:15:21 There was no Uber.
0:15:26 And go down there and then go for a few walks, and I decided to invest.
0:15:29 Because he was always actually a big believer on APIs as assembly line.
0:15:30 He could see that.
0:15:30 Yeah.
0:15:35 Maybe he wasn’t sure Marketplace was the right execution, but the theme, he was a big believer.
0:15:38 And I think he, like, us, like, he came to see us leap in the same mattress.
0:15:42 He wanted to really see that we’re not, like, bullshitting the big drama story.
0:15:42 It was really drama.
0:15:46 Actually, he opens, he came to the Acre House, because we moved to Acre House in South Park
0:15:49 at that time, where we’re sleeping and working there with the 70p.
0:15:54 And he opens a closet, and there’s, like, all the bananas falling off, because it was one
0:15:56 guy’s only eating huge bananas.
0:15:57 He opened another closet.
0:15:59 There’s another mattress with another guy sleeping in a second closet.
0:16:02 And he said, okay, this is real.
0:16:03 Wow.
0:16:06 How big was your pay?
0:16:08 6.5 million.
0:16:11 Oh, so for you, that must be, must have been a lot of money.
0:16:13 6.5 million.
0:16:13 Yeah.
0:16:14 I went out with this PowerPoint.
0:16:15 Let’s raise a 10 million seriously.
0:16:17 At that point, that was, like, the big thing.
0:16:19 We ended up at 6.5.
0:16:22 And I say, that’s fine.
0:16:24 It was, like, when we saw it, it was, like, yeah.
0:16:27 And, like, maybe we got a shot.
0:16:30 So, at some point, you decided that the market wasn’t working.
0:16:32 The market wasn’t working.
0:16:36 And I think, so we raised this, and we hired more.
0:16:38 We moved to a new office, 25 people.
0:16:40 Like, you know, the usual post-race honeymoon.
0:16:49 And I remember this thing, like, six months after, we, the business wasn’t really doing anything.
0:16:52 So, it was one board mini that would just cook pasta for the board members at that time,
0:16:55 because that was, like, two years before you joined us.
0:16:57 And it was nothing to talk about from business.
0:17:02 The issue was, is you couldn’t monetize, or there was churn, there’s a graduation problem.
0:17:04 Like, I mean, these marketplaces are very tough.
0:17:08 So, the idea of the marketplace, when I was staying with Airbnb founders,
0:17:13 I learned that the marketplace could be the biggest, more powerful business in the world.
0:17:15 Like, you don’t even have to innovate once you get liquidity.
0:17:17 It’s just, you can’t disrupt it.
0:17:17 Look at eBay.
0:17:18 You can’t kill.
0:17:20 So, I thought, like, there’s all this API.
0:17:21 You can build a marketplace with liquidity.
0:17:24 It’ll be, like, the AWS of mine.
0:17:29 And so, we noticed, though, that in our case, it was a developer API marketplace.
0:17:36 So, to have, to a marketplace to work, you need to have a long tail of low-power people.
0:17:40 If you have concentrated in a few high-power, marketplace doesn’t work.
0:17:42 Like, Airbnb houses, like, millions of people with low power.
0:17:43 So, that was one.
0:17:45 Two, you need to have exclusivity, somewhat.
0:17:50 Like, the door to access that marketplace supply has to be through the marketplace.
0:17:52 APIs, you could Google and go through the website.
0:17:54 You wouldn’t go through the marketplace.
0:17:58 APIs, at that time, power of low for public APIs was on the tweet or the stride.
0:18:01 There were 30 that matters and 3,000 that didn’t matter much.
0:18:03 So, it was also this long tail power.
0:18:04 And third thing is, was quality.
0:18:06 Like, you couldn’t, you were running a cloud marketplace.
0:18:09 You couldn’t actually maintain the quality of the supply.
0:18:11 You would always get blamed for it.
0:18:12 And there was no trust.
0:18:16 And so, I think because of that, it got to a million and a half in gross revenue.
0:18:19 But it never became this Airbnb or Uber of APIs.
0:18:21 That is like 10%.
0:18:23 Yeah, and it was also losing margin on AWS.
0:18:27 So, I could never make the economics in that model.
0:18:28 I could never make the economics works.
0:18:30 Even if this thing would have scaled.
0:18:31 So, then we go there.
0:18:32 It’s like, okay, this is where we’re here.
0:18:33 We’re burning out.
0:18:34 We’re running out of money.
0:18:39 And so, we built this massive API engine behind the marketplace, API Gateway,
0:18:44 that was firing 20,000 APIs of this long tail, doing billing, rate limiting, routing, caching,
0:18:47 authentication, authorization, logging, all of that.
0:18:48 We built it three times.
0:18:50 And the third time was the great one.
0:18:51 And we say, wait a second.
0:18:52 Every company will become an API company.
0:18:55 Why don’t we take this engine and we give it to the whole world?
0:18:58 And that was the beginning of open source, Mongo.
0:19:02 And so, boom, we open source Kong.
0:19:06 What was your runway at the time that you open sourced Kong?
0:19:09 So, we open sourced in April 15.
0:19:15 We had to take a bridge of 2 million to go another year.
0:19:17 Was it an insider bridge?
0:19:17 Yeah.
0:19:21 We had to take an extension because we were out of gas.
0:19:23 From Depthed and Mike?
0:19:23 Yeah.
0:19:27 They gave us an extension on the 2 million because we were out of gas.
0:19:28 Like, we would have died otherwise.
0:19:29 Wow.
0:19:30 So, you released Kong?
0:19:31 I remember when Kong released.
0:19:32 It was actually a really big deal.
0:19:33 When was that?
0:19:34 2015.
0:19:34 2015.
0:19:36 Yes, 2015.
0:19:37 That was a really big deal.
0:19:37 I remember.
0:19:37 It took off.
0:19:38 Boom.
0:19:38 Yeah.
0:19:40 So, this is when you and I started talking about your raise.
0:19:42 You’re raising the B.
0:19:43 You came at the right time.
0:19:45 Before, like, these guys make no sense.
0:19:46 Okay, now it starts to make sense.
0:19:51 Well, that wasn’t even a tough raise for you just because the company had been around for
0:19:58 seven years, like a marketplace, like Kong had just come out and it was taking off, but
0:20:03 like, it only been a couple of weeks, maybe a couple of months.
0:20:08 And so, honestly, I’ll tell you what, what did it for me is, you know, we were doing all
0:20:14 the work and like, the GitHub stars checked out, your story is phenomenal, your command
0:20:16 of the business is great, but it just wasn’t enough.
0:20:21 But then, while we were doing the diligence, like, I kept getting these kind of serendipitous,
0:20:24 like, somebody had used Kong and loved it.
0:20:28 I remember, didn’t like somebody stay in like your Airbnb and like loved Kong and like, and
0:20:30 then you forwarded that to me.
0:20:35 And so, they’re just kind of like all of this, you know, zeitgeist around Kong.
0:20:38 And as a result of that, I’m like, oh, this is clearly a phenomenon.
0:20:42 Yeah, I remember I was spamming you with emails of every prospect or customer user that
0:20:45 were saying, it was just, you say, Kong, Kong usage, Kong usage.
0:20:46 Just nonstop.
0:20:48 Like, it was blowing up the inbox.
0:20:49 Yeah, yeah, yeah.
0:20:53 So, how close, how close were you to running out of money for it to be?
0:20:58 So, after Breach, there were, eh, weeks.
0:20:58 Jeez.
0:21:00 Yeah.
0:21:00 But it was very.
0:21:06 Nothing is ever going to stress you again in your entire life because you’ve been so close
0:21:09 to at least business so many times.
0:21:14 Because I actually remember when we went to the office, it felt dead.
0:21:15 It felt like basically.
0:21:15 No, no.
0:21:16 We were dead.
0:21:17 We just didn’t know about it.
0:21:19 You were like two weeks from being dead.
0:21:19 I mean, it felt.
0:21:22 We were like Bungal B, you know, that it flies, but it’s not supposed to fly.
0:21:23 And we keep going.
0:21:26 No, I remember that very, very well.
0:21:26 Yeah.
0:21:28 And you were like, you’re like, yeah, this guy’s been there a while.
0:21:30 I think they’re going to, you know, whatever.
0:21:31 They raise money and then they’re going to give up.
0:21:31 You were.
0:21:34 I said, I said, it was tough.
0:21:40 And I think if we go back and say, I don’t know, we were able to replicate all the sequence
0:21:42 that happens, all the things that happens.
0:21:45 And I remember we went, yeah.
0:21:50 And then we had that great sushi with Mark Andreessen, you and I, and we sealed the deal.
0:21:51 And Marco.
0:21:51 Yeah.
0:21:53 The end of 2016, we closed.
0:21:55 And since then, the company’s just been remarkable.
0:21:58 I mean, there was kind of an announcement recently that across 100 million, which is now actually
0:21:59 quite a while back.
0:22:00 A year and a half ago, yeah.
0:22:01 A year and a half ago.
0:22:01 Yeah.
0:22:07 So we, we, yeah, it was in, in a year and a half is 10 years where we were like, when you
0:22:10 invested, we were ARR less than a million.
0:22:12 Yeah.
0:22:13 Less than a million of ARR.
0:22:14 Do you remember?
0:22:14 Do you remember?
0:22:15 Not even a million ARR.
0:22:16 500K probably.
0:22:16 Do you remember once?
