This week: Shakeel Hashim on Apple One, Snowflake and Unity; Janko Roettgers on Facebook's big (and small) plans for AR and VR; and Ashkhen Kazaryan and Emily Birnbaum on what's been happening with TikTok, Oracle, China and the White House.
For more on the topics in this episode:
David Pierce ( @pierce) is Protocol's former editorial director. 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.
Changpeng "CZ" Zhao, who leads crypto’s largest marketplace, is pushing back on attempts to link Binance to Beijing.
Despite Binance having to abandon its country of origin shortly after its founding, critics have portrayed the exchange as a tool of the Chinese government.
Benjamin Pimentel ( @benpimentel) covers crypto and 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 Google Voice at (925) 307-9342.
In crypto, he is known simply as CZ, head of one of the industry’s most dominant players.
It took only five years for Binance CEO and co-founder Changpeng Zhao to build his company, which launched in 2017, into the world’s biggest crypto exchange, with 90 million customers and roughly $76 billion in daily trading volume, outpacing the U.S. crypto powerhouse Coinbase.
But Binance also emerged as one of crypto’s most controversial companies. It’s been accused of being a “hub for hackers, fraudsters and drug traffickers.” The company is barred from operating in two major markets — the U.S., where a separate entity, Binance.US, operates with aid from Binance, and in China, the country where Binance got its start.
Despite Binance having to abandon its country of origin shortly after its founding, critics have portrayed the exchange as a tool of the Chinese government. CZ, who was born in China but grew up in Canada and is a naturalized Canadian citizen, addressed the charge in a blog post after a journalist asked on Twitter about a Binance employee who he said has been accused of being a Chinese spy.
In an interview with Protocol, CZ talked about why he felt the need to address the charges, the controversy over recent changes in the way Binance handles USDC stablecoins, and his views on the ongoing push for more crypto regulation.
This interview was edited for clarity and brevity.
Why did you move to delist Circle’s USDC? There are those who describe it as a very aggressive competitive move.
That's a misnomer. We actually did not delist USDC. People can deposit and withdraw USDC from Binance. No problem. It's just that when they deposit, we convert them one-to-one to be BUSD. So we consolidated all the liquidity. We just picked BUSD. But when people finish trading, and they want to withdraw, they can withdraw USDC and the other stablecoins. So it’s not a delisting. That's a misconception that we somehow did not explain that very well.
And why didn't you do the same thing with tether?
Tether, to be honest, we don't know if it will depeg. We have a commercial relationship with Circle for converting at a one-to-one peg. We have an agreement with Circle that we feel pretty confident that we can exchange that one-to-one, whereas with tether we don't have this commercial agreement in place.
Tether is a black box and because we don't have the commercial agreement in place, we don't have a channel to convert one-to-one. We didn't feel comfortable [that it is] always guaranteed a one-to-one conversion.
Was this move with the USDC done in coordination or in consultation with Circle?
Yes, yes. We were in communication with Circle. We notified them ahead of time. They were okay with it. It was just the messaging. Many people misunderstood the messaging.
[In an interview with Protocol, Circle CEO Jeremy Allaire confirmed that Binance “did disclose to us their intentions.” But he also said, “They unilaterally took customers’ funds and then moved them into something else. And I think that's really problematic.”]
What do you think about the way the stablecoin market is evolving? There's a push towards CBDCs, which is gaining momentum. China has its digital yuan. There is also a push for a digital dollar in the U.S. What do you see as Binance’s role in that trend?
I think we don't really have a role per se. We just want to provide users access to as many things as they can. China's central bank digital currency currently is unavailable to us. So we can't integrate with it. Our users can't use it. We don't know what the U.S. [currency] is going to look like. Ideally, hopefully, we can integrate directly with it. I think that's the best way to continue the global dominance of the U.S. dollar.
Central bank digital currencies are a little bit different from stablecoins. Most central bank digital currencies will have more permission and tracking going on, whereas with today's stablecoins, it’s more permissionless. So it's easier to transfer between different crypto exchanges. I fundamentally believe that the more choices we have, the better.
There is a big push toward more regulation, especially in the U.S. What rules or laws or proposals are you most worried about?
When it comes to regulations, I think more regulation definitely is good — more regulatory clarity. Industry players know what to do. Consumers know what to expect. There's more licensing. There's more oversight. All of those things are good.
But not all regulations are good. China has banned cryptocurrency exchanges. That is one type of regulation that clearly is not good for us or, we think, for the industry. Another example would be India [with] a tax per transaction.
I believe the U.S. actually is pretty good. In the U.S., the banks work with cryptocurrency exchanges very well. Overall, I think more clarity is generally good. Other [governments like] France, Dubai, they're moving forward with very relatively friendly regulations.
Can you talk a bit about Binance.US? Clearly it's a separate entity, but it is of course affiliated with Binance.
Binance.US is a separate legal entity, but it uses the Binance product and technology. It also uses the brand. I sit on the board of Binance.US. But other than that, the team is relatively independent.
