Guys, thanks for joining. I am absolutely thrilled here today to have a fireside chat with François Ajenstat, Chief Product Officer, and Yaoxian, Head of Investor Relations from Amplitude. So just to kind of kick off the conversation here, for those in the audience who are unfamiliar with Amplitude, maybe even unfamiliar with you, François, can you give a little brief background of Amplitude? What is it? What do you guys do? What is the opportunity that you're going after, and a little bit about yourself. You joined Amplitude, I think, in November of last year, and so, you know, what brought you to Amplitude? What have you learned since you've come to Amplitude, and maybe the one thing that, or one of the key things that has surprised you the most over the past, call it, six months.
Well, Koji, thanks for having us here. Really delighted to share the story. You know, Amplitude's mission is pretty straightforward. We help companies build better products, which is extremely critical in this environment where more and more companies are going through digital transformations. They're building more digital products, and they have to think through the customer experience. And what Amplitude provides is, it gives them a complete view of the entire customer journey, so they can really optimize every part of that customer journey, whether it's the acquisition of new customers, the activation, the retention, and the monetization of those customers. Essentially, we help our customers build better experiences that delight their customers.
and we are used by over 3,000 different companies all over the world, whether it's a Chick-fil-A, who not only does great chicken, but they also build kiosks, and they want to ensure that those kiosks work great and enable their customers to get the products that they want. Or other companies like Fender. Fender builds great guitars, but they're also building digital mobile applications to help people learn how to play guitar. And so the mobile experience is critical, and Amplitude helps to power that. Or large, digital companies like Atlassian, that is using Amplitude broadly to help them build better products, deliver new products, that continuously serve and delight their users. And so as we think about that transformation that's going on in every company, in every sector, people are building more digital apps.
As they build more apps, essentially every company is becoming more or less a new software company, and so they have to operate like a software company. They need to use data to figure out what they're building and the results of that. They do experimentation to ensure that they're delivering the right experiences. They look at the entire customer journey to optimize and engage their users in the right way. That's fundamental now, not just for digital natives, but every single company building modern digital application. That basically leads to why I joined Amplitude. So I've been at Amplitude now for just over six months. Prior to that, I was at a company called Tableau, and I was at Tableau for 13 years, from the early startup years.
I was the first product manager hired, and I went through the entire journey from startup to IPO, to hypergrowth, to rebuilding, to eventually being acquired by Salesforce in one of the largest software acquisitions at the time. And then spent four and a half years at Salesforce through the integration, which was an incredible journey through seeing all the phases of the company. And before that, I was at Microsoft in both the Office team and the SQL Server team, and before that, I was at Cognos. So I've been a data person essentially my whole career, and I've seen the power that data can bring to companies, and I've been building for my entire career. And now the opportunity to combine data with building and enabling companies to transform is one I just couldn't resist.
I've seen this size of company as well. I've seen it go through the highs and lows, and I truly believe that there is an opportunity now to really enable these great experiences to be built with Amplitude at the center, that gives them that full view of their customer experience.
Thank you. Thank you for that. When I think about Amplitude and the opportunity that you guys are going after, it almost seems like any sort of digital experience should have something like Amplitude behind it. Is that right, or are there types of experiences out there where maybe Amplitude doesn't make a lot of sense?
I mean, you're 100% right. Anybody that builds a digital experience, whether that's an e-commerce website, a B2B application, they're generating vast amounts of data about their user behaviors. But they need the, they need to understand where their users are frustrated, where are there issues in the journey, and they want to really know whether those applications that they're building are driving the outcomes that they want. And what Amplitude really does is it enables, it gives every customer the power to know.
Mm-hmm.
The power to know what drives growth, the power to know what delights customers, the power to know what are the next opportunities to build. And so whether you're in marketing or product, whether you're a data team, Amplitude becomes essential to the entire customer experience. And this is so important today. Companies win or lose based on the quality of the digital experience. Not a nice-to-have, it's a must-have. And so anybody that's building needs to have this ability.... Anybody that's building requires optimization of those experiences. Otherwise, they're just throwing money away. And so we help them get the return on all of those digital product, investments they're making.
