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Bootstrapping Lessons: FairWarning CEO Kurt Long (Part 4)

Sramana Mitra: How long did Open Network go on?

Kurt Long: Almost 10 years.

Sramana Mitra: What happened then?

Kurt Long: It was acquired by BMC.

Sramana Mitra: What year was that acquisition?

Kurt Long: I think it was 2004 or 2005.

Sramana Mitra: You did not raise outside capital?
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Bootstrapping Lessons: FairWarning CEO Kurt Long (Part 3)

Sramana Mitra: On this topic, I’d like to probe a little bit more. Let me give you some context. We have a very significant research and curriculum material on a methodology that you followed, which we call Bootstrapping Using Services. One of our Entrepreneur Journeys Series books actually covers this as well. Let’s double-click on this a bit. When you started doing Fortune 500 services work around security, tell us a bit more about what specifically did you do?

Kurt Long: It was actually an early version of web single sign-on for large corporations. Whether it’s an insurance company or a telecommunications company, they might have a collection of applications that they use to service their external customers. They don’t want those customers to have to sign in multiple times. They want the experience to be seamless through a portal. They want it to be seamless in terms of security model. >>>

Concept Financing from Andreessen Horowitz: Andrew Rubin, CEO of Illumio (Part 7)

Sramana Mitra: Also, your sales cycle was already in full swing. If there are 100 customers engaged in the developing of the product, that means that as soon as the product is ready, a good percentage of those are ready to buy. If you have product–market fit, a good percentage of those are ready to buy.

Andrew Rubin: Even though we didn’t do it with the idea of pipeline in mind, it was obvious to us that some of the work that we were doing would eventually pay off after we launch the company. We ended up running in stealth mode until October 22nd of 2014. On that day, we publicly launched the company. Just to endorse what you said about not only building the feedback loop but also the customer engagement, on the day that we launched, we had referenceable customers on the record who were talking about us. One of them in particular is worth calling out. Morgan Stanley, who I’m sure you know by name, is obviously one of the very large global banks. >>>

Bootstrapping Lessons: FairWarning CEO Kurt Long (Part 2)

Sramana Mitra: Tell me about the conditions under which you started your first company. What was that company? What was going on around that led you to that and how did you get that going?

Kurt Long: I was very naive about being an entrepreneur. I was a really good software developer and had a lot of energy. I had a lot of ambition and very little knowledge. It was in 1994 when I saw the World Wide Web for the first time. Many took one look at the World Wide Web and said, “This is going to change the world profoundly.” With a great deal of naivete, I left the corporate world and started my own business. >>>

Concept Financing from Andreessen Horowitz: Andrew Rubin, CEO of Illumio (Part 6)

Sramana Mitra: Venture capitalists and even seed investors do not fund concepts. We say this to our entrepreneurs in the program all the time. You have to get to a business. You have to get to some level of validation with your product before people are willing to write big checks.

Andrew Rubin: I think there’s a lot of truth in that. But I think we are among the few of the data points that does show that there are some exceptions to the rule. They are far and few between. What ended up happening with us was we had a lot of soak time. We spent a year. Although we hadn’t built the product and we didn’t have customers and revenues, we were in a position to be able to explain in an unbelievable level of detail, the depth of the problem, the specifics of why it existed, exactly what we wanted to build, the architecture of how we were going to build it, and exactly what it would do and how it would behave. I think three things came together for us in December 2012 when we pitched Andreessen Horowitz, which gave us a yes before we had a product. >>>

Bootstrapping Lessons: FairWarning CEO Kurt Long (Part 1)

Kurt has tried different permutations and combinations of bootstrapping, several of them successfully. Listen to his perspective on each of those.

Sramana Mitra: Let’s start at the very beginning of your journey. Where were you born, raised, and in what kind of background?

Kurt Long: I was raised in Clearwater, Florida. I grew up in Florida at a very special time where we enjoyed being outside and in the waters. As I grew up, I watched the Apollo missions and other NASA-based missions take off from the Kennedy Space Center, which is on the other coast but you could still see the launches. From a very early age, those made an impression on me that I wanted to participate in innovation and exploration. That’s something that has stayed with me through my whole career. As I went through high school and college, I held on to the dream and even wrote letters to Kennedy Space Center to ask about the Space Center and how it worked. >>>

Concept Financing from Andreessen Horowitz: Andrew Rubin, CEO of Illumio (Part 5)

Sramana Mitra: What are the nuggets of what you were going to do differently and how you were going to do them differently?

Andrew Rubin: Very simply put, our industry has been dominated by hardware- and network-based solutions for over 20 years. It doesn’t mean that it’s wrong. It’s just that it was the singular approach. Our world, which is the infrastructure and the applications that our customers run their business on, has changed so dramatically that in a lot of ways it felt like security has been left behind. For us, the very first conclusion we made was we needed to build a security platform in software – not in hardware – and not reliant on the network or in other words, not following the same model and motion of everything else that our customers are already doing. >>>

Concept Financing from Andreessen Horowitz: Andrew Rubin, CEO of Illumio (Part 4)

Sramana Mitra: When you started to get this thing off the ground, anecdotally and structurally, what were the next steps?

Andrew Rubin: PJ and I probably first had to figure out whether or not we like each other enough to spend more time together. I know that sounds silly now in hindsight, but when you meet somebody for the first time, you literally consider tethering the most important investment of your life to somebody else. You want to make sure you like the person. >>>