If you only have a few minutes to spare, here's what investors, operators, and founders should know about WorkOS.
- Bridging the enterprise chasm. Startups often struggle to sell to large companies because of their technological demands. That includes things like SSO, SCIM, and audit logging. WorkOS exists to bridge the chasm between startups and big businesses.
- An API that increases your TAM. With elegant APIs, WorkOS makes it possible for startups to serve large enterprise customers. This can be revolutionary for companies, massively increasing their addressable market. As a result, CEO Michael Grinich refers to his business as “an API that increases your TAM.”
- Founder-business fit. Few understand the problem WorkOS is solving better than Grinich. The CEO’s first company sunset its core product after it became clear that it lacked the features necessary to sell to enterprise customers.
- A sense of taste. WorkOS is solving an acute pain point. It doesn’t need to be beautiful to be successful. And yet, Grinich’s team has built an exceptionally elegant product that shows a love for the craft. The result is a platform that developers love.
- Building a new interface. In the fullness of time, WorkOS might look less like an API business and more like an interface. Grinich is constructing a layer that helps companies navigate and adopt new technology. It may also change how software is developed.
This piece was written as part of The Generalist's partner program. You can read about the ethical guidelines I adhere to in the link above. I always note partnerships transparently, only share my genuine opinion, and commit to working with organizations I consider exceptional. WorkOS is one of them.
Paul Graham has been credited with saying that startups die by suicide rather than homicide. Though founders fret over the momentum and machinations of competitors, survival typically rests in the hands of the executives themselves.
Perhaps the one place where this does not apply – or applies least – is in the world of enterprise software. Promising startups have repeatedly seen their trajectories snuffed out by the industry’s apex predators.
The canonical example is Slack. Stew Butterfield’s messaging business embarked on a remarkable tear before success attracted the attention of Redmond’s exterminator. Microsoft rolled out Teams to its legion of Office 365 customers and, in doing so, choked off Slack’s future customer base.
This story is well known. But explanations of how Microsoft managed this maneuver almost always miss a vital element. It is not that Microsoft has more money, though that helps. It is not even that it has an expansive, installed userbase. (Though again, it’s nice to have.) It’s that Microsoft is fully and completely enterprise ready. Over decades of effort, the firm has developed the features and infrastructure needed to serve big customers. Equipping the Fortune 500 with Teams requires Microsoft to build only the product, not a software stack spanning SSO, SAML, OAuth, directory syncs, audit logs, and beyond.
It’s hard to overstate the importance of this edge. The insurgent’s primary advantages relative to the incumbent are speed and focus – both disappear when it comes to serving enterprise. In Slack’s case, once Microsoft forced it to begin competing for large enterprises head-on, Butterfield’s business had to redirect attention and talent to building that stack. At precisely the time that speed and focus were needed most, Slack had to relinquish it.
Because of these dynamics, fearing annihilation in enterprise software is not paranoia but pragmatism. As Neil Shah, General Partner of Greenoaks, an investor in WorkOS, noted:
There is no ambiguity in terms of what happens when you find success as a software company. You will be replicated by a massive software company, and you will be bundled for free or close to free.
Shah added that insurgents need to focus on building “only differential” features but cannot do so given demands levied by enterprise customers.
Founded in 2019 by second-time entrepreneur Michael Grinich, WorkOS is not just a provider of SSO and other services, it is enterprise software’s great equalizer. Instead of spending years building and maintaining in-house infrastructure, insurgent software companies can rely on WorkOS to achieve enterprise readiness in a fraction of the time. By doing so, insurgents maintain and intensify their natural advantages, unlocking the ability to serve larger customers without losing speed or focus. Grinich describes his company as “an API that expands your TAM.” WorkOS’s demonstrable value, ease of use, and focus on developer experience have prompted investors like Lachy Groom to refer to the company as “the next Stripe.” Coming from Stripe’s former Head of Issuing, that’s a meaningful comparison.
As you might expect, that proposition has resonated with customers and venture capitalists. WorkOS counts Webflow, Vercel, Hopin, Loom, Airbase, and many others in a clientele that stretches into the hundreds. Last month, the company announced it had raised an $80 million Series B, led by Shah’s Greenoaks. Investors noted that it was an especially competitive fundraise.
