Building an Open Source Software Company Around Cassandra, Seed-Funded by RackSpace: Jonathan Ellis and Matt Pfeil, Founders of DataStax (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

This is an interesting story of how an open source software company built around Cassandra was incubated by RackSpace and has grown to $5 million in revenue. Founded by engineers Jonathan Ellis and Matt Pfeil, the interview traces not only the successes of their journey but also the mistakes they made in structuring their funding rounds.

Sramana Mitra: Jonathan and Matt, let’s start with both of your backgrounds. Where you were born? Where did you grow up? How did you get together?

Jonathan Ellis: I grew up in New Jersey. I met Matt after I moved to Texas to work for Rackspace. Rackspace hired me to build a scalable database for their internal infrastructure as they started to compete more with companies like Amazon, Google, and the Cloud. In late 2008, I started working on Cassandra. I met Matt Pfeil shortly afterwards as he led the group that was going to be deploying Cassandra internally at Rackspace.

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Running A Global Virtual Incubator: 10 Lessons We Have Learned

Further to my earlier post, Mentoring Startups: 10 Lessons We Have Learned, I want to also go over our learnings through running, what is today, the world’s only global virtual incubation program.

1. Reach & Scalability: We have successfully created a virtual incubation program that entrepreneurs all over the world are using. The self-service curriculum is quite rich now, which makes the program scalable. Also, the online mentoring roundtables have been extremely productive, as discussed in the earlier post. We’re also running an active content organization that helps our portfolio companies get coverage, as well as distribution for their messages through social media (reach over 100k currently).

2. Inclusive vs. Exclusive: We have successfully reset the definition of entrepreneurship within the program from Entrepreneurship = Financing to Entrepreneurship = (Customers + Revenues + Profits), Financing and Exit are optional. This has enabled us to be inclusive, as opposed to exclusive. Unlike YCombinator that takes pride in how many entrepreneurs they reject, we take pride in the fact that we do not reject anybody. Over 99% of entrepreneurs seeking financing get rejected. We work with ‘The Other 99%’ irrespective of their fundability, helping them grow to become successful businesses, and to raise financing if appropriate. Also, you don’t have to move to Silicon Valley to get incubated with us, which also gives us tremendous flexibility on whom we can work with.

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Harvard Business Review: How To Fund Indian Start-Ups

Harvard Business Review has published Sramana Mitra’s piece How To Fund Indian Start-Ups. You can read the entire article here.

How Do You Develop Seed Ecosystems Around The World?

In the last five years, there has been a distinct globalization of entrepreneurship. There is a lot more romanticism about startups now, a lot more startup related events, organizations, incubators, so forth and so on.

However, the seed capital eco-system around the world is inadequate. How do we change that?

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Seed Capital: Inventus Capital Partners

1M/1M ambassador Irina Patterson talks with Parag Dhol of Inventus Capital Partners.

Irina Patterson: Please tell us briefly about your personal background and about your fund.

Parag Dhol: Inventus Capital Partners is a U.S.–India venture firm managed by successful entrepreneurs and industry operating veterans who have backed over 100 entrepreneurs with operations in India and/or Silicon Valley. Inventus backs entrepreneurs first and foremost. The companies financed by Inventus include redBus (acquired by MIH/Naspers and our biggest success), Vizury, Credit Sesame, Savaari, PoshMark, Power2sme, Policybazaar and eDreams, among others. Inventus started investing out of Fund-II earlier this year. >>>

How to Navigate India’s Seed Capital Gap

India has a minuscule seed capital ecosystem. Entrepreneurs thus have to be really creative to survive.

My new piece How To Navigate The Seed Capital Gap in India offers a synthesis of how entrepreneurs are getting around. Two companion pieces offer perspective on why the ecosystem is developing so slowly: Seed Investors in India: Why So Few? and Venture Capital in India: Age of Reckoning. >>>

Indian Venture Capital: Age of Reckoning

Ashish Gupta left Silicon Valley to partake in the bonanza that venture capital in India was supposed to create. He founded Helion Capital, a $605 million fund that has been in business for a while.

The style of venture capital that Ashish and his compatriots at Sequoia, Accel, and others wanted to practice was the classic Silicon Valley model of putting $5 – 20M to work per technology company that is ready to grow at a furious pace.

The trouble is such companies are few and far between in the India of 2013.
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Is Too Much Liquidity In The Angel Capital Market Good or Bad?

Too much dumb money rushing into the angel investment game is inevitable with crowdsourcing, AngelList and other innovations. Innovation is welcome. Liquidity for startups is welcome. How much is too much?

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