The U.S. has a very different set of regulations and business environment. The U.S. is a big market. So we obviously hope Binance.US will continue to be able to provide the best product in the U.S. Today they are providing a very decent product, but it's still much smaller compared to Coinbase. Hopefully that will grow.
I'd like to revisit a blog that you wrote recently titled “Who is Guangying Chen, and Is Binance a ‘Chinese company?’” Can you elaborate on why it was deemed offensive or racist for that journalist to ask about a person who's supposed to be affiliated with Binance? You referred to a campaign attacking Binance.
There is a common narrative, especially in the U.S., that Binance is a Chinese company, mainly because I look Chinese, I think. I did spend quite a number of years in China. When Binance started, we started in Shanghai first.
So, there is that perception. That perception itself is okay. But we hear in the lobbying circles in Washington that “Binance is run by the Chinese Communist Party,” which couldn't be further from the truth. And “Binance is a Chinese spy.”
We're like, “No, we're not that.” Guangying Chen is one of the original founding team [members]. But she's not super senior. She managed admin. So it's not like a business-facing function. It's not public-facing. It's not like the marketing guy, or the CTO. She's not that high-level. But her name was on some company documents, especially in company registries, in my previous company before Binance that was in China.
We heard many backdoor bad rumors that were spread about us saying, “She's a Communist party individual.” So we just want to clear that up. That's pretty much it.
You wrote, “Simply being Chinese, of Chinese descent or having emigrated from China should not be a scarlet letter one has to wear for the rest of their life.” How did that play out for you personally?
I grew up in Canada. Canada is an immigrant country. I'm very comfortable with international cities or countries. Singapore is like that too. Singapore has a lot of immigrants in the country. So I feel very comfortable with that. I was actually very insensitive to ethnicity, race, color, this type of stuff when I was growing up.
Only recently, our teams were constantly telling me there is a strong narrative, especially in Washington, D.C., that Binance is a Chinese company. With the increased tension between the U.S. and China, many people label us with another company with a similar name, ByteDance, [the parent of] TikTok. [ByteDance] is a Chinese company. Its headquarters is in Beijing. They have a large team in Beijing. So we’re very often lumped into that.
When Binance.US was doing fundraising there were questions: Are you related to the Chinese government? There were a lot of those kinds of questions behind closed doors. It was bubbling up to the top. So we see journalists writing that in blogs, on Twitter. We are always transparent. [I said,] “Let's just address it head on so that we remove any of that concern.” We're not a Chinese company. I'm a Canadian. I've been a Canadian for 33 years now. And this is who we are.
The flipside of your statement is that it could also be interpreted, including by Asian Americans and Asian Canadians, as a rejection of your Chinese heritage and identity. I wonder if you could also speak to that point. (And for context, I am Filipino of Chinese descent and like you, I'm an immigrant.)
It was definitely not a denial of my ethnicity. On the contrary, I'm very proud to be of Chinese ethnicity leading an industry-leading organization. I've always been very proud of that. I understand that that may be a concern. We actually talked about it before we published that blog. But so far we have not received any negative comments along those lines. At least, I have not.
What were some of the concerns that were raised by your team?
We actually have a large Asian team. A lot of our users are Asian. It was exactly what you described: Would they feel alienated by our statement saying, “We're not Chinese.” I'm like, “Look, we should state the fact.” I was just stating the facts and we should get ahead of the rumors. We're very proud of our ethnicity, but it does not mean our company's a Chinese company.
Clearly, the evolution and the growth of crypto is taking place in an international geopolitical context with Russia's invasion of Ukraine, and then the rivalry between the U.S. and China. How does Binance plan to navigate this reality?
It's pretty simple today. There's nothing to do in China. China clearly banned cryptocurrency exchanges. So that made things very simple. We were not able to offer our services in China. The Great Firewall of China blocks our domains.
Binance.US is in the U.S. and Binance.com services the rest of the world wherever we can service them. We're not political. We're not for or against any country.
What has been the toughest part about the market downturn for you? What has surprised you?
To be honest, it has always been the educational component. There's too many misconceptions about crypto. Whenever something negative happens, “Oh, crypto is bad.” When Netflix’s stock price drops by 70-75%, people don't say, “The stock market is bad.” They just say, “Netflix is bad.” With crypto when one project fails, they say, “Oh, the entire crypto [ecosystem] is bad.” They wouldn’t just say “that project.”
It’s always that education, misconception component which is always very difficult to correct at this early stage in the industry. But I think as the industry matures, this will fix itself. We're doing our part to constantly educate people.
It’s been reported that Terraform Labs founder Do Kwon is now a fugitive. [Binance was an investor in Terraform Labs.] Do you have any insights into how the UST-luna crash has impacted the industry?
The UST-luna crash really damaged the industry for sure. There was a significant impact. At the same time, I think the industry is learning a very expensive lesson. So how do we avoid this in the future?
I've never spoken to Do Kwon personally. I don't know him at all. I don't know if there's any criminal element in that failure. I would assume that the law enforcement agencies have done their homework.