0:22:17 I remember.
0:22:17 So yeah.
0:22:18 So you had a great first year.
0:22:23 And then I told you, I said, listen, if you, if, if you hit 10 million or whatever it
0:22:24 was, I’ll buy you a car.
0:22:25 Remember that?
0:22:26 I did.
0:22:28 Oh, actually we have in the new office now.
0:22:28 I need to send you a picture.
0:22:30 Well, there’s a funny story about this.
0:22:34 And so like, you know, you, um, you do it.
0:22:37 So like, I think you grow like 10 X that year.
0:22:40 So that year we went from 2 million of ARR.
0:22:41 Yeah.
0:22:41 To 10.
0:22:42 That was right.
0:22:44 The plan I think was six or seven.
0:22:45 Yeah, yeah, yeah, yeah, yeah.
0:22:51 And then I went and I checked with compliance and I’m like, can I buy Augie a cheap car?
0:22:53 And they said, the maximum for a gift is whatever it is.
0:22:54 And so I’m like, crap.
0:22:58 So I ended up buying you the best model car I could find.
0:22:59 From Japan.
0:22:59 I think.
0:23:00 Yeah, yeah, yeah.
0:23:03 I spent a long time actually looking for this model car.
0:23:05 Is there a 280 GT?
0:23:06 Yeah, yeah.
0:23:06 That’s right.
0:23:08 So great.
0:23:09 So, so I would love to shift.
0:23:14 So I think this is the most remarkable Silicon Valley startup story that I know of that I’m
0:23:15 close to.
0:23:17 That will make a movie one day.
0:23:19 They will have to make a movie one day.
0:23:19 Yeah.
0:23:23 I would love to like kind of shift towards how you think about product, how you think about
0:23:26 markets and then kind of move towards AI.
0:23:29 So you actually have seen a number of shifts now, right?
0:23:30 You saw the cloud come.
0:23:32 You saw the shift to APIs.
0:23:38 So maybe just talk a little bit about how you view this current shift with AI.
0:23:39 Is it, is it fundamentally different?
0:23:40 Is it the same?
0:23:42 Does it change how you think about yourself as a leader?
0:23:46 Like how, how, how is your view at a high level?
0:23:50 So the, the, the big thing is I, I start with API first.
0:23:54 So obviously we, we, we built, we become this API infrastructure company.
0:23:55 Yeah.
0:23:58 Maybe we should just describe what Kong is right now before we actually do that.
0:24:03 So, so we left with this pivot and we open source Kong API gateway took off and we become
0:24:04 an enterprise company.
0:24:06 We became, we rebrand Kong Inc.
0:24:12 And we start to build all sorts of API infrastructure to run, manage, and secure your internal or external
0:24:13 APIs.
0:24:19 So you have software, you have microservices, you have 10, 100,000 of APIs.
0:24:23 We’re kind of this highways that makes them run.
0:24:24 And you have rate limiting.
0:24:30 Like if, if APIs were a cars, you got guardrails, speed bump, speed cameras, gas stations, stalls,
0:24:33 bumps, guardrails, everything.
0:24:37 Ambulance, and that we provide all the infrastructure to make sure that the API connectivity
0:24:40 runs for small company, big company, all of that.
0:24:47 Now in, in this transition you mentioned, what really drove, I think this explosion of
0:24:50 cloud APIs was the workload moving from on-prem to the cloud.
0:24:54 The second transition is breaking down the monolith to microservice.
0:24:56 It recreates more and more APIs, the big data and all that.
0:24:58 It creates event streaming, all that.
0:25:02 So this just data in motion is much higher than, it’s becoming much higher than like data
0:25:05 rest or data, data in use than before.
0:25:09 But, but, but in a way, when you were starting the company, you were drafting on a big transition,
0:25:09 right?
0:25:12 Which was the breaking down of the monolith and the shift to cloud.
0:25:12 Yes, that was the killer.
0:25:13 Right.
0:25:14 And so that was the key.
0:25:14 Yeah.
0:25:19 I think, I think before there were all these archive legacy solutions in APIs, but they were
0:25:24 not built for the transition to the cloud and breaking down the monoliths into microservices
0:25:27 and high scale decentralized architecture.
0:25:30 I mean, you know, from your time on this year, like we, we, we kind of invented the control
0:25:35 plane, data plane separation at the API management, API control plane level.
0:25:36 Nobody was doing it before.
0:25:42 I got to say, I think a lot of people don’t know, or maybe don’t appreciate how fast Kong
0:25:43 grew when it actually happened.
0:25:46 So there was seven years of starvation, right?
0:25:48 I mean, it was just basically wasn’t working.
0:25:52 No, actually, you know, and you don’t, you know, despite like every year we do the founders
0:25:53 award.
0:25:53 Yeah.
0:25:59 The founders award is 2,555 stock to the best employee of the company.
0:25:59 Yeah.
0:26:00 Why that?
0:26:05 It’s 255 days of struggle to remember every day, which is seven years.
0:26:06 That’s amazing.
0:26:07 It’s seven years.
0:26:07 I didn’t know that.
0:26:10 Every year the company has to go, they get 2,55.
0:26:11 It’s just, it’s just symbolic.
0:26:12 Yeah.
0:26:12 Yeah.
0:26:12 Of course.
0:26:15 To remember seven years of struggle every year is a retool.
0:26:21 And there was this crazy diving catch, which, you know, Marco does the greatest Kong.
0:26:23 He throws it out on the market and it catches off.
0:26:26 But once it did, the company grew incredibly quickly.
0:26:29 And we had 45 competitors when we started.
0:26:30 Oh, I remember that.
0:26:30 Yeah.
0:26:31 Now it’s probably 30.
0:26:34 But even then at the time, yeah.
0:26:36 Well, Kong broke away pretty quickly.
0:26:40 So, I mean, you know, in recent years, it’s clearly been the leader on this.
0:26:44 And that only happens, I think, if there’s just clearly a market need.
0:26:48 The market also kind of did you a favor in that, like, MuleSoft got acquired and Apogee
0:26:48 got acquired, too.
0:26:49 Right?
0:26:50 It was right.
0:26:50 Yeah.
0:26:51 17, MuleSoft got acquired.
0:26:53 Apogee got acquired in 16.
0:26:54 That’s right.
0:26:54 Yeah.
0:26:59 So, like, in a way, kind of like there was consolidation and you broke out this later.
0:27:03 So, you kind of navigated this transition from, you know, cloud to breaking up the microservices.
0:27:05 You know, you built the control plane for APIs.
0:27:10 You’re considered now, like, the, you know, the leader independent for sure in the API space,
0:27:11 Kong is the leader independent.
0:27:13 There’s no question of that.
0:27:19 But now you’re facing another market shift, which is kind of this movement to AI.
0:27:24 And so, do you view this as directly impactful, adjacent, accretive?
0:27:27 Like, how are you as CEO viewing this?
0:27:27 Yeah.
0:27:34 I think, again, it’s not like it was like any meat as things, but the market came at us in
0:27:36 AI by creating more APIs.
0:27:37 What that means?
0:27:40 Agents are going to consume internet in a very different way.
0:27:41 way than how human did.
0:27:46 There’s not any more websites, scroll, click, up and down, applications.
0:27:49 They’re going to be there, but not as relevant as before.
0:27:54 Agents are going to programmatically exchange labor, get tasks done through programming interface,
0:28:00 whether it’s classic APRS, MCP protocols, which is like Duolingo for APIs, makes them speak
0:28:02 English, whatever it is, the protocol.
0:28:06 But machines consuming internet is going to be very different than human consuming internet.
0:28:08 Human consuming internet would be through UI.
0:28:13 Machine consuming internet is through programming interface.
0:28:23 That’s the huge shift that we are now capturing and powering and making sure the enterprise think about AI connectivity.
0:28:26 And at the end of the day, behind the scene, it’s all APIs.
0:28:29 We had a board meeting, what was it, yesterday?
0:28:30 Yes.
0:28:37 And what I found actually pretty remarkable is how many more banal use cases there are around AI, right?
0:28:53 We can talk about agents and I think it’s worth talking about and I agree with you, but it also feels like there’s like a lot of just basic stuff like key management for, you know, like a lot of the companies are spending a lot of money on these AI models, right?
0:28:59 So it’s great to be able to have like, you know, monitoring, billing, key rotations, all of that stuff.
0:29:02 So are you actually seeing like a non-agentic draft now?
0:29:03 Yeah.
0:29:09 So when I think the word is a bit of stuck, okay, you have these AI companies like Poole that are just building models, yada, yada.
0:29:15 And then you have this wrapper company that are trying to solve, you know, HR issue, whatever, through AI.
0:29:17 Then you have these LLMs that have APIs to talks.
0:29:21 Companies like Entropy, a lot of revenue through APIs, all that.
0:29:26 What is missing is the infrastructure to make those AI talks and run.
0:29:28 And that’s what we do now with the AI gave to a lot of products.
0:29:33 But at the core, the boring problem, like you mentioned, authentication, authorization.
0:29:39 You can be AGI as much as you want, but at the end, an agent gets stuck if he has to authenticate.
0:29:41 And to authenticate, you’ve got to get an API key.
0:29:43 You need a human in the loop to get the API key authenticate.
0:29:52 But if you can provide infrastructure at the beginning, you can provision and automate key provisioning, key rotation, authentication.
