Grit

Building Cloudflare for the Next 50 Years | Co-founder Cloudfare Michelle Zatlyn

December 1, 2025

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  • The rapid adoption of AI is fundamentally challenging the existing business model of the web by circumventing original content sources, necessitating a new compensation structure for creators. 
  • Sustaining a high-growth company like Cloudflare for 15 years requires maintaining the core mantras of 'always be recruiting' and 'always be closing,' despite the emotional toll of employee turnover. 
  • Founders must actively resist the allure of success-induced detachment from reality, as exemplified by lessons learned from HBS professors about staying grounded while building generational companies. 
  • Founders should prioritize solving real, important customer problems over chasing what is currently perceived as 'sexy' technology, as solving problems leads to a better business model. 
  • While technology and invention are celebrated, success in the long run is ultimately measured by business metrics like revenue growth and gross margins, not just technical superiority. 
  • A winning company culture appreciates the value brought by all functions, including go-to-market and finance teams, not just product and engineering. 

Segments

AI Threat to Web Business Model
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(00:00:00)
  • Key Takeaway: AI services risk collapsing the web’s content creator compensation model by consuming content without returning traffic or payment to original sources.
  • Summary: The invention of AI is proceeding five times faster than mobile adoption, drawing an analogy to the invention of electricity in its transformative scope. AI services crawl the web to feed LLMs, bypassing the traditional click-through model where content creators received compensation. If creators are no longer paid for their work, the incentive to produce original content for the web diminishes.
Cloudflare’s 15-Year Milestone
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(00:01:08)
  • Key Takeaway: Despite reaching 15 years and significant valuation, Cloudflare’s leadership maintains the belief that the company is ‘just getting started’ with a generational vision.
  • Summary: Cloudflare recently celebrated its 15th birthday, marking the occasion with product announcements and team celebration. Michelle Zatlyn remains committed to the long-term vision, inspired by companies like Microsoft turning 50, believing Cloudflare has more headway ahead than behind. This long-term perspective informs decision-making, aiming for Cloudflare to become a generational company.
Enduring Company Building Hardships
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(00:03:49)
  • Key Takeaway: For founders, the hardest lesson in company building is outliving employees and realizing that while people are not fickle, founders must live with decisions longer than anyone else.
  • Summary: Michelle Zatlyn finds that being in the situation of building for 15 years does not feel hard; she loves the job and does not feel the grass is greener elsewhere. A common challenge is high-performer departures, such as a key sales leader leaving for a CEO role elsewhere after only a year and a half. The founder must accept that they will outlive most hires and learn to take departures less personally, recognizing that people manage their own lives.
Recruiting and Decision Ownership
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(00:06:21)
  • Key Takeaway: The two constant mantras for high-growth companies are ‘always be recruiting’ and ‘always be closing,’ and founders must embrace taking ultimate ownership of decisions because they will remain long after others depart.
  • Summary: The constant demands of high-growth leadership include perpetually recruiting talent and closing deals, as revenue remains the critical scoreboard. When a key employee leaves for a CEO role, it is flattering but necessitates immediately resetting the bar and finding a successor. Founders must internalize that they live with the consequences of decisions longer than anyone else, which validates taking a more central role in key decisions, similar to Brian Chesky’s philosophy at Airbnb.
Founder Rituals and Prioritization
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(00:14:01)
  • Key Takeaway: Spending dedicated time with customers is the most critical ritual for prioritization, as it cuts through internal debates and clarifies the focus for a company with overwhelming demands.
  • Summary: The power of relationships and spending time with customers are North Stars for prioritization amidst overwhelming demands. Spending time with customers clarifies what they care about, allowing leaders to make better decisions on where to focus resources. This practice, advocated by board member Mark Hawkins, helps avoid internal debates over copy or product direction when the customer’s actual needs are clear.
Personal Rituals for Longevity
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(00:15:50)
  • Key Takeaway: Prioritizing sleep as a superpower, saying ’no’ to non-essential events, and maintaining levity are essential rituals for leaders playing a 50-year game.
  • Summary: Michelle Zatlyn views sleep as a superpower, aiming for 8-9 hours nightly to ensure better decision-making and refueling. A key resolution this year is saying ’no’ to more events and dinners to create space for reading and thinking, despite the trade-off of missing peer conversations. Furthermore, embracing humor and levity at work, supported by research like the book Humor Seriously, is vital for enjoying the mission-critical work.