In today’s piece, we’ll explore what WorkOS is, why it matters, and the radical opportunity it is chasing. In the process, we’ll discuss:
- Hard lessons. Before starting WorkOS, Michael Grinich founded email client Nylas. Its initial failure demonstrated the need for enterprise readiness as a service.
- A tenth of the time. WorkOS reduces the time it takes to set up enterprise SSO by as much as 90%. It has a similar impact with other features like Directory Sync.
- Saying yes. IT administrators want to adopt new products but can’t do so unless specific requirements are met. By helping address these needs, WorkOS helps IT administrators experiment with cutting-edge tools.
- Impressive talent. Grinich has succeeded in recruiting tenured talent. That seems to come down to his leadership, along with the size of the WorkOS opportunity.
- Going top-down. WorkOS has scaled by leveraging a classic bottom-up motion. That works well for small-to-medium-sized businesses (and startups). WorkOS may need to add a different approach to capture the top end of the market.
Let’s get to it.
Origins: Crossing the enterprise chasm
Michael Grinich’s first company failed to cross the enterprise chasm – at least in its first iteration. But from the failure of Nylas Mail, Grinich found a fresh opportunity. WorkOS is not only a game-changing platform, it’s the solution its CEO wishes he once had.
Staring into the chasm
Like so many of his classmates, Grinich was fascinated by entrepreneurship. Though he had matriculated to the Massachusetts Institute of Technology for its Media Lab, eager to flex his creative impulses, Grinich quickly found himself drawn to the world of startups.
To sate his curiosity, he initiated an on-campus speaker series, Startup Bootcamp, that attracted founders like Drew Houston, Patrick Collison, Evan Spiegel, Alexis Ohanian, Aaron Schwartz, and Kyle Vogt. Those connections helped Grinich land an internship at Dropbox and encouraged him to start a business of his own.
If the Startup Bootcamp series helped him understand what it took to build the future of technology, Grinich’s startup idea came from studying its foundations. In particular, he became fascinated by email, a technology that predates the internet itself. “It’s the first networked application ever built,” Grinich remarked.
In his MIT dorm room, Grinich wrote the first lines of code for a new kind of email client, re-designed from the ground up. He called it Nylas.
Over the next four years, from 2013 to 2017, Grinich followed in the footsteps of the entrepreneurs he had brought to campus, raising capital and shipping a product.
Customers loved what Grinich had created, appreciating the craft that had gone into the product. Indeed, Grinich’s quest for product perfection bordered on the obsessive – he once spent three days in a recording studio with a hired electronic musician developing the consummate notification sound. The result was an email experience that represented a radical departure from the drabness of Microsoft Outlook or the sterility of Gmail. Nylas was fast, smooth, and tasteful.
If Microsoft’s attack on Slack tested one Paul Graham truism, Nylas did the same for another. The Y Combinator founder is famous for telling entrepreneurs to “make something people want.” Grinich had done that with Nylas Mail – but that alone wasn’t enough. Though consumers adored Nylas’s product, few were willing to pay for it. As a result, the real market opportunity was selling to enterprises.
The more research Grinich did, the more he realized what a challenge that posed. Enterprises were demanding customers. It wasn’t enough to simply have a beloved email product; Nylas needed to offer other supporting services. For example, any big customer needed Nylas to provide Single Sign-On (SSO) support so that employees could access the service without setting up new usernames and passwords. Though adding SSO might sound simple, it represented a real engineering lift. On top of that, it was just the start of what enterprises expected.
Grinich stared into what he would later call the “enterprise chasm.” To build a version of the product that enterprises would pay for, he needed to raise money and redirect Nylas’s resources. In truth, he would need to build a different business, focused less on delighting consumers and more on pleasing IT administrators. “When I finally realized the scope of what we needed to build, it was sort of too late,” Grinich said.
Nylas pivoted, shutting down its email product entirely. It would later find considerable success offering communications APIs. By then, Grinich had long gone, leaving the company in the hands of his first business hire. His mission to revolutionize email had failed to find a way across the chasm. Grinich’s next challenge was ensuring no company would face the same issue.
