October 21, 2025 • 44 mins
Dan Balcauski speaks with Dominik Obermaier, CEO of HiveMQ, a leading enterprise IoT platform. Dominik discusses his transition from CTO to CEO, the surprising benefits of growing HiveMQ from a small town in Germany thats led the company to serving Fortune 500 companies globally. Key points include the significance of personal growth for leaders, the importance of energy management, the benefits of bootstrapping before raising capital, and HiveMQ's approach to open-source and enterprise sales. Dominik also highlights the company's role in the evolving AI revolution and the need for interoperability in industrial IoT. The conversation includes insights on team building, maintaining focus, and the philosophy of lead, build, love.
01:25 Introducing Dominik Obermaier and HiveMQ
02:06 The Internet of Things and AI Revolution
06:38 Dominik's Transition from CTO to CEO
11:25 Lead, Build, Love: Dominik's Guiding Principles
19:28 Building a Global Enterprise from Bavaria
21:24 Bootstrapping vs. Raising Capital
23:02 Early Customer Acquisition Strategies
25:09 The Role of Investment in Company Growth
28:17 Open Source and Enterprise Sales Strategy
32:52 Balancing Free and Paid Features
37:53 The Importance of Understanding Customer Needs
40:48 Rapid Fire Questions and Closing Thoughts
Guest Links
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dominik Obermaier (00:00):
the limit of the growth of the company is the
(00:02):
limit of the CEO and thefounders.
the ultimate currency that everyleader has is energy.
If you're running out of energy,it shows up.
At some point of time when youare working very hard, and you
don't recharge and you haven'tfound what gives you back
energy, you will run out ofenergy and it's very hard to
inspire people to change or toend doing any something epic.
(00:24):
Like overall, when a companystarts, the very first thing is
one must build things thatpeople want, produce value for
them, even if they don't pay youmoney it will pay back.
Growing is the fundamental thingin life.
This is how life works.
A look at a plant either growsor it dies.
There's nothing in between.
And the same, I believe is truefor humans.
(00:46):
The conversation that you aremost fearful of having is the
one that leads to the mostgrowth and will very likely
solve one of the issues youcurrently have in life.
(01:16):
Welcome to SaaS Scaling Secrets,the podcast that brings you the
inside stories from the leadersof the best scale up.
B2B SaaS companies.
I'm your host, Dan Bakowski,founder of Product Tranquility.
Dan Balcauski (01:26):
Today I'm excited to welcome Dominik Obermaier,
CEO of HiveMQ, an enterprise IOTplatform serving Fortune 500
companies like BMW,Mercedes-Benz and Lilly.
Dominik, co-founded HiveMQ andrecently transitioned from CTO
to CEO.
After 11 years, he's built aglobal enterprise software
company generating over 50% ofits revenue from US customers,
all from a small town inBavaria, Germany.
(01:49):
Dominik, welcome to SaaS ScalingSecrets.
Dominik Obermaier (01:53):
Thank you, Dan.
Excited for the conversation.
Dan Balcauski (01:55):
happy you took the time to join us.
I'm very excited to learn fromyou.
Let's start with a quickoverview.
Could you give our audience justa brief introduction to HiveMQ.
What do you do?
Who do you serve?
Dominik Obermaier (02:06):
Yes.
So having you building thecentral nervous system for our
world.
So what we're connecting is likethe actual things in the world,
like machines industry,computers inside factories.
Cars and like, pretty much likevariables and also what people
interact with every single daywith the internet and with
applications.
And so we are at the forefrontof what's called the Internet of
(02:28):
Things.
And we are the messagingbackbone for the largest
enterprises in the world.
So they can produce faster, theycan produce with more.
We help with things like you canactually unlock your car on any
place on the globe.
And yeah, at the end of the day,it's about really connecting
people, applications, andhumans.
And now since a few years we arealso at the forefront of the AI
(02:51):
revolution because what'shappening then is the AI
revolution.
1.0 was chat interfaces likehumans.
Speak or write with applicationsthat look like, like
interactions, like chat would beone of them.
And now what's happening in thesame revolution.
These so, so-called largelanguage models, they can
(03:12):
interact with the world withwith things like what's called
MCP or to communication.
But this is still all thedigital world, like we make AI
interact with the digital world.
And what we at HIV you do is.
We let AI also interact with thephysical world, with machine
robotics and so on.
So, we are actually consideringus as one of the people and one
(03:36):
of the companies who are tryingto define the second AI
revolution that is about tocome.
Dan Balcauski (03:42):
I wanna just for the benefit of our audience if
you can two things.
One just in terms of HiveMQ youare a pure play software
provider, correct?
You're not actually selling Andthen as well, could you just
unpack the world of IOT a littlebit more?
You used the example ofunlocking your car around the
globe.
(04:02):
I'm not sure if I have thatparticular use case, but I know
you're selling to some verylarge enterprises.
Dominik Obermaier (04:08):
Yeah,
Dan Balcauski (04:08):
for the What that world looks like and why the
need for a solution like HiveMQeven is needed within that
world.
Dominik Obermaier (04:18):
Yeah.
Then what's very interesting isthe world doubles the amount of
data that is being produced andconsume every two to three
years.
This is like exponentially high.
We have so much data at theglobe already.
It's incredible and it's justgrowing and growing on the other
end.
We currently have more thanthree times the amount of
internet connected devices,which could be anything from a
(04:39):
car to to small gadgets likesome people have smart watches
and others.
Two machines in the factory.
We have three times the amountof connected devices than humans
on the globe.
And growing and growing withoutend.
And so what's required is youneed an extra backbone or what
we call a central nervous systemthat routes the data, brings the
(04:59):
data where it should be, butalso governs the data.
Just imagine you're a company,you're a manufacturing company,
you have supply chain to manage,and of course you want to have
all of the data of your supplychain, but you also wanna make
sure it's your data because thisis your let's say competitive
advantage.
And you want to get insights outof this.
As an example, why is there adelay in shipment?
Why can't I produce more?
(05:21):
Why do I have so much downturnthat I could prevent in the
manufacturing settings?
And in order to do that, youfirst need to bring the data
into single platform, which alsohaving helps you need to bring
the data to the applicationsthat can actually do something
with the data.
But then you also need to have asample of time some actions on
top of it, what's called AI ahanactions to say, okay.
(05:43):
Now something's happening.
And I want a system toautonomously do things like
shutting a door stop producingor double down on producing
things.
And all of this requires actualdata pipelines.
And this is what KU does.
So we do everything that's underthe hood.
So we make the world run byproviding this data, type data
pipelines, and also the runtimefor these kind of ancient
(06:04):
actions.
Dan Balcauski (06:06):
massive increase in data you have machines that
are now spewing off data streamsthat are on production lines
Dominik Obermaier (06:13):
Yeah.
Dan Balcauski (06:14):
But, as companies sort of wrangle with this.
You mentioned a couple of thingsof just the sheer volume and
velocity of that data as well asthe governance and ownership and
control over that data becomesimportant.
Did, and correct me if I missedanything in there, but that was
my takeaway for what you said.
Perfect.
(06:34):
Perfect.
Well, I'm curious I'm talking toyou at an interesting time.
I heard you on a couple of otherpodcasts and not too long ago
you were the title on those wasyou were the CTO and now you are
the CEO.
Walk me through that transition.
I guess what prompted it andlet's dive into that a little
bit more.
Dominik Obermaier (06:53):
Yes.
Yes.
So the company was founded in2012, which is quite a long
time.
And we took a very differentapproach than many companies
these days because what wedecide is to bootstrap.
This means we were founding thecompany.
Out of university and we weretrying to win customers based on
an early product and based onthis scale, the company based on
(07:16):
more customers.
So it's pretty much like acustomer funded business.
This is how we started.
And in hindsight what washappening is we were way too
early to market, way too early.
And and so, but the great thingabout it is we could, as a
company, already build aproduct.
That's really working for us.
(07:36):
Trust and reliability are thecore promises.
So we are at the critical path.
We are in the value chain oflargest companies in the world.
So, if our software wouldn'twork properly.
People on the airlines, theywouldn't be able to board.
They wouldn't get tickets, likeluggage wouldn't show up.
Basically logistics providerslike UPS FedEx are also
(07:57):
customers of ours.
Like packages wouldn't show upat the doors of customers.
So that's really high stakes.
And so, what's important for usis to get the engineering right
and.
I think you mentioned this, likewe founded a company in Germany
and Germany.
I mean, there's a few things weare good at and a few things we
aren't good at, but one of thethings that German has a good
reputation in the world is forGerman engineering, and I think
(08:20):
this applies also to Hy mq.
And so in the early days wenailed the product, but our
go-to market was something thatneeded to pick up because we
were a bit too early to market.
And so I was taking care of theproduct for the.
For the last 10 years, I wouldsay a bit more than 10 years.
And I also make sure that theservices on top of it.
I also ran marketing before we,we scaled the company and hired
(08:43):
a chief marketing officer.
And now also services is run bysome somebody else.
But I was pretty much involvedin all the strategy as well as
the product and engineering.
And now since, since this year,I also took ownership of all our
go to market marketing again,and also all other functions of
the company.
And now I am, I'm steering italso towards even further
(09:06):
growth, especially in the US andalso in Europe.
Dan Balcauski (09:10):
I definitely second Germany's strong
reputation for rock solidengineering.
And I'm curious about yourtransition in, the person who, I
mean, obviously you, before yousaid you, you were running some
of the marketing function beforeyou scaled.
And I think
Dominik Obermaier (09:26):
Hmm.
Dan Balcauski (09:26):
could Reflective of a lot of experience of
co-founders where they're,
Dominik Obermaier (09:30):
Yeah,
Dan Balcauski (09:30):
their, head janitor at the same time.
Right.
For,
Dominik Obermaier (09:33):
exactly.
Yeah.
Yeah.
Dan Balcauski (09:36):
curious, as you've now taken the CEO reigns
of scaled organization, whatsurprised you most about that
shift?
Dominik Obermaier (09:46):
So being a co-founder and also being on the
board for like, since forevernot a lot of surprised me, but
there were a lot of things thatI wanted to give it a difference
spin.
And so this is the thing aboutcompanies like you companies go
like through the stages ofmaturity.
And there is a saying that youneed to reinvent the company
every single time you're goingthrough something.
(10:08):
So, I mean, there's a lot ofdata out there.
Like when you're in a seed phaseof a company, you have very
different problems to solve.
Like finding product market fitis the most important one.
Like having something like buildsomething people want, this is
the very first thing to focuson.
And then the next thing is.
How do you scale it when you gointo a growth stage and then at
some point of time it's about,okay, how, not only how can you
(10:30):
scale this, so, but how can youscale it efficiently when you're
going more towards publicmarkets and the thing is, what I
learned from a lot of mentorsis.
And I experienced it myself.
