Saving Billions of Lives with Next Generation CRISPR Company Mammoth

The relationship between Mayfield and Mammoth Biosciences began when Mayfield managing director Navin Chaddha met Mammoth co-founder and CEO Trevor Martin back in 2017. Trevor was a recent Stanford PhD graduate pursuing an unusual path: he planned to start a company focused not on his graduate thesis work, but on the newly-invented CRISPR diagnostic technology, licensed from the University of California at Berkeley. Mayfield partner Ursheet Parikh was investing in the next generation of bio-engineering platforms, opening the door to a whole new class of treatments and diagnostics, in contrast to traditional biotech investing, focused on individual treatment. Ursheet and Navin were very impressed with Trevor’s passion and entrepreneurial spirit. Mayfield invested in a seed round in a company that was then called Apheleia Diagnostics.

Ursheet drew upon Mayfield’s expertise in guiding scores of companies at the inception stage, including Poshmark, Outreach, and HashiCorp, and leaned in to help. As Trevor and Ursheet got to know each other in the following months, they discovered a shared passion for building a defined, extensible platform to power hundreds of new treatments and diagnostics. Trevor called it “Mammoth Inside,” drawing the analogy to “Intel Inside.” Building such a platform company would require Mammoth to involve the core inventors of CRISPR and the core of the CRISPR discovery engine that could power future innovation. To drive this effort, Ursheet connected with Dr. Jennifer Doudna — now the winner of the Nobel Prize in Chemistry, for her development of the CRISPR method for genome editing, and whose lab at UC Berkeley is a hotbed of CRISPR innovation. She shared that her students, Janice Chen and Lucas Harrington – inventors of the CRISPR diagnostics technology as well as many novel CRISPR systems for diagnostics and therapeutics – were also interested in starting a company. Ursheet facilitated a set of conversations at the Mammoth office in Dogpatch, hosted the team at his home in SOMA, as well as at Stanley Hall on the UC Berkeley campus. Through these discussions, the group found a deeply shared common ground to use these new technologies to have a positive impact on patients’ lives, and the rest is history: Trevor, Janice, Lucas and Jennifer combined forces to co-found Mammoth Biosciences.

The core mission that drove this alignment was the intense desire to help patients as quickly as possible, from disease detection to treatment, spanning diagnostics and therapeutics. “Ursheet shared and encouraged our vision to build something foundational from a general healthcare perspective, that would have a lasting positive impact on the world across many fronts,” says Trevor. Mayfield led a $23 million Series A which several seed and angel investors joined, including Apple’s Tim Cook.

Trevor Martin, Jennifer Doudna, Janice Chen, Ursheet Parikh, Maneesh Jain and Lucas Harrington at dinner
Dinner post the Series A partnership presentation on March 31 2018; left to right, Trevor, Jennifer, Janice, Ursheet, Maneesh Jain (advisor & co-founder of Mayfield company Mirvie) and Lucas.

Ursheet recalls his early meetings with Trevor. The 27-year-old biologist had just finished his PhD and showed an immense capacity to learn business. “Trevor is exceptionally self-aware, asked for help frequently, came up with creative solutions and followed up fast. When introduced to the best in class cofounders, advisors, mentors and service providers, he would inspire them to get involved and was magnanimous in sharing the platform.”

“Since no one before them had built a CRISPR platform company with such a diverse toolkit of proteins and potential, they were going to have to grow up quickly to make it happen. A company cannot grow faster than its founders” says Ursheet of his work since then with Trevor, Janice, who is the CTO, and Lucas, who is CSO. Jennifer continues to remain involved as co-founder and chair of the company’s scientific advisory board. Trevor, Janice and Lucas knew that they wanted to build a new type of biotech company not wedded to the typical playbooks often used for single-asset companies. The underlying science was too closely wedded to the business opportunity for that. To help them transition from scientists into business people, Ursheet spent time with the team to talk about everything from product strategy and business development to building a world-class team. “Mayfield was definitely the most proactive in terms of making themselves available to help,” says Trevor.

“Getting a PhD is really relevant to starting a company, because it helps you deal with uncertainty,” says Trevor. “But you can’t just read a bunch of books to learn how to manage people.” To help, Mayfield connected Trevor, Janice, and Lucas to John Baird, a veteran executive coach whose clients included Steve Jobs. “Mayfield also helped recruit key executives such as COO Ted Tisch and CBO Peter Nell and this unique combination of scientist founders and experienced executives working closely together is what makes the Mammoth story possible,” Trevor adds. And Navin continues to be a sounding board for strategy and growth conversations.

The relationship has been fruitful. Mammoth has rapidly morphed from a research project in the lab into one of the most promising, closely-watched life sciences businesses in the world. The company, which recently crossed 100 employees, continues to pioneer CRISPR technology and stand at the forefront of delivering on the promise of CRISPR through its therapeutic and diagnostic programs.

When COVID hit, Ursheet was one of the first to urge Mammoth’s founders to focus on creating a test for the disease. The company has a strong culture of accountability, and the founders were concerned that doing this would require delaying the timeline on some other goals set by the company. Also, it was unclear how these new Covid-19 products could get approved in time to help. “I remember a long call on Sunday afternoon in February 2020 to prioritize Covid-19 over existing diagnostic programs and making the case that it was ok to take the leap with or without a clear approval path. If there was ever going to be a time when new bio-platforms will get to patients fast, it will be during a pandemic. One of the silver linings of Covid-19 now is that we will get the first MRNA and CRISPR products for patients years ahead of the original schedule and this will save innumerable lives,” says Ursheet.

Mammoth has been the most prolific inventor of new CRISPR systems that have significantly expanded the conditions that can be treated and diagnosed. To translate this into patient impact fast, Mammoth is both developing these treatments in-house and also working closely with other biotech companies. Mammoth has developed partnerships for novel CRISPR products with leading healthcare companies including Glaxo-Smith Kline, MilliporeSigma, Hamilton Company, and Agilent Technologies. The company was awarded two contracts from the Defense Advanced Research Projects Agency (DARPA) and the National Institutes of Health (NIH) to develop and commercialize CRISPR-based diagnostics and biosurveillance platforms for COVID-19 and other infectious diseases. Even before the pandemic began, Ursheet encouraged and helped the Mammoth team to forge partnerships to demonstrate its leadership of a vast new ecosystem. In January, 2020, for example, Mammoth inked a deal with Horizon Discovery, a U.K.-based developer of biomanufacturing technologies that drug-makers can use to manufacture new treatments.

That would be more than enough of a contribution for any start-up. For Mammoth, it’s just the beginning. Beyond healthcare, Mammoth has the potential to power the next generation of companies working on improving the health of our planet with better foods. “I feel inspired and blessed to be supporting the mission of the stellar team at Mammoth,” says Ursheet.

Says Trevor: “It’s super valuable to have investors who suggest bold bets themselves and commit to supporting them.”

KiwiCo: Doing Well While Doing Good

Sandra Oh Lin knew it would be easy for venture capitalists to typecast her as a “mompreneur.”

It was 2011 and she was raising money for a new company, KiwiCo, that would deliver educational projects to kids. A mother of two young children, she had just left eBay where she was leading their $2 billion-a-year fashion business. Maybe, they might think, she was more interested in pursuing an altruistic passion, rather than building a valuable company.

