#93 - Peter Reinhardt

**Craig Cannon** (0:00)
Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast.
Today's episode is with Peter Reinhardt, Peter's co-founder and CEO of Segment. Segment helps companies capture data from every customer touchpoint and send it to the tools where it can be used most effectively. They were part of the YC Summer 2011 batch. You can find Peter on Twitter at RyanPK. All right, here we go.
The average person probably doesn't know what Segment is.

**Peter Reinhardt** (0:28)
Mm-hmm.

**Craig Cannon** (0:29)
So, could you explain?

**Peter Reinhardt** (0:31)
For sure. So Segment helps companies give their customers a better customer experience.
And we do that by helping them organize all of their internal data about all their interactions with the customer. So, for example, if you go to the bank, they interact with you at the ATM, at the teller, via a phone call center. They have a web app, a mobile app. They send you emails. They're interacting with you across this huge surface area.
And they need to be able to coordinate that interaction. They need to know that if you encountered an error on the ATM, the teller needs to be able to say, like, I'm so sorry you encountered an error. We'd love to be able to help you. And so what we do is we help sort of bridge that gap of having a single record of all those interactions with each customer.

**Craig Cannon** (1:10)
Because previously, companies would build all this in-house. Or not at all, maybe.

**Peter Reinhardt** (1:15)
Yeah, there's sort of two worlds. One is they would build it all in-house, exactly. And there'd be a rat's nest of data pipelines from one place to another. And so the engineering team would spend all their time building these data pipelines, rather than actually building things for the customer.
That's one world. The other world is one where it really used to be a one-on-one relationship with a bank branch manager, for example.
And they might keep the information in a CRM, right? But if you are, someone would be an optometrist, right? You go in, they have your past orders, etc. But now the world is moving much more to a Warby Parker kind of world, where you're not interacting with a person. So a CRM doesn't even make sense. It's like not the right technology for understanding what interactions you're having with a customer. And instead, it's all these different digital channels. So that's where we come in.

**Craig Cannon** (1:57)
And your first customers, were they large scale companies like banks? Or who did you get in the beginning?

**Peter Reinhardt** (2:03)
At the very beginning, we actually launched as an open source library on Hacker News.

**Craig Cannon** (2:06)
Yeah.

**Peter Reinhardt** (2:07)
And it took off there, blew up basically overnight.

**Craig Cannon** (2:12)
So to be fair, it was kind of like the long road.

**Peter Reinhardt** (2:15)
Oh, yeah, no, no, let's not skip the year and a half of dark times.

**Craig Cannon** (2:18)
Yeah, yeah, we shouldn't totally go over that. But okay, yeah, so anyway, you blew up overnight on HN.

**Peter Reinhardt** (2:25)
Once it went live on HN, it blew up overnight. And so our first customers were the folks hanging out on Hacker News. It was basically small companies for the most part, founders who were looking for better ways to instrument their web applications and mobile apps with this sort of analytics tracking.

**Craig Cannon** (2:41)
And so the initial growth was, that was just completely unpaid customers, right? So they're just using the open source, whatever you put up on GitHub, right?

**Peter Reinhardt** (2:50)
So the strange thing about the open source library, which is sort of this data router, so you put in one piece of data, customer did X, and then we turn around, transform it, and fan it out to all the different places downstream. And what's funny about the library is if you want to turn on a new tool, if you want to send the data to a new place, you need to recompile the library and redeploy it to your website.
So it doesn't actually, the open source library doesn't quite actually solve the problem, which is really a marketer or a product manager wants to use a new tool. So what happens is you really want to use the hosted version. So almost no one actually uses the open source version.

**Craig Cannon** (3:20)
Was that by design?

**Peter Reinhardt** (3:23)
No, no, it was completely accidental.

**Craig Cannon** (3:24)
Really?

**Peter Reinhardt** (3:25)
Yeah, there's just no way to make a good open source product around it. That's crazy.