You, it's not the company thatneeds to reinvent.
It's the people running thecompany that need to reinvent
themselves, which in our case isfounder led.
This means personal growth isnot optional.
(10:51):
It's mandatory because the limitof the growth of the company is
the limit of the CEO and thefounders.
And so the actual work is toworking, of course, on the
business, but the actual work isinwards.
To actually become the personthat can grow the company.
Dan Balcauski (11:08):
you think about that growth, and I know you're
still early in, in yourtransition, although, obviously
you've been involved as aco-founder and at the board
level for a while have youpinpointed any mindset shifts or
growth areas that have beenparticularly important in your
new roles?
Dominik Obermaier (11:24):
Yes.
So I have I have some rules inmy life that I used for many
years used and I also brought itto the company.
And I mean, people around audiowon't be able to see that.
But I have a medallion with methat I have like every single
day and.
It says lead, build, love.
And I think these are the threethings that define that, that I
(11:49):
use as guiding principles formyself.
And I decided to use them alsofor the company.
And what I mean with this so, solead.
So first of all, one must leadyour, you must lead yourself in
order to be able to lead others.
The work with leadership alwaysstarts first.
Inwards and then also outwardsand basically as a company
leader, this is the obviousthing because you're leading
(12:11):
others, but it's important.
It's important to, tounderstand.
This is not a hostage situation.
People can free, can choosewhere they want to work.
And so leading also meansinspiring for action and for
positive action for the world.
But it must start inward.
You cannot inspire others if youdon't draw from the inspiration
(12:32):
by self and getting the pros andthat can inspire others.
This is lead and build is, Imean, this is what.
What founders do they buildcompanies.
It's very straightforward, butit's also building a life.
It's like we, we have limitedtime on earth.
Very limited.
There are some people these dayswho believe we can live forever,
but I mean, we don't know atthis point of time.
(12:52):
At least it looks like peoplewon't live forever and most
people won't live, live forever.
So time is limited and so weshould make the best out of it.
So, so what we do is build, sobuild a life, family.
Your body, respect your body,like all of these kind of things
that also start inwards.
And this results in this, mybelief results in creative
energy that can be unleashed ina company to build something
(13:14):
epic.
But again, it must startinwards.
And the third thing is love.
This is the reason why we exist.
And even in business and loveshows up as empathy.
And as I said, this is not ahostage situation.
This is work and.
And if you, and the very mostimportant thing that I learned
from many of my mentors is lovestarts from the inside.
(13:37):
If you don't start you to loveyourself, you cannot show the
empathy towards others, in a waythat also inspires others.
And so, and love in businessshows up as custom obsession and
all of these kind of things thatare important.
But again, it starts the wordsand.
And I brought this philosophyinto the company.
So, so we are leading with highstandards.
(13:59):
We are building with urgency andwe are loving with empathy.
And these are really the areasthat, that we look at as a
company.
And that I also look at, andthese are the three guiding
principles.
How I'm looking at things and.
And yeah, so some of it we'renot a big change, but at least
we surfaced it and now this isthen also a culture change that,
(14:22):
that comes from that because asI said, it starts inwards and
then it shows up in the companyand then you have a, this kind
of new set of standards that areemerging.
Dan Balcauski (14:32):
Lead build love.
I'm curious on the first thingon lead.
I mean, I definitely agree withthe sentiment that it's
difficult to inspire others ifyou've.
sort of feel that inspiration.
I'm curious though, everyone's,CEOs, have nothing.
It's a, it's the old problem ofbeing the leader of an
organization or a country.
It's like the easy problemsdon't make it to your radar,
(14:53):
right?
Like the wins are, at any giveneight hour workday or 16 hour
workday, whatever it might be.
I'm sure everything is likeburning fires.
And so I imagine sometimes thatinspiration is maybe hard to
come by.
Or.
Or maybe it's just not, notthere.
Just naturally are there anyways that you found that either
sort of keep you in check of,like, like making that sort of
(15:13):
obviously you have themedallion, so that's a, I think
a probably a powerful reminderthat's always with you.
But like, like how do you thinkabout sort of, staying in that
sort of or generating thatinspiration for yourself?
Dominik Obermaier (15:26):
It's a okay.
It's a very interestingquestion.
I think it starts with purposefor me, every.
Every single day when I wake up,and I would be lying if I would
say I wake up full of energy andconquer with the world mindset
every single day.
But what works for me is reallycoming back to the basics.
What, why are we doing this?
(15:46):
And most so, especially whenyou're on a mission that's
larger than yourself, most ofthe actual problems are very
small.
Even in the moment, they're big,obviously, otherwise there
wouldn't be issues.
But, but working backwards fromthe mission, it's always like,
will I care about this in twoyears?
Is this really relevant?
Is it make or break?
Sometimes it is, by the way.
(16:07):
When it's really make or break,then you should actually work
it.
But very often it's really justfocus.
There is so much distractionseverywhere.
And it's not only distractionsby, oh, there is whatever social
media and office I'm talkingabout in work escalation here or
there.
This doesn't work.
Somebody needs help here.
All this kind of things.
But the ultimate currency thatevery leader has is energy.
(16:28):
If you're running out of energy,it shows up.
It's not the time because likepeople say, ah, you just need to
work whatever, 24 hours.
Yes, you can do that in case youdon't run out of energy.
At some point of time when youare working very hard, hard, a
lot and you don't recharge andyou haven't found what gives you
back energy, you will run out ofenergy and it's very hard to
inspire people to change or toend doing any something epic.
(16:52):
If the leader doesn't show upwith energy and there's
suffering philosophies like it,it works for some people by
whatever, pressuring and otherthings.
I don't think this is the besttool for at least what I found
is showing up is the best.
Manage all your energy and thendrive positive change, and then
also focus on what needs to bedone and simplify.
Simplify, simplify.
(17:12):
Everybody will convince you ortry to convince you.
The world is complex.
It is, but actually life is verysimple.
And our brain tries to make iteven more complex and
complicated and so on.
But at the end of the day, it issimple.
And for some of the listenerswould say, ah, Dominik, I don't
believe that stuff iscomplicated.
(17:32):
Imagine a following.
It happened to be multiple timesthat when I had an issue in what
my private life, something, acomplicated situations on there.
When I talk to a friend foradvice, people say, don't make
this.
It's simple.
Why don't you just do X, Y, Z?
And then I'm like, yeah, you'reright.
And just making it up in my headand making it more complicated.
(17:53):
And the same is true forbusiness things.
Things are not complicated.
Things are simple.
But since we are theprotagonist, they're often in
our problems.
We are very often part of theissue, and this is where our
brain strikes us.
And so this is for me, a bit ofa constant struggle.
But it seems to be a constantstruggle with most people.
Dan Balcauski (18:11):
love what you said there around focus because
I think, you know where thatenergy drain sometimes comes
from is you feel, there's somany things burning.
You can't fix all of them.
You're sort of constantly sortof pushing on everything just a
little bit at a time.
But if you're able to sort offocus, you're able to actually
(18:31):
make, be like, well, all those,all these other things are
secondary and make progress.
There is something.
Really energizing and sort ofreinforcing about that focus
area.
And I used to have, I used to bea product leader in different
organizations and, productleaders, not exactly like a CEO,
but in many ways, there's allthese voices telling you what
you should do, what you shouldfocus on.
And I always had this experienceas like, if I was ever in that
(18:53):
situation.
The
Dominik Obermaier (18:55):
Right.
Dan Balcauski (18:55):
and I'll give to other product leaders, like go
talk to customers.
Like if you are in that
Dominik Obermaier (19:00):
Yep.
Dan Balcauski (19:01):
cause always found that incredibly clarifying
because like, oh, all this otherstuff is noise inside the
building about what people'sopinions are.
And as soon as I talk to
Dominik Obermaier (19:09):
Yep.
Dan Balcauski (19:10):
like that would Also it would have that impact,
right?
I mean, tying it back to youridea of like, mission and why
are we doing this?
It's like, well, like thesepeople on the other side need
us.
They're getting, they're excitedor satisfied, like we're solving
real problems for them.
And that always was reallyclarifying and energizing.
So I love your answer there.
I do wanna shift a little bit.
So, hi, MQ is based in Ipronounce it correctly?
Dominik Obermaier (19:33):
Yes.
Yes.
Dan Balcauski (19:34):
which is outside of bunich in Bavaria.
It's not exactly a major techhub yet you are generating over
50% of your revenues from UScustomers.
I'm curious how you built aglobal enterprise software
company from a small Germantown.
I.
Dominik Obermaier (19:49):
Yes, it took us quite some time as I
mentioned earlier because wewere a bit too early to market
and so we needed to figure out alot of things along the way.
I think the first 10 years,these days could be compressed
actually into two to three yearseasily of fi figuring things
out.
But also we didn't do animationinvestments.
Like the very first investmentround was in 2021.
(20:10):
Where we got out the capitalmainly to, to go fast into the
US and the essence then weraised quite a bit of capital.
We were able to deploy thisproperly and then also scale
also in the us.
And these days KU is a US aswell as a European company.
So we are not, while technicallywe still have our beautiful
headquarter here in, in, inGermany, which is very close to
(20:33):
the Munich airport, which is oneof the features of the town.
Actually it's closer to theMunich airport than mch.
And since we are a internationalcompany, it makes travel really
easy.
This is why we chose that, thatas a hub.
But yeah, it's it's just like weare located there, there was a
university there, and so westarted the company out of
there.
And this is why we technicallywe are still here, like the
(20:54):
headquarters still here.
We got a pretty good deal to, tohave one of the, a beautiful
office here and one of thethree.
Very iconic buildings in thetown.
It's an 80,000 people town.
And so yeah we like it here.
People, all hiv qs coming inglobally for meetings and
events.
They also like it here.
So we are happy, but we are aglobal company.
We are, we have people, likemore than one third of the
(21:16):
people is in the US and weexpect the maturity of people is
going to be in the US in thefuture.
Dan Balcauski (21:22):
Well, you've talked about this fundraising
element.
So boot your bootstrap for nineyears before taking
institutional money.
That these days it seems likepeople are raising money before
they even necessarily have aproduct a lot of times in the
us.
I'm curious your perspective onthe advantages of that approach,
did that approach allow you tobuild in a way that you couldn't
(21:43):
have if you had taken capitalearlier?
Dominik Obermaier (21:48):
I mean, it's an interesting question.
Like overall, when a companystarts, the very first thing is
PE one must build things thatpeople want, build things,
people want.
This is basic why Combinator?
What?
Teach, why Combinator things Ithink they want build something
people want.
And I mean, it depends a bitwhat kind of business you're in.
(22:08):
Like if you are building asoftware business like a SARS
business.
Or on cloud infrastructure, likethere is, okay, you need a
laptop.
Most people have a laptop thesedays, even if they don't find a
startup.