0:30:04 So once you’re there, you can unleash your LLM, your agents to just roam free without getting stuck every time for authentication, authorization, because you’re already provisioning all these keys.
0:30:07 I think that’s where we want to our customers.
0:30:16 So maybe just assume for this part of our discussion that whoever’s listening is pretty familiar with API infrastructure, right?
0:30:25 Do you think that the way API infrastructure looks in six months or a year or two years is dramatically different because of AI?
0:30:33 Or is it that the infrastructure that we have in place that we understand today evolves to also service agents in ways that are pretty obvious?
0:30:39 Like, to what extent do you think this is, like, transformational in the infrastructure layer versus, like, more of a transition?
0:30:42 I think you cannot do AI if you’re not API first.
0:30:46 It’s just you don’t have the mouth and the ears to a model.
0:30:50 And so that’s how AI talks.
0:30:56 So the way we know about API infrastructure, it will evolve and won’t change.
0:31:00 But API traffic and AI traffic, they are converging.
0:31:04 So the classic API calls, yes, but also when you move tokens, it’s an API call.
0:31:08 And Intelligent, let’s say Intelligent will be sold through tokens.
0:31:10 Every earning release is about tokens.
0:31:14 But behind any tokens, there are calls that payloads move tokens.
0:31:16 So they’re kind of converging.
0:31:23 And what we are calling or building is a unified API and AI connectivity platform that helps you navigate this transition.
0:31:33 As you’re managing classic API traffic, as you’re managing agent traffic, as you manage MCP traffic, as you manage LLM traffic, I think it will all converge into a unified, like, broker.
0:31:35 And that’s how I think intelligence will move.
0:31:39 And it’s an evolutionary steps in, like, two, three years.
0:31:42 But we already see MCP traffic growing every quarter.
0:31:46 I mean, I see even, like, really basic things, like, for developers, this is evolving very quickly.
0:31:50 So, for example, you know, for fun, I develop using Cursor.
0:32:05 You know, I used to be a professional developer, you know, in a previous life, even knowing what APIs existed in a company required a ton of reading through docs or some weird search.
0:32:15 And it feels like now, especially, like, if you have something like Kong, which, you know, has all the metadata and has the catalog, and then you can integrate into something like Cursor.
0:32:20 So, not only does the agent itself know about the APIs, but you cannot expose it to you.
0:32:28 I mean, it feels like a lot of, like, even the development paradigm is shifting now because we can start to surface these things to developers.
0:32:37 Yeah, I think you can think you can, we can be an enabler to help large companies, small companies to get into the hands of more developers or more Cursor.
0:32:38 Because it’s also an API.
0:32:41 We can provide you that infrastructures and all of that.
0:32:46 We, as you see from yesterday, we have a very exciting roadmap that is going, you know, in that direction.
0:32:49 So, those are all the name of them.
0:32:50 I think here’s the big bet.
0:32:57 The big bet is what happened in microservices, because I grew up in Italy, and you don’t really study a lot of math.
0:32:59 You just study history.
0:33:03 But what you learn from history is that even it doesn’t exactly repeat, but it reads.
0:33:05 It’s just, it’s always unannounced.
0:33:08 So, what we see with microservices, what happened?
0:33:18 We first built rate limiting and authentication 10 times, 100 times, 50 times into the Python framework, the JavaScript framework, the TypeScript framework, the Java framework, whatever, PHP, blah, blah, blah.
0:33:20 At some point, it didn’t make any sense.
0:33:28 Let’s abstract everything to a gateway pattern, and we move all this connectivity logic to the gateway, and then dispatch to the right service, no matter what language.
0:33:31 The same thing, I think, is going to happen in LLMs.
0:33:34 At first, you have one enterprise use one big LLMs.
0:33:38 Now, they’re going to use five, 10, 100, small LMs, medium, large, whatever.
0:33:45 Once you get to, you don’t do tokens, relimiting, token authentication in each LLM using the framework, the long chain, whatever.
0:33:51 Eventually, same thing happened in Microsoft, but you will abstract that to a gateway partner once again.
0:34:02 And that’s where I think AI Gateway will have the same analogy and dispatcher to right connectivity logic to the right LLM versus rewriting in each LLM.
0:34:10 I think that’s the big bet that we make that happens in microservices, happens in how enterprise will run and govern hundreds of LLMs.
0:34:25 Great. Well, listen, as we wrap this up, I think it’d be great to kind of end with, like, any sort of recommendations for people that are listening to learn a bit more about how kind of AI shifting the API landscape, or maybe, you know, some advice on…
0:34:26 Don’t start a company, I’m joking.
0:34:38 Maybe advice on kind of, like, you know, how to start thinking about getting ready for that.
0:34:45 I think I said before, like, there is a lot of focus on model pre-training, tuning, all of that.
0:34:54 But a key thing is the connectivity layer, how LLMs, agents, whatever, will talk to each other, how you will run.
0:34:57 I think a lot of the traffic will be very strategic.
0:35:06 And you have to build in the startups of the enterprise to manage that AI connectivity into your next apps, your next internal tools, your next customers.
0:35:17 And for the, listen, the budding founders that are listening to, like, the most hardcore Silicon Valley struggle story ever, what advice do you give to them?
0:35:21 I think what I learned over a decade of, like…
0:35:27 I mean, do you ever think, I just have to, do you ever think that, like, maybe you should have cut your losses and try to start it over again?
0:35:29 Like, do you ever think that that would have been the right thing?
0:35:29 Never.
0:35:30 No.
0:35:30 Never.
0:35:31 Never.
0:35:40 The reason is I could never visualize myself going back to the airport in Italy and my dad picking me up and say, how’s it going?
0:35:44 And it’s just like, would fail with my tails and my legs.
0:35:46 Like, I could never, I would have died here without food.
0:35:47 Like, I cannot do that.
0:35:50 And so that, that never crossed through the head.
0:35:51 Shivers.
0:35:52 That was so good.
0:35:53 But never.
0:36:00 Like, that’s, that’s the visual that every time I even start to, I had that visual and immediately say, I’m not going back like that.
0:36:07 And so, and then, but the thing to advise is, it always takes longer than what we think.
0:36:15 It is good to take a trend the last 10 years, 20 years, because you have time to grow into and do a lot of mistakes and building.
0:36:19 And just, you have to generally believe it in this trend versus falling glitters.
0:36:21 Because it’s going to take longer than what you think.
0:36:25 As a leader, as a human, as a marketer, as a product, as a revenue, it’s always going to take longer.
0:36:30 So take something that lasts and just put 110% on it every day.
0:36:31 And then it will compound.
0:36:34 Keep the burn rate low in the early days.
0:36:34 Don’t die.
0:36:36 Don’t die.
0:36:37 Like, don’t quit.
0:36:42 Those, those are, those, those are, I think, the things I learned along the way.
0:36:47 Agi, it’s been a privilege and an honor working with you these past few years.
0:36:48 And thanks so much for coming on the podcast.
0:36:49 Likewise.
0:36:51 Thank you, Martin.
0:36:56 Thanks for listening to this episode of the A16Z podcast.
0:37:03 If you liked this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family.
0:37:08 For more episodes, go to YouTube, Apple Podcasts, and Spotify.
0:37:14 Follow us on X at A16Z and subscribe to our substack at A16Z.substack.com.
0:37:17 Thanks again for listening, and I’ll see you in the next episode.
0:37:31 As a reminder, the content here is for informational purposes only, should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.
0:37:37 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:37:44 For more details, including a link to our investments, please see A16Z.com forward slash disclosures.
0:00:05 is only eating huge bananas.
0:00:09 He opened another closet, there’s another mattress with other guys sleeping in a second
0:00:09 closet.
0:00:11 I said, okay, this is real.
0:00:12 We had no money.
0:00:18 We just take 600 bucks plus left to go to a United flight and we had 90 days to just
0:00:20 make it or break it.
0:00:24 We knew that if we couldn’t race, we wouldn’t go back to Italy broke and that was it.
0:00:30 I think a lot of people don’t know or maybe don’t appreciate how fast Kong grew when it
0:00:30 actually happened.
0:00:33 So there was seven years of starvation, right?
0:00:35 I mean, it was just basically wasn’t working.
0:00:37 Every year we do the Founders Award.
0:00:43 The Founders Award is 2,555 stock to the best employee of the company.
0:00:44 Why that?
0:00:47 It’s 255 days of struggle.
0:00:48 It’s just symbolic.
0:00:52 But to remember seven years of struggle every year is a ritual.
0:00:57 What if the backbone of modern software was forged on $1,000 a month in a borrowed couch?
0:01:03 Today’s guest is Augusto Agui Marietti, CEO and co-founder of Kong.
0:01:09 He joins A16Z general partner Martin Cassato to trace an improbable path from a garage in
0:01:12 Milan to building one of the world’s leading API platforms.
0:01:17 We get into the seven-year grind before breakout, the near-death moments that forced reinvention,
0:01:20 and how APIs became the assembly line of software.
0:01:25 Agui also explains how Kong sits in the flow of everything, from microservices to AI agents,
0:01:30 and why the next wave of autonomous systems will make APIs more essential than ever.
0:01:32 Let’s get into it.
0:01:52 So Agui is the founder and CEO of Kong, which was previously Mashhape, and we’re covering his background from a garage in Milan to now being the CEO of an at-scale company with, I dare say, IPO ambitions at some point.
0:01:55 Long way to go, but that’s one of the steps along the way.
0:01:59 So you’re doing this kind of API thing.
