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How COVID Transformed Microsoft’s Cloud Computing Team into Fermyon’s Founding Force

Ten people leaving Microsoft on the same day to start a company is unusual. Even more remarkable is when that entire team had already worked together for years, bypassing the typical startup formation challenges. In a recent episode of Category Visionaries, Matt Butcher shared how his team’s response to COVID became the catalyst for founding Fermyon, a next-generation cloud computing company.

The story begins not with a dramatic vision or breakthrough technology, but with a team at Microsoft hitting an emotional low during COVID lockdown. Rather than quietly disengaging, they radically restructured their work approach. “We started talking about, well, what kinds of things could get us excited, even in this kind of low time,” Matt recalls.

This shift manifested in unexpected ways. Traditional stand-ups transformed from status updates to emotional check-ins. “We reworked our entire work schedule to be based around stand ups, went from, ‘What did you do yesterday? What are you doing today?’ to ‘How are you feeling today? What would make your day better?'” Matt explains.

The team’s project priorities underwent an equally dramatic transformation: “Projects went from grinding through bug releases and fixes and things like that to what’s getting you excited? Let’s spend most of the day on that and then check off the mandatory checkboxes as we go.”

This period of experimentation led to a crucial insight: the friction between developers and platform engineers had been exacerbated by contemporary cloud architecture. “Developers would often have to build their code or compile and package their code once per operating system architecture combo,” Matt notes. This meant developers needed intimate knowledge of operational details, creating a constant back-and-forth with platform engineers.

The team began exploring solutions, particularly around serverless functions. But rather than trying to solve this within Microsoft’s existing framework, they made the bold decision to start fresh. The transition wasn’t easy. As Matt admits, “I was in a great job, great pay, stock is like shooting up, and I like the team and I like the stuff I’m doing.”

Their go-to-market strategy emerged from a clear understanding of their target users’ needs. They launched their first open source project in March 2022, followed by a cloud product in October. Their core promise? “The easiest way for you to go from a blinking cursor to a deployed application in two minutes or less.”

This laser focus shaped their entire product roadmap. “Every single person in the company knows that line, has it memorized because it was just, we drilled it in. This is the story we want to be able to tell,” Matt emphasizes.

Their GTM approach followed a classic product-led growth model, starting with a developer-oriented cloud rather than a production-ready platform. Matt explains, “We built a developer oriented cloud to launch in October, knowing that then after that we would begin building up the second phase of our strategy, which was how do we create, how do we make Fermyon cloud the best place to run your serverless applications?”

The strategy paid off. Within their first month, they attracted 100 users. Now they’re “up in the thousands and still growing,” with acceleration in their growth curve beginning to show.

For founders, perhaps the most valuable lesson from Fermyon’s journey isn’t about technology or market timing, but about team building. The crisis of COVID became an opportunity to develop new ways of working that prioritized engagement and excitement over rigid productivity metrics. This approach not only helped the team survive a difficult period but created such strong bonds that when the time came to start something new, the entire team was ready to take the leap together.

Looking ahead, Matt sees Fermyon as foundational infrastructure for the AI revolution: “We will provide the kind of high performance, low cost, extraordinarily developer friendly environment upon which that generation of applications is built.”