Cloud infrastructure is reallyeasy these days with AI coding
tools cranking out a prototypethat doesn't even need to work
just to, to pretty much likestructure the ideas is extremely
(22:29):
easy.
So I'm wondering like why inorder to build something people
want, why would you need a lotof capital?
What you need us?
You'll have a raise againsttime.
And you need to, nobody's goingto hire people before you find
product market fit.
I mean, some people do, but formost software companies, they
don't need that.
This is why you have a foundingteam, or at least you can bring
(22:50):
in a very early engineer, buthaving a, but,
Dan Balcauski (22:54):
is, is probably longer than most people would
think that the
Dominik Obermaier (22:57):
yeah.
Dan Balcauski (22:58):
you probably hit product market fit well before
the end of the nine year period.
Dominik Obermaier (23:02):
Yeah.
Right.
I would say we hit that in 2000,I would say 14, 15 when we got
the first customers.
Like we got BMW as a very firstcustomer for all of the car
sharing Mercedes-Benz for themanufacturing sites.
We also very early on, gotcustomers in the US, like Dell
and others, but this was basedon a product, and this was all
inbound.
(23:22):
We didn't build enterprisesales.
We built a product, wepositioned the product, we.
We did some very, let's say,capital, inexpensive things to,
to get in front of these peopleso that they learn about it.
We did, build, building athought leadership brand.
Back then blog posts were one ofthe things, there was not a lot
of content out there.
And so we built like a lot ofthe initial content around one
(23:45):
of the technologies that wehelped pretty much promote,
which is called NQTT.
And we are still benefiting fromthis, so, so we made sure, okay,
that we are all of the keywordsthat somebody.
In the problem domain possiblyever would go after they would
see us.
So building a magnet, prettymuch like, from a marketing
standpoint, it's not expensiveto do, but it's it takes a lot
(24:07):
of time and it also requiresexpertise.
We didn't do any ads or anythinglike this for a very long time.
And so the majority of, let'ssay the first one or 2 million
of recurring revenue was alldone organically by pretty much.
Not even trade shows.
It was by speaking in front ofour target audience at
conferences was by blog posts,was by educating the market and
(24:29):
evangelizing the market, whichagain, was the playbook that
worked in 2014 to 16 These days,the playbook would of course,
look different based on today'stechnologies.
I would not focus on SEOs asmuch these days anymore if I
would found a startup right now.
But I would absolutely look at,Hey, how can I make sure that
chat BT shows me as a trustedsource versus the competition,
(24:50):
these kind of things.
So it requires different tacticsbut again, it comes back to a
philosophy.
Build something people want.
Even marketing, don't just teasethem and do this kind of
understand things.
Build something people want.
Produce value for them, even ifthey don't pay you money it will
pay back.
This is how you build somethingthat's growing and I still
believe the tool is there.
Dan Balcauski (25:09):
Well, when you did finally decide to take
investment as I understand it,you were already profitable and
and growing.
I'm curious
Dominik Obermaier (25:16):
Yeah.
Dan Balcauski (25:18):
money change the company?
Dominik Obermaier (25:22):
It changed the company.
In very good ways.
So first of all, if you'retaking institutional money, you
have a better access to talentpool.
So especially if you're lookingfor senior leaders very often
the senior leaders in themarket, especially in the SARS
market and software market, theyare looking for companies that
might be the next unicorn.
So you won't be a unicorn, bydefinition, you can be a
unicorn.
(25:42):
If you don't raise money,because the valuation is based
on what external sources say.
And if you're just a privatecompany, if you owe money, what
are you worth?
Nobody knows except if you, IPOobviously.
But in order to go there, youneed talent.
And so this was one of thereasons why we raised the money,
because it was clear to us toattract the, also the leaders
that we want to have in order togrow the business.
(26:04):
We also need to be present inthe capital market.
And this also helped us.
And the, the other thing is itallowed us to go faster.
So if you just need to make,earn Monday in the enterprise
sales, you have, depending, inour case, you have more than six
months sales cycle.
This means even if you are aboutto close a deal, then in six
months, and then it takesanother three months until they
(26:26):
pay you.
So, until you, if you bootstrap,if you don't have the money in
the bank, you can't invest it ifyou're very conservative.
But if you are taking.
Capital and whatever.
You raise a few millions ofdollars, you have them in a bank
and you can spend them.
And then you're with yourexpectation that at leads to,
to, to growth down the line.
And I mean, in our case itworked really well.
(26:48):
But there's also risk attachedto it.
So if you don't have anythingcustomers want, the risk is
pretty high.
Like build, like raising capitalwithout having product market
fit is something I'm not quitesure if I would do that.
This would be way too stressfulbecause you're.
You're try, you're selling andyou're building at the same
time.
You have a non-function go tomarket engine and a
non-functioning product, likelyalso non-function and
(27:10):
functioning.
You have, everything isdysfunctional at this point and
this is a mess that like leads.
To a lot of founders, and I haveknown many founders personally,
it leads to things like burnoutof people.
It leads to bad decision making,and finally it leads also to a
great opportunity and great ideathat just vanishes because it
couldn't be executed against.
So I think some people can dothis, but in, in my case, I
(27:34):
prefer building something peoplewant and then scale it from
there.
Dan Balcauski (27:38):
Well, that's fantastic and I can understand I
guess all those transitions.
And definitely the access tobetter talent as you have the
verification or stamp ofapproval on a term sheet of what
your valuation is.
I could see how that was beingincredibly helpful.
And just also fascinating thatyou were able to grow.
Fast, organically especiallywith enterprise level customers
(27:58):
through through the methods thatyou mentioned.
Yeah.
We are in constantly changingworlds with now needing
Dominik Obermaier (28:04):
Mm-hmm.
Dan Balcauski (28:04):
the we're worth reaching out to.
It's a, it's an interestingworld.
I for one, welcome our new robotoverlords.
Well, that foundation that youbuilt through I guess
bootstrapping it, buildingthrough your receivers have set
you up well for your current.
market approach.
I'm curious about your strategybecause you have this in
interesting combination of opensource with enterprise sales.
So like you have you have aproduct high VE q Edge that's
(28:25):
free at open source as Iunderstand it.
I guess what what drove thatdecision to pursue the open
source route with that offering?
Dominik Obermaier (28:34):
Yeah, so I'm having to access a product, what
we call is in the dataacquisition layer.
So you have if you look at afactory, you have a lot of
history in there.
And the thing about a factory isusually you don't change things
that work and very often youdon't change things that don't
work by the way.
De depends on the company and.
And also the what's called thePLCs.
(28:56):
These are pretty much the smallcomputers that interact like
with robots and other things.
They're designed for a very longlifespan, so it's not unheard of
that you have a PLC from theeighties or nineties in the
factory today.
And the thing is, if you lookback at the world in the
nineties and the eighties, thiswas a very different world of
than today.
It was not built forinterconnectivity in all of
(29:17):
this.
And so.
This results in more than 150languages of these devices in
factories that they speak.
It's like, imagine, like, likehumans speak, like I would, if I
would speak German, you speakEnglish, we would've a very hard
time understanding of eachother's.
And so what you require is youneed a common language.
(29:38):
So the reason why the both of uscan communicate is because we
chose to speak English.
You might have it as a nativelanguage.
I do not, but I still can speakthe language so we can
interoperate and we can conveyideas and things our language.
And so the same is happening inthe factory.
And we found there's not a lotof companies who try to tackle
the problem of making all thesethings speak to each other for
(30:02):
multiple reasons.
And if I look, if you look athistorically all of these
different vendors, they have nointention to make their data
accessible to other vendors.
Because if you buy from thiscompany, the hardware, you also
buy the software because itworks.
You can buy other softwarebecause it doesn't work.
And so they, they pretty muchbuild very large, almost like
empires ba based on theirproprietary nature.
(30:24):
The thing is, and if the,looking back at the history of
compute and internet, it showsus one thing, interoperability
is the winning technology.
Always, this is the history ofthe internet and it repeats and
repeats all over again.
And we, we thought why is nobodytackling the problem?
Like we, our customers arebegging us to help them to get
(30:46):
insights based on your machinedata, but the machine data is
not accessible.
And some of the players who wantto play in that space, they
build again, a proprietaryplatform and doesn't make it
accessible to others.
And w.
And our core belief is in openstandards and interoperability.
We believe the world should beable to communicate in a way
(31:07):
that even outside of HighQ,really like, I have no problem
if people use competing productsas long as it is using a, an
open standard, because this ishow we advance, advance
humanity.
And so long story short, wedecided, okay, why don't we
build.
That component that makes thedata accessible.
It gets the data out into ourcentral nervous system.
(31:28):
This build open standards, butcan also push the data back.
And and we decided to do this oopen and free.
First of all, because there isnot a lot of money in the market
to be very frank.
This is operations technology.
This is very conservative.
There's no lot of budgets.
And the other thing is we wantto make the data free and
accessible.
To provide value.
And so, free and open source isabsolutely fine for us.
(31:51):
We figured out while making itfree and accessible, customers
wanna pay for that because ofsupport and other things.
So we make actually a lot ofmoney there.
But the initial idea is stillthe same.
Take it, every OT engineerlistening to this can take home
to edge and can free all of thedata in the factories and make
it accessible to other systems.
Do analysis, do AI and otherthings.
And we think this is importantbecause we think it must exist.
Dan Balcauski (32:16):
so there's a massive protocols, languages,
sort of a Tower of Babelsituation.
None of these systems talk toeach other and
Dominik Obermaier (32:22):
Yeah.
Dan Balcauski (32:23):
that layer but then also all the adding into
that, all the elements of, yeah,there's not really industry wide
push to make these systemsinterconnected because they can
create vendor lock in withintheir own sort of,
Dominik Obermaier (32:36):
Right.
Dan Balcauski (32:36):
or empires to sort of push that out.
And then, with the other sidethat it's budget.
So these, the folks who are inthat world don't really have,
money to spend in that side.
You do said that they do, likefolks do pay you.
I am curious about that tension.
So, within, so you have the opensource platform.
I'm curious how you've thoughtabout, okay, what do, what is
(33:00):
the barrier between what we giveaway and what we charge for?
Is it purely like, more like RedHat Linux model where it's like
you're just paying for supportcontract?
Or is it, are you actuallybuilding additional monetized
features and capabilities onthat platform that you charge
for Additionally?
Dominik Obermaier (33:17):
Yeah, so how we look at things is like for
whom is that?
And.
And what kind of value does itprovide?
So as an example, if somebody isan OT engineer and they really
want to experiment we make it aseasy as possible.
I mean, you can get from hq, youcan get HQ Edge for free.
We also have what's called abroker, which is like the
component that also distributesthe data to the cloud and back.
(33:39):
For free.
You even get the cloud for freeat Hyper Q.
It has limitations because likewe, we pay for this.
