Sramana Mitra: This company is selling to enterprises?
Ashmeet Sidana: Menlo Security is focused primarily on large enterprises. If you’re a bank or financial services enterprise, that is our target market. You have to be very careful what you do and yet you have tens of thousands of employees who have to be able to interact with the web.
There is no modern business that can run without access to the web. Yet, anti-virus was not solving the problem. A radical new technology with a fundamentally new architecture creating real business value is what we’ve been able to create with Menlo Security.
Sramana Mitra: Are all your investments in Engineering Capital focused on enterprise-facing businesses?
Ashmeet Sidana: They don’t have to be, but that is the case right now. Engineering Capital will invest in a great entrepreneur with a great technical idea who can fundamentally disrupt the infrastructure space. That’s what I’m looking for. If you have a credible business plan, I’m interested in you. Credible business plans have a path to profit. Whether that profit comes because you sell to a consumer or enterprise, both are valid approaches and I’m open to either.
Sramana Mitra: Why don’t we do more one more example from your portfolio and then we’ll switch to the next topic.
Ashmeet Sidana: Another investment I have is in a company called Xockets. This is a very technical play. It is a new memory architecture. What it lets you do is run Hadoop or Spark up to a hundred times faster. It’s still at the seed stage. I recently invested in the company. We still have some technical risk. We haven’t yet proven that this will work but if it does work, I think it will radically change how people run big data workloads.
Sramana Mitra: What are you looking for in the founders that you choose to invest in?
Ashmeet Sidana: That is my favorite topic because it is the most important thing especially working at the seed stage where the market is still unproven, the technology is still unproven. Often we don’t even have a clear idea of exactly what the product will be when I’m investing over there. It really is about the founders that makes the difference.
I continue to believe that Apple will not exist without Steve Jobs, Microsoft will not exit without Bill Gates, Facebook will not exist without Mark Zuckerberg, HP will not exist without Dave and Bill. It really is about the founders. What is it that make these people so special?
First I look for the fundamentals. Are they intelligent? Are they hardworking? Perhaps they have a good education. It’s not required, but useful to have. Do they have a good work habit? Are they ambitious? Are they motivated? These are basic skills. If you don’t have this skills, I don’t think you can succeed as an entrepreneur. The reality is a large number of people have these skills and yet don’t succeed.
What is the additional component that makes an entrepreneur successful? Great entrepreneurs have the ability to have a big vision, to dream and think big, see the future before other people can, and then bring it and relate it all the way back to reality today. If you can only dream big dreams, perhaps you’re hallucinating. If you’re only in the weeds and looking at the details, then you can’t have the big vision. You need to be able to do both.
Great entrepreneurs also have contradictory attributes. They are incredibly persistent. They are incredibly diligent. They can take many no’s and continue to move forward with their own vision. They’re also great listeners. They know when to understand what a customer wants and what users want and how to change what they’re doing.
We talked about Facebook earlier. Look how much it has changed over the years. It started as an application on universities. Look at where Facebook is today. What does it do? It has iterated all along the way at a very rapid pace. Great entrepreneurs have the ability to change paths just like this. Microsoft started as a compiler company, became an OS company, and then a productivity company after that.
Great entrepreneurs have the ability to make this change while facing criticisms and negative feedback from people saying that what they’re dreaming about is not possible. Looking for these contradictory attributes is essential.