Sramana Mitra: Definitely, we encourage the philosophy of bootstrap first and raise money later. We have nothing against raising money but bootstrapping first is really critical to preserve ownerships. The amount of money that is being raised today, especially in these cloud businesses is crazy. By the time you raised that much money, that valuation is crazy.
Naren Gupta: I think one thing it does for you is it makes you frugal. I really believe that all great entrepreneurs are extremely frugal. It doesn’t mean you don’t spent the money to build your business, but you spend the money only when there is payoff. You only spend that much amount of money that’s necessary to get you a result. I’m a big fan of it. I started a company many many years ago and I bootstrapped for a number of years and it worked out great.
I’m going to go back to the question you asked in the cloud space. If you look at five years ago when the cloud journey began, the focus was on the infrastructure. We funded a company called cloud.com. It was one of the earliest companies in the cloud space after DimDim. DimDim was the first company we funded in the cloud space. Today, the opportunities are very broad. The infrastructure issues still have not been resolved.
As many of you know, OpenStack is becoming quite popular to build cloud infrastructure. Beyond the infrastructure, there are opportunities in the middleware, ability to write application, and distribute them. There’s a whole lot of new areas that we are looking in terms of how to secure a cloud application. Going back to the infrastructure, the focus is more on flexibility and being able to increase capacity on the fly and being able to control large cloud infrastructures effectively.
That is leading to things like software-driven networking and storage, and ultimately software-driven data centers. We now need a whole new class of both database and servers. There are opportunities across the board in the cloud. I would also say that cloud is enabling whole new kinds of applications like Big Data. Big Data would not have been possible without the cloud. Think of cloud both as something that should be worked on and, even more importantly, as an enabler of new applications.
The things we are doing in the mobile space are distributed and will not be possible without a cloud infrastructure. Uber is one of the biggest consumer of cloud applications. That wouldn’t be possible unless you had an infrastructure that is distributed, flexible, and easy to access. I want to hear from entrepreneurs what they are thinking about because they have the best ideas. I would say that your imagination is your only limit.
Sramana Mitra: We actually had two of your portfolio companies besides DimDim as Entrepreneur Journeys case studies that are very inspiring case studies. One of them is Druva. I think I have mentioned this to you. India is our second largest geography outside of the United States for One Million by One Million.
Druva is a flagship company for the Indian industry. The Indian industry came out of the services background. In the last six or seven years, there’s more of a product industry developing in India. There have been a lot of people putting in a lot of work to make that happen. We have done our share of this work. One of the companies that have emerged out of that is Druva.
It started off in India and it has since moved to a San Francisco headquartered global customer base model. Talk a little bit about this particular company and what your thoughts are about the model of Indian companies starting in India and then building these global footprint businesses.
Naren Gupta: Druva is a very interesting case study. They started about five to six years back in India. The first thing they did is build a good product. That is the key to everything. Without marketing, they had customers in more than 20 countries when they were based in India. We invested in the company about three years back. When we funded them, the goal was to create a global platform. That’s what they have been able to do.
The thing I would say about Druva is that they have been rated better than anybody else in all 10 categories in studies on endpoint data protection. Why could India now develop good products that it couldn’t develop five or six years ago? It’s partly because the advanced technology startups is becoming a global phenomena. The benefits of the cloud is, you can be in Shanghai or in Bangkok and you can still start a global company because the distribution has been really enabled by the cloud infrastructure. When we funded them, they were doing about a million dollars.
Today, they are doing more than $10 million each quarter. What you have to do is have a great product – iterating on the product until you believe it can be used by a broad group of people and then you spend the money on marketing. One thing I see that bothers me a little bit is that the company is spending too much money on marketing too early on, before the product is in a form that a lot of people can use it. That often goes to waste.