So she made sure she was ready to parry such misconceptions up front. “I didn’t lead with any ‘I just drove here in my minivan’ jokes,” she laughs. Instead, she stressed her background in consumer products and ecommerce – as an R&D engineer at Procter & Gamble prior to her eBay experience – and came prepared with carefully-researched market projections and a detailed operating plan. “It was all about showing ‘Here’s why I’m credible,’” she says. “And only one of my credentials is that I’m a mom.”

At least one VC didn’t need such assurances. Mayfield managing director Navin Chaddha had worked with Sandra as an advisor to Poshmark, the social marketplace for fashion that went public in January 2021. “Sandra was laser focused on her mission to foster creativity in children and I could tell that she had the acumen to build a big business,” said Navin. He quickly agreed to invest in KiwiCo’s $2 million seed round, even though the company was still just an idea.

A decade later, KiwiCo is riding a wave of success for monthly-subscription box services that Sandra was early to spot. Companies such as clothier StitchFix and pet products’ supplier Barkbox have gone public and Mayfield portfolio company, Grove Collaborative, which sells sustainable home goods & personal care products, recently raised funds that gave it a valuation north of $1 billion.

While it’s only just begun to do any brand advertising and has raised only $10 million in venture capital, KiwiCo’s traction with customers puts her in that cohort. The company has already shipped over 25 million Kiwi Crates to kids in 40 countries, who receive materials and instructions for educational projects such as slime circuits to learn about electronics and flying squirrels to learn about zoology and gliding.

Each crate is targeted at a specific age group and designed by a team of educators, engineers, and makers and tested extensively with kids in the intended age cohort. KiwiCo now has 8 different subscription lines ranging from infant to what they like to call kids-at-heart. “Since the beginning, our mission has been all about encouraging kids to become creative problem solvers,” she says. “We wanted to give them materials and inspiration to gain both the skills and that creative confidence to feel like they could actually make a difference and hopefully, change the world for the better.”

While that goal was there from the beginning, success didn’t happen overnight. The idea of subscribing to services that delivered physical goods was not yet widely accepted by consumers 10 years ago. “We were doing okay, but I wouldn’t say things were awesome,” Sandra recalls. “So we never assumed that we could raise more money.”

That forced the team to be efficient from a capital perspective. At one point early on, the company cranked out three new offerings, including an app for a kind of “digital refrigerator door” where parents could store and look at their kids’ creations, without big headcount increases. When they didn’t immediately take off, they made the decision to pull the plug within a few months. “We were disciplined,” she says. “If something wasn’t working, we didn’t chase growth at all costs.”

Mayfield supported KiwiCo by participating in a $5 million Series A round of financing in January 2012. Two years later, the firm helped round up investors to come together for a small financing which gave the company much needed runway. “One of our beliefs is in being loyal to a fault with entrepreneurs,” said Navin. “That cash infusion allowed Sandra to execute on her plans and continue to build KiwiCo into a vibrant subscription business.”

The KiwiCo team kept experimenting against the huge market opportunity. Grandparents alone spend $64 billion a year on gifts for the grandkids, and parents spend $5 to $10 billion a year on arts and crafts. The toy and activities market is over $100 billion.

A turning point came in 2014, when the company introduced Koala Crate for preschoolers, Doodle Crate for 9 to 16 year old art-lovers, and Tinker Crate for the STEM-oriented. Not only did they do well on their own that Christmas, but more than 20% of customers were soon ordering more than one. That vastly improved the economics, by increasing the lifetime value of customers and driving down shipping costs, says Sandra. By early 2016, it was profitable and cash flow positive, and they haven’t looked back.

The pandemic was an inflection point for the company. Through “Zoom School,” parents got a close up view of their child’s classroom and a deeper understanding of what they were learning – or not learning. Additionally, parents and children alike were hungry for non-screen experiences after spending all day on laptops and tablets for school and work. As a result, Kiwi saw its sales more than double and its employee count grow to 200. It has expanded beyond its age-specific subscription boxes, which cost $17 or $30 a month (less for longer-term contracts), with an e-commerce site that features scores of products, ranging from a face mask coloring kit to a build-your-own electric pencil sharpener. A company unit focuses on delivering products specifically for schools and organizations, including those serving disadvantaged children.

With the acceleration provided by the pandemic, the company has anchored market leadership and has many options to explore for the next phase of their financial journey.

Reflecting on the journey, Sandra says Navin, partner Tim Chang, and Mayfield have been an important sounding board and were always ready to lend a hand when she needed it. “They have been very helpful and very supportive at the right times, which is what you want from an investor,” she says.

How Mission & Values Set the Foundation for Couchbase’s Success

Couchbase

Couchbase is on a mission to empower enterprises to develop, deploy, and maintain their mission-critical applications by delivering a high-performance, flexible and scalable modern database. Today the company listed on the Nasdaq exchange under the ticker symbol “BASE.” I sat down with Couchbase President and CEO Matt Cain to get a little more insight into how leadership and culture paved the way for Couchbase’s journey to IPO.

Congratulations on Couchbase becoming a public company! What role do you think culture plays in a company’s success?

I believe that the foundation of any leading company is its world-class team, a combination of industry leading talent and a set of values that enables those people to do the best and most fulfilling work in their careers. Culture is the product of those values in action, and leaders must be the stewards of ensuring the company is living consistently with them. When it comes to teamwork and communication, I have tried to create as many opportunities as I can to ask what’s working, what’s not working, and where the team needs help. At Couchbase our culture is a sustainable competitive advantage as we attract, develop and retain the highly-skilled talent necessary to execute on our business growth strategies. The leadership team and I work relentlessly to make Team Couchbase feel valued so they can then work together to create value for our customers, partners and shareholders.

Describe your leadership style and approach as CEO.

Several early-life experiences shaped my approach to leadership. First, my parents raised me with strong Midwestern values. I also developed a love and passion for teamwork and collective goals through competitive team sports. And going through a Jesuit education reinforced the concept of leveraging your talents to make the world a better place and act as a “person for others.” Roll all of these together and you get a servant leadership style with an emphasis on teamwork. I’m about the “extreme ownership” and “servant leadership” philosophies to drive the best results while building a culture that is durable– and wins. In this model, the leaders are ultimately responsible, but teams make the difference. My goal has always been to build, reinforce, and model a culture of openness, transparency, and trust that delivers results. And we have to have fun along the way!

Couchbase was founded in 2011 and you came on board in 2017 as a first time CEO. What was that like, stepping into a new role to lead a company?

So one of our company values is Attack Hard Problems, and that’s sort of the approach I took head on when I arrived at Couchbase. I think there’s a razor-thin edge that elite performers must balance between self-confidence, or a willingness to try new things, and humility, or knowing that you will get things wrong. With this mindset and when facing challenging times as a leader, I try to stay calm and work through things as a team. I also try to remember that I’m in service of others, like employees, customers, partners, and shareholders, to derive motivation to work through hard things. I can’t fix problems I don’t know about, so I work hard to maintain a genuine connection with as many of our team members and possible. As an example, in my first 100 days I committed to setting up at least 100 meetings with employees, customers, investors, partners, vendors and analysts to listen and learn. I’m a true believer that people can do amazing things when they work together and put the team first. I’m very proud of what we have accomplished so far as a company, and I think you can see some of that reflected in things like our Glassdoor rating and also in our business results which allowed us to become a public company today.

What advice would you give another CEO as they begin to prepare for the IPO process?