Okay. So you joined November of last year. You've seen about six months of demand environment for Amplitude. And so the question really becomes: What are you seeing out there today? How do you compare it to when you first joined the company? And what's interesting about Amplitude is, when you look at the financials, there's a headwind from big pandemic contracts kind of flowing through the revenue model. But you maybe miss or can't see, you know, kind of the growth and demand out there because of these big contracts coming through. So help us understand what you see out there, and how would you compare it to when you first joined?
Yeah, I'll give you my experiences, and then you can add on kind of the broader environment. You know, one of the big things that I did just joining the company was spending a lot of time with customers.
Mm-hmm.
Every day, I'm engaging with a customer, whether they're the largest customer or prospect, and I'm using that to learn. The enthusiasm for Amplitude is higher than I would've anticipated. People are looking for our guidance to help them build. I was in Europe two weeks ago, visited. I want to say I met with over 200 different customers there, and, you know, they want the power of Amplitude, and they need that help to figure out, "How do we drive growth? How do we drive PLG? How do we drive these things?" So to me, it's a great signal of the fact that there's an immense opportunity to deliver more value. Now, based on where we are, and in order to fulfill that opportunity, I think there's three fundamental opportunities or fundamental things we have to do.
Number 1 is, we need to make our products radically simpler to use, radically easier to install, to acquire, to use, and to get value. And that is critical because as we move from our core digital native install base to the more traditional companies, you know, we're essentially crossing that chasm, and ease of use is not a nice-to-have, it's, it's a required requirement. And so as we're completely revamping our product line with ease of use as the number one priority, and that will enable us to not only reach more companies, but more people at those companies who need the value that we bring, Number 1. Number 2, in all those conversations, we've seen a desire to consolidate more into our platform.
And so we've been on this transformation from going from being a product company to a platform company and building more capabilities that build on the platform. In addition to our product analytics, we've added experimentation, our CDP, session replay, and our customers are starting to consolidate their spend from multiple point solutions to Amplitude at the heart of that. And that really becomes an important opportunity because all those solutions become stronger, more powerful with analytics at the center, and that accelerates our flywheel. Then last but not least, as we go to the enterprise and those larger accounts, we need to continue to bolster our enterprise capabilities.
In order to win the enterprise, you need security, governance, compliance, and we have a lot of those things, but we're continuing to add more to meet the needs of the largest, most rigorous companies in the world, and this is why we have some of the largest brands, the most trusted brands in the world, built on Amplitude. So to me, that, again, that gives me that confidence of what we're building and, you know, how customers are reacting to the product.
Let me just add on to the macro comment. Specifically, you know, last quarter, during our earnings, we called out that, look, there are still challenges out there in the environment. Companies continue to optimize on the top end from pandemic-era contracts. Certainly on the VC side of things and small business stuff still remains challenging on a variety of fronts. I think explicitly, we've been asked by many investors: Are we seeing incremental SMB weakness that has been called out by a lot of peers? And the reality is, no, not really. I think, for better or worse, we've been one of those companies, given our exposure to digital natives and the venture capital community, where we've been living with this reality and volatility for a little bit. So we haven't seen incremental change to the downside on that front.
More importantly, you know, speaking to our current guidance and outlook, you know, I'd say, we're explicitly not assuming any improvement in the small business environment through the end of the year, and we feel pretty comfortable about managing for the unknowns out there. I think another line that's worth noting and remembering is we continue to say that new ARR remains healthy on a variety of fronts, offset by churn optimizations. Now, that's pretty key, right? Understanding where we are in the market in terms of penetration, budget priorities, that new ARR remains healthy, even in an environment like this. And we continue to see a bunch of green shoots on a bunch of fronts, as we called out, whether it's post-renewal customers are much healthier in terms of relationships and health.
We've talked about the lack of a double dip. When customers optimize with us one time, the majority of them actually renew flat or grow off that base. And I think more importantly, we're starting to see healthier cohorts flow through. We called out that customers from second half 2022 onward are exhibiting gross and net retention characteristics, on average, 5-10 percentage points higher than customers signed during the pandemic. So I'd say we're in the trapping process, there's healthy visibility on new business, and we're managing through this year. So that's more explicit on the macro commentary, Koji.
Thanks, y'all. Question on AI.
Of course.