It was also reported that Binance is making an investment in Forbes. What is the status of that? Can you talk about the decision to make that investment?
That investment to my knowledge has mostly stalled. So it's no longer progressing forward. At the time, Forbes was doing a SPAC listing, and so we were going to participate. That SPAC listing did not happen. To the best of my knowledge, I don't think anything's really happened yet. I'm not closely involved.
The thesis behind that investment is we would like to pick traditional industries, look at different sectors, and pick one or two players in those sectors, invest in them, help to bring them into Web3, adopt crypto, accept crypto payments, issue NFTs. If we can help them do that, it probably will give them new business models. And hopefully with those new models, they're better funded so that they make more money.
We want to grow the industry. When the industry grows, Binance benefits because we are the largest player with the largest exchange. So that was kind of the thesis.
We looked at Forbes, which is a media company. We looked at Twitter, which is a social media company. We also looked at gaming, ecommerce, many other sectors. So we're still looking at them but many of those deals are not small. So it takes time.
Tell me about the first time you encountered bitcoin and crypto.
It was actually at a poker table. I was playing poker with Bobby Lee [who] was becoming the CEO of BTC China. This was in 2013, a very friendly small-stakes poker game.
The next day, I met him for lunch. He says, “CZ, you should convert 10% of your holdings into bitcoin. There's a small chance you will go to zero. There's a higher chance of 10x. If it’s 10x you double your net worth.” I was like, “Okay, that's pretty serious.” That's when I started looking more seriously. I sold my apartment for bitcoin.
How much was that?
That was close to a million dollars. I had an apartment in Shanghai. I learned about [bitcoin] for about six months. By December 2013, I was selling my apartment. It took a while to sell so by early 2014 I was converting each payment chunk into bitcoin. And then the price dropped afterwards for like a year and a half. [Laughs.]
1989 was the year you left China as a child, shortly before the Tiananmen crackdown. That was also the year the web was invented. I wonder how you feel about the way China's role in technology and in the world has evolved, given that there seems to be more confrontation and even distrust now.
In 1989, I was 12. I went to Canada, and then I saw the internet grow. But I was too young to participate, to be part of it. Twenty-four years later, I came across bitcoin. I'm like, “The internet was the technology for transferring information. Blockchain is the new technology for transferring value. Information versus money — this is going to be a bigger industry.”
I was not going to miss this industry. That had a very strong effect on me to go all in on crypto. I sold my house, quit my job, started looking for a new job in crypto and then just went from there.
China's quite negative on a number of industries. Crypto exchanges, not allowed. Mining, not allowed. Many of the industries are negatively impacted. In the short term, we don't have a strategy in China. We just have to wait. So we're focused on the rest of the world.
We just went through a crash that wiped out $2 trillion in crypto’s value. There's more tension, in different parts of the world, including China and Taiwan. What are you most worried about in the industry given all that?
I think it's really just a matter of talent growth. The more developers that we can get into the industry, the more this technology works. But the technology needs time to develop. The computer didn't just grow on its own. There's like thousands, hundreds of thousands, or millions of people working on different parts of the computer — the chips, the CPU, the memory, and the internet. We're still at the TCPIP stage of the blockchain world. We still talk about consensus mechanisms. We're still talking about the techie stuff.
As long as there are more developers coming in building different applications, building different tools, the industry will continue to grow and people, more entrepreneurs, come in.
For me, the biggest risk is regulation saying that you cannot innovate in this area. But luckily, there are 200 different countries in the world. The countries that say that will typically be left behind, and their economies suffer long term. We're seeing smarter countries already adopting this. So it's not something that causes me to lose sleep, but that's one of the biggest hurdles we have to overcome.
Benjamin Pimentel ( @benpimentel) covers crypto and 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 Google Voice at (925) 307-9342.
Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.
Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.
From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”
Patents are the primary means of protecting IP — trademarks, copyrights, and trade secrets offer additional IP protection — and represent a rule-of-law guarantee akin to a deed’s role in protecting land ownership. The founders of the United States wrote patent protection into the Constitution to “promote the progress of science and the useful arts.” Abraham Lincoln revered patents for adding “the fuel of interest to the fire of genius.”
In today’s knowledge-based economy, IP rights play a foundational role. “Core R&D is the first step in getting good products into people’s hands,” said John Smee, senior VP of engineering and global head of wireless research at Qualcomm. “Everything from smartphones to the Internet of Things, automotive and industrial innovation begins as a breakthrough within our research labs.” At Qualcomm, Smee said, strong IP laws help the company confidently conduct cutting-edge 5G and 6G wireless research that will make its way into products ranging from everyday consumer goods to the factory floor.
Semiconductor companies, in particular, are fiercely protective of their IP because it’s their primary competitive advantage. Chip companies go to extraordinary lengths to protect their IP by maintaining black boxes only accessible to one person per fab, choosing highly secure operating locations, and keeping R&D teams separate from fab operations teams.
