CrowdStrike is the perfect SaaS product. (Hear me out…)

Remember when CrowdStrike went down last month? All the Microsoft-based IT systems went down, including major airlines. Their stock plummeted.

And I bought a bunch of CrowdStrike stock. 

Let’s dive into why.

Here’s why I bought a bunch of CrowdStrike.

One thing I love about CrowdStrike is that it’s founder-led.

To quote Paul Graham newest essay, "There are things founders can do that managers can't, and not doing them feels wrong to founders, because it is."

Since George Kurtz is in Founder Mode, he’ll navigate this situation in a way that only founders can, which will benefit the company’s long-term growth.

Another reason I bought the stock is because it’s very hard to replace their product. You can’t just quickly swap it for another product. 

So even though customers weren’t happy about the downtime, they aren’t going to just jump ship and use another product.

CrowdStrike should have been tracking this metric.

One metric that they should have been tracking, which my software DevStats tracks, is Mean Time to Recover (MTTR). This is one of the DevOps Research and Assessment (DORA) metrics to evaluate process performance.

MTTR is how long it takes to recover after things go wrong. My SaaS product, DevStats, tracks this. It helps you get better at reducing recovery time and even helps you run simulation scenarios for your MTTR.

CrowdStrike was down for four days, so the MTTR was not great, to say the least. And that’s why their stock went down. If they were tracking this metric closer and were better at responding to these types of situations, the stock likely wouldn’t have dropped.

But even though the time to recover was super long and made their stock plummet (and they’re going to be sued by Delta), I still thought it was a great investment.

I think they will learn from this experience and implement systems (maybe DevStats?) so it doesn't happen again.

In addition, CrowdStrike is the perfect SaaS product.

CrowdStrike is a great example of what I believe to be the perfect SaaS product. It’s a vertical SaaS product that’s very niche. They have a lot of huge customers. So it’s very hard to leave, and I think that’s the kind of SaaS product I want to invest in and build. 

The cost of switching to another product is too high. You’re not going to switch just because it went down once. It’s painful to leave. And that’s why I thought, “Hey, I’m buying this!” 

And I know they have to improve on the Mean Time to Recover, but I think they will.

While the stock dipped, it will come back up. This is a problem that any business could have, but it’s a quality product. 

The key is not to overreact when something goes wrong, especially when it comes to your own business. 

This happens to so many entrepreneurs. We freak out because we forget it’s a solid business, but in the case of CrowdStrike, other people’s freak out is my gain. 

TL;DR: CrowdStrike fucked up. Their stock dipped. I bought a bunch because I think it’s the perfect SaaS product.

It’s a niche product in a profitable vertical, making it really hard for people to jump ship. Their customers won’t be leaving just because they were down for a bit. And I believe in their culture and their founder, so I know it’ll be back up again.

To your rebel journey,

Phil Alves