I'm going to ask every company this AI question. I asked everybody this question last year. But I think it's interesting because now the end markets that you guys serve has had time to kind of digest all this. I don't know if noise is the right word or marketing material, whatever it may be. They've had a year and a half to really try and figure out, or maybe they're still trying to figure out, what does it all mean? So the question for you is: what does AI mean for you from a customer awareness of what they need to do? Do they view it as a threat or an opportunity? Is it actually a potential tailwind for adoption for you guys, or do you kind of view AI as a risk?
I think AI is a huge opportunity for our industry and for our company as well. But we're still in the early innings.
Yeah.
You know, last year, we were definitely in the peak of the hype of AI, and I think we're still in that hype moment, where most companies are experimenting and trying to figure out what is their AI strategy, and they're trying lots of different things. Specifically, there's three, you know, big focus areas. Number one is obviously, we're adding AI into our own products. We introduced, for instance, Amplitude AI, which has capabilities like Ask Amplitude, which is natural language query built into Amplitude. That simplifies our experience, enables more people to ask richer, more sophisticated questions without the complexity of having to learn our product. And we're seeing some nice adoption on that front. We've added a lot of capabilities throughout the product that just refines the experience and, you know, again, increases that ease of use.
So clearly, it's beneficial for us and our customers. But the second is, as customers are building more LLM apps, they're building AI apps. Well, all those AI apps are going to need product analytics because those customers are gonna want to understand: am I getting value from that? Is that delivering the outcomes that I want? So increasingly, we're seeing these customers starting to instrument those apps with Amplitude to know, you know, where are customers getting frustrated? Is it delivering the value that we wanted? Where is their drop-off? And they're using that to then refine their models and build better applications. But I'd say we're still in the early innings on that front. Along the same lines, we're starting to see some of the largest AI companies, companies like Midjourney or Character.AI, that are building the future of AI, they're building on Amplitude.
Amplitude is a core part of how they deliver their solutions in the market to build the AI future that we're all living in. I think that's a huge, huge, huge, signal there of where we might go as more of these AI apps get developed. Finally, I think there's an opportunity for us to also build transformative capabilities, within Amplitude using the power of AI, and, you know, what we call the self-improving product. There's clearly simplification, there's augmentation, and now this last category is really all, all about automation. The analogy I like to use internally is, prior to Amplitude, most customers, it was kind of like the maps world. Prior to Amplitude, you had a physical map. If you wanted to go somewhere, you used a printed map, and then you drew out your destination.
When Amplitude came in, it was more like Google Maps. It's available everywhere, it gives you that freedom, self-service, to look at that journey. You know, I wanna avoid tolls, I wanna avoid traffic. Amplitude gives you that visibility. Now, the future is really more like the self-driving cars, which is still early in the market, but how does the product continuously improve itself based on user behavior and based on the data that's there? So AI will help automate a lot of that.
You've been in the data world for a long time.
Long time.
Curious to hear your thoughts. The question's gonna be about how to visualize or place Amplitude in the tech stack. I remember when Amplitude was first dropped on my desk many years ago, and my first thought was: I don't know where this thing actually goes, you know, frankly. And so you've seen a lot, and I think I understand where it goes today, but very curious to hear from you how you contextualize what does Amplitude fit today? Where could it potentially fit in the future?
Well, look, ultimately, what we have built is an opinionated, verticalized solution targeting the product building vertical, if you will. Where we've added not just access to data, it's not a reporting solution. It's really an opinionated solution to solve the product-building use case. And you look at that, and it becomes important because as people are building more products... Well, in fact, if you look at the future, will there be more products created? Yes. Will there be more people that need access to the insights from those products? Yes. Will there be more data generated by these apps, more events? Yes. All those things, to me, are the key ingredients of what Amplitude provides. And so we're really helping our customers understand funnel conversion, understand retention, understand what drives growth.
I think that this becomes more important in the future because people aren't just looking at delivering technology, they're trying to deliver business outcomes. The business outcomes become much more important today than they have ever been. And I think that's where Amplitude goes, is really connecting the business with the product delivery so that you're getting more results out of all of your digital investments. That, I think, is where the opportunities are. And as we look at the amount of data that's growing, there's more data, obviously, that's being generated every day. There are more sources of customer data being generated every day, and we help stitch that all together, to provide that complete view of the customer, the user experience, and help them optimize everything along that way.
