Episode 63
· 32:55
It was clear, basically, we wanna do it for developers. We just had no idea how this can be done, and we learned this along the way.
Jack Bridger:Hi, everyone. You're listening to scaling dev tools. I'm joined today by Felix, who is the founder of Hanco. And Hanco is an open source authentication tool, that is very big on passkeys and simplicity. So, Felix, thank you so much for joining today.
Felix Magedanz:Thank you.
Jack Bridger:We wanted to talk about something that you went through, which I think is one of the hardest things a start up can ever go through, which is a pivot once you've already had traction, you've already got funding, and you've already got real customers. Could you talk a bit about what that was like?
Felix Magedanz:Yes. Of course. So okay. We we started this, this thing, a tool for authentication, basically targeting developers as a proprietary software in 2018. So we thought, okay, let's build a software service tool.
Felix Magedanz:That that covers that solves authentication, but it does better than Auth0 was and probably still is the biggest player on the market. What can we do better? You mentioned it, our focus is on passkeys. So we always we always come are coming from the direction to say, okay, let's let's imagine there's a word where passkeys are not only something you you bolt onto your authentication solution, but it is the authentication solution that has replaced passwords because that's the direction, we're heading. So this is gonna happen.
Felix Magedanz:We are we know and we are convinced of that. So, we said, Okay, let's let's take a look at that future and build an authentication solution, basically, and all 0 for that future. And that's that's how we started. But I mean, somewhat inexperienced, not very familiar with the open source world. To be honest, not very familiar with the developer audience to sell to, right?
Felix Magedanz:This was something we haven't done before. In my previous life, I led a software agency, so we built software more for enterprise customers. Of course, the whole team were developers participating in open source in some way or another, probably many or most of them. But building a an open source project, I wanna done that. So we started as a proprietary company.
Felix Magedanz:We built we built a software, Hanco 1 dot o as we as we call it now, as as was a proprietary stack, didn't, made some bad decisions also with the architecture. It didn't scale so well. The cloud model was, of course, part of it from day 1. It didn't it didn't scare so well, it's it was really problematic at some point. And but it went it still went very well.
Felix Magedanz:So the the passwordless authentication angle brought us some some very cool leads. We had some customers. It went it went good. But still, we we at some point, we said, okay, let's let's talk about what we're doing and where we want to go. And let's let's take a look at, are we making the right choices and are we doing the right thing?
Felix Magedanz:And during those, those meetings with the team, we came to the point where I said, okay, we are building this this piece of software for developers. The the why are we not doing it open source? The best way would to would be to do it as an open source company or commercial open source company. And, yeah, of course, this would mean drop everything, start start a new project on GitHub, basically change your whole messaging, and, oh, man, the code base, it is not ready for open source. We cannot show this.
Felix Magedanz:This is not good. And this is a few weeks went by. And at some point, we said, okay, this week, we cannot think about it. So maybe we have to do it. And that's this was 2020 22.
Felix Magedanz:So last year, and we said, okay. Let's do it. Wow. And that's, like, such a bold decision. Like, how
Jack Bridger:when it was going well, like, what about it was, like, kind of leading you to to make, like, a a big decision like that?
Felix Magedanz:I think why we did it is we knew we could scale this proprietary solution, I think, with a good pace, with good growth. It would take, of course, much more effort and with regards to sales and marketing, investors were were okay with that, so they they were behind us and and, it it would have it would have worked, but we were convinced the other way would work so much better. And not only for the go to market, but also for ourselves. So what is what is the thing you wanna work on? And, you have to you have to be sure about this.
Felix Magedanz:Otherwise, you can't make it. And, we knew we wanted to we wanted to do the other thing. So Yeah. But I mean, right, do something where you where you know it will work or do something where, you know, it will work very, very well. So these 2, something like that, I think.
Jack Bridger:Yeah. That makes sense. But I feel like it's still, like, quite you know, it's all still scary. Right? Like, it's not kinda guaranteed, and you've got something that has customers, that has revenue.
Jack Bridger:There's, you know, the invest as you said, the investors are happy. Like, I must have still been a really kind of, like, gut wrenching
Felix Magedanz:Yeah. Yeah. Decision. No. It was it was definitely the the biggest decision we ever made and the scariest decision.