0:02:02 You come to the U.S. on a tourist visa?
0:02:03 Tourist visa, yeah.
0:02:04 And the idea was to raise-
0:02:04 90 days.
0:02:05 Is the idea to raise funding?
0:02:06 Yeah, we had no money.
0:02:12 We just take 600 bucks, last left to go to a United flight through Cincinnati.
0:02:14 United flight through Cincinnati.
0:02:15 We went through secondary room.
0:02:17 And we landed up.
0:02:18 Sorry, Atlanta first time.
0:02:19 Cincinnati was second, secondary room.
0:02:23 And then we went, we arrived to San Francisco, and we had 90 days to just make it or break it.
0:02:27 We knew that if we couldn’t raise, we would go back to Italy broke, and that was it.
0:02:29 So did you raise in those?
0:02:30 Yeah, we raised two weeks before departure.
0:02:32 You raised in those?
0:02:33 Angel rounds.
0:02:35 We’re talking about a decade ago, right?
0:02:35 Small checks.
0:02:37 It was 50K angel rounds.
0:02:37 Who was it from?
0:02:39 It was the funding YouTube teams.
0:02:40 Oh, really?
0:02:40 There we go.
0:02:41 And here’s the funny story.
0:02:42 How did you get introduced to them?
0:02:45 So there’s two interesting things that you say, can you redo it again?
0:02:46 I won’t be able to redo it again.
0:02:46 Yeah.
0:02:49 So number one is, we went to the Stanford Entrepreneurship Week.
0:02:52 At that time, Stanford was doing the Stanford Entrepreneurship Week in February.
0:02:53 And it was cool.
0:02:55 You made all the entrepreneurs, all the VC were coming there.
0:02:58 And there was this entrepreneurship mixer, big party.
0:02:59 We arrived.
0:03:00 We left late.
0:03:03 At that point, it was all paper with all the email and the registration.
0:03:07 We steal the things with all the email and the registration.
0:03:08 And we walk home with that.
0:03:13 And that night till 5 a.m., I write all the 400 emails about,
0:03:15 hey, you need to know about Masha.
0:03:18 We didn’t have time to catch up at the mixer, but I’m happy to give you a pitch tomorrow.
0:03:19 Wow.
0:03:21 I think 470 didn’t reply.
0:03:23 30 reply.
0:03:25 And 10 were kind of interested.
0:03:27 And then at the end, 5 or 6 went to meet us.
0:03:27 Wow.
0:03:29 And then this one person,
0:03:32 called Kevin Donahue, who was one of the VP or funding team of YouTube,
0:03:33 came to our-
0:03:33 What’s his name?
0:03:35 Kevin Donahue.
0:03:35 Kevin Donahue.
0:03:38 And then he started a company for baby books.
0:03:38 He sold it.
0:03:40 But he said, look, I think this is something.
0:03:42 So he wrote a $17,000 check on our earmatch.
0:03:43 17?
0:03:43 Thousands.
0:03:44 Yeah.
0:03:46 And for us, 17,000 was life.
0:03:47 Yeah.
0:03:47 Versus debt.
0:03:48 Yeah.
0:03:50 So we came from $600 and a few hundred bucks.
0:03:52 And so then he brought two other funding team to write out of six.
0:03:55 It actually was $16,000, $16,000, $16,000.
0:03:56 We got $15,000.
0:03:59 The problem with $15,000 divided three was six, six, six, six, six, six, six.
0:04:00 It was too many six.
0:04:01 It’s like, we don’t want too many six in the captive.
0:04:06 So we rounded up $17,000, $17,000, $17,000, and we got $51,000 check.
0:04:12 Now, the second funny part is we negotiated and closed the deal at Travis Kalanick’s house.
0:04:14 Travis Kalanick’s house.
0:04:16 I remember there was an article about you sleeping on his couch.
0:04:17 Yes.
0:04:18 And Airbnb guys as well.
0:04:22 But what happened during the negotiation with these guys, we’re negotiating and they didn’t
0:04:22 want.
0:04:26 So Travis, at that time, was this house up in Castro called the Jampad, where everybody
0:04:27 would go.
0:04:28 Aaron Lee would go.
0:04:30 And Drew from Dropbox was the data.
0:04:31 We’re all going there on the weekends.
0:04:32 And I didn’t have a place to stay.
0:04:37 So actually, Travis gave me his place to stay a few weeks, as long as I would cook carbonara
0:04:39 for his better half once a week.
0:04:40 And I did that.
0:04:41 And then we need help.
0:04:42 They said, come to my kitchen.
0:04:42 We negotiated.
0:04:44 So we sit on the table.
0:04:46 It was myself and Travis Kalanick.
0:04:47 And they were the three YouTube investors.
0:04:50 Negotiated these convertible notes at like 50% discount.
0:04:51 Something crazy.
0:04:51 We were desperate.
0:04:54 And so I said, okay, well, I don’t want to take this deal.
0:04:55 Screw that.
0:04:57 I said, okay, okay, we’re going to leave.
0:04:59 And I was very naive, 20 years old.
0:05:00 Okay, okay, give a comeback.
0:05:04 And Travis come to me, put the hands and say, if this guy leave, you’re never going
0:05:04 to see them again.
0:05:05 And nor the money.
0:05:06 Wow.
0:05:07 So let me do something else.
0:05:07 Wow.
0:05:10 So you guys stay here and figure it out, the counter offer.
0:05:12 Aggie and I go to the bathroom.
0:05:14 We close the salary and we come back in 10 minutes.
0:05:18 So Travis brought me to the bathroom, locked the door of the house so these guys don’t leave.
0:05:26 Went to the bathroom and we sit there 10 minutes, go back, another round of negotiation, back
0:05:26 to the bathroom.
0:05:27 So three, four times.
0:05:29 At the end, we handshake on the deal.
0:05:29 And what was it?
0:05:32 It was finally better, like 42% convertible.
0:05:33 It’s kind of instead of 50.
0:05:34 And it was a higher cap.
0:05:36 And that’s it.
0:05:37 And then we shake the hand and that was it.
0:05:39 That’s crazy.
0:05:45 So I remember you had the Quora, like the top Quora post for living on like 14,000 a year
0:05:47 in San Francisco.
0:05:49 You had raised 51,000.
0:05:49 Yeah.
0:05:52 And now you had to make that last as long as possible.
0:05:56 So maybe talk about the next stretch.
0:05:58 What happened is obviously we got 50,000.
0:05:59 We got to go back.
0:06:00 We are illegal in two weeks.
0:06:03 So we went back to Italy and we came back with a B1, which you could be there.
0:06:05 We can be here six months.
0:06:06 But how?
0:06:07 We have no social security number.
0:06:09 We have no credit score, nobody.
0:06:12 So you have into this American system, very different than Italy’s system.
0:06:17 You have to enter into a new system and we had zero anything.
0:06:20 So we couldn’t pay our salary because we didn’t have SSN.
0:06:23 We didn’t have a legal visa to pay ourself, all that.
0:06:24 So the company.
0:06:25 Did you have employees at this point?
0:06:26 No.
0:06:27 It’s just you two.
0:06:28 It was three of us.
0:06:30 It was Michele was the third co-founder back then.
0:06:35 But we did about a thousand and a hundred monthly promissory note that the company would
0:06:38 give us and we would have to leave in three with a
0:06:39 thousand dollars a month.
0:06:42 So you were living off a thousand dollars a month?
0:06:43 In three.
0:06:45 Three people were living off a thousand dollars?
0:06:46 Yeah.
0:06:46 Yeah.
0:06:47 In San Francisco.
0:06:47 Yeah.
0:06:48 How do you do that?
0:06:49 It was cheaper.
0:06:50 Now what year was this?
0:06:51 2009, 2010.
0:06:54 Even then, it’s as impossible.
0:06:56 A thousand dollars a month for three people?
0:06:57 I’ll tell you how we did it.
0:07:03 So we live in an Airbnb somewhere else at a hundred bucks and all in the same mattress.
0:07:04 Wow.
0:07:06 And we were going to Valencia.
0:07:08 I don’t know if you do this in Valencia.
0:07:09 Did you have an office?
0:07:11 No, we were working out of Starbucks.
0:07:18 And we were living in Valencia and we were buying rice, beans, and tuna and pasta.
0:07:23 And the reason is that we had to find the right amount of carbs and product the cheapest way
0:07:23 possible.
0:07:29 And that was the combination of, I guess, amount of carbs and product the cheapest way
0:07:29 possible.
0:07:30 And that’s how we made it.
0:07:32 Like, we never eat out.
0:07:32 We never buy it.
0:07:33 We did everything in-house.
0:07:36 We cooked in the kitchen Airbnb, rice, beans, or tuna pasta.
0:07:41 In fact, we had so much tuna pasta with tomato that Marco and I, when we seen our tuna
0:07:44 pasta, we almost threw up because we’re just running on tuna pasta every single day.
0:07:48 So how long did this last?
0:07:53 That last, so March, April, 2010, a year, a year and a few months.
0:07:55 And what were you doing this time?
0:07:57 I can, I know what Marco was doing this time.
0:07:57 He’s writing code.
0:07:58 What were you doing?
0:08:03 I was writing blog, building the website, calling the sign up, talking with every sign up on
0:08:05 the website that was talking to us and trying to figure out.