Next question is going to be about how do you sell Amplitude, right? And I think it's an interesting one because lots of companies have digital products. They're using something for analytics, I would think, I would hope. And there's other tools out there. Amplitude has a product. You've come in, you've built some pretty big companies or helped build some pretty big companies in the past. And so, what have you learned over the past six months, and how do you think about selling the product? Question number one. Question number two is, does the end market really understand what they need out there? I mean, do they know that they need this?
Do they understand where everything is going, or are you still out there evangelizing what is Amplitude—this, this is digital experience? I mean, how do you think about all that?
I mean, that, that's a great question because I think we are in the early stages. We have to educate the market on why they need product analytics and the value of digital experience. The companies that have really understood its power tend to be the digital native companies because the product is the business.
Mm-hmm.
So they understand that success or failure is defined by the understanding of the product impact and the value. And so those really go hand in hand. But as we think about the full opportunity, there's dramatically more companies in the world that have never even heard of this term. And so this is why the simplicity, the category, the platformization of our product becomes so critical as we get, you know, past the chasm to that early majority. And so really, the way we sell becomes pretty straightforward, where we're not necessarily selling what Amplitude is, we're selling the business outcomes. You know, what do you need to drive growth? Where are your users frustrated? How do you know whether or not you're delivering value of your customer experience?
And what's been interesting in that journey, that we're seeing is that there's, I'll call it Gen One solutions, you know, the Omniture or Adobe solutions that have been in the market for a long time for website optimization. Been really fantastic solutions. Google Analytics, fantastic for web optimization. But they end up being slow, inflexible, and closed, and they essentially limit the options for our customers.
Mm.
And what we're coming in with a different value prop, that's really about speed, real time, self-service, open and flexible in a way that our customers haven't seen before. And so it's really about transforming and helping people build products differently. And so I'm spending a lot of time with customers, just really showing them the art of the possible.
Mm-hmm.
You know, getting them down that journey and helping them improve that product experience.
Okay, okay.
Just to add on to that a little bit more, Koji, as to how we sell, what are we seeing in the environment. I think two other key points worth noting, we've been talking about in the earnings about maturing our messaging and go-to-market processes, right? And we've been as specific as... Look, back during the pandemic, a lot of these sales were reactive. Everybody just needed to buy more software. It didn't really matter what it was. We were engaged with startup product line owners. We were probably more isolated in an organization than we needed to be. Obviously, with new sales leadership post in a tougher selling environment, we've started to adapt both our go-to-market motions and our conversation with the customers, right? We've gone higher up in organizations.
We're now speaking with director, VP, C-suite level of people, not just in product, but across product, marketing, growth, experience. We're taking budget share across a variety of different personas. We're aligning with business outcomes. And I'd say how we're selling is also becoming more mature, both in targeting through an enterprise named account fashion, to driving more discipline and rigor from where we were two years ago. I think that's key to understand, as part of the evolution of how we sell as well. And the other bit, François, you obviously talked about, you know, still needing to educate the market a good amount on the right way to do things or the newer way of doing things. I'd say, look, from two years ago, it's probably a bit more mature than it was even then.
We've talked about customers, for example, if you go back to earnings releases and the customer examples we cite, we talk about a global gaming customer, where a VP of marketing took over both product and marketing and standardized on Amplitude going wall to wall as part of a standardized stack for product. We've talked in the past about displacing legacy martech solutions in a flat budget environment, where IT spend was flat year-over-year, but they're repurposing legacy martech dollars to spend on us 'cause we're the future-proof solution. So these things are starting to pop up more often in the nature and deals of customers that we're speaking with, and we think we're in the early stages of where we can go with this as well.
So this is more, going deeper. Actually, I'm gonna ask one more question, and I do want to open the, the questions up to the audience, if they have any questions for you. But I want to press you a little bit here. Going deeper on go-to-market, how to sell, I mean, you are the Chief Product Officer. And so when I think about software companies, I think about these sales guys, and they walk into a prospect, and they give them a one-pager. You know, "Here's what Amplitude does on the top. Here's how Amplitude is different on the bottom." And I think that it would be helpful to understand from your lens, what is it specifically about the Amplitude technology that is differentiated, difficult to replicate.