Building the bridge
Grinich’s revelation didn’t arrive immediately. After leaving Nylas in 2017, he spent a year and a half exploring different ideas and helping friends on their projects. But as he reflected on the failure of Nylas’s email product, a new idea began to form.
What if instead of each startup having to build features from scratch to serve big enterprise, there was a business that handled it for you? Grinich envisioned a company whose sole purpose was to provide enterprise readiness tooling, making it easy to offer SSO and other necessary features. This company would radically cut the cost and time needed to cross the enterprise chasm. The idea echoed one of the most disruptive innovations of the past two decades: Amazon Web Services (AWS). Just as the debut of AWS in 2006 had made it unnecessary for most startups to build their own data centers, Grinich’s business would make building SSO (and more) from scratch sound absurd.
Grinich put together a slide deck and gave his idea a name: WorkOS. Within a week, he’d gotten a term sheet.
Nakul Mandan instantly understood the impact of what Grinich was building. As a partner at Lightspeed, he had focused on enterprise software and seen just how challenging it could be to cross the chasm. “Instantly, the pitch resonated with me,” Mandan said, “Every B2B company I’ve interacted with has to build enterprise features. It takes a year to build them.” Even products like Okta, which promised to simplify parts of the process, could end up being a “long implementation” in Mandan’s experience.
Grinich’s history also stood out to Mandan. Not only did he have an acute understanding of the problem thanks to his time at Nylas, he demonstrated the maturity of a seasoned entrepreneur. Mandan noted that Grinich cared as much about WorkOS’s business model and distribution as the product itself. Days after their first meeting, Mandan offered to lead WorkOS’s $3 million seed round. Grinich’s second act was about to begin in earnest.
The next Stripe
With money in the bank, the WorkOS team set about building. They planned to unveil their creation at the SaaStr conference in the spring of 2020.
A few weeks before the event, covid broke out across the United States, forcing the cancellation of SaaStr and thwarting WorkOS’s initial launch plan. Undeterred, Grinich decided to unveil his product all the same, trading the conference hall for social media platforms.
On March 17, 2020, WorkOS launched on Twitter and Hacker News. To the team’s surprise, their creation received an enthusiastic response, even from the notoriously acerbic Hacker News. “There was no real snark,” Grinich said. Instead, founders and engineers commented:
- “I dream of the day that these features (SSO, Sync/SCIM, auditing) are considered table stakes. I hope WorkOS takes off and drives that.”
- “I wish I would have found this 3 month[s] ago…”
As those responses suggested, there was strong demand for what WorkOS was selling. “We had this huge wave of interest after the launch,” Grinich remembered. Conversations with potential clients gave the CEO even more conviction in the importance of what WorkOS was building.
Investor interest followed soon after. Lachy Groom, a prominent solo capitalist, beat out the competition to lead a $15 million Series A. “[Michael Grinich] sent the deck across and I fell in love with it,” Groom remembered, “I moved very, very quickly to make an offer.” Part of the reason Groom sprang into action was that he saw something of his former employer in the startup. Like Stripe, WorkOS offered an elegant, developer-first solution to a fiendish, unsexy problem. “This is something I know very well,” Groom noted.
Over the next year, WorkOS won over more customers and investors. In the autumn of 2020, WorkOS snagged its first major client: Webflow. Co-founder Bryant Chou had played with the product during one of Webflow’s hackathons, finding it so easy to use that he’d implemented it himself in a few days. That validation showed Grinich that WorkOS could be helpful for larger tech companies and those just getting started – everyone wanted simpler ways to handle SSO and directory sync. Vercel, Drata, Airbase, Loom, and others would soon join.
Around the same time Webflow converted, Neil Shah approached WorkOS to preempt a Series B round. He had learned about Grinich’s businesses through Vercel, one of Greenoaks’ portfolio companies. “They were very happy customers,” Shah remembered. He recalled asking one of Vercel’s founders, Guillermo Rauch, if he would ever consider building WorkOS’s feature set in-house. Rauch responded, "If we ever get to a point in Vercel’s roadmap where we do, I’ll quit.” The message was clear: WorkOS was not only providing something valuable. It was solving a problem companies didn’t want to handle themselves.