Surround yourself with a world-class team. No one person can go through this rigorous process alone– it really does take a tremendous amount of teamwork and collaboration. Invest in your people and your culture because at the end of the day, the results the team delivers are what are going to help position the business to go public. That and get ready for the grind! In all seriousness, it really does require a super talented team to pull it all off. I’m grateful for the team’s continued dedication and passion for our business, even in the face of a global health crisis. It inspires me every day.

Congratulations again to Matt and the entire Couchbase team on their IPO, which marks the latest milestone in our decade long journey – looking forward to all that is to come.

How Tonal Became a Home Fitness Star

When his first start-up hit hard times in 2012, Aly Orady knew that if he ever started another company, he would give Mayfield managing director Navin Chaddha a shot at investing before anyone else. Navin, more than any other board member of Pano Logic, the thin client company Aly co-founded in 2007, stood by management when many other investors were “running for the hills,” Aly says.

“I remember one phone call when our bank was demanding its money, the investment bankers were spent, and we had 100 or so employees to worry about,” Aly says. “Navin assured me, ‘No matter what happens, we’re going to do the right thing’.”

And Mayfield did. As part of a sale and wind down process, the company had to lay off almost all of those employees on very short notice. In a move that’s almost unheard of in the world of VC-backed startups, Mayfield led the charge to cover the cost of severance packages. This required not only money from Mayfield, but leadership to convince the investor syndicate and influence with the company’s bankers.

“Mayfield talks about being people-centric, and it sounds like a tagline. But it’s not,” Aly says. “I experienced it first-hand.”

The trust engendered in those tough days set the stage for a much more rewarding relationship. Over the past six years, Aly has built Tonal, which makes an ingenious digital strength-training system for the home ­– essentially, a Peloton for strength conditioning – into a star of the booming home fitness market. Mayfield was there every step of the way.

Partner Tim Chang, an early quantified self, biohacking & fitness enthusiast, provided early strategic and product help and led the effort to secure seed financing. Since then, he’s helped recruit key advisors and executives, who have successfully overseen the company’s hyper-growth. Tonal recently announced a $250 million funding round, led by Dragoneer Investment Group, at a valuation of $1.6 billion with new athlete investors including Maria Sharapova and Mike Tyson. Mayfield invested in the round alongside other existing investors, including consumer VC giant L. Catterton. Prior investors include Amazon’s Alexa Fund and athletes including Steph Curry and golfer Michelle Wie.

“It’s been especially rewarding to get to work closely with a repeat Mayfield founder right from the very early days of the company, on a product that I’m personally excited about and have always been the perfect target customer for,” says Tim. “I’ve been into strength training for more than half my life, and had spent months and months prior to Tonal researching every home system on the market trying to build out my own dream gym. I knew from first glance that they had a breakthrough innovation never seen before in the field, enabling safe self-spotting for newbies as well as ‘quantified reps’ and advanced lifting modes such as eccentric loading for experienced lifters. It’s incredibly gratifying to see that early vision and thesis play out in the market, and resonate with so many customers!”

The Tonal story began after Aly joined Mayfield as an entrepreneur-in-residence in 2013. Coming into his office at Mayfield twice a week, he discussed ideas for another enterprise technology company with Navin, Rajeev Batra and other partners, who also opened doors to many of their contacts. And spending time at internal and external Mayfield events, including the daily lunches for staff, provided him a view on everything from finance to culture. “I haven’t talked about this much publicly, but I was a solo founder. When you don’t have co-founders, it’s a lot more important to trust and be comfortable with your investors,” says Aly.

While this was happening, Aly decided to get in shape, and lose the chubbiness that had frustrated him since childhood. He was soon hooked on weight-lifting and lost 70 pounds in nine months.

But he’d also lost countless hours driving back and forth to the gym and waiting for equipment to free up. Then, while lying on a bench staring at all the digital displays on the analog equipment, an idea popped into his head. “If I could make a system that uses electricity instead of gravity, I could shrink it down into something I could use in my apartment,” Aly recalls. “It could completely change the world of strength training, which has been stuck in the past for too long.”

At first he kept the idea to himself, wondering if a heavy-duty technologist who’d never been a CEO could pull it off. When he shared it with Mayfield’s partners, Navin asked: “Are you sure you don’t want to do something in enterprise infrastructure?” But when Aly pointed out that he wanted to follow his newfound passion for fitness to make an impact on people’s health, Navin encouraged him. And Tim was a believer and a booster from the start, and loved the company’s initial name: Ript Labs.

After six months, in late 2015, Aly had a working prototype and asked Tim to give it a try. After just a few bicep curls, Tim told Aly to come back and pitch the partnership again.

Aly did so a few days later and just as he returned to his apartment afterwards, he got a call from Tim asking him to come back to Mayfield’s Sand Hill Road offices. A $1 million term sheet awaited him. After some minor negotiations, they shook hands on the deal and an updated term sheet soon followed.

Tim sought out seasoned entrepreneurial talent with the right backgrounds to help build the team, as well as other angel investors that could help. Tonal ended up raising $1.5 million in its seed round in May 2016, led by Mayfield with participation from Bolt Ventures and angels, many of which resulted from Tim’s introductions. Just as important as the money was access to Bolt’s R&D lab, which was equipped with 3D printers and $250,000 CNC machines that are used for rapid prototyping.

Tim has continued to counsel Aly on everything from strategy to product, helping to gamify the Tonal experience. He introduced Aly to numerous venture firms which resulted in an $11 million series A in October 2016. And Tim helped to persuade former Fitbit chief business officer Woody Scal and former Twitter COO Adam Bain to become independent directors, and helped recruit Tonal executives such as content chief Ryan Vance.

“I think I have personally sold more Tonals than any other board member,” says Tim, who proudly describes himself as an advocate and word-of-mouth promoter of the product.

Looking back, Aly says none of that would have happened without the enduring bond that he and Navin cemented during the bad-old days at Pano Logic. “When things are going smoothly, it’s not really so necessary to have strong relationships with your investors,” he says. “But when things are rocky, that’s when you see who your friends are.”

“As a people-first investor, you have to believe in people, even if their prior experience is different from the idea they are passionate about,” says Navin. “It has been inspiring to see Aly grow into a great leader and to watch the impact that Tonal has made in delivering fitness to thousands of people.”

Click here to read other news on how Tonal became a home fitness star.

How the Rancher No-Drama Team Quietly Built a Kubernetes Leader

For the five years Mayfield partner Ursheet Parikh sat on Rancher Labs’ board of directors — from Mayfield’s A round investment in 2014 to the sale of the company in 2020 for over $600 million — Rancher never missed a quarterly financial target, despite two major pivots and one pandemic. Even the board meetings went smoothly, says Parikh, never exceeding the allotted two hours.

“Working with Rancher has been a delight from day one,” says Ursheet. “It’s the lowest-drama company I’ve ever seen.”

Sheng Liang, co-founder and former CEO, credits a “keep-it-simple” philosophy. “We hit our goals by laying out a plan we think we can achieve, and then finding a way to meet it. That’s it,” says Sheng, who is now president of engineering and innovation for SUSE, the German open-source giant that acquired Rancher last December.

Of course, keeping things simple doesn’t just happen. It requires some key ingredients. First among them is trust, so that executives, employees, and directors know they can rely on each other to do what they say they will. Another is transparency, so that everyone can pull together to address challenges as quickly as possible. And it requires a particular kind of pragmatism.

“To be a successful entrepreneur, you have to be ambitious and optimistic. You have to believe you can topple VMware, or Amazon,” says Sheng. “But many companies get carried away and don’t back it up with a dose of reality.”