And, but we support thecommunity here.
And it's design that a singleperson can get value.
This means they can get thedata, they can do something with
the data, they can route it totheir applications.
They can even, whatever, routeit to a dashboard so they can
(34:01):
show their boss what they'vedone and so on.
But we also know there is not alot of money in there because
there's no budget.
Because like in order to get tobudget some at some point of
time, these people are veryoften innovators in this
company.
And so they need to, first ofall pretty much learn about
technology, prove thetechnology, and then also bring
it into the business.
But.
(34:21):
The, but frankly we have everymonth every quarter, tens of
thousands of people are signingup for our, even for our free
cloud, home automation.
Other universities, lot ofprofessionals, sometimes without
a real project, they want toalso do something and just
educate themselves.
So, and we are updating,supporting all of this.
The next thing is that theprofessional tier, this is
(34:42):
really built for teams, smallteams that try to innovate.
They try to do something andalso have a project, usually a
bit of a budget also availablebecause they get asked to solve
a problem very often.
It has to do with digitization.
Very often it has to do withacquiring the data and actually
making, demonstrating that theycan use the data for AI use
(35:03):
cases.
It is a big driver these days.
And there, there's others.
And we also designed off thefeatures as for them, these guys
don't need single sign on.
They don't need chiefinformation Security signing off
on all of the security things.
Why?
Because it's small scale.
It's not enterprise wide, andthey're still proving a point or
have a small productioninstallation.
This means they're connecting afew factories.
(35:24):
One factory usually having alive dashboard and then also
showing to the leadership, Hey,this is what you can, what we
could be doing.
And then Enterprise is reallylike full platform Enterprise
Square security.
We can scale across hundreds offactories with customers with
more than 300 factories thatconnect all of the data.
Happening on the shop floor andbringing it together, using it
(35:46):
for ai, machine learning,generating insights and
improving overall equipmentefficiency and other things.
And this wouldn't be possiblewith the free tier, obviously,
but we decided carefully so wecan help.
A company and also theindividuals in the company guide
them through the journey tounlock the value.
And then also at the end of theday, you still need budget.
I mean, we are a company.
(36:06):
We're not a charity.
Not everything is for free, butalso the approaches and the
value we unlock, like we, likeliterally we save, serve our
customers millions of dollars.
We help customers produce.
Medication six months beforetheir estimated timeline and
bring it to market saving andsaving millions of people's
lives by doing that.
And I mean, this is our, butthis is our enterprise tier.
(36:28):
You wouldn't do that with opensource.
Dan Balcauski (36:30):
Dominik if you were here, I would hug you right
now.
And maybe that wouldn't be aproper German thing, but I love
what you just said.
So I, when I'm not doing apodcast, I spend all my time in
the pricing world and what youjust outlined and what you just
was beautiful articulation ofwhy I, what I try to get into
people's heads.
When you're thinking about yourbundles or your offers.
What you described, there was aperfect example of aligning
(36:52):
those two customer segments withdefined contexts and defined
needs.
It wasn't
Dominik Obermaier (36:58):
Yeah,
Dan Balcauski (36:58):
hey,
Dominik Obermaier (36:59):
I,
Dan Balcauski (37:00):
like might pay for this, so we put it at the
upgrade tier.
It was very clearly defined interms of is this feature for
this person in this context, andtherefore it goes in this plan.
I am
Dominik Obermaier (37:10):
yeah.
Dan Balcauski (37:10):
often there Even with there, so like, maybe this
applies to either yourenterprise or your professional
segment.
So I'm curious if you've runinto this situation where
potentially is a capability thatwould, be needed in those
environments, but also like, canbe incredibly impactful just at
the open source layer in termsof driving.
(37:31):
Value across the ecosystem.
I'm curious how you've thoughtabout, like, I, I dunno if those
situations have existed for you.
Sometimes they come up more,
Dominik Obermaier (37:38):
Hmm.
Dan Balcauski (37:39):
or not.
guys have had to make sort ofthose trade offs and like, yeah
we could charge here, but itactually makes sense for us to
put this in the, into the opensource overall just to drive the
overall health of the ecosystem.
Instead here's how you navigatethose trade offs.
Dominik Obermaier (37:53):
So one of the things is, what I found is in
99% of cases, everybody's wrong,and the only way to validate is
with, not by having a strongopinion that's articulated in a
fancy way, but by actuallytrying it out with customers or
the target audience, which couldalso be, in this case,
community, open source.
(38:14):
It's very surprising very often,especially also other things
like UX and other things, like,it's very surprising when people
do have a product, when theydon't know how the people
building it think that it shouldbe used.
It's very surprising.
And so it's all aboutunderstanding, know your
customer.
Know your customer is soimportant, and either by doing
it, especially for early stages,be with a customer.
(38:36):
Observe them.
Ask them.
Sometimes people, but peopledon't, people lie all the time.
They say, oh, I would need that.
Understand Why do they need it?
What's the problem they wannasolve?
I want this feature.
Interesting.
What do you try to achieve?
Oh, this is what I want toissue.
Okay, cool.
Here's another way of doing it.
Hey.
Perfect.
And so it's not like building asoftware is not order taking.
(38:58):
It's not being an Ivo tower andjust coming up with a fancy idea
and build it.
It's also not order taking froma customer.
It's deeply understanding theproblem to solve.
And also the other, the nextquestion is, should we as a
company even solve the problem?
You can't solve, you can't solveworld hanger with software as an
example.
This would be very bad.
This is obvious obviously but,this kind of franking products
(39:19):
exist where, where you add andadd and add and so validate with
the market where they, with thecustomers.
And la last point on this, thereis one way door if you make
something free and available andthen take it away.
Is much, much worse and almostimpossible sometimes than doing
it opposite, being conservative,and then add more value to the
three tiers over time which iswhat I would recommend to people
(39:43):
instead of going the oppositeroute.
Dan Balcauski (39:45):
In earlier in the conversation we were talking
about AI and you mentioned theidea of MCP, which I think was,
is an interesting example thatmaybe other people can relate to
because is anthropic the makersof Claude came out with the MCP
standard much like, USB,
Dominik Obermaier (40:00):
Yeah.
Dan Balcauski (40:00):
idea of anything in anything unless you're Apple,
of course.
And then they hate everyone.
They make you buy$90 connectors.
But everyone else has
Dominik Obermaier (40:07):
Yeah.
Dan Balcauski (40:07):
hey, we want Every device to every device and
not have to have.
Custom
Dominik Obermaier (40:11):
No.
Dan Balcauski (40:11):
for it.
They were like, Hey, we're,there's this broad universe of
ways we think we could addcapabilities to LLMs and we
could make this sort of, wecould build direct proprietary
connectors or we could createthis thing and then release it
to the ecosystem.
And I think it's just had such apositive impact on,
Dominik Obermaier (40:28):
Mm-hmm.
Dan Balcauski (40:28):
still And TBD, like what that will evolve
Dominik Obermaier (40:31):
Yep.
Dan Balcauski (40:32):
But I think Example that maybe is a little
bit more relatable to folks oflike, yeah, they could have just
sort of built that proprietary,but like, it is there, there is
that sort of like, okay, thewhole ecosystem will benefit for
it.
Dominik, this has been awesome.
I would love to talk to you allday.
But I wanna be respectful ofyour and the audience's time.
I want to close it out with acouple of rapid fire questions.
You ready?
Dominik Obermaier (40:51):
Yeah, I am.
Dan Balcauski (40:53):
When you think about all the spectacular people
that you've had a chance to workwith is there anyone that just
pops to mind that's had adisproportionate effect on the
way that you think aboutbuilding and growing companies?
Now?
Dominik Obermaier (41:04):
First of all, my wife.
Not that we discuss buildingcompanies, but I am learning
more and more the more I learnabout myself, about
relationship, about humans.
The more I learn about buildingcompanies.
And the second thing is a bitmore tactical is I a lot of
mentors along the way.
I had so much great people thathelped me.
(41:26):
There is people like I mean
Dan Balcauski (41:28):
Name them.
Go ahead.
Dominik Obermaier (41:30):
well known, so, so people like all of
Schmitz as an.
I'm currently learning also alot from our new chairman, Barry
Liebert.
One of is one of them.
So there's a ton of people.
Also, I learn a lot from theinvestors.
I learn a lot from my executiveteam, at the end of the day.
Like growing is the fundamentalthing in life.
(41:50):
This is how life works.
A look at a plant, a planteither grows or it dies.
There's nothing in between.
And the same, I believe is truefor humans.
And the day you stop learning,the day you think you've figured
things out, this is the day youstop growing.
And and so yeah I'm trying tolearn as much as possible
because the thing is.
I try to be more right thanwrong but on average I am too
(42:12):
often wrong and so I want tolearn much more.
Dan Balcauski (42:16):
so, so props to your wife.
I do wanna concentrate on thenext person you mentioned.
So, Olaf Schmitz, I believe yousaid his last name was.
If you think about,conversations you've had with
What's the best sort ofdirection or piece of advice
that, that he's given you asyou've grown as a leader?
Dominik Obermaier (42:31):
When I started working with him, he
said, Dominik, all of theorganizational problems you will
ever face are HR problems.
And I was like, what?
This doesn't make any sense.
It turn, it turns out most ofthe distractions, most of the
issues of a company, the reasonscompanies grow or die, happen
with the people.
And this is culture.
(42:51):
This is who you bring in, whatyou accept, what are the
standards?
How do you structure work?
Very important.
You can have the best people inthe world and you have a crap
organizational structure, andthen people fail.
At the end of the day, buildinga company is over
proportionately hr.
And the thing is, many leaders,and especially founders that
just don't care about hr,somebody should do hr, but it
(43:14):
turns out that actually this isthe way how you not doing the
details are very important.
Solving the detailed problems isnot what I'm talking about, but
setting the tone, setting theculture, be 100% intentional.
How you structure the company,who you're bringing and why.
Dan Balcauski (43:30):
Well, if I gave you a billboard, you could put
any advice on there for otherB2B SAS CEOs trying to scale
their businesses, what would itsay?
Dominik Obermaier (43:37):
If I would have a billboard I think it, it
wouldn't only be for SA CEOs,the bill I think it would
provide on the billboard.
God put what you're looking forat the other side of fear.
Dan Balcauski (43:50):
deep.
I like it.
Was the the what the treasureseeking?
Is it the darkest part of theforest?
Something along those lines, Ithink is another way to,
Dominik Obermaier (43:58):
It
Dan Balcauski (43:58):
that
Dominik Obermaier (43:58):
is it's always, I think there's also
this it's in life in general.
The conversation that you aremost fearful of having is the
one that leads to the mostgrowth and will very likely
solve one of the issues youcurrently have in life.
It's always the same.
Dan Balcauski (44:17):
Dominik, this has a joy.
If listeners want to connectwith you, learn more about Hi.