0:08:11 I was doing a mix of B devs, HTML, CSS, slicer, talking with investors too, as you start
0:08:16 to build the seed rounds, trying to do some recruiting that never worked because nobody wanted
0:08:18 to work for illegal Italians that will disappear.
0:08:24 So a lot of mistakes and this, yeah, figured things out.
0:08:25 All right.
0:08:27 So take us to the seed round.
0:08:30 So somebody decided to give you a proper round at some point.
0:08:32 So then a year later, we re-architected.
0:08:36 So we went to Honolulu, on the beach, Moana beach.
0:08:38 And we thought about, okay, all these APIs were aggregating.
0:08:43 I think the word is, actually, we see now, finally now, but 10, 15 years ago, it wasn’t
0:08:47 ready to work to build apps on the fly through APIs with drag and drop.
0:08:48 We were too far ahead.
0:08:49 We’re missing pieces.
0:08:51 But I say, hey, we are wrapping a lot of APIs.
0:08:53 Actually, that assembly line visual still hold.
0:08:59 We just have to pivot it and build an API marketplace where all the APIs, producer and consumers, they
0:08:59 can come together.
0:09:01 And so we pivot that.
0:09:03 We re-launch it.
0:09:05 We then crunch all the stuff.
0:09:10 So you originally were doing this kind of drag and drop composable apps builder thing.
0:09:12 So funny how many companies go through this exact journey.
0:09:13 And then you’re like, okay.
0:09:14 With HTML5.
0:09:15 Wow.
0:09:18 And then you’re like, okay, no, we need to build a marketplace.
0:09:20 Exactly.
0:09:22 Because, okay, the economy, this API economy will come.
0:09:23 It’s not just apps.
0:09:24 It will be APIs.
0:09:25 And we build a marketplace.
0:09:26 We launch it.
0:09:28 We got these attractions on long tail.
0:09:30 And that was already the summer of 2011.
0:09:31 Yeah.
0:09:32 After a pivot in Hawaii.
0:09:33 So we launch very fast.
0:09:34 Boom, boom, boom.
0:09:35 And then we raise.
0:09:37 Was the Hawaii on the last of the money from?
0:09:38 No, no.
0:09:42 Because San Francisco, Tuono, Lula, I think at that time, it was like 300 bucks.
0:09:43 So it’s like with our 51K.
0:09:49 We’re living like on tuna pasta, rice and beans in Valencia, in Mission, in this historic
0:09:50 building, middle of nowhere in Mission.
0:09:53 And you guys, same mattress.
0:09:54 Same mattress and things.
0:09:58 It’s like, at some point, I remember, as I remember, a couple of mornings, I need to
0:09:58 go to Onolulu.
0:10:02 We could do our walk on the beach and thinking about our future or no future because we knew
0:10:03 this was going to the future.
0:10:06 Our money were starting to drain and we needed to pivot.
0:10:09 And that’s where we had the idea, let’s go for the pivot.
0:10:10 And then we come back.
0:10:11 We did crazy.
0:10:12 I remember us building the website.
0:10:13 Marco was going crazy.
0:10:17 The third co-founder was building all the Java backends and the launch it fast.
0:10:19 And I’ve got a little bit of TechCrunch press.
0:10:21 At that time, it was read, write, web.
0:10:23 This other one was mashable.
0:10:27 And so, somehow, we got covered by all of that, which is now like, Chris.
0:10:28 And then, boom.
0:10:30 And then, let’s start a seed round phase.
0:10:30 From who?
0:10:35 So, at that time, we went through a lot of iterations.
0:10:42 where we ended up was NEA leading the seed round and then Index co-leading to NEA.
0:10:43 And then, we got a bunch.
0:10:44 In the seed.
0:10:45 So, Volpe did the?
0:10:46 Yeah.
0:10:50 So, what happened is, actually, the first checks were George Zachari from CRV back then.
0:10:52 He didn’t lead the round, but he was the first 100K commit.
0:10:54 So, with that, he said, we have CRV, 100K.
0:10:55 At that point, they had a seed program.
0:10:57 Very unusual back then.
0:10:58 So, we went to NEA.
0:10:59 And he said, we’re going to lead this round.
0:11:02 At that point, also, they started a seed program, 500K.
0:11:06 And then, I met Mike Volpe that just moved to San Francisco to launch Index U.S.
0:11:08 It was like him and Danny Reimer through there somewhere.
0:11:12 And they also started out Angel, a seed program, and they wrote on other big checks.
0:11:18 And then, we got a long tail, which was, likely, Jeff Bezos and Eric Schmidt into the funds.
0:11:20 And so, we got this combination.
0:11:21 How did you get Bezos and Eric Schmidt?
0:11:25 So, again, that’s his serendipity that I don’t know we can replicate.
0:11:29 So, what happened is, Jeff Bezos.
0:11:34 So, Jeff Bezos, I knew he was special about Marketplace as a business, APIs, and developers.
0:11:36 AWS was just starting to take off.
0:11:37 It was this hidden secret.
0:11:39 This is 2011?
0:11:39 Yeah.
0:11:44 So, Amazon was maybe a $50 billion company then, $80 billion company.
0:11:54 So, what happened is, I hired the lawyer of his family office for call, for mesheque.
0:11:59 And after we hired for doing the seed round, as the seed round was going along, I said,
0:12:03 by the way, since you are also the lawyer of the family office and Bezos expeditions,
0:12:04 can you introduce me?
0:12:06 Can you introduce me to Jeff Bezos?
0:12:07 That’s what we do.
0:12:08 So, it’s a PG co-co.
0:12:12 And then he was on the road with his brother, going around with his brother on the road in
0:12:12 Texas.
0:12:16 And you actually really want to put more and invest.
0:12:17 Boom.
0:12:18 So, that was Jeff Bezos.
0:12:20 What do you get from Jeff Bezos?
0:12:21 You get the brand.
0:12:25 So, we got a dinners, a year strategy, any of things.
0:12:27 But obviously, it was the big brand.
0:12:31 And then second, Eric Schmidt, we were working in this co-working space.
0:12:37 And what happened is we were the only startup that stayed the latest in the night after
0:12:39 this other startup that was doing Expedia for cruise ships.
0:12:44 They just raised from NEA and Eric Schmidt.
0:12:47 And at the end, they saw us working until 3 a.m., 4 a.m.
0:12:48 They would leave a chew.
0:12:50 They knew we were fundraising.
0:12:52 And the investor asked, who is the hardest worker they knew?
0:12:54 And they said, this guy is next to us.
0:12:56 And so, they introduced us to the Eric Schmidt Fund.
0:12:58 And that’s how Eric Schmidt invests.
0:13:00 Totally unrelated.
0:13:02 All right.
0:13:03 So, now this brings us to 2011.
0:13:04 A lot of luck.
0:13:06 So, what was your total seat fund you raised?
0:13:08 At that time, it was very big.
0:13:09 It was 1.5.
0:13:11 It’s like, wow, a huge seat drum.
0:13:12 I got to say.
0:13:13 In 2010, 2011.
0:13:15 I got to say, there’s a lot of optimism.
0:13:21 It’s an optimistic retrospective view to be like, there was three of you on a mattress
0:13:23 for a year, and then you say you were lucky.
0:13:24 Illegally.
0:13:25 That sounds pretty unlucky to me.
0:13:26 No longer jail.
0:13:28 All right.
0:13:29 So, now you have your seat fund.
0:13:30 Matt Shapes going.
0:13:32 So, then we raised the seat.
0:13:33 All right.
0:13:34 Now, it’s real.
0:13:35 We got to get these visas.
0:13:37 We got to meet them.
0:13:40 So, we went back to Italy, go to the American embassy, blah, blah, blah.
0:13:42 Do the letter of recommendations.
0:13:45 Actually, Sam Altman was one of the guys that wrote me a letter of recommendation when he
0:13:47 was CEO of Loopt.
0:13:48 No kidding.
0:13:49 Which I met.
0:13:53 We were going to the NEA retreat, and I sit next to him in the bus, and we went to Pebble
0:13:55 Beach to the NEA retreat, and we spent three hours together.
0:13:57 And I said, by the way, I’m illegal here.
0:13:58 Can you write me a letter of recommendation?
0:13:59 For my O-1 visa.
0:14:00 No kidding.
0:14:00 And he wrote me.
0:14:02 So, I have this big thing of how great I am.
0:14:04 From Sam Altman, that’s great.
0:14:05 From Sam Altman, that’s great.
0:14:08 You got to get this guy in the country, no matter what.
0:14:15 So, we got this five letters, and I get this O-1 visa, and finally, I got the visa.
0:14:16 So, finally, I can come here.
0:14:21 I can get a WeWork space, and we start to hire, and we got seven people, and Mark also
0:14:21 get the visa.
0:14:25 Mark has also, because of the love book, he never got to college or nothing.
0:14:27 So, it was the hardest visa to do.
0:14:31 So, we figured it out, more letter recommendations for him, and we brought him there.
0:14:32 We stay here, blah, blah, blah.
0:14:33 We build a year.
0:14:33 We grow.
0:14:38 But, you know, at that time, like, you needed, like, a million, let’s say, a million revenue
0:14:40 to take a good Cirrus A.
0:14:43 For a marketplace, you need a million in gross volume.
0:14:44 We were, like, at 50K.
0:14:46 So, a lot of traction, but not a lot of revenue.
0:14:55 But we went through a three, four-month Cirrus A race, and CRV led, and then indexed.
