HashiCorp's founder turned a passion project into a 300-person company and then took on a tougher challenge: hiring a CEO

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HashiCorp's founder turned a passion project into a 300-person company and then took on a tougher challenge: hiring a CEO

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HashiCorp

HashiCorp founder and CTO Mitchell Hashimoto

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  • This week, open-source software company HashiCorp announced new versions for three of its products.
  • Co-founder and CTO Mitchell Hashimoto says the company has come a long way since it started as a passion project, where he and co-founder Armon Dadgar would spend all their free time on developing open-source projects that would become the foundation of HashiCorp.
  • About three years ago, Hashimoto realized he didn't love being CEO and preferred to focus on technical strategy, so he threw his efforts on hiring a CEO that would be the right match.
  • In 2016, HashiCorp hired Dave McJannet, who had previously worked at Greylock Partners, GitHub, Microsoft and VMWare, as CEO.

The biggest struggle in building a company isn't the technical part - not the hours spent writing and debugging code, or toiling to make the software come alive. For Mitchell Hashimoto, CTO and co-founder of open-source software company HashiCorp, that's a passion project.

When it comes to technical challenges, Hashimoto is fairly confident he can figure out technical challenges. After all, he's been programming since age 12. He taught himself by downloading source code, playing around with it and modifying it. In college, he made half a million dollars a year from a program he wrote to automatically register students for classes.

But learning to build sales teams, business models, a strong culture and managing people all have a learning curve. And after mastering those skills, Hashimoto learned another important job for many tech entrepreneurs: How to to hire a good CEO from the outside.

Six years ago, HashiCorp was just Hashimoto, who was the CEO, and Armon Dadgar, his co-founder. They were responsible for everything, and if they didn't work, the company stopped. Three years ago, it was 70 employees. Now, the company is at 325 employees.

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"The fact that we survived past a year was a triumph," Hashimoto said. "We've been able to build a portfolio of projects that were all successful. We got questioned a lot, why don't you just focus on one? The triumph is we've gotten past that huge hurdle."

This week, HashiCorp announced new versions of its Consul, Terraform and Vault products, as well as improvements to its HashiCorp Configuration Language (HCL), which was named one of the fastest growing programming languages of 2018. And in November, HashiCorp will launch a new version of Nomad, which is used for deploying applications.

And Hashimoto isn't CEO anymore -- he stepped down to become co-CTO with Dadgar in June 2016 and announced in August that HashiCorp had hired Dave McJannet as CEO. When he and Dadgar told HashiCorp's board that they would like to bring on a new CEO, the board was surprised. But Hashimoto knew he didn't love being CEO.

A 16 month courtship of coffees and dinners

Originally, Hashimoto and Dadgar, who were best friends in college, started developing the open-source projects Vagrant and Packer just for fun, which would become the foundation of HashiCorp. At the time, they had absolutely zero intention of creating a business.

And when they first founded HashiCorp, Hashimoto admits he was "pretty naive" about what a CEO's responsibilities are -- it involves financial planning, board management and more.

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"I like to joke, it's a real job," Hashimoto said. "With technical strategy, I can tell you what we're building five years from now. With business strategy, I struggle a bit more."

The process of searching and talking to potential CEO's took 18 months. Two months into the process, Hashimoto met McJannet, who had previously worked at Greylock Partners, GitHub, Microsoft and VMWare. Over the following 16 months, the pair met with increasing frequency, from coffee once a month, to dinners, to McJannet visiting the office once a week to learn more about the company.

"I like to describe it as a marriage," Hashimoto said. He's actually getting married to actress Amy Okuda next week. The process of finding a CEO was much more stressful though.

"A CEO joining is at least a five year commitment," Hashimoto said. "There's lots of risk when it comes to mission and vision. It was a lot of coffees. It's as if you substituted that as dating. You get to a point where you'll sort of commit to each other."

The company itself has come a long way since six years ago, when Hashimoto and Dadgar were just working on projects during their free time. At the time, they both had full-time jobs, and when they weren't working, they were moonlighting as open source developers for a project that ended up becoming immensely popular.

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"People sometimes laugh because they ask, how can it possibly be a passion?" Hashimoto recalls. "We don't have time to go to the gym, we don't have time to date anyone. We thought, we either have to abandon this or quit our jobs. Who works on something eight hours a night when it's not a passion?"

With some new releases in its lineup and a growing mix of customers, from individuals to Fortune 500 clients, Hashimoto will make sure the company keeps growing. He has an idea of what HashiCorp will build in the next five years, but he won't reveal it.

"We're fairly stable as a commercial business," Hashimoto said. "We're investing heavily where we think there's a lot more opportunity. We could stop hiring and be a successful business, but we think in three to five years, 500 of of the Fortune 500 customers could be a customers. We have to keep hiring and keep shipping features."

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