HiveMQ.
How can they do that?
Dominik Obermaier (44:24):
The internet like mq.com is our website.
I am on LinkedIn, just put inDominik Meyer.
Happy to connect.
Also yeah, happy to exchange anyfurther thoughts about building
SaaS companies and some of theother things I talked about.
So, yeah, so people can reachout if they want.
Dan Balcauski (44:42):
those links in the show notes for listeners
everyone that wraps up thisepisode of SaaS Scaling Secrets.
Thank you to Dominik for sharinghis journey and insights For our
listeners, if you foundDominik's insights valuable,
please leave a review and sharethis episode with your network.
It really helps the show grow.
Thank you so much.
the limit of the growth of the company is the
(00:02):
limit of the CEO and thefounders.
the ultimate currency that everyleader has is energy.
If you're running out of energy,it shows up.
At some point of time when youare working very hard, and you
don't recharge and you haven'tfound what gives you back
energy, you will run out ofenergy and it's very hard to
inspire people to change or toend doing any something epic.
(00:24):
Like overall, when a companystarts, the very first thing is
one must build things thatpeople want, produce value for
them, even if they don't pay youmoney it will pay back.
Growing is the fundamental thingin life.
This is how life works.
A look at a plant either growsor it dies.
There's nothing in between.
And the same, I believe is truefor humans.
(00:46):
The conversation that you aremost fearful of having is the
one that leads to the mostgrowth and will very likely
solve one of the issues youcurrently have in life.
(01:16):
Welcome to SaaS Scaling Secrets,the podcast that brings you the
inside stories from the leadersof the best scale up.
B2B SaaS companies.
I'm your host, Dan Bakowski,founder of Product Tranquility.
Dan Balcauski (01:26):
Today I'm excited to welcome Dominik Obermaier,
CEO of HiveMQ, an enterprise IOTplatform serving Fortune 500
companies like BMW,Mercedes-Benz and Lilly.
Dominik, co-founded HiveMQ andrecently transitioned from CTO
to CEO.
After 11 years, he's built aglobal enterprise software
company generating over 50% ofits revenue from US customers,
all from a small town inBavaria, Germany.
(01:49):
Dominik, welcome to SaaS ScalingSecrets.
Dominik Obermaier (01:53):
Thank you, Dan.
Excited for the conversation.
Dan Balcauski (01:55):
happy you took the time to join us.
I'm very excited to learn fromyou.
Let's start with a quickoverview.
Could you give our audience justa brief introduction to HiveMQ.
What do you do?
Who do you serve?
Dominik Obermaier (02:06):
Yes.
So having you building thecentral nervous system for our
world.
So what we're connecting is likethe actual things in the world,
like machines industry,computers inside factories.
Cars and like, pretty much likevariables and also what people
interact with every single daywith the internet and with
applications.
And so we are at the forefrontof what's called the Internet of
(02:28):
Things.
And we are the messagingbackbone for the largest
enterprises in the world.
So they can produce faster, theycan produce with more.
We help with things like you canactually unlock your car on any
place on the globe.
And yeah, at the end of the day,it's about really connecting
people, applications, andhumans.
And now since a few years we arealso at the forefront of the AI
(02:51):
revolution because what'shappening then is the AI
revolution.
1.0 was chat interfaces likehumans.
Speak or write with applicationsthat look like, like
interactions, like chat would beone of them.
And now what's happening in thesame revolution.
These so, so-called largelanguage models, they can
(03:12):
interact with the world withwith things like what's called
MCP or to communication.
But this is still all thedigital world, like we make AI
interact with the digital world.
And what we at HIV you do is.
We let AI also interact with thephysical world, with machine
robotics and so on.
So, we are actually consideringus as one of the people and one
(03:36):
of the companies who are tryingto define the second AI
revolution that is about tocome.
Dan Balcauski (03:42):
I wanna just for the benefit of our audience if
you can two things.
One just in terms of HiveMQ youare a pure play software
provider, correct?
You're not actually selling Andthen as well, could you just
unpack the world of IOT a littlebit more?
You used the example ofunlocking your car around the
globe.
(04:02):
I'm not sure if I have thatparticular use case, but I know
you're selling to some verylarge enterprises.
Dominik Obermaier (04:08):
Yeah,
Dan Balcauski (04:08):
for the What that world looks like and why the
need for a solution like HiveMQeven is needed within that
world.
Dominik Obermaier (04:18):
Yeah.
Then what's very interesting isthe world doubles the amount of
data that is being produced andconsume every two to three
years.
This is like exponentially high.
We have so much data at theglobe already.
It's incredible and it's justgrowing and growing on the other
end.
We currently have more thanthree times the amount of
internet connected devices,which could be anything from a
(04:39):
car to to small gadgets likesome people have smart watches
and others.
Two machines in the factory.
We have three times the amountof connected devices than humans
on the globe.
And growing and growing withoutend.
And so what's required is youneed an extra backbone or what
we call a central nervous systemthat routes the data, brings the
(04:59):
data where it should be, butalso governs the data.
Just imagine you're a company,you're a manufacturing company,
you have supply chain to manage,and of course you want to have
all of the data of your supplychain, but you also wanna make
sure it's your data because thisis your let's say competitive
advantage.
And you want to get insights outof this.
As an example, why is there adelay in shipment?
Why can't I produce more?
(05:21):
Why do I have so much downturnthat I could prevent in the
manufacturing settings?
And in order to do that, youfirst need to bring the data
into single platform, which alsohaving helps you need to bring
the data to the applicationsthat can actually do something
with the data.
But then you also need to have asample of time some actions on
top of it, what's called AI ahanactions to say, okay.
(05:43):
Now something's happening.
And I want a system toautonomously do things like
shutting a door stop producingor double down on producing
things.
And all of this requires actualdata pipelines.
And this is what KU does.
So we do everything that's underthe hood.
So we make the world run byproviding this data, type data
pipelines, and also the runtimefor these kind of ancient
(06:04):
actions.
Dan Balcauski (06:06):
massive increase in data you have machines that
are now spewing off data streamsthat are on production lines
Dominik Obermaier (06:13):
Yeah.
Dan Balcauski (06:14):
But, as companies sort of wrangle with this.
You mentioned a couple of thingsof just the sheer volume and
velocity of that data as well asthe governance and ownership and
control over that data becomesimportant.
Did, and correct me if I missedanything in there, but that was
my takeaway for what you said.
Perfect.
(06:34):
Perfect.
Well, I'm curious I'm talking toyou at an interesting time.
I heard you on a couple of otherpodcasts and not too long ago
you were the title on those wasyou were the CTO and now you are
the CEO.
Walk me through that transition.
I guess what prompted it andlet's dive into that a little
bit more.
Dominik Obermaier (06:53):
Yes.
Yes.
So the company was founded in2012, which is quite a long
time.
And we took a very differentapproach than many companies
these days because what wedecide is to bootstrap.
This means we were founding thecompany.
Out of university and we weretrying to win customers based on
an early product and based onthis scale, the company based on
(07:16):
more customers.
So it's pretty much like acustomer funded business.
This is how we started.
And in hindsight what washappening is we were way too
early to market, way too early.
And and so, but the great thingabout it is we could, as a
company, already build aproduct.
That's really working for us.
(07:36):
Trust and reliability are thecore promises.
So we are at the critical path.
We are in the value chain oflargest companies in the world.
So, if our software wouldn'twork properly.
People on the airlines, theywouldn't be able to board.
They wouldn't get tickets, likeluggage wouldn't show up.
Basically logistics providerslike UPS FedEx are also
(07:57):
customers of ours.
Like packages wouldn't show upat the doors of customers.
So that's really high stakes.
And so, what's important for usis to get the engineering right
and.
I think you mentioned this, likewe founded a company in Germany
and Germany.
I mean, there's a few things weare good at and a few things we
aren't good at, but one of thethings that German has a good
reputation in the world is forGerman engineering, and I think
(08:20):
this applies also to Hy mq.
And so in the early days wenailed the product, but our
go-to market was something thatneeded to pick up because we
were a bit too early to market.
And so I was taking care of theproduct for the.
For the last 10 years, I wouldsay a bit more than 10 years.
And I also make sure that theservices on top of it.
I also ran marketing before we,we scaled the company and hired
(08:43):
a chief marketing officer.
And now also services is run bysome somebody else.
But I was pretty much involvedin all the strategy as well as
the product and engineering.
And now since, since this year,I also took ownership of all our
go to market marketing again,and also all other functions of
the company.
And now I am, I'm steering italso towards even further
(09:06):
growth, especially in the US andalso in Europe.
Dan Balcauski (09:10):
I definitely second Germany's strong
reputation for rock solidengineering.
And I'm curious about yourtransition in, the person who, I
mean, obviously you, before yousaid you, you were running some
of the marketing function beforeyou scaled.
And I think
Dominik Obermaier (09:26):
Hmm.
Dan Balcauski (09:26):
could Reflective of a lot of experience of
co-founders where they're,
Dominik Obermaier (09:30):
Yeah,
Dan Balcauski (09:30):
their, head janitor at the same time.
Right.
For,
Dominik Obermaier (09:33):
exactly.
Yeah.
Yeah.
Dan Balcauski (09:36):
curious, as you've now taken the CEO reigns
of scaled organization, whatsurprised you most about that
shift?
Dominik Obermaier (09:46):
So being a co-founder and also being on the
board for like, since forevernot a lot of surprised me, but
there were a lot of things thatI wanted to give it a difference
spin.
And so this is the thing aboutcompanies like you companies go
like through the stages ofmaturity.
And there is a saying that youneed to reinvent the company
every single time you're goingthrough something.
(10:08):
So, I mean, there's a lot ofdata out there.
Like when you're in a seed phaseof a company, you have very
different problems to solve.
Like finding product market fitis the most important one.
Like having something like buildsomething people want, this is
the very first thing to focuson.
And then the next thing is.
How do you scale it when you gointo a growth stage and then at
some point of time it's about,okay, how, not only how can you
(10:30):
scale this, so, but how can youscale it efficiently when you're
going more towards publicmarkets and the thing is, what I
learned from a lot of mentorsis.
And I experienced it myself.
You, it's not the company thatneeds to reinvent.
It's the people running thecompany that need to reinvent
themselves, which in our case isfounder led.
This means personal growth isnot optional.
(10:51):
It's mandatory because the limitof the growth of the company is
the limit of the CEO and thefounders.
And so the actual work is toworking, of course, on the
business, but the actual work isinwards.
To actually become the personthat can grow the company.
Dan Balcauski (11:08):
you think about that growth, and I know you're
still early in, in yourtransition, although, obviously
you've been involved as aco-founder and at the board
level for a while have youpinpointed any mindset shifts or
growth areas that have beenparticularly important in your
new roles?
Dominik Obermaier (11:24):
Yes.
