Sramana Mitra: You talked about MuleSoft. Let’s take a couple of your companies and drill down and understand your thinking behind why you invested in those opportunities. Obviously today, these are big successes. When you invested, that was not so clear. You must have made a certain analysis of those businesses. What was that thought process and how has that evolved over time? What can we learn from that?
Ann Winblad: There are three things to learn. First is, how did we find this company in the beginning or how did the company find us. Every entrepreneur wants to know that. Because we’re focused on the enterprise, we keep very strong relationships with all of the analysts that cover the enterprise.
In this case, an analyst by the name of Jason Maynard who had covered the enterprise for a number of investment banking firms called me up and said, “I cover traditional companies like IBM and Oracle. MuleSoft kept coming up. I’ve done some investigative work myself. It’s one of those new open source companies.” That’s called a trusted source for a venture capitalist. It could be another one of my colleagues who calls me up or an entrepreneur that we’ve funded before.
We jump on those opportunities in front of anything that comes directly to us without an introduction. Having yourself be discoverable by an influencer is really important for an entrepreneur early on. I reached out to this entrepreneur and I was a little shocked to find that he lives in Malta. I had to admit to myself that I didn’t exactly know specifically where Malta was.
He happened to be visiting the States and had one co-founder here. It was a new category called open source. This is really indicative of today’s companies – about 150,000 copies of an enterprise service. This is something that traditionally has professional services coming in to large companies. Large companies had downloaded this software. One company had built their trading platform. One major airline had built their reservation system. One pharmaceutical firm had built their backend infrastructure without having anyone appear at this company.
It was a testament to the quality of the software. An enterprise service bus is an important infrastructure. Also, it indicated the trend that companies want to service themselves and were committing to self-service high quality software. It was really apparent that this was a real big opportunity. At that point in time which was about five years ago, there were only five or six public application programmer interfaces. There probably were a thousand SaaS companies. Today, there are 10,000 SaaS companies. There are tens of thousands of API that are published. There are multiple clouds. There are hybrid cloud.
The integration challenge has magnified, which is further increasing the opportunity for MuleSoft. The company kept true to its mission to provide very high quality software. It had a community of developers. Some of that community of developers were in Buenos Aires where we started a development center. The company has scaled all of these pieces. MuleSoft today has just under 500 employees and has offices in Buenos Aires, London, Sydney, and San Francisco.
Ross is still the visionary leader of the company with 499 other visionaries. It had a very strong mission and a very big opportunity. It had proven the opportunity without any capital. It has very high standards along the way on hiring, maintaining the culture, maintaining a global company, and maintaining high quality service and delivery to their customers. They entered the market with a brand new business model where software is downloaded. It’s subscription revenue; not perpetual licensing.
They really knew that responding to the customer, they had to be agile and fast and continually leverage the community of not just developers but customers. It really has executed extremely well. The talent we’ve been able to recruit has been key to their success. It’s one of those perfect venture stories so far. They’re not all this perfect.