Sheng, an engineer who had a key role in the development of Java while at Sun Microsystems in the 1990s, eschews many practices that complicate life for Silicon Valley entrepreneurs. For example, Rancher never had different sales targets for the board, the company, and the sales team. There was no sandbagged “board plan” to keep Sheng looking good for directors, and no unrealistic “stretch” plan promising soaring bonuses to salespeople who hit higher sales quotas. Instead, every salesperson at Rancher had one unchanging quota, based on the only plan that mattered: the real one.

“If you can grow 100% a year, there’s no reason to go for 120%,” says Sheng. “Heck, if you just grow at 50% for another 20 years, you’re the next Microsoft.”

Seeing the opportunity

Given its business, Rancher had little room for shenanigans. The company was founded in 2014, when companies were flocking to a new technology called “containers,” which let them deploy their software in tiny chunks that could be run on any kind of infrastructure, from a mega-data center to the server in the closet.

Rancher’s founders immediately understood the implications. Sheng, Shannon Williams, and William Chan had founded Cloud.com in 2008. It sold software for anyone that hoped to create their own cloud platform rather than use AWS or Azure.

By the time they started Rancher (Darren Shepherd, a former Cloud.com customer, was the fourth co-founder), very few people would think of competing with AWS, Microsoft, or Google. But while these companies offered their own container services, Rancher’s founders foresaw a day when companies would need “multi-cloud” tools that would work on all of the main platforms — say, to be able to shift to another cloud service or company-owned data center, if a cloud had an outage.

For the first 18 months, the team struggled with how to help customers trying to run software in such a heterogeneous world. A technology called Docker had emerged as the basic container technology. If Docker containers were like rail cars of code, customers still needed a system to organize them into trains, and to manage those trains as they moved onto different gauge rails.

Rancher built a Docker-based system, just in time for it to be rendered irrelevant by Kubernetes, an open-source technology created by Google that quickly became the standard container framework. Suddenly, the tiny company faced competition from a slew of well-funded startups offering their own implementations, or “distros,” of Kubernetes. Worse, the cloud giants themselves threw in Kubernetes management as a freebie to get companies to use their cloud offerings.

It was a scary time, says Shannon. But the level of trust was such that no one left. “We had so much confidence in each other that we didn’t face the self-doubt that brings down a lot of startups,” says Shannon. “We were able to move through a risky time pretty comfortably.”

Forging a new path forward

The easiest path would have been to crank out their own distro, with extra features or some other small advantage. But Sheng was not willing to bet the company that Rancher could do a better version of free.

“If you have an ounce of honesty, you’d have to realize that was a hopeless business model,” he says. “It was obvious to us, but I can tell you it wasn’t obvious to a lot of our competitors, and still isn’t.”

Instead, the team bore down on finding unaddressed niches in the Kubernetes ecosystem. While many distros focused on running software on a particular public cloud, Rancher’s namesake product helped customers easily move containers between competing clouds, but also on other kinds of infrastructure, such as legacy, company-owned data centers. In 2019, it added a popular miniaturized Kubernetes distro called k3s that can be squeezed into IoT devices such as wind turbines and drones, which have very limited compute capacity.

As sales rose, the founders made sure to keep their focus on market realities. At one critical juncture, Sheng and Shannon, who was Rancher’s president before the acquisition, decided to write down a list of all the reasons a customer would not buy Rancher’s products — from lack of a feature, to the fact that the company was simply too small. While many startups focus only on making their products as good as possible, “We’ve learned that the why nots are often more important than the whys,” says Shannon. Rancher’s development effort therefore focuses as much on eliminating “why-nots” as creating “whys.”

By early 2020, Rancher had carved out a valuable corner of the booming Kubernetes ecosystem, and done so quickly. Sheng loves to point out that rival Red Hat had a Kubernetes distro before Rancher was even founded, but didn’t come out with a Rancher-like product until 2020. “We went from three years behind Red Hat to two years ahead.”

When SUSE approached the company about an acquisition in July, the Kubernetes market was heating up. While the pandemic had hurt overall tech spending, it had also caused many companies to accelerate their adoption of the cloud as a way to save money and accomplish their digital transformation goals. While Rancher had grown to 250 people, Shannon figured SUSE’s much larger sales and engineering teams meant Rancher could quickly reach ten times more customers than it could on its own.

“The market was developing much quicker than expected, and by combining forces with SUSE we’ll be able to build the undisputed market leader in Kubernetes,” says Sheng. “Ursheet supported us staying independent but also realized that the exit could help us realize our vision and that it made sense for our stakeholders and employees.” The SUSE offer was one of many, and the company’s value had more than doubled by the final bid.

Read also: Ursheet Parikh’s cradle-to-exit role at Rancher Labs

“We’ll never know what might have happened otherwise,” says Sheng, “but we probably did the right thing.”

Again, no drama.

How Volterra Dreamed Big, Then Focused Its Way to 300% Growth

Ankur Singla knows what it’s like to be an overnight success. Back in December 2012, Juniper Networks bought his first start-up, Contrail Systems, for $176 million. The company was just nine months old.

So when Ankur started Volterra in 2017 with $25 Million in Series A funding led by Mayfield, he was looking for a different kind of experience. He wanted to develop technology to tackle one of the digital economy’s knottiest problems, knowing full well it might take years to solve. He just didn’t know which problem. So while he searched, Volterra’s engineering team started work on a new kind of soup-to-nuts “edge” network that companies could use to replace scads of standalone products that weren’t designed for modern cloud applications. Whatever problem Ankur ultimately settled on, it would make use of this cloud networking platform. 

“I was on a quest to find that big application, and we ended up going on a lot of goose chases to find it,” says Ankur. “And then the pandemic hit.”

Suddenly, companies all over the world were trying to figure out how to keep employees productive from their homes, and edge-centric networks, which handle traffic closer to end users so everything doesn’t go back to overwhelmed corporate networks, were suddenly center-stage. After refocusing on a technology that was supposed to have been a means-to-an-end, the company’s sales grew at a 300% clip in 2020. To take better advantage of the sudden demand, Volterra agreed to be acquired by much larger F5 Networks for $500 million in January 2021.  

“We didn’t want to do another infrastructure company,” he says. “We created technology we could apply to a big and tangible problem, like autonomous cars or industrial robotics. In the end, we found we’d already created something that applied across many problems.”

“Founding investors have to build a zone of trust with founders as they explore the different phases of early stage company building,” says Mayfield managing director Navin Chaddha. “It was a delight to partner with Ankur, who is a big thinker and constant learner, as he and the team guided Volterra to a great outcome for all.”

From the beginning, Volterra’s networking and security technology was designed to address the obvious weaknesses of legacy networks in a cloud-centric world. For decades, companies had built expensive, complex private networks so employees in the office could safely use applications they created or purchased from companies like Microsoft and Oracle. By comparison, the public Internet was insecure, slow, and inefficient. With little network capacity at the edge, every mouse-click generated traffic that might have to travel thousands of miles to a corporate network or cloud data center,

The public Internet was also unbalanced. Network capacity was largely architected so a few big companies (think Netflix) could push content to consumers and far less for when consumers wanted to send information back.

Read also: How Mayfield’s Navin Chaddha Supported a Founder’s Quest

Ankur realized those assumptions no longer applied. Long before the pandemic, companies were shifting rapidly from on-premises applications to cloud services that live on that same Internet they used to eschew. And overall traffic patterns were shifting as well: It wasn’t just Netflix movies sucking up the Internet’s capacity, but billions of Instagram, YouTube, and TikTok posts ricocheting across the globe.