So I have I have some rules inmy life that I used for many
years used and I also brought itto the company.
And I mean, people around audiowon't be able to see that.
But I have a medallion with methat I have like every single
day and.
It says lead, build, love.
And I think these are the threethings that define that, that I
(11:49):
use as guiding principles formyself.
And I decided to use them alsofor the company.
And what I mean with this so, solead.
So first of all, one must leadyour, you must lead yourself in
order to be able to lead others.
The work with leadership alwaysstarts first.
Inwards and then also outwardsand basically as a company
leader, this is the obviousthing because you're leading
(12:11):
others, but it's important.
It's important to, tounderstand.
This is not a hostage situation.
People can free, can choosewhere they want to work.
And so leading also meansinspiring for action and for
positive action for the world.
But it must start inward.
You cannot inspire others if youdon't draw from the inspiration
(12:32):
by self and getting the pros andthat can inspire others.
This is lead and build is, Imean, this is what.
What founders do they buildcompanies.
It's very straightforward, butit's also building a life.
It's like we, we have limitedtime on earth.
Very limited.
There are some people these dayswho believe we can live forever,
but I mean, we don't know atthis point of time.
(12:52):
At least it looks like peoplewon't live forever and most
people won't live, live forever.
So time is limited and so weshould make the best out of it.
So, so what we do is build, sobuild a life, family.
Your body, respect your body,like all of these kind of things
that also start inwards.
And this results in this, mybelief results in creative
energy that can be unleashed ina company to build something
(13:14):
epic.
But again, it must startinwards.
And the third thing is love.
This is the reason why we exist.
And even in business and loveshows up as empathy.
And as I said, this is not ahostage situation.
This is work and.
And if you, and the very mostimportant thing that I learned
from many of my mentors is lovestarts from the inside.
(13:37):
If you don't start you to loveyourself, you cannot show the
empathy towards others, in a waythat also inspires others.
And so, and love in businessshows up as custom obsession and
all of these kind of things thatare important.
But again, it starts the wordsand.
And I brought this philosophyinto the company.
So, so we are leading with highstandards.
(13:59):
We are building with urgency andwe are loving with empathy.
And these are really the areasthat, that we look at as a
company.
And that I also look at, andthese are the three guiding
principles.
How I'm looking at things and.
And yeah, so some of it we'renot a big change, but at least
we surfaced it and now this isthen also a culture change that,
(14:22):
that comes from that because asI said, it starts inwards and
then it shows up in the companyand then you have a, this kind
of new set of standards that areemerging.
Dan Balcauski (14:32):
Lead build love.
I'm curious on the first thingon lead.
I mean, I definitely agree withthe sentiment that it's
difficult to inspire others ifyou've.
sort of feel that inspiration.
I'm curious though, everyone's,CEOs, have nothing.
It's a, it's the old problem ofbeing the leader of an
organization or a country.
It's like the easy problemsdon't make it to your radar,
(14:53):
right?
Like the wins are, at any giveneight hour workday or 16 hour
workday, whatever it might be.
I'm sure everything is likeburning fires.
And so I imagine sometimes thatinspiration is maybe hard to
come by.
Or.
Or maybe it's just not, notthere.
Just naturally are there anyways that you found that either
sort of keep you in check of,like, like making that sort of
(15:13):
obviously you have themedallion, so that's a, I think
a probably a powerful reminderthat's always with you.
But like, like how do you thinkabout sort of, staying in that
sort of or generating thatinspiration for yourself?
Dominik Obermaier (15:26):
It's a okay.
It's a very interestingquestion.
I think it starts with purposefor me, every.
Every single day when I wake up,and I would be lying if I would
say I wake up full of energy andconquer with the world mindset
every single day.
But what works for me is reallycoming back to the basics.
What, why are we doing this?
(15:46):
And most so, especially whenyou're on a mission that's
larger than yourself, most ofthe actual problems are very
small.
Even in the moment, they're big,obviously, otherwise there
wouldn't be issues.
But, but working backwards fromthe mission, it's always like,
will I care about this in twoyears?
Is this really relevant?
Is it make or break?
Sometimes it is, by the way.
(16:07):
When it's really make or break,then you should actually work
it.
But very often it's really justfocus.
There is so much distractionseverywhere.
And it's not only distractionsby, oh, there is whatever social
media and office I'm talkingabout in work escalation here or
there.
This doesn't work.
Somebody needs help here.
All this kind of things.
But the ultimate currency thatevery leader has is energy.
(16:28):
If you're running out of energy,it shows up.
It's not the time because likepeople say, ah, you just need to
work whatever, 24 hours.
Yes, you can do that in case youdon't run out of energy.
At some point of time when youare working very hard, hard, a
lot and you don't recharge andyou haven't found what gives you
back energy, you will run out ofenergy and it's very hard to
inspire people to change or toend doing any something epic.
(16:52):
If the leader doesn't show upwith energy and there's
suffering philosophies like it,it works for some people by
whatever, pressuring and otherthings.
I don't think this is the besttool for at least what I found
is showing up is the best.
Manage all your energy and thendrive positive change, and then
also focus on what needs to bedone and simplify.
Simplify, simplify.
(17:12):
Everybody will convince you ortry to convince you.
The world is complex.
It is, but actually life is verysimple.
And our brain tries to make iteven more complex and
complicated and so on.
But at the end of the day, it issimple.
And for some of the listenerswould say, ah, Dominik, I don't
believe that stuff iscomplicated.
(17:32):
Imagine a following.
It happened to be multiple timesthat when I had an issue in what
my private life, something, acomplicated situations on there.
When I talk to a friend foradvice, people say, don't make
this.
It's simple.
Why don't you just do X, Y, Z?
And then I'm like, yeah, you'reright.
And just making it up in my headand making it more complicated.
(17:53):
And the same is true forbusiness things.
Things are not complicated.
Things are simple.
But since we are theprotagonist, they're often in
our problems.
We are very often part of theissue, and this is where our
brain strikes us.
And so this is for me, a bit ofa constant struggle.
But it seems to be a constantstruggle with most people.
Dan Balcauski (18:11):
love what you said there around focus because
I think, you know where thatenergy drain sometimes comes
from is you feel, there's somany things burning.
You can't fix all of them.
You're sort of constantly sortof pushing on everything just a
little bit at a time.
But if you're able to sort offocus, you're able to actually
(18:31):
make, be like, well, all those,all these other things are
secondary and make progress.
There is something.
Really energizing and sort ofreinforcing about that focus
area.
And I used to have, I used to bea product leader in different
organizations and, productleaders, not exactly like a CEO,
but in many ways, there's allthese voices telling you what
you should do, what you shouldfocus on.
And I always had this experienceas like, if I was ever in that
(18:53):
situation.
The
Dominik Obermaier (18:55):
Right.
Dan Balcauski (18:55):
and I'll give to other product leaders, like go
talk to customers.
Like if you are in that
Dominik Obermaier (19:00):
Yep.
Dan Balcauski (19:01):
cause always found that incredibly clarifying
because like, oh, all this otherstuff is noise inside the
building about what people'sopinions are.
And as soon as I talk to
Dominik Obermaier (19:09):
Yep.
Dan Balcauski (19:10):
like that would Also it would have that impact,
right?
I mean, tying it back to youridea of like, mission and why
are we doing this?
It's like, well, like thesepeople on the other side need
us.
They're getting, they're excitedor satisfied, like we're solving
real problems for them.
And that always was reallyclarifying and energizing.
So I love your answer there.
I do wanna shift a little bit.
So, hi, MQ is based in Ipronounce it correctly?
Dominik Obermaier (19:33):
Yes.
Yes.
Dan Balcauski (19:34):
which is outside of bunich in Bavaria.
It's not exactly a major techhub yet you are generating over
50% of your revenues from UScustomers.
I'm curious how you built aglobal enterprise software
company from a small Germantown.
I.
Dominik Obermaier (19:49):
Yes, it took us quite some time as I
mentioned earlier because wewere a bit too early to market
and so we needed to figure out alot of things along the way.
I think the first 10 years,these days could be compressed
actually into two to three yearseasily of fi figuring things
out.
But also we didn't do animationinvestments.
Like the very first investmentround was in 2021.
(20:10):
Where we got out the capitalmainly to, to go fast into the
US and the essence then weraised quite a bit of capital.
We were able to deploy thisproperly and then also scale
also in the us.
And these days KU is a US aswell as a European company.
So we are not, while technicallywe still have our beautiful
headquarter here in, in, inGermany, which is very close to
(20:33):
the Munich airport, which is oneof the features of the town.
Actually it's closer to theMunich airport than mch.
And since we are a internationalcompany, it makes travel really
easy.
This is why we chose that, thatas a hub.
But yeah, it's it's just like weare located there, there was a
university there, and so westarted the company out of
there.
And this is why we technicallywe are still here, like the
(20:54):
headquarters still here.
We got a pretty good deal to, tohave one of the, a beautiful
office here and one of thethree.
Very iconic buildings in thetown.
It's an 80,000 people town.
And so yeah we like it here.
People, all hiv qs coming inglobally for meetings and
events.
They also like it here.
So we are happy, but we are aglobal company.
We are, we have people, likemore than one third of the
(21:16):
people is in the US and weexpect the maturity of people is
going to be in the US in thefuture.
Dan Balcauski (21:22):
Well, you've talked about this fundraising
element.
So boot your bootstrap for nineyears before taking
institutional money.
That these days it seems likepeople are raising money before
they even necessarily have aproduct a lot of times in the
us.
I'm curious your perspective onthe advantages of that approach,
did that approach allow you tobuild in a way that you couldn't
(21:43):
have if you had taken capitalearlier?
Dominik Obermaier (21:48):
I mean, it's an interesting question.
Like overall, when a companystarts, the very first thing is
PE one must build things thatpeople want, build things,
people want.
This is basic why Combinator?
What?
Teach, why Combinator things Ithink they want build something
people want.
And I mean, it depends a bitwhat kind of business you're in.
(22:08):
Like if you are building asoftware business like a SARS
business.
Or on cloud infrastructure, likethere is, okay, you need a
laptop.
Most people have a laptop thesedays, even if they don't find a
startup.
Cloud infrastructure is reallyeasy these days with AI coding
tools cranking out a prototypethat doesn't even need to work
just to, to pretty much likestructure the ideas is extremely
(22:29):
easy.
So I'm wondering like why inorder to build something people
want, why would you need a lotof capital?
What you need us?
You'll have a raise againsttime.
And you need to, nobody's goingto hire people before you find
product market fit.
I mean, some people do, but formost software companies, they
don't need that.
This is why you have a foundingteam, or at least you can bring
(22:50):
in a very early engineer, buthaving a, but,
Dan Balcauski (22:54):
is, is probably longer than most people would
think that the
Dominik Obermaier (22:57):
yeah.