Earlier this month, WorkOS announced it had raised an $80 million Series B, led by Shah. It represented quite a coup for the Greenoaks investor; WorkOS had reportedly attracted significant interest, receiving battling term sheets. Shah’s nuanced understanding of the problem and opportunity had helped him seal the deal.
For Grinich, it represented further validation. Almost ten years after he had started building Nylas Mail, he had done more than address the issue that had scuppered that venture. Not only had Grinich found his way across the enterprise chasm, he’d built a bridge so others might too.
Product: The TAM API
The story above explains what problem WorkOS is solving. But it’s worth spending another moment discussing this before we study the startup’s product.
Selling software to enterprise clients is a little like the children’s book If You Give a Mouse a Cookie. After a mouse receives a cookie in that story, he asks for a glass of milk, a straw, a mirror, nail scissors, and a nap, among other things. The premise is that one ask begets another.
Enterprise clients follow the same pattern, according to Nakul Mandan. They start by asking for SSO before demanding directory sync (SCIM), audit logs, role-based access control (RBAC), and change management. “Typically, SSO is the first thing they ask for,” Mandan said, “But it’s not the last.”
This framing illustrates the importance of WorkOS and explains the company’s product strategy. Serving enterprises isn’t solved by integrating a single feature but by addressing continuous requests over time. Point solutions are insufficient, as a result. A broad suite is needed to get a startup genuinely enterprise ready.
Fulfilling core needs
WorkOS offers three main products: Enterprise SSO, Directory Sync, and Admin Portal.
As mentioned, the first request enterprise clients typically make is for SSO support. Clients want their employees (or customers) to be able to login into a new product with an established identity provider like Google, Azure, or Okta. This is desirable because it means users don’t have to create new usernames or passwords to access the service, which is better for security and usability. SSO helps enterprises keep track of their employee logins and makes it easier for them to use the platforms they need. Integrating SSO often means using open standards like SAML, which allows providers to verify a user’s identity with the end product.
WorkOS solves this problem in just a few lines of code. With the company’s API, startups can offer fully-featured enterprise SSO that integrates with more than twenty different identity providers. WorkOS lets customers control the UI/UX of their SSO screens and adds thoughtful features like support for magic links. In seven minutes, startups can fulfill an enterprise request that might have once taken months.
Directory Sync addresses another common request. If an enterprise is adopting a new tool, it needs a way to port over its organizational structure, including which employees work in which group and what permissions that entails. Adding this information manually is infeasible, as would managing it on an ongoing basis. This is why organizations sync their “directory,” typically from an HR provider like Workday or Rippling, or an IT system like ActiveDirectory. This process relies on a protocol: SCIM. Like SAML, SCIM is a protocol that makes transporting this information possible but not easy. Bending SCIM to a specific use case takes considerable effort and engineering time.
WorkOS offers a simple, intuitive API to solve this problem. By adding a little code to their product, startups can offer Directory Sync that integrates with more than twelve directory services, including Workday, BambooHR, Breathe, and Rippling. Organizational information stays updated via webhooks, meaning that anytime an employee is added or subtracted from the core directory, WorkOS captures that change and ports it over to the startup’s product.
WorkOS’s final product is designed to smooth the implementation of its other two features. Admin Portal is a customizable onboarding solution for enterprise customers. Rather than trading SAML and SCIM configuration steps via Slack and email, enterprises can configure identity providers or directory services via a clean interface. Admin Portal exists to support the meta-work of onboarding enterprise customers. WorkOS recognizes that this is yet another burden that it can alleviate.
We’ll soon discuss the features WorkOS may one day add. But even in its current instantiation, the company’s product has an impressive impact.
Amid acronyms like SCIM and SAML, it can be easy to miss the impact of what WorkOS has built. Already, Grinich’s company has four profound effects:
- It helps startups get new customers.
- It helps startups save time.
- It helps startups focus on their core differentiation.
- It helps IT administrators and other software gatekeepers say “yes.”
The first may be the most obvious: WorkOS helps startups get new customers. Grinich knew from his days at Nylas that startups cannot win the enterprise market without the right features. By making it easy to offer SSO and Directory Sync, WorkOS has opened up the enterprise market to startups much earlier in their life. Companies that might have needed to wait for a Series B to attempt selling a 5,000-seat contract can now do so at the seed stage.
