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Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio (Part 3)

Sramana: How did the venture capitalist find you?

Ash Ashutosh: I don’t know. He was out of Dallas so I am sure he heard about us somewhere. We were doing very well. The company had zero external financing. There were four co-founders who owned 100% of the company. When we got acquired we realized that investing was a good option and some of us started investing in other companies for a short while.

Sramana: Did you take money from that VC?

Ash Ashutosh: No, we had bootstrapped the company and we did that the entire way through. We never took any investors money anywhere. All of the acquisition proceeds came to us. When we sold the company I wound up with more money than I ever thought I would have in my life. It was significantly more than I ever expected. Some of the founders went on to become VCs. I was able to do whatever I wanted. >>>

Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio (Part 2)

Sramana: Can you look back and talk about the process of determining what you were going to do as an entrepreneur?

Ash Ashutosh: Somewhere along the way, as I was leaving college, I had an entrepreneurial streak there. I was trying to build a business in India right out of engineering school which was practically impossible in the late 80’s. >>>

Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio (Part 1)

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Ash Ashutosh is the CEO of Actifio, a company which provides advanced data storage products. He brings more than 25 years of storage industry and entrepreneurship experience to his role of CEO at Actifio. Ashutosh is a recognized leader and architect in the storage industry where he has spearheaded several major industry initiatives, including iSCSI and storage virtualization, and he has led the authoring of numerous storage industry standards. Ashutosh was most recently a partner with Greylock Partners, where he focused on making investments in enterprise IT companies. Prior to Greylock, he was vice president and chief technologist for HP Storage.

Ashutosh founded and led AppIQ, a market leader of Storage Resource Management (SRM) solutions, which was acquired by HP in 2005. He was also the founder of Serano Systems, a Fibre Channel controller solutions provider, acquired by Vitesse Semiconductor in 1999. Prior to Serano, Ashutosh was senior vice president at StorageNetworks, the industry’s first storage service provider. He previously worked as an architect and engineer at LSI and Intergraph.

Sramana: Ash, let’s start with the beginning of your story. What is the back story to your entrepreneurial journey? Where were you born and where did you grow up?

Ash Ashutosh: I was born and raised in Hyderabad, India. I came to the U.S. to pursue my masters and PhD in computer science. I got half way through my PhD when someone came and gave me a job to go build a new RISC processor. This was in the early days of RISC processors, in 1988 and 1989. I have been a systems person for a long time. I was involved with the early development of building systems and the storage used on those systems. >>>

First-Time Entrepreneur at 37: Okta CEO Todd McKinnon (Part 7)

Sramana Mitra: As you have built the company, how has the evolution been? Did you start with large enterprises and come down, or did you start with the mid-market and move up?

Todd McKinnon: Initially we had a lot of success with companies that had between 1,000 and 5,000 employees. In the last year and a half, we have had a lot of success with companies that have over 10,000 employees.

Sramana Mitra: How do you price the product?

Todd McKinnon: We have a product that is sold based on the number of internal employees who use it, and that is sold as a monthly subscription. We also have a product that is for people who are logging into applications less frequently, such as partners or individuals from another company. That product is sold on a per transaction basis, so we charge for each log in. >>>

First-Time Entrepreneur at 37: Okta CEO Todd McKinnon (Part 6)

Sramana Mitra: Would you provide some information about your company’s product? What did you ultimately end up building?

Todd McKinnon: The product is an identity management system for applications on-premise or in the cloud. It is delivered in the cloud. It is a system of record for which users are allowed to log in to which applications from which devices. That means it does enhanced security such as two-factor authentication, it does single sign-on, and it also does integration of user profiles. It can copy permissions and user accounts from different applications and replicate them. When a user joins a company, he or she can receive all the correct accounts, and if that person changes roles, then their account status can be automatically updated. >>>

First-Time Entrepreneur at 37: Okta CEO Todd McKinnon (Part 5)

Sramana Mitra: Once you had identified identity access as the real problem your target customers faced, what did you do next?

Todd McKinnon: I built a paper prototype of the product that was based on identity management and access. I continued to have meetings based on those mock-ups and then moved to webpage demonstrations. Once we hired a few engineers we had a simple implementation working and we were able to demonstrate that. We focused on something simple that worked instead of trying to boil the ocean. >>>

First-Time Entrepreneur at 37: Okta CEO Todd McKinnon (Part 4)

Sramana Mitra: What I am hearing you say is that you were able to have detailed conversations with a lot of potential clients based on a mock-up. I think this is an important point to make.

Todd McKinnon: If you talk only about high level concepts then it is difficult to communicate with any level of fidelity. I would tell entrepreneurs that any concern they have about giving away their idea should be thrown out the window. If someone else can steal your idea and be more successful at it than you then you have bigger problems as an entrepreneur. >>>

First-Time Entrepreneur at 37: Okta CEO Todd McKinnon (Part 3)

Sramana Mitra: So you started your business off with one hypothesis for a product, and ultimately shifted your product direction based on actual market feedback. Is that a fair statement?

Todd McKinnon: We had a macro idea and a specific product that we started off with. The product changed after we talked to companies and found that there was a more pressing need.

Sramana Mitra: Can you talk about how you went through that refinement process? You went to a bunch of CIOs whom you had known from your Salesforce days and proposed a macro idea. Did they convey the more pressing problem? How exactly did you discover what they would be willing to pay for?

Todd McKinnon: That is exactly what it was. When I left my job at Salesforce, I did not have the luxury of time to decompress. The clock was ticking as far as I was concerned. The first thing I did was establish as many meetings as I could with associates I knew in the industry and people I had met while I was at Salesforce. I went and met with everyone I could. >>>