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Bootstrapping a Big Data Company Using Services: DataSong CEO John Wallace (Part 3)

Posted on Monday, Apr 28th 2014

Sramana Mitra: How much did you do in terms of revenues in the first couple of years?

John Wallace: It probably took us four years to get to a million dollars.

Sramana Mitra: How many people were involved?

John Wallace: There were about four people. My original hypothesis was that there would be a lot of short-term contracts and that people need specialty skills and once they’ve seen it in action, they would try to copy it and do it themselves. That’s not at all what happened. I worked in the field of analytics that I would describe as building a model. It turns out that the under-served portion of our field is leaving behind a whole living breathing system. If I were competing on modeling, on that front I guess I’m competing with the best professors at Stanford. It’s not really what customers are buying. You have to put the model in action.

Sramana Mitra: And keep it in that shape.

John Wallace: Keep it in that shape, yes. It turns out we need a ratio of 7:1 – seven engineers to keep up with one. That ended up building these very long-term relationships. All of our original customers are still customers.

Sramana Mitra: What happened in terms of vertical shake out? Where did you eventually end up?

John Wallace: We’re in what we call multi and omni-channel.

Sramana Mitra: Very good area for analytics.

John Wallace: It’s a healthy list of customers, some of the largest. Williams-Sonoma was one of our customers. They were instrumental for us to transition from services to a software model. They saw our work and realized it’s going to be bigger than what they could run. With the same time that we were putting all of our work over to a big data platform Hadoop, they were able to let us get that worked up.

Sramana Mitra: Talk about where in your history this happens?

John Wallace: 2011.

Sramana Mitra: It’s a while later.

John Wallace: Even Hadoop wasn’t around then.

Sramana Mitra: Exactly. So you did services until about 2011. What revenue level did you reach in that time frame?

John Wallace: At 2010, we were probably at about $4 million.

Sramana Mitra: How many people?

John Wallace: About 30 people.

Sramana Mitra: So you really had core expertise in the company and you had good revenue. Had you made the switch to omni-channel retail along the way?

John Wallace: We had picked up more retail clients – Macy’s, Sephora.

Sramana Mitra: So it was gradually moving over to the omni-channel retail model.

John Wallace: We worked on one really difficult problem. When we saw the reactions of the executives to the work, we realized that we saw something significant. Everyone else that was in our current retail wanted that as well.

This segment is part 3 in the series : Bootstrapping a Big Data Company Using Services: DataSong CEO John Wallace
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