Sramana: How much money were you able to raise before you had revenue?
Chris Gladwin: Something to the order of $10 million.
Sramana: I talk with a lot of entrepreneurs and I have found that those who build capital intensive products requiring substantial capital investments were able to do it if they had either prior relationships with investors and a track record of making them money or they have been able to bootstrap using services to prove domain expertise. What is your opinion here? Is there another way to do it?
Chris Gladwin: I think you are right. You have to have prior relationships or you have to go bootstrap the company. I have seen companies bootstrap where they will restrict capabilities and market focus to the point where they can bootstrap it. Based on that, they are in a position to raise capital, particularly with web-based companies.
Sramana: That sounds like the lean startup model. If it is a business that can get into the hands of customers with a small amount of capital, that model works very well. I am focusing on the fat startup model where you need substantial amounts of capital.
Chris Gladwin: In the fat startup environment, I really think you need to have relationships.
Sramana: You started generating revenue in 2010 and since then your market has expanded substantially. How has your business ramped?
Chris Gladwin: There have been a combination of internal and external factors that have resulted in our business taking off. One of them is the external factor that you just noted. The number of companies buying a petabyte or 10 petabytes of data per year has increased. Those are all growing 50% per year. That is wonderful because our market is getting bigger every year.
At the same time, we became more capable. Our product became more proven, gained more features, and we have more customers. We were better able to serve the market as a result. Those internal and external factors lined up to drive our growth.
Sramana: How did the competitive landscape evolve?
Chris Gladwin: In 2010, the enterprise storage market was a $30 billion market. The big enterprise system market was around $12 billion. It was a market that was and still is dominated by seven multinational companies such as EMC, NetApp, HP, Dell, Oracle, and folks like that. They still dominate that market.
All of those companies were using the legacy technologies in 2010. Their techniques had not fundamentally changed. You had a classic innovators’ dilemma. A long time ago those companies were innovative but now they had an existing value network with their sales organizations. Having a new kind of capability that was better and more cost effective was not in their short term interest. They don’t necessarily want to lead the charge in making their existing product lines obsolete. In 2010, as well as today, we are able to go up against those major incumbents and have a much better solution.