Felix Magedanz:And but in in hindsight, it was the best decision we ever made. So so pivoting to to open source from proprietary with developer audience that we cater to with the product product, the product and the market that we're in, it was the best decision we ever made. But again, you you mentioned it was it wasn't it it, of course, wasn't simple. It wasn't easy. So, this pivot did mean we had to drop the the product that we had.
Felix Magedanz:We had paying customers. We had to we had to call them and say, okay, we made a decision internally. It has nothing to do with you. We we drop what what you what you get from us. We will not develop it further.
Felix Magedanz:You will not get any new features. We will help you. We will support you. You can you can keep what you have alive, and we will make sure it it works for you. That's what all of them did, and no one, so that it wasn't really such an issue that we that we imagined before.
Felix Magedanz:So it it worked out pretty well, I have to say, and thank you very much to the customers that went this way with that with us. But, we didn't know it would work out this way. So, it was very scary, these calls. And, also, we had we had we had started building, sales. We had started started building marketing, for this for this product that we had.
Felix Magedanz:And going forward, convincing the investors, it's a good idea to drop everything that we worked so hard for, for such a long time, and start from scratch because we want to be open source. That, that, of course, was very hard. And so, again, this also worked out pretty well. I think everyone is happy with the decision now. But at that point, it was this was some, some very hard calls to make.
Felix Magedanz:And, one, one outcome, of course, was we, we had to, become a bit more capital efficient for the, for the, for the phase, we decided to enter or to re enter where we had to build a product and not have anything we can sell because we didn't want to sell or invest any more into selling the the old product. It wouldn't make sense. We didn't want to split the focus on, with with the small developer team that we had, which we wanted to focus on the new thing. We figured this is the only way this can work. So, yeah, we we had to cut the team basically in half at that point.
Felix Magedanz:And aside from the hard custom calls with the customers, the calls with the investors, then, of course, we had to had to had to make those decisions, with the team. That's probably the, the worst part of it, I have to say. Not everyone could could join us on our new journey. Everyone is happy now, I have to say, so it's no one no one had any problems finding a new job. We are still friends with everyone, so it's all good.
Felix Magedanz:But this was, of course, not easy, especially for me as a bearer of the bad news.
Jack Bridger:Yeah. Is there any, like, kind of, advice you would give to, like, another founder, kind of going for a similar
Felix Magedanz:It's definitely transparency. So it you can't bullshit your team. You can't you can't come up with some shady explanations or some I I I made it, I think I made it fully transparent to everyone, what we were doing, what's what are the reasons for what why we are doing things. It in some form, it was a team decision to do this. So, still, we had issues with, miss with motivation after that, building the same thing over again.
Felix Magedanz:There were some hard times, even months in when we started the open source project. But ultimately, it was it was also a team decision. And I had to make sure that at least the remaining folks, know exactly what's going on, why why decisions have been made that way. And I think everyone was on board with that, and those who couldn't join us, I think, also understood.
Jack Bridger:Yeah. In terms of the people that stayed around, like, going through a pivot was and and you've kind of, I guess, got to before you had customers, and it's kind of easy to be motivated when it's like, okay. This customer asked us for this. Like, how when you're rebuilding, and and I guess there's, like, a long period of development and this you've just gone through this pivot, what what did you do to kind of, like, motivate the team?
Felix Magedanz:I think a a developer until a certain point is always happy with building the next iteration of something they started, and it came out. It works, but it's not beautiful. So now you have the chance to do it the right way. It's probably not the right way, but the better way. So this is, this helps, I think, just help us.
Jack Bridger:Everyone wishes they could start again to some extent.
Felix Magedanz:Yeah. It's it helped. It helped a lot, I think, during that time. But still, there were there were design meetings and, some workshops around certain I mean, some of it is pretty complex, and, we we we talked about it. Then we, it came to our mind.
Felix Magedanz:Man, we talked about this 2 years ago, and now we're talking about it again. Of course, the first approach, it wasn't very well documented here and there. So we had to do it again, basically. And so these were moments that were not so cool, but I have to say, and this is like, also this was like the the the the reward for the decision. It came quick because, I mean, it may it may have been a too low bar or too too low goal, but we figured, okay, in 6 months, we want to reach 100 stars on GitHub.