On the legal side, America’s Semiconductor Chip Protection Act of 1984 bestows legal protection of chip topography and design layout IP while the EU’s Legal Protection of Topographies of Semiconductor Products of 1986 protects IC design. These regulations “have encouraged firms to continue to innovate,” according to the findings of Qualcomm’s and Accenture’s report, Harnessing the power of the semiconductor value chain.Having a high-quality patent portfolio also helps companies build out their ecosystem, should they choose to license, through advising, training, support for launches, assistance in expanding to new markets, and much more.
Licensing democratizes innovation and invention— it makes the cutting-edge IP developed by one firm accessible to a broad range of others. As such, it allows other companies to skip the R&D step and jump right into building on the innovator’s foundation. This lowers the barrier to entry for upstart companies while providing a steady return on investments for the companies who have the resources to dedicate to heavy R&D.
An outsize economic impact
IP protection also has an outsized impact on the US economy and helps create good higher-paying jobs. A report from The United States Patent and Trademark Office (USPTO) found that in 2019 industries that intensively use IP protection account for over 41% of U.S. gross domestic product (or about $7.8 trillion) and employ one-third of the total workforce — that’s 47.2 million jobs. In 2019, the average weekly earnings of $1,517 for workers across all IP-intensive industries was 60% higher than weekly earnings for workers in other industries.
Workers in IP-intensive industries were more likely to earn higher wages as well as participate in employer-sponsored health insurance and retirement plans, the USPTO report found.
But patent laws are often subject to much debate — one person’s idea of protection is another’s view of monopoly. That’s where organizations like LeadershIP come into play. The group brings together experts on IP and innovation to debate issues at the intersection of research, policy, and industry.
In addition, several efforts are underway to help inventors get their ideas into the marketplace. The Inventors Patent Academy (TIPA), for instance, is an online learning platform aimed at guiding inventors through the benefits of patenting and the process of obtaining a patent. TIPA has designed its program to make patenting more accessible and understandable for groups historically underrepresented in the patent-heavy science and engineering fields, including women, people of color, people who identify as LGBTQIA, lower-income communities, and people with disabilities.
Closing these gaps would promote U.S. job creation, entrepreneurial activity, economic growth, and global leadership in innovation. Estimates suggest that increasing participation by underrepresented groups in invention and patenting would quadruple the number of American inventors and increase the annual U.S. gross domestic product by nearly $1 trillion.
If we want our nation’s rich history of innovation to continue, experts say, we must create an IP protection ecosystem that helps ensure that tech innovation will thrive.
“With the protection of patents,” Smee said, “there is no limit to where our creativity can take us.”
Melissa Di Donato moved to Europe to broaden her technology experience with a different market perspective. She planned to stay two years. Seventeen years later, she remains in London as CEO of Suse.
“It was a hard go for me in the beginning. I was entering inside of a company that had been very traditional in a sense.”
Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.
A native New Yorker, Melissa Di Donato made a life-changing decision back in 2005 when she packed up for Europe to further her career in technology. Then with IBM, she made London her new home base.
Today, Di Donato is CEO of Germany’s Suse, now a 30-year-old, open-source enterprise software company that specializes in Linux operating systems, container management, storage, and edge computing. As the company’s first female leader, she has led Suse through the coronavirus pandemic, a 2021 IPO on the Frankfurt Stock Exchange, and the acquisitions of Kubernetes management startup Rancher Labs and container security company NeuVector.
“Being an American in Europe is unique,” Di Donato said. “Being an American leading a tech company that’s listed in Germany is unique. Being a female American running a German tech company on the SDAX is even more unique at the size of our company.”
Di Donato’s story, as told to Protocol, has been edited for clarity and brevity.
I was at a stage personally, where I was a New Yorker, had been in San Francisco for more than a decade, was really interested in getting a more well-rounded experience for my career, so I thought living in Europe for a short time would do the trick. I thought it would give [me] a different perspective. I was managing some projects that were global projects in nature, so it didn’t really matter, necessarily, where I lived. When I left IBM, I had a lot of my old contacts from my days at Pricewaterhouse and Oracle, and they started calling and saying, “Oh, we’re doing a global systems integration project or global outsourcing project, or we’re doing an implementation in Europe.” Everyone started coming to me asking me for help. So then I ended up running a number of different businesses from Europe in the U.K.
It was a really interesting transition to go from Salesforce, SAP, and then, obviously, the last three years for Suse. Being an American and being an American woman probably didn’t work in my favor for sure. I scream both of those things as soon as I open my mouth. I still sometimes pinch myself of the fact that [Suse owner EQT] turned over a $2.5 billion investment to an American woman. Granted, I was a big part of running an 8.5-billion-euro portfolio at SAP, but still, [I was] not German and not German-speaking. I don’t live in Germany, I live in London. Open source has not been reveled as the most diverse of areas of technology, let alone that technology itself is already struggling to ensure that diversity is included at all levels. It was a hard go for me in the beginning. I was entering inside of a company that had been very traditional in a sense, but also very ready to grow and transform on its own right, without being inside of another business.