0:14:57 Was it DevDot that-
0:14:57 Yeah.
0:14:58 Yeah.
0:15:03 Yeah, because George Zachary was more a consumer, so he passed the thing to DevTag, just generally
0:15:04 more on the enterprise side.
0:15:12 I remember DevTag called me, like, Sunday at 6 a.m. to go for a walk to decide to invest
0:15:12 or not.
0:15:18 He knows I’m at Night Hall, and he just signed at 6 a.m. to go down to Palo Alto, which I
0:15:19 had to rent a zip car.
0:15:20 There were the zip cars.
0:15:21 There was no Uber.
0:15:26 And go down there and then go for a few walks, and I decided to invest.
0:15:29 Because he was always actually a big believer on APIs as assembly line.
0:15:30 He could see that.
0:15:30 Yeah.
0:15:35 Maybe he wasn’t sure Marketplace was the right execution, but the theme, he was a big believer.
0:15:38 And I think he, like, us, like, he came to see us leap in the same mattress.
0:15:42 He wanted to really see that we’re not, like, bullshitting the big drama story.
0:15:42 It was really drama.
0:15:46 Actually, he opens, he came to the Acre House, because we moved to Acre House in South Park
0:15:49 at that time, where we’re sleeping and working there with the 70p.
0:15:54 And he opens a closet, and there’s, like, all the bananas falling off, because it was one
0:15:56 guy’s only eating huge bananas.
0:15:57 He opened another closet.
0:15:59 There’s another mattress with another guy sleeping in a second closet.
0:16:02 And he said, okay, this is real.
0:16:03 Wow.
0:16:06 How big was your pay?
0:16:08 6.5 million.
0:16:11 Oh, so for you, that must be, must have been a lot of money.
0:16:13 6.5 million.
0:16:13 Yeah.
0:16:14 I went out with this PowerPoint.
0:16:15 Let’s raise a 10 million seriously.
0:16:17 At that point, that was, like, the big thing.
0:16:19 We ended up at 6.5.
0:16:22 And I say, that’s fine.
0:16:24 It was, like, when we saw it, it was, like, yeah.
0:16:27 And, like, maybe we got a shot.
0:16:30 So, at some point, you decided that the market wasn’t working.
0:16:32 The market wasn’t working.
0:16:36 And I think, so we raised this, and we hired more.
0:16:38 We moved to a new office, 25 people.
0:16:40 Like, you know, the usual post-race honeymoon.
0:16:49 And I remember this thing, like, six months after, we, the business wasn’t really doing anything.
0:16:52 So, it was one board mini that would just cook pasta for the board members at that time,
0:16:55 because that was, like, two years before you joined us.
0:16:57 And it was nothing to talk about from business.
0:17:02 The issue was, is you couldn’t monetize, or there was churn, there’s a graduation problem.
0:17:04 Like, I mean, these marketplaces are very tough.
0:17:08 So, the idea of the marketplace, when I was staying with Airbnb founders,
0:17:13 I learned that the marketplace could be the biggest, more powerful business in the world.
0:17:15 Like, you don’t even have to innovate once you get liquidity.
0:17:17 It’s just, you can’t disrupt it.
0:17:17 Look at eBay.
0:17:18 You can’t kill.
0:17:20 So, I thought, like, there’s all this API.
0:17:21 You can build a marketplace with liquidity.
0:17:24 It’ll be, like, the AWS of mine.
0:17:29 And so, we noticed, though, that in our case, it was a developer API marketplace.
0:17:36 So, to have, to a marketplace to work, you need to have a long tail of low-power people.
0:17:40 If you have concentrated in a few high-power, marketplace doesn’t work.
0:17:42 Like, Airbnb houses, like, millions of people with low power.
0:17:43 So, that was one.
0:17:45 Two, you need to have exclusivity, somewhat.
0:17:50 Like, the door to access that marketplace supply has to be through the marketplace.
0:17:52 APIs, you could Google and go through the website.
0:17:54 You wouldn’t go through the marketplace.
0:17:58 APIs, at that time, power of low for public APIs was on the tweet or the stride.
0:18:01 There were 30 that matters and 3,000 that didn’t matter much.
0:18:03 So, it was also this long tail power.
0:18:04 And third thing is, was quality.
0:18:06 Like, you couldn’t, you were running a cloud marketplace.
0:18:09 You couldn’t actually maintain the quality of the supply.
0:18:11 You would always get blamed for it.
0:18:12 And there was no trust.
0:18:16 And so, I think because of that, it got to a million and a half in gross revenue.
0:18:19 But it never became this Airbnb or Uber of APIs.
0:18:21 That is like 10%.
0:18:23 Yeah, and it was also losing margin on AWS.
0:18:27 So, I could never make the economics in that model.
0:18:28 I could never make the economics works.
0:18:30 Even if this thing would have scaled.
0:18:31 So, then we go there.
0:18:32 It’s like, okay, this is where we’re here.
0:18:33 We’re burning out.
0:18:34 We’re running out of money.
0:18:39 And so, we built this massive API engine behind the marketplace, API Gateway,
0:18:44 that was firing 20,000 APIs of this long tail, doing billing, rate limiting, routing, caching,
0:18:47 authentication, authorization, logging, all of that.
0:18:48 We built it three times.
0:18:50 And the third time was the great one.
0:18:51 And we say, wait a second.
0:18:52 Every company will become an API company.
0:18:55 Why don’t we take this engine and we give it to the whole world?
0:18:58 And that was the beginning of open source, Mongo.
0:19:02 And so, boom, we open source Kong.
0:19:06 What was your runway at the time that you open sourced Kong?
0:19:09 So, we open sourced in April 15.
0:19:15 We had to take a bridge of 2 million to go another year.
0:19:17 Was it an insider bridge?
0:19:17 Yeah.
0:19:21 We had to take an extension because we were out of gas.
0:19:23 From Depthed and Mike?
0:19:23 Yeah.
0:19:27 They gave us an extension on the 2 million because we were out of gas.
0:19:28 Like, we would have died otherwise.
0:19:29 Wow.
0:19:30 So, you released Kong?
0:19:31 I remember when Kong released.
0:19:32 It was actually a really big deal.
0:19:33 When was that?
0:19:34 2015.
0:19:34 2015.
0:19:36 Yes, 2015.
0:19:37 That was a really big deal.
0:19:37 I remember.
0:19:37 It took off.
0:19:38 Boom.
0:19:38 Yeah.
0:19:40 So, this is when you and I started talking about your raise.
0:19:42 You’re raising the B.
0:19:43 You came at the right time.
0:19:45 Before, like, these guys make no sense.
0:19:46 Okay, now it starts to make sense.
0:19:51 Well, that wasn’t even a tough raise for you just because the company had been around for
0:19:58 seven years, like a marketplace, like Kong had just come out and it was taking off, but
0:20:03 like, it only been a couple of weeks, maybe a couple of months.
0:20:08 And so, honestly, I’ll tell you what, what did it for me is, you know, we were doing all
0:20:14 the work and like, the GitHub stars checked out, your story is phenomenal, your command
0:20:16 of the business is great, but it just wasn’t enough.
0:20:21 But then, while we were doing the diligence, like, I kept getting these kind of serendipitous,
0:20:24 like, somebody had used Kong and loved it.
0:20:28 I remember, didn’t like somebody stay in like your Airbnb and like loved Kong and like, and
0:20:30 then you forwarded that to me.
0:20:35 And so, they’re just kind of like all of this, you know, zeitgeist around Kong.
0:20:38 And as a result of that, I’m like, oh, this is clearly a phenomenon.
0:20:42 Yeah, I remember I was spamming you with emails of every prospect or customer user that
0:20:45 were saying, it was just, you say, Kong, Kong usage, Kong usage.
0:20:46 Just nonstop.
0:20:48 Like, it was blowing up the inbox.
0:20:49 Yeah, yeah, yeah.
0:20:53 So, how close, how close were you to running out of money for it to be?
0:20:58 So, after Breach, there were, eh, weeks.
0:20:58 Jeez.
0:21:00 Yeah.
0:21:00 But it was very.
0:21:06 Nothing is ever going to stress you again in your entire life because you’ve been so close
0:21:09 to at least business so many times.
0:21:14 Because I actually remember when we went to the office, it felt dead.
0:21:15 It felt like basically.
0:21:15 No, no.
0:21:16 We were dead.
0:21:17 We just didn’t know about it.
0:21:19 You were like two weeks from being dead.
0:21:19 I mean, it felt.
0:21:22 We were like Bungal B, you know, that it flies, but it’s not supposed to fly.
0:21:23 And we keep going.
0:21:26 No, I remember that very, very well.
0:21:26 Yeah.
0:21:28 And you were like, you’re like, yeah, this guy’s been there a while.
0:21:30 I think they’re going to, you know, whatever.
0:21:31 They raise money and then they’re going to give up.
0:21:31 You were.
0:21:34 I said, I said, it was tough.
0:21:40 And I think if we go back and say, I don’t know, we were able to replicate all the sequence
0:21:42 that happens, all the things that happens.
0:21:45 And I remember we went, yeah.
0:21:50 And then we had that great sushi with Mark Andreessen, you and I, and we sealed the deal.
0:21:51 And Marco.
0:21:51 Yeah.
0:21:53 The end of 2016, we closed.
0:21:55 And since then, the company’s just been remarkable.
0:21:58 I mean, there was kind of an announcement recently that across 100 million, which is now actually
0:21:59 quite a while back.