Felix Magedanz:I can smile at it now. But it was, I mean, 100. It means 100 people all over the world find interesting what we do and give give us this form of appreciation. So let's, let's try to solve this. Let's try to bring it to 100 stars.
Felix Magedanz:And we have we have never done it before. So we didn't know. And then we, we built the first, the first, 0.1 beta, basically. And we launched it, and it went to 100 pretty quickly. And then, we launched it on on on product hunt, spent some spend some time, on on, I don't know, creating a video or some screenshots came up with the text, the copy for the for the message there, And it blew through a 1000 stars, basically, in 2 or 3 days.
Felix Magedanz:So this is not the traction, you get used to this pretty quickly, then you have the flats, of course, again. So but, this was this was so cool. And this this, just gave us a lot of motivation. It was very rewarding to see this, to get all the people coming into into our community, asking questions, bringing praise, basically. They like what we do.
Felix Magedanz:This is and we never had that before with the proprietary solution. It's completely different. It's completely different. Of course, you work with your customers, and you get, like, the appreciation there, but it's a different it's a different, relationship. They pay you probably a lot sometimes, so they have high expectations.
Felix Magedanz:They may be demanding. And this the the dynamic changes in an open source project was was the community. And, of course, there's also bad apples, but, not really for us until now. It was pretty rewarding.
Jack Bridger:Yeah. Well, you're actually, like, very uniquely placed to to maybe answer this, but could you talk about, like, the typical, adoption of your customers previously versus your customers today?
Felix Magedanz:Yeah. So before that, we had, like, 10% was inbound because they somewhere found us, and 90% was network sales outbound, said that we had to push, basically, our thing into the market. And it's typical top down motion, basically. At some point, developers were involved, and this always has always been the good the good point, but we had to we had to get from the top to the to the developer, basically. And this, of course, has completely changed.
Felix Magedanz:And we we decided and this is something we reevaluate every few weeks. But, for now, we will we will completely focus on catering to the to the individual developer, basically. Our product at the moment is is priced and is targeted at, of course, we have a commercial, product built on top of the ops open source project. We use at some point, we still need to make money, but this commercial product is targeted at is is basically indie developers, someone starting a new project and want to solve authentication. It's very cheap.
Felix Magedanz:It's it's $9 per month. Can you can, as an individual, pay for that. No problem. And, this is like the complete opposite than before. And, of course, you need to reach a lot of folks when you want to make something successful that way.
Felix Magedanz:And, we will, for sure, we will do sales and top down in the future. But currently our it's not a niche, but our way to go is through the individual developer and, make them make them love us by by really focusing on on the needs of, of such individuals and not, become, defocused by, right, talking to banks about their 2FA and so on. This I did all that in the past, but it's it's not really helpful for what we try to achieve at the moment.
Jack Bridger:So it's like trying to create the product that appeals to, like, a broad range of people Yeah. Rather than
Felix Magedanz:Yeah.
Jack Bridger:Like, a couple of enterprise customers, specific stuff to 1 or 2 German banks or something.
Felix Magedanz:Yeah. You it's probably we had in the past. We had I don't know, for sure, but it felt like we had the opportunity to do that, to to focus on that and make some, some good money with that. But, ultimately, it was not what we wanted to do. And we we I think we could have been quicker in deciding that, but it's very tempting when you have these opportunities dangling in front of you.
Felix Magedanz:And, yeah, I'm I I don't know. Maybe others would have probably tried to follow that part, but we didn't. We wanted to build a product for the developer. And that was, ironically, that was the plan from day 1. So, when we, when we are very, very, long time ago, almost when when I had this vision of building the auth solution for passkeys, as I as I was talking about, it it was clear, basically, we wanna do it for developers.
Felix Magedanz:We just had no idea how this can be done, and we learned this along the way.
Jack Bridger:Yeah. And and now you've, you've you've found it. So now now you kind of talked a bit about, you know, you kind of did the product on launches and you flew through a 1,000 GitHub stars. How have you been growing, since then?