Being a CEO for tech business in a private setting in the U.S. and in Europe is probably very similar. We have the same KPIs, the same measurements, the same outlook, the same big dreams, the same futures, same technologies. We tend to adopt things a little bit slightly later — I would say six months, depending on what the technology is, to a year or two years later in Europe — than we do in the U.S. Where there is a difference is running a U.S.-listed company and a European-listed company. The American investors in technology just tend to be slightly more used to and well versed in investing in technology businesses, which often can be very fluid. You have a lot of tech startups coming out of the valley and out of the U.S. that have very significant valuations that are not profitable, for example. That’s kind of par for the course in the U.S., and American investors are used to that. European investors are well known to be a bit more conservative. They want to have profitability and growth measured together. There’s a lot less ability to invest for growth in Europe.
When I first arrived, European tech was really still in its infancy. The successful homegrown companies, there weren’t many. You could count them on one hand. You couldn’t string together the European tech scene in a way to create a cohesive tech ecosystem.
The early days of the [2008] financial crisis … changed the face of European tech for the better. We had a lot of ambitious young graduates coming out looking at an entrepreneurial approach to business as unemployment was hitting its peak. Venture was just starting to really grow a decade ago in Europe. People started staying in Europe. All the big investors, private equity, and VCs from the U.S. were now making their way to Europe. Startup by startup, it was solidifying into profitable companies and put Europe on the map for tech investment only in the last decade. We started showing and encouraging the investor communities, but also the European startup community, that they can really chart their course, and they don’t have to be a Silicon startup to really be a tech icon. We produced a record $100 billion in capital investment [last year], and we have 98 new unicorns in Europe.
Being an American woman in Europe running a German tech company is challenging a lot of days. Businesses must see equality and diversity as a key underpin to the success of business. Europe generally is behind the U.S. in the way of diversity, particularly in the C-level and the boardroom. I am very vocally against quotas, because I don’t want anyone to ever think that I was put into a company because I’m a woman, but rather I’m the right candidate. But it’s like brass tacks here. I don’t want to be the exception. I want to be the norm, and we’re not there yet.
I have been incredibly embraced and well received in Germany. I’ve been a very sought-after leader in Germany, and they rewarded me incredibly with elevating my role and my position and all the things that I’ve done in Germany. I’ve been incredibly well supported, more so than I could have ever asked or dreamt of, really. So the issue is not Germany at all. The issue is tradition, and the fact that we don’t have enough women in the pipeline. But we are going to change that. We are absolutely going to change it.
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This story was updated to clarify the stock exchange on which shares of Suse are listed.
Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.
Protocol caught up with Enslin, named earlier this year as UiPath’s co-CEO, to discuss why he left Google Cloud, the untapped potential of robotic-process automation, and how he plans to lead alongside founder Daniel Dines.
Rob Enslin, UiPath's co-CEO, chats with Protocol about the company's future.
Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.
UiPath has had a shaky history.
The company, which helps companies automate business processes, went public in 2021 at a valuation of more than $30 billion, but now the company’s market capitalization is only around $7 billion. To add insult to injury, UiPath laid off 5% of its staff in June and then lowered its full-year guidance for fiscal year 2023 just months later, tanking its stock by 15%.
But UiPath is hoping financial discipline, an increased focus on global expansion, and the addition of Rob Enslin as co-CEO can turn things around. Enslin is a veteran of enterprise tech, starting his career under Hasso Plattner at SAP before leaving to run Google Cloud, where he was credited with expanding sales internationally. Now as co-CEO at UiPath, Enslin thinks automation is the next great category of enterprise tech; he wants to take it international despite the company’s recent struggles.
In a conversation with Protocol, Enslin discussed his long career, why he left Google, the untapped potential of automation, and how he plans to lead UiPath alongside founder Daniel Dines.
The following interview has been edited and condensed for clarity.
What brought you to UiPath?
I have always had a passion to help companies compete and operate at speed. I saw it in the very early days of SAP and how ERP could help globalize, help support global supply chains, figure out how to do it at highly efficient processes, integrate solutions, and I think that's pretty unique. I saw it at Google when it came to data and AI. I felt like that was the next thing in terms of what companies needed. And why do I say that? Because the world of structured information is one thing; the world of AI and ML is using unstructured [information] to understand patterns [and then] combine the patterns to solve solutions with structured data, and I felt like the cloud providers were in an incredible position to be able to do that using the next generation of technology. That cloud creates massive levels of speed and flexibility in how to deploy and serverless and so on.
And when I looked at applications, I knew that UiPath was in a unique position to define enterprise automation. I don't think it's defined. I think there are pillars to it.
In some cases, the process-mining companies mention one thing, but they don't have the ability to solve the problem. On the other hand, you get the workflow, case-management type companies: They can do workflow, but they don't have the ability to solve automation.