“The Internet was built for moving data downstream. With the distributed nature of modern applications, we realized it needed to be more symmetrical,” Ankur says. “That was probably our biggest insight.”

But it wasn’t his only one. The 100-person engineering team also developed a new security model for distributed applications and a console that enabled network administrators to easily monitor and manage them all. Significantly, it was “multi-cloud,” allowing companies to securely manage apps hosted on AWS, Google Cloud, and Microsoft Azure as if they were one.

“The basic idea was, ‘We will operate the network and apps for you so you can focus on your business,’ Ankur says.

When the company came out of stealth mode and began selling in 2019, the response from customers was swift.  SoftBank, for example, signed up to use Volterra’s platform in its new 5G network in Japan, as did other companies from a wide variety of industries.

While Ankur kept drilling down on the right applications to maximize Volterra’s value-add, the company leveraged the capital it raised to staff up to about 125 employees, almost half of whom were industry veterans who had worked with Ankur at some point during the past 15 years.

When COVID hit, Ankur expected demand for the product would drop. He decided to put his quest for “the killer application” on hold, and focused on the existing product to ensure the company’s near-term survival. Instead, demand spiked as companies that had only been thinking about moving to multi-cloud and edge-centric computing suddenly had no choice. Enroute to that 300% growth in 2020, Volterra signed up customers that included two more huge phone companies and a top five carmaker.

By year end, it had become clear the company’s ten person sales and marketing team couldn’t keep up with demand. Ankur began looking for a partner with a larger sales force and established marketing programs, to help make the most of the moment. 

One of the potential partners was F5, a 25-year-old company with a broad product lineup, a well-known brand, and a long list of marquee clients that might be receptive to Volterra’s technology. The companies also shared a similar raison d’être.  Both focused less on the basic plumbing of the Internet, and more on making sure companies could run their apps as quickly and safely as possible anywhere. 

When talks escalated and F5 made its acquisition offer, it was the right decision for investors and offered the best way to drive adoption of the company’s technology. 

“I had really wanted to keep building the company,” Ankur says. But after long discussions with advisors including Navin, Volterra accepted the bid from F5.

“You’ve got to do what is right for the team,” Ankur says. “I’ve learned over my career that if you don’t, things will never work out in the long-term.”

How the NUVIA Dream Team Built a New Age Silicon Company

From the outside, the brief story of NUVIA reads like a Silicon Valley fairy tale. Three semiconductor industry veterans who had worked together at Apple on the A-series chips that power millions of iPhones and iPads started the company in 2019 to create an ambitious new kind of chip for data centers. Less than two years later, on Jan. 12, Qualcomm announced its intent to acquire Nuvia for $1.4 billion plus company cash and completed the acquisition on March 16.

Easy peasy, right?

Wrong. NUVIA had raised a $53 million Series A round in Summer 2019. The founders started discussions with investors and strategic partners to raise their Series B, with expectations of closing a round within a few months.  But after COVID-19 hit, all financing discussions paused, leading to worries about future funding.  “This put some serious gray hair on our heads,” says Gerard Williams, NUVIA’s CEO, who co-founded the company with Manu Gulati and John Bruno. “We’d convinced hundreds of great people to leave cushy jobs to join us.”

Having never so much as pitched a VC before starting NUVIA, these first-time founders were fortunate to have an experienced team of advisors and board members to help them navigate the challenging times. Our own Navin Chaddha took a particularly active role, both in driving a process that led to a $240 million Series B last September, and in the decision to sell to Qualcomm a few months later.

Navin’s involvement with NUVIA dates back to early 2018, when Manu and John, then at Google had an idea for a data center start-up and then reached out to talk to Gerard, still at Apple, about joining them in this endeavor. To test their basic thesis — that data center operators needed a new kind of super-fast, low-power server chip to keep up with the soaring demands of an increasingly cloud-based economy — Manu called Navin for an informal chat.

The two had known each other since the late 1980s, when they were classmates at the Indian Institute of Technology in New Delhi. Manu knew that Navin was one of the few VCs in the Valley with experience and enthusiasm for the high-stakes game of building chips. He’d even developed a detailed thesis about a coming “silicon renaissance.” 

“Not many investors have an appetite for something as capital intensive as building silicon, and far fewer understand the big picture, or all the global trends,” says Manu. “Navin advised us to go big. Plus, Navin was the top student in our class, so we wanted him on our team.”

The admiration was mutual. Navin had followed Manu’s career as he, and later John, moved to Google to create processors for consumer devices. The two of them and Gerard have a combined 100 patents and 20 major chip architectures on their resumes.

A pandemic, and a seismic industry change

NUVIA got off to a great start. By the end of 2019, it had assembled a star staff of 100, and was well on its way to developing a server processor codenamed “Phoenix” that in tests would run up to twice as fast as competing chips from Intel and others. By February of 2020, Nuvia had lined up investors for a big Series B round to be raised around mid-year. 

Then, the pandemic hit. “Everything came to an absolute standstill,” says Gerard. “It seemed like no one wanted to jump in anymore until things got back to normal.”

That’s when Navin and other board members took a more active role. They led a plan to reach out to potential investors and run a tight fundraising process. They pitched many new entities within a few weeks, including big financial institutions (previously, they had focused on VCs and strategic partners.). During this time, the board met around three times a week to discuss promising leads, but Navin often spoke with one of the founders multiple times a day. “Navin was very, very proactive in making sure all the leads were followed and making sure the spreadsheet was up to date,” says Manu.

Finally, on Sept. 24, the company announced a $240 million Series B. The round was led by Mithril Capital, and Mayfield was joined by investors including Marvell Technology Group founders Sehat Sutardja and Weili Dai, as well as funds and accounts managed by BlackRock and Fidelity Management, WRVI, Dell Technologies, Capricorn and others. 

Then, the industry was rocked by a series of headline-making announcements that reinforced new realities, including increased consolidation in the data center silicon industry, including a decision by the world’s largest consumer device company to make more of its silicon itself. In September, Nvidia announced a planned $40 billion acquisition of ARM Holdings, saying it would let big cloud companies integrate Nvidia’s AI and graphics technologies into custom-designed chips. In November, Apple unveiled its first Macs powered by its own M1 chips (rather than chips from Intel).

As they tried to think through the new market realities, the team got the kind of sober, honest counsel that Navin is known for. He explained why the changes might reduce NUVIA’s TAM if more companies moved to in-house silicon programs, but also why the new conditions might compel industry giants to want to buy NUVIA in short order.

Sure enough,there were multiple acquisition inquiries  – and the founders were prepared to consider them. Just to be sure, Navin and other directors spent time with each of the co-founders to find out if they were ready to give up on their dreams of building their own independent, public company. “The board was 100% behind us either way,” recalls Manu. “But emotion can get in the way at times like these. Navin helped us stay data-driven and objective. He plays the cards in front of him, and doesn’t mince words. I love that about him.”

When talks with Qualcomm got more serious, Navin showed another side of him that the founders hadn’t expected. “Navin really, really, really – I don’t know how to emphasize this enough – cared about our employees. Looking back on 2020, it’s clear he was trying to do what was best for them all along the way,” says Gerard.

“None of this could have been possible without the support and guidance of our early stage investors, and in particular Navin,” says John. “He took a threesome of first-time founders and stood by our side all the way through.”