Felix Magedanz:Yeah. So, the first, like, the first rush of, basically growing the community, that was really cool and I think gave us a very good foundation, and we're now on the face of building on top of that foundation. The first iteration of the of the project was you could you could get a login, you could integrate it in, let's say, depending on your capabilities, 10, 30 minutes, you were up and running, depending on the framework probably. We made some decisions, how we how we make it. That simple, it involves web components.
Felix Magedanz:It's quite complex stuff we have to we have to tackle. And we have we have paying customers on Hangar Cloud, of course, thousands of developers, thousands of free instances. So we have this free tier up to a 1,000, monthly active users. I think it's free. So this is all there, and we improve it every day.
Felix Magedanz:And now we're in the phase where we say, okay, how do we bring this, what we have now to the next level? And, there's a certain expectation around the product we are building because it's not something that's completely new. Right? I mean, I think you said it in another in another podcast, auth is solved, right? I don't think it is, but there are ways how you can do it, of course, and some of them are very good.
Felix Magedanz:But, I think we bring we bring in a new and unique angle to it. And, now we have to make sure it lives up to these expectations. This involves like you wanna you wanna support sign in with Apple and Google and all the others, you have to make sure if someone signs up with the email address and then clicks on sign in with Google, this works out of the box, you need you need support for for mobile apps, for example. So we're building the SDK so that at the moment, organizations is something. So if you're building a software service product, you have, you have a point where, your customers, have have, maybe they are selling to, to businesses.
Felix Magedanz:So, these customers have some expectations to the, to the authentication solution. And, so these kinds of of, use cases, we, of course, have to have to take care of and have to deliver on. And that's what we're focusing on right now. We are restructuring, for example, the the way the front end, the back end work, the API works, make it much cooler. This project we're working on at the moment, for someone who doesn't want to use our web components, for example, wants to build their own stuff.
Felix Magedanz:Still the API can provide so much value, and with the with the new API that we will, we're working on at the moment, it will be very, very cool building your own authentication on top of Hanko API, and and still it will be very quick, but not that opinionated. You can do whatever you want with it.
Jack Bridger:So it sounds like, most of your kind of focus is on
Felix Magedanz:Product. Products. Right? Yeah. Yeah.
Felix Magedanz:It is.
Jack Bridger:Yeah. And you've I guess because you have people coming in the door through word-of-mouth or, your
Felix Magedanz:And this is this is great. This is what we what we wanna double double down on. And, how can this be done? Of course, the product has to be very, very good. This is, I think, without that, it would never work.
Felix Magedanz:And then, you have to make noise around it, and that's, that's the other thing, mostly I'm working on. And this is where we also, start hiring at the moment. So, we need more more eyes and more brains on, on the stuff that goes out to the developers that probably need us but never heard of us. So we we have to change this.
Jack Bridger:Yeah. So tell tell me, like, how you, like, it's kind of an interesting point where you're like we we spoke we spoke about this very briefly before the call, but, like, how are you thinking about who you need, to bring on to the team at this point? Because right now, it's all engineers and yourself. Right?
Felix Magedanz:Yeah. It's it's, we also have Mia on the team. She's doing all the designs, so it has to look good as well, of course. But that's it. So we are we are focusing on, on engineering and developers.
Felix Magedanz:Probably also because that's what we know best. It's that's how we how we act when we when we don't think about it. And so the I think the next logical step is hiring, hiring. So the the the job description we have on our page, it's called def def rel engineer, developer relations engineer. It's probably, it's probably more an engineer that likes to do, that likes to compute communicate and maybe write something and, share share the thoughts, they have with the word.
Felix Magedanz:So someone someone, that that can help us build the thing, but bring it to the people. And why the engineering aspect of it? So, right, defra, they are, I think the most, most folks out there for defra are probably not the strongest engineers. I don't know, but maybe so.
Jack Bridger:Yeah, I'm gonna get some letters of complaint here.
Felix Magedanz:I'm sorry for that. And I think I take it back, right? It's not the strongest engineers, but it's like the the
Jack Bridger:The focus maybe.
Felix Magedanz:The focus and also the, yeah, what do you want to do? It's it's it doesn't involve, hundreds of hours of coding. It may be involve, writing a blog post or making a video. And this is, this is this is very, very valuable, but the background needs to be, technical. That's what I want to say.