WorkOS can help startups access the top of the market earlier because it has radically reduced the cost and time it takes to become enterprise ready. Nick Van Wiggeren, VP of Engineering at PlanetScale, a WorkOS customer, remarked that it often took teams of up to seven engineers just to maintain SSO support. Because of that, Van Wiggeren was wise enough to ensure PlanetScale outsourced the problem. “We didn’t consider doing this ourselves, even for a second,” he said. Though Van Wiggeren considered other point solutions, he found WorkOS far and away the easiest to integrate. “Versus doing it yourself, WorkOS takes a tenth of the time,” he said, “Versus an alternative, it takes half the time.” Daniel Marashlian, co-founder and CTO of Drata, noted that such efficiency gains were not transitory. Whenever his company lands a new client, he estimates that WorkOS saves “two to three hours.”
Jeff Bezos once said, “Making your own power doesn’t make your beer taste better.” The Amazon founder was commenting on the fact that many business activities don’t improve a product’s quality or differentiation. The same can be said of SSO and Directory Sync – neither makes your email application, developer tool, or database service better at their primary job. As Grinich noted, “Having the best SAML code in the world will not make your product experience better.”
WorkOS frees startups to focus on refining their core differentiation. In the process, they also save the sanity of thousands of engineers. As Nakul Mandan noted, “Nobody really wants to build SSO.” Marashlian called it a “royal pain in the ass.”
Finally, WorkOS allows IT administrators and other software buyers to stop being the bad guys. A typical motion for a company to experiment with a new product goes something like this:
- An employee finds a new product that helps them do their job better.
- They share it with other people on their team.
- They share it with other people in their department.
- Employees ask IT to purchase it for the company.
- IT administrator assesses whether the product is enterprise ready.
- If the product isn’t enterprise ready, the IT administrator refuses to buy it.
As Grinich noted, this is a suboptimal outcome for everybody, IT administrators included. “They want to buy products like Webflow and Loom,” he said, “but they need to have features like SSO.” By making it easier to get enterprise ready, WorkOS allows big enterprises to adopt the best products on the market much faster. It enables IT administrators to say “yes” for a change.
Providing enterprise readiness requires a wide aperture. Though that’s already apparent in WorkOS’s current offering, we can expect the company to add many features in the years ahead. It’s not hard to predict what products will be most beneficial – WorkOS can work its way through the requirements enterprises typically have for their software vendors. That’s likely to include audit logging, role-based access control (RBAC), and encryption and authorization features. Each one of these is a massive opportunity in its own right. Nakul Mandan remarked that RBAC could be a billion-dollar business line by itself. Lachy Groom noted that in three to five years, WorkOS might be known for a feature that has yet to be released.
Next up is audit logging. As the name suggests, an audit log records activity within a particular product. This includes logging in, resetting passwords, accessing information, or using a specific feature. IT administrators need audit logs to track user behavior and receive alerts if something is going awry. As with WorkOS’s other features, audit logging is the kind of request that might seem easy to fulfill at first glance but ends up being a costly time-suck. “Most engineers think they could build it in a day,” Grinich noted. “As it turns out, it's really complicated.”
Over the coming years, WorkOS may tackle dozens of these problems. VP of Developer Relations, Zeno Rocha, estimated the company had “executed on just 1%” of what it intended to build. “We have a roadmap for the next ten years,” Rocha said, “At least.”
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Culture: Developer joy
Michael Grinich has not only succeeded in creating an impactful product, he’s built a company with a distinctive culture. Like few CEOs I have met, Grinich demonstrates impeccable taste and an obsession with delighting the developers he serves. That skillset and ethos have attracted an impressive collection of serious operators.
Visit WorkOS’s homepage, and it quickly becomes apparent that this is a startup with a strong sense of taste. Everything from the UX to the animations to the documentation has been crafted with care. Though Grinich has matured since his Nylas Mail days, better knowing where to focus his energy, he still retains much of the verve of the young CEO that spent three days in a recording studio to refine a notification noise.