I think when it comes to the category of automation, if you assume that the discovery process is really important, that community and studio development is important, that you have to have a low-code/no-code type of solution, and you have to have workflow in it, that you need a UI and API type environment to connect to the multiple systems and then be able to automate across platforms at speed, I think we're the only company today that has that capability across all of those platforms. And I felt that it was an opportunity to let the world know the capabilities that enterprise automation could bring to the market. And it was incredible that [UiPath] got to a billion dollars as fast as they did, and that simply tells me the product is incredible and now we need to make certain that we can bring automation to the world.
I want to understand more about what you were just saying in terms of “process mining is one piece, but maybe not the full thing.” There are some automation companies that don't use the same approach as UiPath. Can you talk more about those distinctions?
UiPath was born into RPA. It created the category, it is by far the leader in that category. RPA by itself solves problems, but it's not enough to drive full understanding of which processes we should be working on on the back end, but the front end as well.
We forget that the phone is a walking terminal. This is where most people do information today, this is where most people capture. So you've got to be able to do task capture, task mining, you've got to be able to do process mining. But that's not enough, because what do you do if you find the problem? What do you say? “Here’s your problem!” “Well, thank you, what do I do now?”
I actually think we take it one step further, which nobody else has even thought of, and that's with Test Suite. And you say, “Why Test Suite? Why would anyone want to do testing?” Testing is one of the most highly effective ways to create speed in an organization because you can't put something into production without testing it, you have to do regression testing. Once you’ve gone to production, it's not about putting it there, it's about creating the automations already so if things change, you've already had the automation and you can redo the automation on the fly. You go into a system to capture an opportunity in a CRM system; [if] somebody decides they need to change the back-end ERP system, the automations are already written, we’ve already got testing, it can all happen automatically. So it's a complete life cycle circle that we have built.
RPA by itself solves problems, but it's not enough to drive full understanding of which processes we should be working on on the back end, but the front end as well.
Then we've added in, in any enterprise, the management capability to actually manage automations. So if you go on vacation with your automation sitting on your laptop, I’ve got to know that you actually can either run that automation or that I need to find somebody that's going to replace it and run it for you. So that's on the front end, but we actually have unattended automations as well. But if they have runaway automations, there’s latency issues, they didn't run, that's important for a mission-critical business to understand how to operate, because this is part of your day-to-day processes.
We are working on sub-processes, not processes, because the processes are managed by the Salesforces, the SAPs, the Workdays, the Oracles, and so on. That’s where we actually really scale. That’s why I say RPA is one thing, process mining is another thing, low-code/no-code is another thing, but putting it all together defines an enterprise automation category. I think we are at the beginning of that journey. And I think as we scale, we will see that this will become one of the biggest levers companies can use to deliver speed and accuracy.
You talked about testing, which is interesting because I think in the early days of RPA, there was this sort of perception of, “OK, it’s gonna scrape this web page,” but then if you change something, everything's broken, and you have to start over.
That's absolutely, 100% right. So when you build the automations, you build the testing as well. And so when the automation changes, because it always changes … that’s one of the challenges with workflow type products or low-code: They don't come with the manageability if things change. And things do change: Companies get sold, divisions get bought, you change the organization structure. One day you're a division and you’re part of the broader alphabet; the next day, you're a separate entity. Things happen.
And so if you're not able to adjust to that, you end up in an environment that is slow because you have to plan for it, you have to test, you have to go through a whole methodology. So we build the testing automation as part of the automation, and that includes linking — we've got 190 APIs that link to multiple different systems automatically — so it's not only for one system: It's for the whole ecosystem around us.
You had earnings, and the full-year guidance was lowered a bit. What were the reasons for that? Was it the macroeconomic environment, was it inflationary pressures?
I would include the inflationary pressures in the macroeconomic environment. Negativity on foreign exchange was a big portion of that, 50% of our businesses outside of the U.S. — and that’s in local currency, so there’s an immediate impact. And we have a significant portion in Japan and Europe. So [foreign exchange movement] was a big part of it in Europe. I would say the macro piece certainly had an impact in Japan, and the U.S. we feel really positive about. So that's why we looked to the guidance for the rest of the year, the way that he articulated to the markets.
Where do you see growth areas? What are you thinking about in terms of where UiPath goes next?
We certainly see growth areas expanding our partner ecosystem, having less partners and doing more, especially with the global system integrators — we're seeing significant traction with them. They’re wanting to partner more with us now that they see the full automation platform at play because it's more significant for them. I see the ability to embed UiPath technology into other technologies as a big player. We saw it with iCIMS, we made the announcement with iCIMS where automation will become part of their iCIMS cloud. The product is just very good at being embedded and helping other companies' products utilize automation as a feature for value to the customers. That’s a big play for us.
If you can work in an environment where your egos are not part of the environment and you’re there because you want to do something that's important and you feel it's important, then you find a way to make it work.
I think there's significant opportunity in terms of automation outside of RPA for sure. I think we’re at the early stages of that. We have a full set of products already in that space, it’s fully integrated. We believe with our 20.10 announcement, which is our vision coming out in October, that we will see the cloud grow much much faster because we’ve put a lot into process mining and task capture with that version. So we feel like there's a ton of opportunity.