Felix Magedanz:So, because the audience is technical, and it's very hard to convince to convince developers when you're not when you're not one of them, basically. So this is why I think, it's better to, to have this engineering background and work on the docs, work on the SDKs, and then, grow grow into this communication role.
Jack Bridger:Yeah. Yeah. That makes sense. And what kind of how would you think about them being successful? Like, what would you tell them that you want them to kind of achieve in, say, like, the 1st 6 months or a year?
Felix Magedanz:Yeah. I mean, of course you can, you can put out metrics like the, certain number of blog posts and so on. But I think in the end, it's it's this this intangible, thing developer love, right? We want to create developer love and whatever works, is, is, is good. So it, it can be, it can also be like organizing a hackathon as part of an event, for example.
Felix Magedanz:But I think, I think the that's why I'm stressing this engineering part so much. I think the most important thing is that your SDKs are great, that your documentation is great, and that the developer journey, that the developer experience when someone finds you, someone tries your product, this has to be in the best possible state it can be. So I would always focus on on focus on investing here and then talk about it. Right?
Jack Bridger:Yeah. Yeah. It's, I felt like it could be a whole other discussion that I felt like it's kind of like a paradoxical role in a sense that, like, and I I think about this a lot as well is that, that part you mentioned about the empathy and stuff and, like, it's like how do you how do you have that empathy and that understanding and connection when you're not, like, you know, smashing out features and fixing bugs, which is what, I guess, the majority of developers are doing. Yeah. And even spending time on, like, SDKs and stuff, I guess you become, like, a very specific type of, skill set.
Jack Bridger:And Yeah. I feel like it's it's really hard because it's, like, almost like the person you want, it would be their first role because once they get really good at that, they may be more served at, like, a bigger company where they're really you have a specialist rather than someone that's, like, in the last few years, has been, like, you know, working as, you know, just like a standard standard kind of developer. It's a really interesting thing.
Felix Magedanz:Yeah. I'm I'm talking to some very cool folks at the moment. We made some some first steps together already, so, it's it looks very promising. But it is yeah. It's not that simple, of course.
Felix Magedanz:It's not that simple. Developing things, focus on the development. That's what we what we know and what we can do all the time. But building, building on top of that and finding, finding people who want to support us, getting it out, that's, that's the challenge at the moment.
Jack Bridger:Yeah. Interesting. Felix, I think we are coming to the end. If there was one thing that you would tell to a a DevTools founder, you know, a lot something that you've learned along the way, what would it be?
Felix Magedanz:What would it be? I think the, I think it is, it is good to think about, the commercial aspect of it. So dev tool founder doesn't necessarily have to mean you want to make money with it, but I think, to sustain it, it's probably a good idea to do that and to think about how you can make that work and then, make the decisions, that that will lead you to it. I think that's, even if they are very, very hard, even if that means, going out of your comfort zone and hiring folks that you have no idea how you can do that. But there are so many ways.
Felix Magedanz:You are probably, in so many Discord communities or Slack communities. You can, you can share your vision, you can share your, your, your conviction. And, you will find it may take a while, but you will find like minded people who will join you. And then, yeah, you can build a company on top of that, even if it's stressful. I'm not not lie about it.
Felix Magedanz:There are ups and downs, to it, but I think that's that's, I think, what I wanna share.
Jack Bridger:Yep. That's awesome. And just before we go, if you're interested in Hanko, then you can find, Hanko at Hanko dot io. And interestingly, to anyone that doesn't know, a Hanko is what they use in Japan for signatures. And I have friends in Japan, and if you don't bring your Hanko with you as like a a stamp, then you can't, like, open a bank account and stuff.
Jack Bridger:And I think it's a great name, for for a Thank you. An authentication company.
Felix Magedanz:Cool that you're bringing it up. It's a very unique name, and, I hope it makes sense. Right? Hanko signature and the the passkey stuff that we that we are so in love with, it is based on cryptographic signatures. That's how the name came to be, and we we stick with it because it's cool.
Jack Bridger:Yeah. I think much more secure than the, original hack codes as well. Yeah. Yeah.
Felix Magedanz:Most definitely.
Jack Bridger:Yeah. Thanks everyone for listening and, thanks Felix for joining. And we'll be back soon.
Felix Magedanz:Thank you, Dick.
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