“WorkOS doesn’t functionally need to look beautiful. We could be successful without being thoughtful about design,” Grinich said. “But that’s not what we’re going to do as a company.”
This ethos has attracted operators that want to push the boundaries of design and experience – while building a massive business. As part of the Series B news, WorkOS announced it had acquired Modulz, a design tool known for its active community and elegant component libraries. Modulz’s founders are staying on, adding to WorkOS’s capabilities in this area. “They really care about the same things that we care about,” Zeno Rocha remarked. “The pursuit of excellence is a shared value.”
WorkOS doesn’t care about craft for no reason. It does so because it wants to provide the best possible tool for its developers. As Grinich noted, his north star is increasing “developer joy.”
As it turns out, Grinich is particularly well-suited to that task. Neil Shah said the CEO’s superpower was “figuring out developer love.” Grinich obsesses over the details of each new feature, thinking through what developers need and how to delight them.
Customers feel this care. PlanetScale’s Nick Van Wiggeren called WorkOS’s thoughtfulness “abundantly clear,” adding, “[You can tell] they’ve designed the product for software engineers and builders.”
In addition to attracting builders with a sense of taste, Grinich has attracted a team with impressive expertise. Neil Shah commented on this, pointing to the additions of people like Zeno Rocha and Alon Levi. Rocha was previously the Chief Product Officer at a 1,200-person cloud company, while Levi served as an SVP of Engineering at Slack and Salesforce. Such blue-chip recruits are atypical for a startup that has just raised a Series B.
How does the WorkOS CEO manage this? Grinich’s secret seems to be a mix of intentionality, effort, and maturity. Zeno Rocha recalled how Grinich had flown to Los Angeles to meet him during the recruiting process. Though Rocha had assumed Grinich was in town for a few days, after their dinner, he learned he was heading straight back to the airport. He’d come just to see Rocha. “For me, that sent a message,” Rocha said, “That’s the kind of leader you want to have.”
Levi cited Grinich’s maturity and intentionality as draws. “He’s very deliberate,” Levi said, “He knows exactly what he wants.” Another of the traits Levi emphasized was Grinich’s listening ability. “Even though he’s often thought about a problem longer than everyone else, he always wants there to be a conversation,” Levi said.
WorkOS has built a culture suited to serious operators who want to create an enduring, impactful business.
Risks: Defending the opportunity
Neil Shah noted that WorkOS’s core products were “growing like crazy.” If the company can maintain its trajectory, it may have a generational impact. To do so, WorkOS must stay ahead of potential competitors, manage a broad product scope, and learn a new sales motion.
Given WorkOS’s success to date, it’s surprising that there isn’t a direct rival. Though there are point solutions like Auth0, no other player seems to be competing with WorkOS’s full vision of enterprise readiness as a service.
Grinich believes it’s inevitable that other businesses will enter the market. “It’s a huge opportunity,” he said, “Of course, other people are going to go after it.”
WorkOS has an obvious advantage as the first mover, but it cannot afford to rest on its laurels. Grinich has effectively validated a new category, and venture capitalists will be willing to fund fast followers. To insulate itself, WorkOS will want to close off wedges that a competitor might use as a vector for attack. Each incremental feature addition, like audit logging, closes an insurgent’s avenue if WorkOS maintains the same product quality.
Ultimately, WorkOS has a clear lead but should expect direct competitors to emerge.
WorkOS has no shortage of ambition. It is not just solving one complex problem but many. Though laudable, that presents challenges. As the company grows, it will need to manage a concatenation of different features, each essential to customers. Can WorkOS hold itself to Grinich’s exacting standards when its focus is split between ten products instead of three? Can it continue to delight customers?
This is likely to be WorkOS’s primary challenge in the coming years, and there is no easy solution. Grinich will need to keep recruiting exceptional builders that are up to the challenge his company is taking on.
WorkOS will need to develop new sales motions over time. Specifically, it will need to implement a top-down approach sensitive to the fact that developers are the primary constituency.
Before discussing this further, let’s take a moment to dissect this practice. Sales motions are bisected into top-down and bottom-up. A top-down approach relies on sales representatives prospecting and closing large enterprise customers. A bottom-up approach makes it easy for new customers to start using a tool. The hope is that these free or low-revenue users will grow their spending.