How do you and Daniel work together? This co-CEO role is something we've seen more and more in the industry.
Some of my best friends have been co-CEOs. We actually are pretty interesting. So you know, I started my career as an engineer. I think Daniel likes it that I can actually talk engineering. When I was at SAP I ran our cloud business, including the engineering pieces, so I have some skills in engineering. I’ve run go-to-market and sales for a long time. I focus on the operation of the company, how to run the company, how to operate the company, how to make it more efficient, how to scale it, how to get it multibillion, and Daniel is focused on innovation and culture. That's what his passion is, he wants to think about the next things. Daniel focuses on people, he really wants to focus on people, making sure the culture of the company continues as we grow the company.
Did you chat with any of your co-CEO friends about how they approach things?
I had firsthand advantage of it. I mean, I had firsthand advantage with Jim Snabe and Bill McDermott, I had firsthand advantage with Hasso Plattner and Henning Kagermann, I had firsthand advantage with Léo Apotheker and Henning at SAP. I’ve watched Salesforce with Marc [Benioff] and Bret [Taylor], and Keith [Block] and [Benioff], I know [Jennifer Morgan] and Christian [Klein] at SAP.
I've seen what works and what doesn't work and what can work. At the end of the day, if you can work in an environment where your egos are not part of the environment and you’re there because you want to do something that's important and you feel it's important, then you find a way to make it work. And then when your skills are complementary, [it feels] like it works really well.
I worked with somebody for 17 years really closely: we weren't co- anything, but our skills were super complementary, and you can basically finish each other's sentences, and so it works. Having a partner is actually an awesome thing. When I go home at night, and it's been a shitty day, my wife has to listen to my BS for the last 36 years — it's nice, I feel better. Like I can have a glass of wine and I feel like there’s somebody here that can just hear me out. And so if you look at it from that point of view, the benefits of it are incredible.
I believe in diversity and diversity for me is, we're all much better when we all bring our best to the party. If you can make it work, you'll be better. And it's hard, it’s not easy. But I think it's an incredible opportunity to use different skill sets in the right way and to build a company. And Daniel is a very humble person, he's extremely hard-working, he’s got a great vision. We just work well together. We like each other!
Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.
Yuhki Yamashita thinks Figma might tackle video or 3D objects someday.
Figman CPO Yuhki Yamashita told Protocol about Adobe's acquisition of the company.
Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.
Figma CPO Yuhki Yamashita’s first design gig was at The Harvard Crimson, waiting for writers to file their stories so he could lay them out in Adobe InDesign. Given his interest in computer science, pursuing UX design became the clear move. He worked on Outlook at Microsoft, YouTube at Google, and user experience at Uber, where he was a very early user of Figma. In 2019, he became a VP of product at Figma; this past June, he became CPO.
“Design has been really near and dear to my heart, which is why when this opportunity came along to join Figma and rethink design, it was such an obvious opportunity,” Yamashita said.
It’s an interesting time to be in charge of Figma’s product vision. About two weeks ago, Figma announced Adobe was acquiring it in a blockbuster $20 billion deal. Aside from ringing antitrust alarm bells, the news felt somewhat like a betrayal for devoted Figma users who disdain Adobe’s customer approach. Now the only real Adobe competitor is Canva, which is also focused on easy, accessible design. Figma CEO Dylan Field told Protocol that the plan is to keep Figma autonomous, both as a company and product. “We want to retain our identity, our community, our brand, our platform,” Field said.
Protocol sat down with Yamashita to learn more about the future of an Adobified Figma product. He’s focused on making the pre- and post-design experiences more efficient by bringing Adobe’s products directly into Figma, as well as pitching Figma to larger customers and, someday, helping people design videos or 3D objects.
This interview has been edited and condensed for clarity.
Obviously I have a lot of acquisition-related questions. But let’s start with talking about designers, Figma’s core user base. In the past few years, you’ve expanded to more general collaboration. Do you hope to continue on this path?
Our main focus right now is the end-to-end product development process. We started from a place of working on product design, but realized that there's so much more to it that happens before someone places a single pixel on the canvas. Things like brainstorming, synthesizing insights. What problems are we solving in the first place?
The pandemic was also the beginnings of more remote work where people were doing those kinds of creative processes on canvases. It was this opportunity to go upstream. Before a designer even starts designing something, there's a lot of other activities that happen. So how can we capture that?
Likewise, we've been thinking a lot about what happens after, too. Just because you have designs in this file doesn't mean you're done. It actually has to get implemented and built as a product out in production. What is our role in helping make that easier? So we've been really thinking about the developer persona. We acquired a company last year in the space that's thinking about the relationship between design and code.
How do you anticipate your product vision changing as you’re absorbed into Adobe’s umbrella?
I think about two distinct things. One is, what were we trying to do? And then the other is, what can we do together?
What were we trying to do? The reality is, even as we think about something like product design or product development, a lot of our customers use Adobe tools throughout their process. Maybe it’s to make a little video that ends up in your product. Or those cool interactions, we call them micro-interactions inside apps. Those are often made in After Effects.
