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Move fast, break nothing: Why investors like JFrog’s approach to modern software development

If every company is now a software company, that means a lot of companies have to figure out how to be software companies. JFrog's tools help those companies ship stable software at a quick pace.

Move fast, break nothing: Why investors like JFrog’s approach to modern software development

"Every company is now a software company," says Shlomi Ben Haim, co-founder and CEO of JFrog.

Photo: JFrog

Velocity is one of the major driving forces behind modern software development, and JFrog quickly showed the public markets Wednesday why companies are interested in tools that help them go fast.

Shares in JFrog rose 47% Wednesday during its first day of trading on the Nasdaq, closing at $64.79, compared to the listing price of $44 per share. That values it at more than $6 billion, a pretty good return for the 12-year-old Israeli company's investors, who poured $226 million in the company as it grew.

"Every company is now a software company," said Shlomi Ben Haim, co-founder and CEO of JFrog, in an interview with Protocol on Wednesday. However, "every company was not created as a software company," and those scrambling to modernize their approach to software development need help making that transition, he said.

JFrog offers a series of software development tools that help companies manage the process of getting software from the idea stage to production. These tools allow companies to manage their code repositories, monitor the entire development pipeline for potential issues or problems, and deploy that code to self-managed servers or cloud services.

This entire process has grown more complex in the cloud era. Software construction used to proceed at a relatively plodding pace through various stages of development, with predetermined release cycles that introduced relatively large changes to the code base. However, the modern approach to software development involves making lots of smaller changes to the code on a more frequent basis, which helps stamp out bugs, introduce new features, and shift priorities according to market forces much more quickly than older processes allowed.

JFrog's software can be consumed as a service on all three major cloud providers or managed on a company's own servers, and customers also pay for support services. JFrog recorded $94 million in revenue during 2019, a 69% jump compared to the previous year.

The company and its investors are betting that the massive number of companies that have yet to contemplate modernizing older tech investments are starting to realize they have no choice, lest they be swept away by newer, more-nimble competitors. Tools like JFrog's are an extension of the DevOps movement, which is as much a cultural shift in thinking inside software factories as a technical one toward faster and more flexible software development.

Over the long term, emerging concepts like serverless computing and low-code development could upend the way companies think about building and shipping software, but JFrog's tools seem well-adapted for companies that built software around virtual machines — the basic processing unit of cloud computing — and are starting to embrace containers.

And as rings true for any company operating on the cloud in 2020, the cloud providers themselves are increasingly interested in providing similar tools to help big clients make the leap onto their platforms. But JFrog executives believe they can operate as a neutral party among cloud vendors and on-premises hardware vendors starting to get into application management services.

Martin Cooper with his original DynaTAC cell phone.

Photo: Ted Soqui/Getty Images

Martin Cooper helped invent one of the most consequential and successful products in history: the cell phone. And almost five decades after he made the first public cell phone call, on a 2-pound brick of a device called the DynaTAC, he's written a book about his career called "Cutting the Cord: The Cell Phone Has Transformed Humanity." In it he tells the story of the cell phone's invention, and looks at how it has changed the world and will continue to do so.

Cooper came on the Source Code Podcast to talk about his time at Motorola, the process of designing the first-ever cell phone, whether today's tech giants are monopolies and why he's bullish on the future of AI.

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David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

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Poshmark made ecommerce social. Wall Street is on board.

"When we go social, we're not going back," says co-founder Tracy Sun.

Tracy Sun is Poshmark's co-founder and SVP of new markets.

Photo: Poshmark/Ken Jay

Investors were keen to buy into Poshmark's vision for the future of retail — one that is social, online and secondhand. The company's stock price more than doubled within a few minutes of its Nasdaq debut this morning, rising from $42 to $103.

Poshmark is anything but an overnight success. The California-based company, founded in 2011, has steadily attracted a community of 31.7 million active users to its marketplace for secondhand apparel, accessories, footwear, home and beauty products. In 2019, these users spent an average of 27 minutes per day on the platform, placing it in the same realm as some of the most popular social media services. This is likely why Poshmark points out in its S-1 that it isn't just an ecommerce platform, but a "social marketplace." Users can like, comment, share and follow other buyers and sellers on the platform.

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Hirsh Chitkara
Hirsh Chitkara (@ChitkaraHirsh) is a researcher at Protocol, based out of New York City. Before joining Protocol, he worked for Business Insider Intelligence, where he wrote about Big Tech, telecoms, workplace privacy, smart cities, and geopolitics. He also worked on the Strategy & Analytics team at the Cleveland Indians.
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Affirm CEO Max Levchin: ‘I see an ocean of opportunities’

The fintech startup's stock soared more than 90% in its IPO debut today.

It was a blockbuster debut for Affirm. The fintech startup's shares soared more than 90% when it went public on Wednesday.

The day itself began quietly for CEO Max Levchin: He kicked it off with a Zoom call with his kids, made a latte for his wife and joined a group chat with some high school friends, one of whom is recovering from COVID-19. "We were very happy to hear that he's doing well," he told Protocol shortly after his startup began trading on the Nasdaq Global Exchange.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

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Affirm takes 'buy now, pay later' public today. Investors may balk at the risk.

The San Francisco startup's rise highlights the rapid growth of payment and lending platforms, especially among millennials.

Affirm, the "buy now, pay later" startup, is going public on Wednesday in one of the most anticipated IPOs this year.

Affirm's IPO, which could value the company at a reported $10 billion, highlights the rapid growth of ecommerce and related payment and lending platforms amid the pandemic, as well as new ways that consumers, particularly younger ones, seek to make purchases: Many are eschewing credit cards to avoid going into debt.

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Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

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The NYSE China flip-flop: A battle between profit and accountability

Western investors want transparency. But what if guaranteeing that closes a door on the U.S. profiting from China's tech success?

The New York Stock Exchange can't decide whether to delist certain Chinese tech apps.

Photo: Julien Chatelain

The New York Stock Exchange's flip-flopping statements this week over the delisting of Chinese tech stocks highlight a longstanding dispute over how much access Chinese corporations should have to U.S. capital markets. It's a debate that some experts say pits profit against accountability, and one that will likely continue under the Biden administration.

The confusion began last week, when the NYSE announced that it would delist the stocks of three Chinese telecom companies — China Telecom, China Mobile and China Unicom — to comply with the Trump administration's order in November barring U.S. companies and individuals from investing in Chinese firms that work with the Chinese military.

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Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

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