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Bootstrapping a Big Data Company Using Services: DataSong CEO John Wallace (Part 2)

Posted on Sunday, Apr 27th 2014

Sramana Mitra: You were kind of an applications engineer?

John Wallace: It was a great opportunity.

Sramana Mitra: That brings us to 2003?

John Wallace: Yes. In 2003, I started a firm doing analytic consulting. I thought that I would be more impartial to what software we use to solve a problem and be more focused on the problem than selling a particular license. I think that the growth that we have as a service firm is tied to that era of computing where in order to practice our trade, we needed to follow and work with very large corporations with major investments in warehousing, technology, licenses, and servers. There was a great place to work with at that time. You could never envision doing that anywhere other than some place that had made it.

Sramana Mitra: Your clients were all major servers. How big did the firm get?

John Wallace: It’s still around. It’s the same firm.

Sramana Mitra: That’s the firm that leads up to DataSong. So it’s a bootstrapping using services story?

John Wallace: Yes. You’ve heard it before?

Sramana Mitra: Many, many, many times.

John Wallace: I always say that good services people are always looking for a way to also practice. We bootstrapped. When I started the firm, I was a one-person company. I had no ambition to do that for long, but decided to give myself one year. One of the three things I thought would happen was I would grow tired of it and go back to the corporate ladder. Number two and three options were that it would probably somehow merge into another consulting firm, or growing it. It turned out to be the third one.

Sramana Mitra: So talk a bit more about growing that services business. What kind of customers were you going after? Was there a vertical focus?

John Wallace: At the beginning, the strategy was to be as diverse as possible with some boundaries.

Sramana Mitra: Why would that be the strategy? That is the farthest from the strategy that we teach our entrepreneurs to follow.

John Wallace: The strategy was very conservative taking into account the possibility that one of these verticals would suffer.

Sramana Mitra: The dot-com industry in 2001.

John Wallace: Yes, the dot-com industry didn’t make it. You had automotive and finance in 2008. I’m not saying it was a perfect strategy, but that was the strategy. There was a second dimension to that strategy, which was the intellectual curiosity – being able to take the teams and expose them to a big variety of problems was something that I thought was going to pay off. One day, you’re looking at a subscription TV business like DirecTV. The next day, you’re looking at a major retailer like GAP. It was a way to keep us stimulated.

Sramana Mitra: It is very stimulating but it’s a very non-scalable strategy.

John Wallace: So that strategy has been retired. You learn in the field, right?

This segment is part 2 in the series : Bootstrapping a Big Data Company Using Services: DataSong CEO John Wallace
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