Two methods of bottom-up sales are “product-led growth” and “developer-led growth.” Product-led growth (PLG) is better-known and more frequently discussed. As the name suggests, startups using this playbook rely on their product to attract end users – typically business users. Slack, Asana, and Airtable all grew with a PLG motion.
WorkOS uses developer-led growth (DLG). In this formulation, the target customer is a software engineer, not a business user. The goal isn’t just to get customers to use a tool but to build with it. Stripe, Vercel, Heroku, and Cloudflare all use DLG.
Though these two motions are structurally similar, they have some critical differences. Companies that use PLG usually need to invest more in marketing – they want to stand out from the crowd. Targeting developers in the same way tends to be less effective and is part of the reason that WorkOS still has no sales or marketing employees. It doesn’t need them right now.
Another key difference is how PLG and DLG businesses layer on a top-down motion. Though startups start by prioritizing either top-down or bottom-up, it is usually vital to build competency in both over time. When PLG companies start layering on top-down sales, the first point of contact typically changes. Instead of a product manager adopting the product, a company salesperson usually reaches out to a department head with authority to greenlight a purchase.
This isn’t typical for DLG businesses. Developers are still the first port of call even when adding a complementary top-down strategy. This changes the job of a salesperson. Running cold outreach campaigns is unlikely to work on developers, and business hires often can’t assess the efficacy of a developer tool. As a result, salespeople in DLG organizations focus less on growing the top of the funnel and more on support and upselling.
This is an area that WorkOS has yet to develop. While the company has secured large enterprise clients and succeeded in growing with them, much more can be done. As it captures ever-larger organizations, it will need a division dedicated to helping them get the most out of the platform and adopt new features. This is something that services like AWS do exceedingly well.
Neil Shah concedes that WorkOS is at “zero” regarding adding top-down support. “We need to figure out how to get it to one,” he said. Ahead of its Series C, WorkOS should invest in establishing this as a core competency. Doing so gives it the chance to expand its own TAM.
Though it’s tempting to compare WorkOS to AWS, its impact might be structurally most similar to Microsoft Windows. WorkOS is simplifying software development for the cloud era, just as Microsoft Windows did in the age of the PC.
To explore the validity of this comparison, we must rewind to a pre-Windows era. Developing an application before the operating system’s release came with many complexities that sound implausible today. Every time you wanted to craft a new application, each engineer needed to configure how a button would look and work across different hardware devices. There was no simple way to create a product that worked seamlessly, whether the user was on an IBM or Compaq.
A particularly pronounced example of the burden developers had to bear can be found among word processors. Before Windows, every new word processing application had to build support for every type of printer. If you wanted to support printing on a particular Hewlett Packard model, that had to be created from scratch. This is a large part of the reason that WordPerfect, an early processing application, established itself as the dominant player – it developed support for thousands of printer drivers. Customers naturally gravitated to the solution that made basic tasks like printing possible.
Microsoft Windows disrupted this state of affairs. (Particularly starting with Windows 3.1.) Developers of word processing software no longer had to embed thousands of printer drivers – Windows took care of it for you. Without having to compete on this dimension, creating a competitive word processor was radically simpler.
This evolution played out across the developer landscape. Windows abstracted many of the complexities of building software, particularly related to interacting with different hardware devices. Doing so significantly lowered the threshold for innovation.
WorkOS is pursuing the same goal; only the underlying platform has moved from physical machines to the cloud. Today, serving enterprise clients requires developers to build custom configurations for cloud platforms like Okta, Splunk, and ActiveDirectory. Like printer drivers in the early 1990s, these integrations add no value to the core product experience. They are taxes on the time and creativity of technologists that inhibit innovation. As Grinich said in his Hacker News launch post:
[WorkOS] runs “under the hood” and lets you focus on building unique product features. It's a standard set of interfaces and features shared across applications. That's the role of the operating system and that's why we call it an OS.
From this vantage, what Grinich is building looks much bigger than SSO support or a bridge across the enterprise chasm. If WorkOS succeeds to its full potential, we may think of it as a step-change in the evolution of software development.
The Generalist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. Our work may feature entities in which Generalist Capital, LLC or the author has invested.