Designers and companies have always been using Adobe alongside our products. This presents an opportunity for us to just make a more seamless end-to-end process. Maybe you're building an app and you're trying to include this little interaction. Instead of having to import and export a bunch of things, you can make some changes inline. I'm really excited for us to make product development better by relying on a lot of the technologies that Adobe has to offer.
Adobe's scope is so much bigger. They're thinking about every single kind of digital asset that could possibly be made.
Then there’s the together vision. Adobe has been excited about us because of our collaboration-first, web-first platform. They see the power of being on the web. They see the power of multiplayer. How can we bring many of their use cases into a collaborative, multiplayer world?
Do you have any specific aspirations for places you’d like to take Figma that you would never have thought about before?
Adobe’s scope is so much bigger. They're thinking about every single kind of digital asset that could possibly be made. For example, a type of digital asset that's really growing right now is video, or 3D objects. Those are things we don't really think about at Figma, because we’re really focused on building software and interfaces.
But I do think [video] is really powerful. Those things feel very difficult today. I don't know if you've ever opened up Premiere Pro, but it can be quite intimidating because it's a professional tool. But when you bring it online, when you make it collaborative, I can totally imagine a world where it's much easier to go in with a teammate. Or riff off of something that's open and available. I don't know for sure that we’ll go there. But those are really exciting for me. To just make a lot more types of creative pursuits accessible.
I’m kind of asking you to predict an alternate time path, but might Figma have ultimately gone after those spaces even without Adobe?
Obviously hard to say, but we've always really been focused on product development. We feel very far from done on that front. When you think about people building software, there's a lot of inefficiencies when design actually translates into the final product. All these companies are wanting to build more products, in-house, faster. So it's hard to believe that we would have tapped out on that anytime soon.
I know Figma launched an enterprise offering earlier this year — does the acquisition make that pitch easier in terms of pushing the product into the enterprise? How does it change?
I hope so. Adobe has a lot of amazing customers. They’ve built up an amazing customer base and relationships and things like that. I'm excited for us to get those intros, learn from that, and maybe tackle the kinds of companies that we haven't been able to reach before.
As an example, I was recently in Japan, and we're opening up the Japan office. Japan is a place where Adobe has a really great, strong presence as well. I’m eager to learn from them and see: What have they learned about the market? How can we customize or tailor our products or positioning accordingly?
How global is Figma right now?
I would say a little over 80% of our users are actually outside of the U.S. For whatever reason, that’s always been the case, because we have these really strong communities who are maybe using our products for free, or smaller businesses all throughout the world.
We text with customers all the time about new ideas. ... I hope we can keep that.
We've also started to invest in having more of a presence in these areas as well. We started with India, then London, and built out an office in Paris and Berlin. And then recently in Tokyo. And a few more locations to come. We're trying to see how we can support those more grassroots, bottoms-up communities better by being in those locations.
Speaking of the users, and I asked Dylan about this last week: How will you work to stay in touch with customer needs and maybe even spread your customer approach upstream to Adobe?
Dylan is the most customer-obsessed person I know. And probably the person at the company who reads the most customer feedback on a daily basis. That’s the DNA of this company, staying in touch with customers. We text with customers all the time about new ideas. It’s a very casual relationship.
I hope we can keep that. I think that's not going to change. Even when I think about how I scale my team, those are attributes that I look for. We’ve had the privilege of having a bunch of users who are really excited about us. It’s now our time to prove that despite some of these changes, that aspect doesn't change.
It seems harder and harder for the younger generation of workplace tools to make it on their own and take down the giants. What is your message to these companies?
In terms of this particular news, it didn't come from a position of “we needed this.” When you look at our growth and our numbers, we've had a lot of amazing growth, and we have a lot of things in play that can help us with that trajectory. There are many paths available to us. It isn’t necessarily the case that we felt like we couldn't make it.
For us, the question was more about, what do we really care about? What we care about is our mission of making design accessible to everyone and being able to do that sustainably. Doing it independently is one path, but there are other ways, too. That's the calculus that Dylan did in terms of, what is the environment in which I can make that happen faster?
A lot of people kind of come in with this idea that there's one narrative to how a company scales. Taking it public, IPO, that kind of thing. But there are many different ways, depending on what you care about. In our case, we really care about making a dent in design and evolving it and this setup allows us to do it the fastest.
What do you really hope to see customers doing in Figma these days? What's your dream for what Figma can help people achieve?
We invest in things like design systems because we don't believe a designer should be designing from scratch every single time. They have their Lego blocks that someone has invested in, being able to assemble that really quickly and create these familiar and consistent experiences rapidly. We want to enable that as well. Hopefully the feeling is that building products is just as easy as writing a doc.
I joined Figma because I really love design. But the reason I love design is because of Adobe and just growing up on those tools. There's a lot of work we need to do, a lot we need to prove. But as a product person, I'm really excited about how to really work on this mission together. Even something like the school newspaper, it would have been so much better if it had been collaborative and on the web.
Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.
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