0:22:00 A year and a half ago, yeah.
0:22:01 A year and a half ago.
0:22:01 Yeah.
0:22:07 So we, we, yeah, it was in, in a year and a half is 10 years where we were like, when you
0:22:10 invested, we were ARR less than a million.
0:22:12 Yeah.
0:22:13 Less than a million of ARR.
0:22:14 Do you remember?
0:22:14 Do you remember?
0:22:15 Not even a million ARR.
0:22:16 500K probably.
0:22:16 Do you remember once?
0:22:17 I remember.
0:22:17 So yeah.
0:22:18 So you had a great first year.
0:22:23 And then I told you, I said, listen, if you, if, if you hit 10 million or whatever it
0:22:24 was, I’ll buy you a car.
0:22:25 Remember that?
0:22:26 I did.
0:22:28 Oh, actually we have in the new office now.
0:22:28 I need to send you a picture.
0:22:30 Well, there’s a funny story about this.
0:22:34 And so like, you know, you, um, you do it.
0:22:37 So like, I think you grow like 10 X that year.
0:22:40 So that year we went from 2 million of ARR.
0:22:41 Yeah.
0:22:41 To 10.
0:22:42 That was right.
0:22:44 The plan I think was six or seven.
0:22:45 Yeah, yeah, yeah, yeah, yeah.
0:22:51 And then I went and I checked with compliance and I’m like, can I buy Augie a cheap car?
0:22:53 And they said, the maximum for a gift is whatever it is.
0:22:54 And so I’m like, crap.
0:22:58 So I ended up buying you the best model car I could find.
0:22:59 From Japan.
0:22:59 I think.
0:23:00 Yeah, yeah, yeah.
0:23:03 I spent a long time actually looking for this model car.
0:23:05 Is there a 280 GT?
0:23:06 Yeah, yeah.
0:23:06 That’s right.
0:23:08 So great.
0:23:09 So, so I would love to shift.
0:23:14 So I think this is the most remarkable Silicon Valley startup story that I know of that I’m
0:23:15 close to.
0:23:17 That will make a movie one day.
0:23:19 They will have to make a movie one day.
0:23:19 Yeah.
0:23:23 I would love to like kind of shift towards how you think about product, how you think about
0:23:26 markets and then kind of move towards AI.
0:23:29 So you actually have seen a number of shifts now, right?
0:23:30 You saw the cloud come.
0:23:32 You saw the shift to APIs.
0:23:38 So maybe just talk a little bit about how you view this current shift with AI.
0:23:39 Is it, is it fundamentally different?
0:23:40 Is it the same?
0:23:42 Does it change how you think about yourself as a leader?
0:23:46 Like how, how, how is your view at a high level?
0:23:50 So the, the, the big thing is I, I start with API first.
0:23:54 So obviously we, we, we built, we become this API infrastructure company.
0:23:55 Yeah.
0:23:58 Maybe we should just describe what Kong is right now before we actually do that.
0:24:03 So, so we left with this pivot and we open source Kong API gateway took off and we become
0:24:04 an enterprise company.
0:24:06 We became, we rebrand Kong Inc.
0:24:12 And we start to build all sorts of API infrastructure to run, manage, and secure your internal or external
0:24:13 APIs.
0:24:19 So you have software, you have microservices, you have 10, 100,000 of APIs.
0:24:23 We’re kind of this highways that makes them run.
0:24:24 And you have rate limiting.
0:24:30 Like if, if APIs were a cars, you got guardrails, speed bump, speed cameras, gas stations, stalls,
0:24:33 bumps, guardrails, everything.
0:24:37 Ambulance, and that we provide all the infrastructure to make sure that the API connectivity
0:24:40 runs for small company, big company, all of that.
0:24:47 Now in, in this transition you mentioned, what really drove, I think this explosion of
0:24:50 cloud APIs was the workload moving from on-prem to the cloud.
0:24:54 The second transition is breaking down the monolith to microservice.
0:24:56 It recreates more and more APIs, the big data and all that.
0:24:58 It creates event streaming, all that.
0:25:02 So this just data in motion is much higher than, it’s becoming much higher than like data
0:25:05 rest or data, data in use than before.
0:25:09 But, but, but in a way, when you were starting the company, you were drafting on a big transition,
0:25:09 right?
0:25:12 Which was the breaking down of the monolith and the shift to cloud.
0:25:12 Yes, that was the killer.
0:25:13 Right.
0:25:14 And so that was the key.
0:25:14 Yeah.
0:25:19 I think, I think before there were all these archive legacy solutions in APIs, but they were
0:25:24 not built for the transition to the cloud and breaking down the monoliths into microservices
0:25:27 and high scale decentralized architecture.
0:25:30 I mean, you know, from your time on this year, like we, we, we kind of invented the control
0:25:35 plane, data plane separation at the API management, API control plane level.
0:25:36 Nobody was doing it before.
0:25:42 I got to say, I think a lot of people don’t know, or maybe don’t appreciate how fast Kong
0:25:43 grew when it actually happened.
0:25:46 So there was seven years of starvation, right?
0:25:48 I mean, it was just basically wasn’t working.
0:25:52 No, actually, you know, and you don’t, you know, despite like every year we do the founders
0:25:53 award.
0:25:53 Yeah.
0:25:59 The founders award is 2,555 stock to the best employee of the company.
0:25:59 Yeah.
0:26:00 Why that?
0:26:05 It’s 255 days of struggle to remember every day, which is seven years.
0:26:06 That’s amazing.
0:26:07 It’s seven years.
0:26:07 I didn’t know that.
0:26:10 Every year the company has to go, they get 2,55.
0:26:11 It’s just, it’s just symbolic.
0:26:12 Yeah.
0:26:12 Yeah.
0:26:12 Of course.
0:26:15 To remember seven years of struggle every year is a retool.
0:26:21 And there was this crazy diving catch, which, you know, Marco does the greatest Kong.
0:26:23 He throws it out on the market and it catches off.
0:26:26 But once it did, the company grew incredibly quickly.
0:26:29 And we had 45 competitors when we started.
0:26:30 Oh, I remember that.
0:26:30 Yeah.
0:26:31 Now it’s probably 30.
0:26:34 But even then at the time, yeah.
0:26:36 Well, Kong broke away pretty quickly.
0:26:40 So, I mean, you know, in recent years, it’s clearly been the leader on this.
0:26:44 And that only happens, I think, if there’s just clearly a market need.
0:26:48 The market also kind of did you a favor in that, like, MuleSoft got acquired and Apogee
0:26:48 got acquired, too.
0:26:49 Right?
0:26:50 It was right.
0:26:50 Yeah.
0:26:51 17, MuleSoft got acquired.
0:26:53 Apogee got acquired in 16.
0:26:54 That’s right.
0:26:54 Yeah.
0:26:59 So, like, in a way, kind of like there was consolidation and you broke out this later.
0:27:03 So, you kind of navigated this transition from, you know, cloud to breaking up the microservices.
0:27:05 You know, you built the control plane for APIs.
0:27:10 You’re considered now, like, the, you know, the leader independent for sure in the API space,
0:27:11 Kong is the leader independent.
0:27:13 There’s no question of that.
0:27:19 But now you’re facing another market shift, which is kind of this movement to AI.
0:27:24 And so, do you view this as directly impactful, adjacent, accretive?
0:27:27 Like, how are you as CEO viewing this?
0:27:27 Yeah.
0:27:34 I think, again, it’s not like it was like any meat as things, but the market came at us in
0:27:36 AI by creating more APIs.
0:27:37 What that means?
0:27:40 Agents are going to consume internet in a very different way.
0:27:41 way than how human did.
0:27:46 There’s not any more websites, scroll, click, up and down, applications.
0:27:49 They’re going to be there, but not as relevant as before.
0:27:54 Agents are going to programmatically exchange labor, get tasks done through programming interface,
0:28:00 whether it’s classic APRS, MCP protocols, which is like Duolingo for APIs, makes them speak
0:28:02 English, whatever it is, the protocol.
0:28:06 But machines consuming internet is going to be very different than human consuming internet.
0:28:08 Human consuming internet would be through UI.
0:28:13 Machine consuming internet is through programming interface.
0:28:23 That’s the huge shift that we are now capturing and powering and making sure the enterprise think about AI connectivity.
0:28:26 And at the end of the day, behind the scene, it’s all APIs.
0:28:29 We had a board meeting, what was it, yesterday?
0:28:30 Yes.
0:28:37 And what I found actually pretty remarkable is how many more banal use cases there are around AI, right?
0:28:53 We can talk about agents and I think it’s worth talking about and I agree with you, but it also feels like there’s like a lot of just basic stuff like key management for, you know, like a lot of the companies are spending a lot of money on these AI models, right?
0:28:59 So it’s great to be able to have like, you know, monitoring, billing, key rotations, all of that stuff.
0:29:02 So are you actually seeing like a non-agentic draft now?
0:29:03 Yeah.
0:29:09 So when I think the word is a bit of stuck, okay, you have these AI companies like Poole that are just building models, yada, yada.
0:29:15 And then you have this wrapper company that are trying to solve, you know, HR issue, whatever, through AI.
0:29:17 Then you have these LLMs that have APIs to talks.
0:29:21 Companies like Entropy, a lot of revenue through APIs, all that.
0:29:26 What is missing is the infrastructure to make those AI talks and run.
