Cloudflare's 2019 IPO letter from Matthew Prince and Michelle Zatlyn

About this letter

Matthew Prince and Michelle Zatlyn, Cloudflare's co-founders, wrote this letter for the registration statement on form S-1 that Cloudflare filed with the SEC on 15 August 2019 ahead of its initial public offering. It is addressed to potential shareholders and signed by Prince as co-founder and chief executive and by Zatlyn as co-founder and chief operating officer.

The founders explain the path the company has taken since its launch on 27 September 2010, so that investors can judge whether Cloudflare is the right investment for them. They describe a business formed to take advantage of the move from on-premise hardware and software to services rented in the cloud, then cover its pricing, its emphasis on efficiency, its platform approach and its view of growth. The letter ends by honouring Lee Holloway, the third co-founder, who stepped down in 2015.

What to notice

1. 1

   Because Cloudflare competed with hardware manufacturers, the founders say usage-based billing never made sense: customers did not pay a firewall vendor more when attacked more, so they chose predictable subscription pricing instead.

“Many great startups pivot over time. We have not.”