When asked about the one quality that first-time founders should look for an investor, the answers come in quickly:

Gerard: Stamina;  Manu: Founder friendliness; John: Resilience

 

How Outreach Grew Into A Category-Leading SaaS Powerhouse

The relationship between Mayfield partner Rajeev Batra and Manny Medina, the co-founder and CEO of Outreach, started off with a big misunderstanding. Actually, two of them.

The first happened in 2012, when Manny sought Mayfield’s investment in GroupTalent, a recruiting software start-up he had co-founded. After hearing the pitch at Mayfield’s offices, Rajeev was deeply impressed with the first-time CEO’s obvious talent, curiosity and intensity. “He clearly showed many of the signs of a great entrepreneur,” says Rajeev. But all Manny heard was that Rajeev chose not to invest.

Then, two years later, Rajeev cast the deciding vote against Manny’s newly pivoted incarnation of the company in a startup competition put on by the Harvard Business School, their mutual alma mater. Manny’s antipathy hardened. “When I heard how we’d lost, I swore I’d never speak to Rajeev again,” says Manny, a former Microsoft product manager and early Amazon AWS team member. “He was dead to me.”

So a year later in April 2015, Rajeev knew he was in for a fraught conversation when a couple of mutual friends told him that GroupTalent had morphed into Outreach – and was exactly the company he’d been searching for: one that made software to help salespeople be more effective in their outreach to potential customers. When one of them urged him to give Manny a call, Rajeev thought: “Ooh, I’m not so sure he likes me very much.”

Unable to quell his intellectual fascination for anything involving sales and marketing-related technology, Rajeev overcame his hesitancy and contacted Manny. After a somewhat chilly first exchange – they laugh now about how Manny at first tried to put off the meeting for months, before inviting Rajeev to his tiny office – they quickly bonded over a shared belief that Outreach could crack one of the most obvious remaining opportunities in cloud software. Despite Salesforce.com’s dominance of the CRM market, the cloud had yet to revolutionize the daily lives of salespeople.

“The original idea behind CRM twenty five years ago was to help salespeople be more productive, but it ended up being a tool for sales managers that salespeople are forced to use, not because it helps them or they love it,” says Rajeev. What salespeople needed, they agreed, was a tool to help them boost their win rates by optimizing and streamlining their use of communications channels such as the phone, email and LinkedIn. “I’d kept close tabs on sales automation since I worked at Siebel in the late 1990s,” says Rajeev. “It was clear that Manny was approaching the problem in a truly original way that could transform how salespeople engage with customers.”

Five years later, Outreach is the leader in a thriving market called Sales Engagement. Its position in the burgeoning market, estimated to be $30B+, has turned Outreach into a unicorn. The company estimates that fewer than 10,000 companies now use sales engagement tools, compared to a million or so that use CRM to keep track of customer accounts. “This is a 100x opportunity,” says Manny.

And a relationship that began bumpily has turned into a deep bond, with Rajeev becoming a trusted advisor for Manny on everything from the company’s basic business model, to how to professionalize its own sales and marketing strategy. “When you’re growing as fast as we are, you’re always operating way out in front of yourself so there’s going to be some self-doubt,” Manny says. “Rajeev is a great sounding board, so those doubts don’t become debilitating.”

Meanwhile, Rajeev has come to admire Manny’s purposeful, transparent leadership style, and the way he has honed a company culture that is hard-driving yet empathetic. “The real story is about Manny’s growth as a CEO, from a guy with a twinkle-in-his-eye that wouldn’t take no for an answer, into the leader of a company that is changing the world,” says Rajeev.

The anatomy of a founder/early investor partnership

When Rajeev made that call in April 2015, Manny and his three co-founders had begun to pull their company out of a death spiral. With cash running out, they’d created workflow software to help them make better use of digital tools to identify and set up meetings with potential customers for their recruiting platform. When customers began showing more interest in the sales software, they pivoted hard and relaunched the company as Outreach.

With grit and charisma, Manny all but willed the company forward. He landed dozens of accounts by cold-pitching tech executives as they tried to enjoy a quiet latte at a San Francisco coffee shop. “It makes it very hard for people to say no when you’re standing right there,” Manny says.

When Manny first responded to Rajeev’s call, Outreach had just raised a $2.4M seed round for the newly pivoted business and was not in a rush to raise a series A. Still, Manny couldn’t resist making Rajeev sweat a bit.

“We’re a little booked up until after Memorial Day,” Manny told Rajeev. That was more than a month away, an eternity for a VC who thought he may have found the startup of his dreams. Manny ultimately agreed to meet sooner, but insisted Rajeev come up from Sand Hill Road to Manny’s tiny office in a not-so-swank section of San Francisco. “It was really just a desk, two chairs and a table with a TV that didn’t work,” Manny laughs. “I appreciated his persistence. He knew this was not going to be an easy meeting.”

By the end of the 2.5-hour meeting, things had turned around. Manny had given up his boycott of Rajeev. He started contacting the dozen or so CEOs and SaaS leaders Rajeev felt could help the first-time CEO take advantage of the opportunity Outreach had created. That August, Mayfield led Outreach’s $9 million Series A, and Rajeev joined the board.

From startup to “real” company

From the very beginning Manny was tapping Rajeev’s insights about how to scale a SaaS company and expertise in CRM. The Mayfield partner had been an early investor in Marketo, a leading marketing automation software company that had done for digital marketers what Outreach was trying to do for salespeople.

The most obvious place where Outreach needed help was ironically, in finding true product market fit and aligning its go to market (GTM) motion and putting basic financial controls like collecting cash before paying commissions. Manny had cobbled together a less-than-traditional team for a company aspiring to sell to the world’s most sophisticated companies. It consisted of a small group of gung-ho recent graduates willing to work on commission alone–more Glengarry Glen Ross than Silicon Valley. Manny let them set up a sales office amid the shut-down steel mills near Penn State. The average deal size they were closing was just $1,200 and less than two seats per customer.

“You know you can’t build a big company this way, right?” Rajeev told Manny the day after Mayfield became an investor in Outreach. “He told me ‘You’re running this place like a drug dealer,’” says Manny. That was on a Friday. On Monday, after a weekend of worry, Manny called an all-hands meeting. From then on, he announced, Outreach wouldn’t do deals for fewer than 10 licenses.

When sales began to soar, Manny’s instinct was to keep his foot on the gas. But when he told the board of his plan to grow annual recurring revenues for 2016 six-fold, from $2.7 million to $17 million, Rajeev urged him to first ensure the company could give itself the room to learn and build its teams and processes to nail product market fit and understand levers of growth. “What are you trying to prove, Manny?” After much debate, Manny changed the target to “only” $10 million. “As a systems thinker, Manny relies on both data and instinct,” says Rajeev. “There is an obsession with the numbers and not the “why” of the numbers. You want to create a culture of setting lofty yet achievable goals, not impossible ones. This creates a possibility of winning, not one of despair & losing no matter what.”

Building a world-class team & equitable culture

The Outreach culture has always been “team first” and deeply rooted in its values of GRIT, having “each other’s back”, accountability, and customer centricity. To that end Manny has been obsessed with surrounding himself with a great team and advisors he can learn from and be an excellent leader & CEO. From the early days, upon Rajeev’s recommendation, he joined 10XCEO, a peer based CEO coaching group and now counts many world class SaaS Entrepreneurs and CEOs on his speed dial and many who reach out to him for counsel. The company has won numerous awards for being one of the best companies to work for.

