This interview focuses on some of the bottlenecks facing the cloud services industry in penetrating the SME customer base.
Sramana Mitra: Austin, give us a bit of context about you as well as Datto.
Austin McChord: I started Datto right out of college about seven years ago. Our goal was to provide backup and SaaS recovery in a better way and at a lower cost. With that, we pivoted towards the SMB market space. Now, we provide innovative solutions for businesses on the backup and SaaS recovery front. We go beyond simply recovering data and even go as far as avoiding downtime all together. Our company has grown really fast around that premise. We have 270 employees now and appliances on every continent except Antarctica. We have been experiencing doubling growth every year and I’m excited to continue that.
Sramana Mitra: You said you founded the company out of college. Where was this?
Austin McChord: I went to college at the Rochester Institute of Technology. I started the company in Connecticut because I ended up moving back home to save money. We’re still in Connecticut today.
Sramana Mitra: You’re based out of Connecticut, excellent.
Austin McChord: Yes, we’re about an hour outside of New York in Norwalk, Connecticut.
Sramana Mitra: Give me a quick summary of the genesis of the company. Connecticut isn’t exactly a tech hub so a little bit of context about how you got the company up and running would be helpful.
Austin McChord: In our case, it all started in a basement. I felt that I could solve this problem better than other people, so I moved home and started working in the basement. I hired a few of my friends as we started to sell the product. To make a long story very short, one thing led to another and now we’re doing incredibly well.
Sramana Mitra: You’re a self-financed company?
Austin McChord: We were a self-financed company. We took on a funding round in 2013 – growth equity.
Sramana Mitra: How far did you get to before taking on capital?
Austin McChord: We were at about $50 million a year run rate when we took on the capital.
Sramana Mitra: Wow!
Austin McChord: The company was bootstrapped and profitable but we needed access to new markets. As the company got bigger, it became clear that I needed a strong board of advisors. That’s where we ended up seeking out financing. I have some fantastic people on my board now. I have Steve Herrod who’s the former CTO of VMWare. He has an enormous amount of technical knowledge. I have Paul Sagan who was the CEO of Akamai, an internet company that’s in a 160 countries. When it comes to market expansion, he has great knowledge. They are real owner-operators rather than just bankers. They’re people who have actually been through the whole process and they have been fantastic advisors as we continue to grow. I feel like it was a good decision waiting as long as I did to take on the financing.