0:29:28 And that’s what we do now with the AI gave to a lot of products.
0:29:33 But at the core, the boring problem, like you mentioned, authentication, authorization.
0:29:39 You can be AGI as much as you want, but at the end, an agent gets stuck if he has to authenticate.
0:29:41 And to authenticate, you’ve got to get an API key.
0:29:43 You need a human in the loop to get the API key authenticate.
0:29:52 But if you can provide infrastructure at the beginning, you can provision and automate key provisioning, key rotation, authentication.
0:30:04 So once you’re there, you can unleash your LLM, your agents to just roam free without getting stuck every time for authentication, authorization, because you’re already provisioning all these keys.
0:30:07 I think that’s where we want to our customers.
0:30:16 So maybe just assume for this part of our discussion that whoever’s listening is pretty familiar with API infrastructure, right?
0:30:25 Do you think that the way API infrastructure looks in six months or a year or two years is dramatically different because of AI?
0:30:33 Or is it that the infrastructure that we have in place that we understand today evolves to also service agents in ways that are pretty obvious?
0:30:39 Like, to what extent do you think this is, like, transformational in the infrastructure layer versus, like, more of a transition?
0:30:42 I think you cannot do AI if you’re not API first.
0:30:46 It’s just you don’t have the mouth and the ears to a model.
0:30:50 And so that’s how AI talks.
0:30:56 So the way we know about API infrastructure, it will evolve and won’t change.
0:31:00 But API traffic and AI traffic, they are converging.
0:31:04 So the classic API calls, yes, but also when you move tokens, it’s an API call.
0:31:08 And Intelligent, let’s say Intelligent will be sold through tokens.
0:31:10 Every earning release is about tokens.
0:31:14 But behind any tokens, there are calls that payloads move tokens.
0:31:16 So they’re kind of converging.
0:31:23 And what we are calling or building is a unified API and AI connectivity platform that helps you navigate this transition.
0:31:33 As you’re managing classic API traffic, as you’re managing agent traffic, as you manage MCP traffic, as you manage LLM traffic, I think it will all converge into a unified, like, broker.
0:31:35 And that’s how I think intelligence will move.
0:31:39 And it’s an evolutionary steps in, like, two, three years.
0:31:42 But we already see MCP traffic growing every quarter.
0:31:46 I mean, I see even, like, really basic things, like, for developers, this is evolving very quickly.
0:31:50 So, for example, you know, for fun, I develop using Cursor.
0:32:05 You know, I used to be a professional developer, you know, in a previous life, even knowing what APIs existed in a company required a ton of reading through docs or some weird search.
0:32:15 And it feels like now, especially, like, if you have something like Kong, which, you know, has all the metadata and has the catalog, and then you can integrate into something like Cursor.
0:32:20 So, not only does the agent itself know about the APIs, but you cannot expose it to you.
0:32:28 I mean, it feels like a lot of, like, even the development paradigm is shifting now because we can start to surface these things to developers.
0:32:37 Yeah, I think you can think you can, we can be an enabler to help large companies, small companies to get into the hands of more developers or more Cursor.
0:32:38 Because it’s also an API.
0:32:41 We can provide you that infrastructures and all of that.
0:32:46 We, as you see from yesterday, we have a very exciting roadmap that is going, you know, in that direction.
0:32:49 So, those are all the name of them.
0:32:50 I think here’s the big bet.
0:32:57 The big bet is what happened in microservices, because I grew up in Italy, and you don’t really study a lot of math.
0:32:59 You just study history.
0:33:03 But what you learn from history is that even it doesn’t exactly repeat, but it reads.
0:33:05 It’s just, it’s always unannounced.
0:33:08 So, what we see with microservices, what happened?
0:33:18 We first built rate limiting and authentication 10 times, 100 times, 50 times into the Python framework, the JavaScript framework, the TypeScript framework, the Java framework, whatever, PHP, blah, blah, blah.
0:33:20 At some point, it didn’t make any sense.
0:33:28 Let’s abstract everything to a gateway pattern, and we move all this connectivity logic to the gateway, and then dispatch to the right service, no matter what language.
0:33:31 The same thing, I think, is going to happen in LLMs.
0:33:34 At first, you have one enterprise use one big LLMs.
0:33:38 Now, they’re going to use five, 10, 100, small LMs, medium, large, whatever.
0:33:45 Once you get to, you don’t do tokens, relimiting, token authentication in each LLM using the framework, the long chain, whatever.
0:33:51 Eventually, same thing happened in Microsoft, but you will abstract that to a gateway partner once again.
0:34:02 And that’s where I think AI Gateway will have the same analogy and dispatcher to right connectivity logic to the right LLM versus rewriting in each LLM.
0:34:10 I think that’s the big bet that we make that happens in microservices, happens in how enterprise will run and govern hundreds of LLMs.
0:34:25 Great. Well, listen, as we wrap this up, I think it’d be great to kind of end with, like, any sort of recommendations for people that are listening to learn a bit more about how kind of AI shifting the API landscape, or maybe, you know, some advice on…
0:34:26 Don’t start a company, I’m joking.
0:34:38 Maybe advice on kind of, like, you know, how to start thinking about getting ready for that.
0:34:45 I think I said before, like, there is a lot of focus on model pre-training, tuning, all of that.
0:34:54 But a key thing is the connectivity layer, how LLMs, agents, whatever, will talk to each other, how you will run.
0:34:57 I think a lot of the traffic will be very strategic.
0:35:06 And you have to build in the startups of the enterprise to manage that AI connectivity into your next apps, your next internal tools, your next customers.
0:35:17 And for the, listen, the budding founders that are listening to, like, the most hardcore Silicon Valley struggle story ever, what advice do you give to them?
0:35:21 I think what I learned over a decade of, like…
0:35:27 I mean, do you ever think, I just have to, do you ever think that, like, maybe you should have cut your losses and try to start it over again?
0:35:29 Like, do you ever think that that would have been the right thing?
0:35:29 Never.
0:35:30 No.
0:35:30 Never.
0:35:31 Never.
0:35:40 The reason is I could never visualize myself going back to the airport in Italy and my dad picking me up and say, how’s it going?
0:35:44 And it’s just like, would fail with my tails and my legs.
0:35:46 Like, I could never, I would have died here without food.
0:35:47 Like, I cannot do that.
0:35:50 And so that, that never crossed through the head.
0:35:51 Shivers.
0:35:52 That was so good.
0:35:53 But never.
0:36:00 Like, that’s, that’s the visual that every time I even start to, I had that visual and immediately say, I’m not going back like that.
0:36:07 And so, and then, but the thing to advise is, it always takes longer than what we think.
0:36:15 It is good to take a trend the last 10 years, 20 years, because you have time to grow into and do a lot of mistakes and building.
0:36:19 And just, you have to generally believe it in this trend versus falling glitters.
0:36:21 Because it’s going to take longer than what you think.
0:36:25 As a leader, as a human, as a marketer, as a product, as a revenue, it’s always going to take longer.
0:36:30 So take something that lasts and just put 110% on it every day.
0:36:31 And then it will compound.
0:36:34 Keep the burn rate low in the early days.
0:36:34 Don’t die.
0:36:36 Don’t die.
0:36:37 Like, don’t quit.
0:36:42 Those, those are, those, those are, I think, the things I learned along the way.
0:36:47 Agi, it’s been a privilege and an honor working with you these past few years.
0:36:48 And thanks so much for coming on the podcast.
0:36:49 Likewise.
0:36:51 Thank you, Martin.
0:36:56 Thanks for listening to this episode of the A16Z podcast.
0:37:03 If you liked this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family.
0:37:08 For more episodes, go to YouTube, Apple Podcasts, and Spotify.
0:37:14 Follow us on X at A16Z and subscribe to our substack at A16Z.substack.com.
0:37:17 Thanks again for listening, and I’ll see you in the next episode.
0:37:31 As a reminder, the content here is for informational purposes only, should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.
0:37:37 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:37:44 For more details, including a link to our investments, please see A16Z.com forward slash disclosures.
Augusto Marietti, CEO and cofounder of Kong, has one of the most remarkable founder stories in Silicon Valley history.
In this conversation with Martin Casado, Aghi shares how he went from a garage in Milan to building one of the world’s leading API infrastructure companies, surviving years of rejection, living in the U.S. on $1,000 a month, and raising his first $50K while sleeping on Travis Kalanick’s couch.
They talk about the near-death moments that defined Kong’s journey, the seven-year grind before breakout success, and how APIs became the “assembly line of software.” Aghi also explains how Kong evolved into the backbone of modern API and AI connectivity, and why the coming wave of AI agents will make APIs more essential than ever.
Resources:
Follow Aghi on X: x.com/sonicaghi
Follow Kong on X: https://x.com/kong
Follow Martin on X: x.com/martin_casado
Stay Updated:
If you enjoyed this episode, be sure to like, subscribe, and share with your friends!
Find a16z on X: https://x.com/a16z
Find a16z on LinkedIn: https://www.linkedin.com/company/a16z
Listen to the a16z Podcast on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYX
Listen to the a16z Podcast on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711
Follow our host: https://x.com/eriktorenberg
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
Stay Updated:
Find a16z on X
Find a16z on LinkedIn
Listen to the a16z Podcast on Spotify
Listen to the a16z Podcast on Apple Podcasts
Follow our host: https://twitter.com/eriktorenberg
Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
Leave a Reply
You must be logged in to post a comment.