Working closely with Rajeev, Tejas Maniar, Mayfield’s head of talent, has helped Manny and Outreach CRO, Anna Baird recruit its CTO, CFO, chief people officer and other key people. Gamiel Gran, Mayfield’s vice president of business development, leverages the firm’s CXO network to connect Outreach executives with people who can supply everything from messaging feedback to customer introductions. Kamini Ramani, Mayfield’s VP of Marketing, secured an invite for Manny to attend an exclusive retreat of enterprise software leaders, at which he met Aneel Bhusri, co-founder and CEO of Workday, who became an investor and advisor to Manny.

While he’s a sponge for learning from others, Manny has an uncanny instinct for talent and people, an important quality in a CEO which is worthy of honing. Most importantly, as an immigrant of Latin/Russian descent he understands what it means to not be from “central casting” and to be overlooked for otherwise suitable opportunities.  When Outreach was preparing to hit the gas on its growth plans, Manny insisted the company hire Matt Millen, who had run sales for motivational speaker Tony Robbins before selling business telephone services for T-Mobile. Rajeev was surprised given Millen’s lack of SaaS experience but shared Manny’s belief that Millen’s empathic, emotional style would resonate. Millen ended up taking sales from $5 million to $50 million before Manny promoted another “non-obvious” choice: former CFO/COO Anna Baird into the CRO role.

Vision, mission and purpose

While there has been an incredible focus on establishing and owning the Sales Engagement category, Manny is always thinking bigger, strategically about the future of the market and most importantly what is the purpose of Outreach.  Why should it exist and why does it matter and to whom?

The basic thesis behind Outreach – that existing sales tools such as Salesforce.com’s CRM was beloved by sales managers, but not by actual salespeople – was bearing out. Rather than position Outreach as an app that could fit into those CRM platforms, the company has set out to create an entirely new AI driven platform for sales and customer engagement addressing a completely different paradigm.  One, where buyers are in control and users of technology are digital natives and remote selling is the norm. It is like providing autonomous cars in a world of horse drawn carriages.  That has meant making huge investments in everything from engineering, which is 40% of revenue, to positioning and branding, and it meant “tickling the dragon” that is Salesforce.com.

Above all, Outreach is about using technology to enable salespeople, the true unsung heroes, to solve their customer’s problems, drive revenue for their business and earn a living.  When sales people can be empathetic to their customers’ needs, the top line improves efficiently for a company, which in turn allows it to invest and innovate and improve the world.  The mission and the “why” of Outreach is simply that and as Manny puts it most people have one big idea and this is it for him!

The pandemic has only served to accelerate the company’s mission with more than 4500 companies running on Outreach.  With $289M in total venture funding, the last round even included Salesforce.com’s internal venture group, a nod of acknowledgement from the biggest player in SaaS.

Thinking back on what went right, Manny and Rajeev agree on a few key lessons.

You should choose your investors – not get chosen by them.

Besides Rajeev’s willingness to change his mind and hustle, Manny was impressed that the Mayfield partner truly shared, and understood, his vision. “After working with Mayfield, we never engage with a firm that doesn’t come in understanding the market. If a VC says ‘alright, pitch me your market’, I’ll say ‘no, you pitch me my market’,” says Manny.

If you’re creating a category, don’t try to be too cute. Enter it, embrace it, most importantly own it and lead it.

Outreach began evangelizing the idea of sales engagement software in 2015, but the concept didn’t immediately resonate with influencers and the media. Concerned, the company spent several months and too much effort trying to establish other labels, such as “revenue intelligence management”. Rajeev, who’d seen Marketo go through a similar process before coming back to the original “marketing automation” idea that ultimately led to its acquisition by Adobe in 2018 for $4.75 billion, was among the voices urging Manny to stick with the original plan. “The lesson was to be extremely intentional about owning and leading the category,” says Rajeev.  “Especially when your customers and all the players in the market start embracing your original pitch.”

“The first rule of building a category is don’t call it something stupid,” says Manny. More seriously, stick to your guns on the strategic value, and try to create a vocabulary that establishes you as the leader. “Suddenly, after a year, all our competitors are talking about ‘sequences’,’’ which is a key element of Outreach’s product and has been prominent in Outreach’s marketing.

Helping people and cultivating friendships helps cultivate sales.

One thing Manny learned while selling to strangers in coffee shops is that selling is still a very human activity. “If I could get someone to watch our demo, I had a 100% hit rate in getting them to do the trial,” Manny says. And often, those people became personal friends that turned into long-term supporters for the company, as well.  Which in turn fueled a grassroots movement for the category and Outreach.

It’s not what you know, it’s what you’re able to learn.

Manny says he was not a natural salesman. In fact, he wasn’t born much of a capitalist. He grew up in Ecuador, where his grandfather was a leader in the Communist Party. He credits his ability to continually adapt to an insatiable curiosity. “My superpower, if I have one, is that I’m unnaturally curious about your business. I’m almost voyeuristic, but it tends to lead to a lot of great discovery calls,” he says.

Rajeev credits Manny for his ability to grow from the hustling first-time founder pitching potential buyers at coffee shops, into a seasoned leader and CEO who combines competitiveness with an insistence on doing what’s right. Whether it comes to hitting revenue goals or on revamping a basic human activity – selling – “he simply doesn’t take no for an answer.”

Of course, Rajeev and Manny don’t agree on everything. Manny still doesn’t seem persuaded by Rajeev’s convoluted explanation about why he wasn’t actually the deciding vote in that HBS contest five years ago.

But they’ve settled into a fruitful partnership in which Rajeev, who has seen some version of whatever Manny’s latest challenge happens to be, provides a patient ear. “When you’re growing as fast as we are, you’re always operating way out in front of yourself so there’s going to be some self-doubt,” Manny says. “But Rajeev is a great sounding board, so those doubts don’t become debilitating.”

 

Portworx’ Secret Formula for Startup Success: Sell First, Build Later

What’s the key to start-up success? Sell first.

That’s the philosophy that Murli Thirumale and Gou Rao have used to create three successful start-ups. The most recent is Portworx, which was acquired by Pure Storage for $370 million in September.

Rather than immediately investing in engineering or preparing decks for potential investors, they first find customers willing to help them hone a basic idea into technologies customers will actually buy. “People don’t have time to waste on things that don’t solve their problems,” says Thirumale. “This way, you have partners that want you to succeed, because you’ve solved their problem together.”

This sell-first idea is core to what they call SDBS, a formula that stands for sell, design, build and scale. Thirumale developed the approach when he was building enterprise networking businesses inside Hewlett-Packard in the 1990s, in part by partnering closely with chipmaker Qualcomm. He met Rao, an OS architect at Intel, through family friends in 1999. Within months they’d quit their jobs to create Net6, which made secure networking solutions for the burgeoning Voice-over-IP market.

After selling Net6 to Citrix in 2004, the duo ran the same play to create Ocarina Networks in 2006. Working with potential customers, they came up with storage optimization software that allowed companies to store up to ten times more data on traditional enterprise storage systems. In 2010, Ocarina was acquired by Dell.

By 2013, Thirumale, Rao and Vinod Jayaraman, who had joined Ocarina in 2008 as principal architect, were ready to start something new. As with both previous companies, they considered a broad range of ideas.