Dan Balcauski (22:58):
you probably hit product market fit well before
the end of the nine year period.
Dominik Obermaier (23:02):
Yeah.
Right.
I would say we hit that in 2000,I would say 14, 15 when we got
the first customers.
Like we got BMW as a very firstcustomer for all of the car
sharing Mercedes-Benz for themanufacturing sites.
We also very early on, gotcustomers in the US, like Dell
and others, but this was basedon a product, and this was all
inbound.
(23:22):
We didn't build enterprisesales.
We built a product, wepositioned the product, we.
We did some very, let's say,capital, inexpensive things to,
to get in front of these peopleso that they learn about it.
We did, build, building athought leadership brand.
Back then blog posts were one ofthe things, there was not a lot
of content out there.
And so we built like a lot ofthe initial content around one
(23:45):
of the technologies that wehelped pretty much promote,
which is called NQTT.
And we are still benefiting fromthis, so, so we made sure, okay,
that we are all of the keywordsthat somebody.
In the problem domain possiblyever would go after they would
see us.
So building a magnet, prettymuch like, from a marketing
standpoint, it's not expensiveto do, but it's it takes a lot
(24:07):
of time and it also requiresexpertise.
We didn't do any ads or anythinglike this for a very long time.
And so the majority of, let'ssay the first one or 2 million
of recurring revenue was alldone organically by pretty much.
Not even trade shows.
It was by speaking in front ofour target audience at
conferences was by blog posts,was by educating the market and
(24:29):
evangelizing the market, whichagain, was the playbook that
worked in 2014 to 16 These days,the playbook would of course,
look different based on today'stechnologies.
I would not focus on SEOs asmuch these days anymore if I
would found a startup right now.
But I would absolutely look at,Hey, how can I make sure that
chat BT shows me as a trustedsource versus the competition,
(24:50):
these kind of things.
So it requires different tacticsbut again, it comes back to a
philosophy.
Build something people want.
Even marketing, don't just teasethem and do this kind of
understand things.
Build something people want.
Produce value for them, even ifthey don't pay you money it will
pay back.
This is how you build somethingthat's growing and I still
believe the tool is there.
Dan Balcauski (25:09):
Well, when you did finally decide to take
investment as I understand it,you were already profitable and
and growing.
I'm curious
Dominik Obermaier (25:16):
Yeah.
Dan Balcauski (25:18):
money change the company?
Dominik Obermaier (25:22):
It changed the company.
In very good ways.
So first of all, if you'retaking institutional money, you
have a better access to talentpool.
So especially if you're lookingfor senior leaders very often
the senior leaders in themarket, especially in the SARS
market and software market, theyare looking for companies that
might be the next unicorn.
So you won't be a unicorn, bydefinition, you can be a
unicorn.
(25:42):
If you don't raise money,because the valuation is based
on what external sources say.
And if you're just a privatecompany, if you owe money, what
are you worth?
Nobody knows except if you, IPOobviously.
But in order to go there, youneed talent.
And so this was one of thereasons why we raised the money,
because it was clear to us toattract the, also the leaders
that we want to have in order togrow the business.
(26:04):
We also need to be present inthe capital market.
And this also helped us.
And the, the other thing is itallowed us to go faster.
So if you just need to make,earn Monday in the enterprise
sales, you have, depending, inour case, you have more than six
months sales cycle.
This means even if you are aboutto close a deal, then in six
months, and then it takesanother three months until they
(26:26):
pay you.
So, until you, if you bootstrap,if you don't have the money in
the bank, you can't invest it ifyou're very conservative.
But if you are taking.
Capital and whatever.
You raise a few millions ofdollars, you have them in a bank
and you can spend them.
And then you're with yourexpectation that at leads to,
to, to growth down the line.
And I mean, in our case itworked really well.
(26:48):
But there's also risk attachedto it.
So if you don't have anythingcustomers want, the risk is
pretty high.
Like build, like raising capitalwithout having product market
fit is something I'm not quitesure if I would do that.
This would be way too stressfulbecause you're.
You're try, you're selling andyou're building at the same
time.
You have a non-function go tomarket engine and a
non-functioning product, likelyalso non-function and
(27:10):
functioning.
You have, everything isdysfunctional at this point and
this is a mess that like leads.
To a lot of founders, and I haveknown many founders personally,
it leads to things like burnoutof people.
It leads to bad decision making,and finally it leads also to a
great opportunity and great ideathat just vanishes because it
couldn't be executed against.
So I think some people can dothis, but in, in my case, I
(27:34):
prefer building something peoplewant and then scale it from
there.
Dan Balcauski (27:38):
Well, that's fantastic and I can understand I
guess all those transitions.
And definitely the access tobetter talent as you have the
verification or stamp ofapproval on a term sheet of what
your valuation is.
I could see how that was beingincredibly helpful.
And just also fascinating thatyou were able to grow.
Fast, organically especiallywith enterprise level customers
(27:58):
through through the methods thatyou mentioned.
Yeah.
We are in constantly changingworlds with now needing
Dominik Obermaier (28:04):
Mm-hmm.
Dan Balcauski (28:04):
the we're worth reaching out to.
It's a, it's an interestingworld.
I for one, welcome our new robotoverlords.
Well, that foundation that youbuilt through I guess
bootstrapping it, buildingthrough your receivers have set
you up well for your current.
market approach.
I'm curious about your strategybecause you have this in
interesting combination of opensource with enterprise sales.
So like you have you have aproduct high VE q Edge that's
(28:25):
free at open source as Iunderstand it.
I guess what what drove thatdecision to pursue the open
source route with that offering?
Dominik Obermaier (28:34):
Yeah, so I'm having to access a product, what
we call is in the dataacquisition layer.
So you have if you look at afactory, you have a lot of
history in there.
And the thing about a factory isusually you don't change things
that work and very often youdon't change things that don't
work by the way.
De depends on the company and.
And also the what's called thePLCs.
(28:56):
These are pretty much the smallcomputers that interact like
with robots and other things.
They're designed for a very longlifespan, so it's not unheard of
that you have a PLC from theeighties or nineties in the
factory today.
And the thing is, if you lookback at the world in the
nineties and the eighties, thiswas a very different world of
than today.
It was not built forinterconnectivity in all of
(29:17):
this.
And so.
This results in more than 150languages of these devices in
factories that they speak.
It's like, imagine, like, likehumans speak, like I would, if I
would speak German, you speakEnglish, we would've a very hard
time understanding of eachother's.
And so what you require is youneed a common language.
(29:38):
So the reason why the both of uscan communicate is because we
chose to speak English.
You might have it as a nativelanguage.
I do not, but I still can speakthe language so we can
interoperate and we can conveyideas and things our language.
And so the same is happening inthe factory.
And we found there's not a lotof companies who try to tackle
the problem of making all thesethings speak to each other for
(30:02):
multiple reasons.
And if I look, if you look athistorically all of these
different vendors, they have nointention to make their data
accessible to other vendors.
Because if you buy from thiscompany, the hardware, you also
buy the software because itworks.
You can buy other softwarebecause it doesn't work.
And so they, they pretty muchbuild very large, almost like
empires ba based on theirproprietary nature.
(30:24):
The thing is, and if the,looking back at the history of
compute and internet, it showsus one thing, interoperability
is the winning technology.
Always, this is the history ofthe internet and it repeats and
repeats all over again.
And we, we thought why is nobodytackling the problem?
Like we, our customers arebegging us to help them to get
(30:46):
insights based on your machinedata, but the machine data is
not accessible.
And some of the players who wantto play in that space, they
build again, a proprietaryplatform and doesn't make it
accessible to others.
And w.
And our core belief is in openstandards and interoperability.
We believe the world should beable to communicate in a way
(31:07):
that even outside of HighQ,really like, I have no problem
if people use competing productsas long as it is using a, an
open standard, because this ishow we advance, advance
humanity.
And so long story short, wedecided, okay, why don't we
build.
That component that makes thedata accessible.
It gets the data out into ourcentral nervous system.
(31:28):
This build open standards, butcan also push the data back.
And and we decided to do this oopen and free.
First of all, because there isnot a lot of money in the market
to be very frank.
This is operations technology.
This is very conservative.
There's no lot of budgets.
And the other thing is we wantto make the data free and
accessible.
To provide value.
And so, free and open source isabsolutely fine for us.
(31:51):
We figured out while making itfree and accessible, customers
wanna pay for that because ofsupport and other things.
So we make actually a lot ofmoney there.
But the initial idea is stillthe same.
Take it, every OT engineerlistening to this can take home
to edge and can free all of thedata in the factories and make
it accessible to other systems.
Do analysis, do AI and otherthings.
And we think this is importantbecause we think it must exist.
Dan Balcauski (32:16):
so there's a massive protocols, languages,
sort of a Tower of Babelsituation.
None of these systems talk toeach other and
Dominik Obermaier (32:22):
Yeah.
Dan Balcauski (32:23):
that layer but then also all the adding into
that, all the elements of, yeah,there's not really industry wide
push to make these systemsinterconnected because they can
create vendor lock in withintheir own sort of,
Dominik Obermaier (32:36):
Right.
Dan Balcauski (32:36):
or empires to sort of push that out.
And then, with the other sidethat it's budget.
So these, the folks who are inthat world don't really have,
money to spend in that side.
You do said that they do, likefolks do pay you.
I am curious about that tension.
So, within, so you have the opensource platform.
I'm curious how you've thoughtabout, okay, what do, what is
(33:00):
the barrier between what we giveaway and what we charge for?
Is it purely like, more like RedHat Linux model where it's like
you're just paying for supportcontract?
Or is it, are you actuallybuilding additional monetized
features and capabilities onthat platform that you charge
for Additionally?
Dominik Obermaier (33:17):
Yeah, so how we look at things is like for
whom is that?
And.
And what kind of value does itprovide?
So as an example, if somebody isan OT engineer and they really
want to experiment we make it aseasy as possible.
I mean, you can get from hq, youcan get HQ Edge for free.
We also have what's called abroker, which is like the
component that also distributesthe data to the cloud and back.
(33:39):
For free.
You even get the cloud for freeat Hyper Q.
It has limitations because likewe, we pay for this.
And, but we support thecommunity here.
And it's design that a singleperson can get value.
This means they can get thedata, they can do something with
the data, they can route it totheir applications.
They can even, whatever, routeit to a dashboard so they can
(34:01):
show their boss what they'vedone and so on.
But we also know there is not alot of money in there because
there's no budget.
Because like in order to get tobudget some at some point of
time, these people are veryoften innovators in this
company.
And so they need to, first ofall pretty much learn about
technology, prove thetechnology, and then also bring
it into the business.
But.
(34:21):
The, but frankly we have everymonth every quarter, tens of
thousands of people are signingup for our, even for our free
cloud, home automation.