Try not to use too many terms that are going to go over my head. You know, keep it real simple for me if you can, right? What is it specifically that is the pitch from the technical side? Because I do think the differentiator, you know, you need to do this if your digital experience makes sense, but why is Amplitude faster, better, cheaper, more expensive? I don't know, technically better or why.
I'll give you the three simple words, and then I'll unpack them.
Okay.
First is easy, second is speed, and third is complete journey. Yes, that's four words. But those are, like, the three biggest attributes. So easy. Instrumenting an application and answering questions, for instance, who are my top users? Creating a funnel or understanding retention, that is supremely easy in Amplitude. We've made it so simple for anybody who's not necessarily a technical person, who doesn't understand how to write code, to answer questions about their product. And it's targeted really in that persona of the digital product. Dramatically easier to use. You could build it in something else, and the amount of effort, skills required is 100x greater. So we made that process really, really simple. The second is the word speed. Speed comes in not only in terms of getting answers fast, but also getting real-time insights into what's going on.
You launch the product, seeing right away whether it's delivering the outcomes that you want. If, you know, we see a lot of media companies, for instance, there's a breaking news story. What's going on? What part of the website is happening, and driving those users? You see that in real time. And so that speed of insight and the speed at getting the data in, highly differentiated. Old pipelines, you would get answers maybe a day later or a week later. I mean, this business is moving way faster than that. You have a promotion, you want an answer now. You want to know what's working. That's Amplitude.
The third is, I'll call it the complete journey, which is we help you see everything that's going on in your product, from the first time they sign up, all the way to the time they sign out. Every behavior, and we can help stitch that across all the different sources. Do they come in through a marketing ad? How are they navigating your product? What's driving frustration? Cohorting those users into high-value users or low-value users that you can then activate. And so this ability of having that complete view versus a narrow view is highly differentiated. You don't get that from other solutions. You can't get that from just a reporting solution. But I'll say that most customers today, they actually don't even go that far. Right?
They are still trying to just keep up with the report, how many daily active users that I have, and that's been the state-of-the-art until Amplitude. Now, we can go much further, and that is a core part of Amplitude.
Got it. Any questions from the audience?
Thank you, Francois. Quick question on the product platform, right? You guys have done a great job expanding the platform, analytics, experimentation, CDP, session replay, like I mentioned earlier. What do you think is next on the horizon, part one? And then part two, how do you think about that, about that from a inorganic and organic perspective?
Yeah, for the webcast, the question was about what could be next for products and how to think about M&A.
I mean, first, like you said, we've been expanding our product line quite a bit. You know, over the last few years, we've introduced product experimentation capabilities, feature flagging, CDP, and just recently, Session Replay. Session Replay, which just launched this year, has already become our fastest adopted product in our company history. And we see our customers seeing tremendous value of combining quant, so quantitative analytics, with qualitative analytics. And now they're getting a full, whole new view of what's going on in their product, whether that's, you know, seeing where there's frustration in the product, seeing where there are opportunities for performance optimization, et cetera. Truly a game changer for Amplitude, but it's all built on the platform. It's powered by our digital analytics capabilities we have in the box.
And so we're looking at all of those opportunities to consolidate more and more of that digital experience, powered by analytics, powered by being able to target different groups of users because we have rich cohorting in the product to target maybe, you know, this class of users or abandoned users, et cetera. And so all of those, you know, we're looking at both obviously organic and inorganic opportunities. But really, I start with the customer problems and how the journey of what we built, how the richness of that data helps them solve that problem in a unique way. And there's so much to build, which is why I'm here, and there's so much opportunity to help our customers do more with their data.
Just to add on one quick data point to that, Session Replay, I think one key tenet to our thesis is that, the platform was more powerful with analytics at the core. What we shared in our most recent quarter is that the majority of Session Replay wins are co-competitive displacements. And we never see customers consolidate away from Amplitude, to a Session Replay vendor. It's much more the other way around, and so I think, wait and see. We've got plenty more to show you guys.
Cool. Thanks for the question. We're all out of time. Thank you so much, Francois. Super appreciate it.
Thank you.
Thanks, Yao-
Thank you
... for the time.
Appreciate it.
Great presentation.