Navigating Executive Perks and Reality
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(00:29:22)
  • Key Takeaway: Successful executives must actively ward off the allure of ‘sexy’ perks like drivers or jets, which sound cooler than they are, by staying grounded in reality as advised by past mentors.
  • Summary: Harvard Business School professor Paul Marshall warned students against losing touch with reality as success brings amenities like drivers and delivered groceries. This advice resonates when considering executive perks, which can create a separate universe for leaders. While some perks might seem practical, founders must decide if they are truly necessary or just an indulgence that separates them from the day-to-day experience.
First-Generation Wealth and SF Resurgence
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(00:36:08)
  • Key Takeaway: The rise of technology, AI, and crypto is accelerating first-generation wealth creation, creating an opportunity for new service industries to support those navigating wealth management without prior structure.
  • Summary: Moving socioeconomic brackets through first-generation wealth creation is difficult, and AI is expected to increase this phenomenon, highlighting a gap in support services. San Francisco is currently experiencing a resurgence, with Mayor London Breed’s leadership credited for tangible improvements like a 30% drop in crime. The city’s inherent appeal, visible upon flying into SFO, suggests it is on the right track to reclaim its status as a world-class city.
AI Agents and Content Control
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(00:40:14)
  • Key Takeaway: Cloudflare is helping content owners establish access control over AI crawlers, enabling them to either block access or charge a fee for content used to train LLMs, thereby protecting the web’s economic foundation.
  • Summary: The conflict between AI crawlers and content creators stems from AI models consuming content without compensating the source, risking the web’s economic model. Cloudflare customers report increased infrastructure costs from bot traffic while simultaneously seeing reduced human traffic as eyeballs stay within chatbots. Cloudflare’s role is to provide visibility and control, allowing publishers to enforce access rules or implement micro-payment exchanges, such as the X402 protocol, for content usage.
Infrastructure Sexiness and Launching
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(00:48:50)
  • Key Takeaway: Early Cloudflare launch at TechCrunch Disrupt contrasts with later industry shifts toward YC as the ‘cool’ launch platform.
  • Summary: Michelle Zatlyn recalls launching Cloudflare at TechCrunch Disrupt when it was considered a ‘cool’ venue, noting that five years later, the company was dismissively called ‘muffler repair for the internet.’ Infrastructure, though sometimes perceived as boring, is described as magical when it works, similar to essential home plumbing. The discussion highlights the irony of making infrastructure ‘sexy’ after initial industry perceptions.
Boring Businesses and Problem Solving
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(00:50:25)
  • Key Takeaway: Doing something perceived as ‘boring’ can often result in a superior business model compared to chasing inherently ‘cool’ consumer ventures.
  • Summary: Founders are advised that while consumer businesses are appealing, focusing on solving fundamental, large-scale problems—even if they sound boring—can lead to a stronger business foundation. Michelle Zatlyn was drawn to the problem of making the internet safer and more reliable, which provided a source of pride in the company’s mission. Cloudflare’s broad utility, serving everyone from high school kids to governments globally, underscores the value of solving horizontal problems.
Metamorphosis: Tech vs. Business Metrics
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(00:52:30)
  • Key Takeaway: Founders, especially engineers, must undergo a metamorphosis from being infatuated with technology to focusing on solving customer problems and achieving business metrics.
  • Summary: Many engineers become infatuated with the technology itself (like new AI models) and risk solving cool problems nobody cares about, necessitating a shift toward solving problems customers value. Early in Cloudflare’s history, the founders ‘poo-pooed’ sales and revenue, focusing only on invention and patents. Realizing that success is measured by business metrics like revenue growth and gross margins, rather than just superior technology, is crucial for faster progress.
User Growth Over Tech Hype
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(00:56:49)
  • Key Takeaway: Never being embarrassed by user growth is a critical mindset for founders, regardless of how gimmicky the initial product might seem.
  • Summary: Evan Spiegel of Snap shared that he has never been embarrassed by users because rapid growth validates the product’s utility. This contrasts with the Silicon Valley tendency to over-celebrate the technologists and inventors over the business drivers. A winning formula involves being product-led or engineering-led while deeply appreciating the value brought by go-to-market and finance teams.