Sramana Mitra: You had $6 million in funding. What happens next?
Justin Moore: The 2008 financial meltdown happened a week later.
Sramana Mitra: But your money was in the bank before the financial meltdown.
Justin Moore: One week before—September 8, I believe. About a week later, you had the financial meltdown. You can imagine trying to recruit people into a three or four-person startup when you’ve got no experience in storage enterprise infrastructure. Enterprise is not hot at all. No one was interested in enterprise in 2008. It was all about consumer and eyeballs.
People were fleeing to security and stability and worrying about their families. Going out to recruit people at that time was extremely challenging. 2009 was a tough year in terms of many things. Companies weren’t really looking to spend more money. They were looking to cut cost. Then we started to see our business take off in late 2009.
Sramana Mitra: What was the key customer acquisition strategy that was helping your business take off in 2009?
Justin Moore: It was the partners. We doubled down on acquiring more and more partners and saw significant growth.
Sramana Mitra: What’s the next inflection point or milestone after 2009?
Justin Moore: Then we were in rapid growth from 2009. For the next few years, we were doubling or tripling every year in terms of employees, revenues, partners, and customers. There were a few years there where it was just keeping the wheels on the bus. We scaled the management team, scaled the employees, and scaled the distribution.
Sramana Mitra: Did you raise more money?
Justin Moore: We did. Over the course of the years that we’ve been in business, we’ve raised about $65 million in equity.
Sramana Mitra: What are the metrics of the business today?
Justin Moore: If I look at our customers, we have close to 5,500 customers in North America. Our customer profile has shifted pretty dramatically. The majority of our customers now have somewhere between 50 and 150 employees. We launched a new product this year which is targeted at companies between 200 and 2,000 employees. We’re seeing our average deal size go up by about 10 times. Our customer growth has slowed down dramatically because the deal sizes are 10 times larger.
If I look at our average deal size when we first took investment versus our deal size last year, there was a five times increase. We’re now expecting a large percentage of our revenue to be 10 times larger. We are looking at deals now that are 50 times larger than when we started the company. We are the source of IT resilience to data loss, corruption, human error, viruses, infrastructure failure, and natural disasters. We’ve heavily invested in our technology over the years. We have 23 patents filed and granted.
We’re the leader in the market. Gartner came out with the Magic Quadrant for Disaster Recovery as a Service (DRaaS), and they put us in the leader quadrant right next to IBM ahead of Microsoft, VMWare, and a lot of the legacy incumbents. We’ve moved beyond Disaster Recovery as a Service to broader IT resilience: from incident to full employee productivity, less than an hour guarantee, no matter what the cause.
We decided about three years ago that we wanted to move dramatically up market because we saw the low end of the market commoditizing. We saw a lot of competition entering the market. We are addressing a market that is expensive to scale. SMBs tend to be good enough when it comes to technology and focus on cost instead of value.
We want to be in a market where there is less competition and a higher barrier to entry for competitors where the relative cost of acquisition was more favorable. About three years ago, we made the decision to move to mid-market. We launched it in August and it’s been met with incredible response.
Sramana Mitra: How far are you from an IPO? It’s been eight years. Are you ready to go out?
Justin Moore: We’re certainly not getting ready to go out. We are debating to raise more capital to expand our marketing channels and get a market strategy. Any capital we raise at this point is for go-to market and expanding internationally. We’ve been concentrating in North America. We’re now moving into Europe. We have our eye on Asia. We are at a point where we try to be fiscally responsible and reduce our burn to manageable levels. We will make a decision probably in the next six months to raise more capital to dramatically expand our sales and marketing. We’re at that crossroad.
Sramana Mitra: Very interesting. Thank you for the story.