Other universities, lot ofprofessionals, sometimes without
a real project, they want toalso do something and just
educate themselves.
So, and we are updating,supporting all of this.
The next thing is that theprofessional tier, this is
(34:42):
really built for teams, smallteams that try to innovate.
They try to do something andalso have a project, usually a
bit of a budget also availablebecause they get asked to solve
a problem very often.
It has to do with digitization.
Very often it has to do withacquiring the data and actually
making, demonstrating that theycan use the data for AI use
(35:03):
cases.
It is a big driver these days.
And there, there's others.
And we also designed off thefeatures as for them, these guys
don't need single sign on.
They don't need chiefinformation Security signing off
on all of the security things.
Why?
Because it's small scale.
It's not enterprise wide, andthey're still proving a point or
have a small productioninstallation.
This means they're connecting afew factories.
(35:24):
One factory usually having alive dashboard and then also
showing to the leadership, Hey,this is what you can, what we
could be doing.
And then Enterprise is reallylike full platform Enterprise
Square security.
We can scale across hundreds offactories with customers with
more than 300 factories thatconnect all of the data.
Happening on the shop floor andbringing it together, using it
(35:46):
for ai, machine learning,generating insights and
improving overall equipmentefficiency and other things.
And this wouldn't be possiblewith the free tier, obviously,
but we decided carefully so wecan help.
A company and also theindividuals in the company guide
them through the journey tounlock the value.
And then also at the end of theday, you still need budget.
I mean, we are a company.
(36:06):
We're not a charity.
Not everything is for free, butalso the approaches and the
value we unlock, like we, likeliterally we save, serve our
customers millions of dollars.
We help customers produce.
Medication six months beforetheir estimated timeline and
bring it to market saving andsaving millions of people's
lives by doing that.
And I mean, this is our, butthis is our enterprise tier.
(36:28):
You wouldn't do that with opensource.
Dan Balcauski (36:30):
Dominik if you were here, I would hug you right
now.
And maybe that wouldn't be aproper German thing, but I love
what you just said.
So I, when I'm not doing apodcast, I spend all my time in
the pricing world and what youjust outlined and what you just
was beautiful articulation ofwhy I, what I try to get into
people's heads.
When you're thinking about yourbundles or your offers.
What you described, there was aperfect example of aligning
(36:52):
those two customer segments withdefined contexts and defined
needs.
It wasn't
Dominik Obermaier (36:58):
Yeah,
Dan Balcauski (36:58):
hey,
Dominik Obermaier (36:59):
I,
Dan Balcauski (37:00):
like might pay for this, so we put it at the
upgrade tier.
It was very clearly defined interms of is this feature for
this person in this context, andtherefore it goes in this plan.
I am
Dominik Obermaier (37:10):
yeah.
Dan Balcauski (37:10):
often there Even with there, so like, maybe this
applies to either yourenterprise or your professional
segment.
So I'm curious if you've runinto this situation where
potentially is a capability thatwould, be needed in those
environments, but also like, canbe incredibly impactful just at
the open source layer in termsof driving.
(37:31):
Value across the ecosystem.
I'm curious how you've thoughtabout, like, I, I dunno if those
situations have existed for you.
Sometimes they come up more,
Dominik Obermaier (37:38):
Hmm.
Dan Balcauski (37:39):
or not.
guys have had to make sort ofthose trade offs and like, yeah
we could charge here, but itactually makes sense for us to
put this in the, into the opensource overall just to drive the
overall health of the ecosystem.
Instead here's how you navigatethose trade offs.
Dominik Obermaier (37:53):
So one of the things is, what I found is in
99% of cases, everybody's wrong,and the only way to validate is
with, not by having a strongopinion that's articulated in a
fancy way, but by actuallytrying it out with customers or
the target audience, which couldalso be, in this case,
community, open source.
(38:14):
It's very surprising very often,especially also other things
like UX and other things, like,it's very surprising when people
do have a product, when theydon't know how the people
building it think that it shouldbe used.
It's very surprising.
And so it's all aboutunderstanding, know your
customer.
Know your customer is soimportant, and either by doing
it, especially for early stages,be with a customer.
(38:36):
Observe them.
Ask them.
Sometimes people, but peopledon't, people lie all the time.
They say, oh, I would need that.
Understand Why do they need it?
What's the problem they wannasolve?
I want this feature.
Interesting.
What do you try to achieve?
Oh, this is what I want toissue.
Okay, cool.
Here's another way of doing it.
Hey.
Perfect.
And so it's not like building asoftware is not order taking.
(38:58):
It's not being an Ivo tower andjust coming up with a fancy idea
and build it.
It's also not order taking froma customer.
It's deeply understanding theproblem to solve.
And also the other, the nextquestion is, should we as a
company even solve the problem?
You can't solve, you can't solveworld hanger with software as an
example.
This would be very bad.
This is obvious obviously but,this kind of franking products
(39:19):
exist where, where you add andadd and add and so validate with
the market where they, with thecustomers.
And la last point on this, thereis one way door if you make
something free and available andthen take it away.
Is much, much worse and almostimpossible sometimes than doing
it opposite, being conservative,and then add more value to the
three tiers over time which iswhat I would recommend to people
(39:43):
instead of going the oppositeroute.
Dan Balcauski (39:45):
In earlier in the conversation we were talking
about AI and you mentioned theidea of MCP, which I think was,
is an interesting example thatmaybe other people can relate to
because is anthropic the makersof Claude came out with the MCP
standard much like, USB,
Dominik Obermaier (40:00):
Yeah.
Dan Balcauski (40:00):
idea of anything in anything unless you're Apple,
of course.
And then they hate everyone.
They make you buy$90 connectors.
But everyone else has
Dominik Obermaier (40:07):
Yeah.
Dan Balcauski (40:07):
hey, we want Every device to every device and
not have to have.
Custom
Dominik Obermaier (40:11):
No.
Dan Balcauski (40:11):
for it.
They were like, Hey, we're,there's this broad universe of
ways we think we could addcapabilities to LLMs and we
could make this sort of, wecould build direct proprietary
connectors or we could createthis thing and then release it
to the ecosystem.
And I think it's just had such apositive impact on,
Dominik Obermaier (40:28):
Mm-hmm.
Dan Balcauski (40:28):
still And TBD, like what that will evolve
Dominik Obermaier (40:31):
Yep.
Dan Balcauski (40:32):
But I think Example that maybe is a little
bit more relatable to folks oflike, yeah, they could have just
sort of built that proprietary,but like, it is there, there is
that sort of like, okay, thewhole ecosystem will benefit for
it.
Dominik, this has been awesome.
I would love to talk to you allday.
But I wanna be respectful ofyour and the audience's time.
I want to close it out with acouple of rapid fire questions.
You ready?
Dominik Obermaier (40:51):
Yeah, I am.
Dan Balcauski (40:53):
When you think about all the spectacular people
that you've had a chance to workwith is there anyone that just
pops to mind that's had adisproportionate effect on the
way that you think aboutbuilding and growing companies?
Now?
Dominik Obermaier (41:04):
First of all, my wife.
Not that we discuss buildingcompanies, but I am learning
more and more the more I learnabout myself, about
relationship, about humans.
The more I learn about buildingcompanies.
And the second thing is a bitmore tactical is I a lot of
mentors along the way.
I had so much great people thathelped me.
(41:26):
There is people like I mean
Dan Balcauski (41:28):
Name them.
Go ahead.
Dominik Obermaier (41:30):
well known, so, so people like all of
Schmitz as an.
I'm currently learning also alot from our new chairman, Barry
Liebert.
One of is one of them.
So there's a ton of people.
Also, I learn a lot from theinvestors.
I learn a lot from my executiveteam, at the end of the day.
Like growing is the fundamentalthing in life.
(41:50):
This is how life works.
A look at a plant, a planteither grows or it dies.
There's nothing in between.
And the same, I believe is truefor humans.
And the day you stop learning,the day you think you've figured
things out, this is the day youstop growing.
And and so yeah I'm trying tolearn as much as possible
because the thing is.
I try to be more right thanwrong but on average I am too
(42:12):
often wrong and so I want tolearn much more.
Dan Balcauski (42:16):
so, so props to your wife.
I do wanna concentrate on thenext person you mentioned.
So, Olaf Schmitz, I believe yousaid his last name was.
If you think about,conversations you've had with
What's the best sort ofdirection or piece of advice
that, that he's given you asyou've grown as a leader?
Dominik Obermaier (42:31):
When I started working with him, he
said, Dominik, all of theorganizational problems you will
ever face are HR problems.
And I was like, what?
This doesn't make any sense.
It turn, it turns out most ofthe distractions, most of the
issues of a company, the reasonscompanies grow or die, happen
with the people.
And this is culture.
(42:51):
This is who you bring in, whatyou accept, what are the
standards?
How do you structure work?
Very important.
You can have the best people inthe world and you have a crap
organizational structure, andthen people fail.
At the end of the day, buildinga company is over
proportionately hr.
And the thing is, many leaders,and especially founders that
just don't care about hr,somebody should do hr, but it
(43:14):
turns out that actually this isthe way how you not doing the
details are very important.
Solving the detailed problems isnot what I'm talking about, but
setting the tone, setting theculture, be 100% intentional.
How you structure the company,who you're bringing and why.
Dan Balcauski (43:30):
Well, if I gave you a billboard, you could put
any advice on there for otherB2B SAS CEOs trying to scale
their businesses, what would itsay?
Dominik Obermaier (43:37):
If I would have a billboard I think it, it
wouldn't only be for SA CEOs,the bill I think it would
provide on the billboard.
God put what you're looking forat the other side of fear.
Dan Balcauski (43:50):
deep.
I like it.
Was the the what the treasureseeking?
Is it the darkest part of theforest?
Something along those lines, Ithink is another way to,
Dominik Obermaier (43:58):
It
Dan Balcauski (43:58):
that
Dominik Obermaier (43:58):
is it's always, I think there's also
this it's in life in general.
The conversation that you aremost fearful of having is the
one that leads to the mostgrowth and will very likely
solve one of the issues youcurrently have in life.
It's always the same.
Dan Balcauski (44:17):
Dominik, this has a joy.
If listeners want to connectwith you, learn more about Hi.
HiveMQ.
How can they do that?
Dominik Obermaier (44:24):
The internet like mq.com is our website.
I am on LinkedIn, just put inDominik Meyer.
Happy to connect.
Also yeah, happy to exchange anyfurther thoughts about building
SaaS companies and some of theother things I talked about.
So, yeah, so people can reachout if they want.
Dan Balcauski (44:42):
those links in the show notes for listeners
everyone that wraps up thisepisode of SaaS Scaling Secrets.
Thank you to Dominik for sharinghis journey and insights For our
listeners, if you foundDominik's insights valuable,
please leave a review and sharethis episode with your network.
It really helps the show grow.
Thank you so much.
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