SM: When you started the company you identified the problem. After that what was the evolution of building the company?
MT: Let’s talk about the customer validation part because that was in the beginning. We built a proof of concept, and while we were building it we went out and hired a third party storage analyst firm to conduct a market evaluation for us. The reason we did that is because we did not want to taint the data with our own excitement and passion. We wanted to have as objective of an evaluation as possible. When the analysts came back and said it was a great market we were not surprised. Since we had concurrently been building a proof of concept, we already were well on our way. In summary, the first year we built the algorithms and validated the market. Unlike typical startups we spent a lot of time on validation. It has paid off in spades. All of the money we are now investing is in the right place and we don’t need course correction.
A lot of the times the first 6, 7 or even 10 months of a startup you are doing the ‘Moses 40 years in the wilderness’ game. Our value proposition has not changed once. We have stayed true to course.
SM: It is straight forward execution.
MT: And we have been very focused on that execution. Only after we built the proof of concept and we tried it out with a couple of customers, and we had results which showed we were getting huge amounts of optimization, then we decided to go raise some funds.
SM: You seeded the company yourself and hired a bunch of algorithms people for the prototype?
MT: Correct. I would much rather do it this way every time.
SM: If you can afford to, this is the ideal way. This is where being a serial entrepreneur pays off because you know what to do.
MT: Everything, like raising money, was easier this time around. We had a huge amount of interest this time. We were able to pick and choose who we wanted. I would rather raise money from customers than VCs, but sometimes you have to use VCs.
SM: What were the deciding factors on what VCs you chose?
MT: There were two things. We went for the right brand and the right people, not in any particular order. We got some great guys on the board, people wise. They have a lot of experience.
SM: Who is on the board?
MT: Peter Bell from Highland Capital. Peter was the CEO of Storage Networks, and he knows everybody in storage. He is a great guy. We also have Matt Murphy at Kleiner Perkins. Matt is great, and he has been very helpful. We did a lot of diligence with our VCs, and I have been very impressed with Kleiner. I did not expect it. There are always people with a lot of aura so you never know.
SM: Matt Murphy is fresh, so that may help too.
MT: We actually get to leverage the brand because he works so hard with us. We also have B.V. Jagadeesh on the board as an independent. He is a very seasoned guy and very supportive.