They could catch the fast-growing AI wave by creating a data visualization platform so even non-data scientists could ask and get answers to complex questions. Thirumale, in particular, was excited about creating a smart ring platform that would let consumers control their TVs, thermostats and car doors with air gestures. Or they could stay in storage and come up with a new approach to match the way many enterprise software developers were starting to create and deploy their code: within virtualized containers, such as those managed with Google’s popular Kubernetes framework.

“We took our time to do due diligence in all three areas, to make sure we could find a problem worth solving, and one we could really get excited about,” says Rao.

Their process doesn’t just involve whiteboard discussions and PowerPoints, but building an intentionally “half-baked” prototype, says Rao. It doesn’t have to be even as ambitious as a minimum viable product, often mentioned as a mandatory early step. But it does need to give customers a sense of how the technology would fit into their lives.

“If we were to build a car, we wouldn’t start with the engine but with the seats, so the customer would know how it would feel to sit inside,” he says.

Typically, this means focusing on the user interface more than technical features and capabilities. In the case of the smart ring, the prototype progressed to the point that Jayaraman, wearing a circuit-card on his wrist, was able to show how he could navigate through Google Earth using only hand movements.

“We’re big believers in designing the UI first, and saving the hard stuff for later,” says Rao. “It’s a lot easier to get off on the right path, and then make micro-corrections.”

The key ingredient: customers

Of course, key to SDBS is finding customers willing to take the time to help define a winning product or service. Portworx’s founders called upon customers from their previous startups, and also hired industry consultants, which provided additional potential customers willing to hear a pitch.

But they also hired veteran enterprise technology salespeople of their own—a major investment, especially since the company was nowhere close to landing significant contracts. “We hired Paul Searles and Jake Johnson in 2016, nine months before we planned on having a sellable product,” says Rao. Rather than sales, their quotas were tied to metrics such as proof-of-concept starts or the number of demos they gave to qualified leads.

“It’s about finding co-development partners,” says Thirumale. “From our perspective, they are angel investors of a different sort.”

Often, these partners fell into one of two groups. Either they were innovation leaders themselves, and wanted to partner with a vendor who could help them get a competitive advantage by pioneering the use of an important new technology. Or the Portworx team convinced the partner they were uniquely qualified to solve its storage related problem. “If they realize you’re going to move mountains to make them successful, it’s like they’re getting some of the best folks in the world to work for them for free or for a big discount,” says Thirumale.

Building Portworx

Ultimately, Thirumale, Rao and Jayaraman chose to stick with storage. The AI market was already getting crowded, and after deep analysis they realized creating the smart-ring platform would require taking on cable-box makers—not a business they were interested in.

Plus, storage was ripe for change. Plenty of startups had created “cloud storage” solutions that were geared for the traditional buyers of such gear, data center storage administrators who were driven heavily by the desire to reduce the amount of hardware they needed to buy.

Rao, as chief technology officer of data protection during his years at Dell, saw a more strategic opportunity: application developers, who were flocking to containers that let them create and run apps that took fuller advantage of the cloud, such as the ability to quickly add new features, or to secure them from the latest cyber-threats. But there was no way for developers to use storage to the utmost benefit—say, by enabling apps to continually decide whether time-sensitive data should be stored in a cloud data center in Oregon or Ireland.

“We knew that anytime there’s such a major shift in how enterprises manage their applications, the infrastructure needs to be re-thought,” says Rao.

Mayfield managing director Navin Chaddha helped the team think through the implications of the shift, Rao recalls. “Are you part of the storage ecosystem, or part of the software ecosystem?,” he asked the Portworx founders at an early board meeting. Rather than hedge, the team went all in on software.

Working with Mayfield: One mark of a great founding investor: knowing what not to ask
Read more >>

As with most entrepreneurial success stories, the timing was perfect. Developers were adopting the open-source Kubernetes platform, originally created by Google, for managing container-based development. Rather than try to convince customers to adopt something entirely new, Portworx created its platform around many of the processes and the vocabulary of Kubernetes.

Before long, sales had ballooned to more than 100 customers, including Comcast, GE and Lufthansa.

While the company leveraged open source technology, it did not embrace open source as a business model. Rather than give away its technology for free and charge for added features or customer support, Thirumale chose to forgo contributions of code from thousands of open source developers. “Maybe we’re old-fashioned, but we believe we can do the job with 40 or so very bright, hand-picked people,” says Thirumale.

He cites a fundamental reason why there are so few financially successful open source companies: because they’re not focused on winning over the people with the money to spend. “You can get a lot of people to join your community, in part because they wrote code for it. But often, these people don’t even work for large enterprises. They can deliver mind share, but not wallet share.

While agreeing on what Portworx should do was challenging, the decision to sell to Pure was far less taxing. Having executed so well on the product front, the main challenge ahead was to address the final S in SDBS, which stands for scaling. “That is traditionally the most expensive phase, because selling is expensive,” says Thirumale. “It became clear to us that Pure could rapidly accelerate our ability to achieve our mission. It was like strapping a large Go-To-Market rocket to ourselves.”

A broader point of view

Their experience founding three startups has reinforced for Thirumale and Rao that success is never a straight line. “Starting companies is always a roller coaster, and anyone who tells you they had it all planned out is lying,” says Thirumale. “So you need partners who you never need to worry about, because you know they’re in for the whole ride. I knew that with our first company, when we pivoted three times and built three completely different product lines—and nobody even brought up the idea of giving up.”

Most of all, it’s given them conviction in their approach of working with customers early in the process and relying on feedback from these potential users to guide the product development process. “The popular image of the entrepreneur is that there’s a flash of brilliance and lightning strikes and you have your idea,” says Thirumale. “But customers don’t buy brilliant ideas. They buy solutions that solve a problem for them.”

Qualcomm Acquires NUVIA for $1.4B

The announcement of Qualcomm’s intent to acquire NUVIA for $1.4 billion plus company cash today represents the joining of two forces – a team of dream big disruptors and an innovative industry leader – who will together deliver a new class of processors for a mobile-first, cloud-native, hyperscale data-centric age. The under two year Mayfield journey with NUVIA from idea to a unicorn has been fast, furious, and immensely rewarding. We first partnered with Gerard Williams III, Manu Gulati, and John Bruno, co-founders of NUVIA at the seed stage in April 2019. I have known Manu since our college days at IIT Delhi and met him in the  fall of 2018 – six months prior to the founding team coming together to brainstorm current and future  opportunities in the semiconductor space. Today, the company has raised over $300 million in funding from top-tier investors, employs 250 world-class people, and is well on its way to creating the world’s highest performance processor. In fact, this journey sets a record in our recent history as a firm, marking the shortest time between serving as founding investor to creating significant  financial value with a unicorn exit. As I reflect on our partnership, here are some lessons that come to mind that might apply to other first-time founders.

It is never too early to engage with investors

Manu reached out to me more than 6 months before NUVIA’s founding team came together. He knew that I was excited about the megatrend of the Renaissance of Silicon, and we talked about the industry dynamics, the timing of founding a silicon startup, and the influence of hyperscale data centers. It was Manu’s first serious exploratory investor discussion on the idea of NUVIA, and together with Gerard and John, who brought complementary skill sets and world-class leadership, they were extremely selective about their founding investors. They made sure to align with those who had a *founder-friendly* reputation, understood their target market, were seasoned enough to have seen ups and downs, and were well connected with key stakeholders. As a result, their seed-stage investors included Amarjit Gill, a semiconductor angel investor and prior serial entrepreneur (founder of SiByte and PA Semi), semiconductor legend Lip-Bu Tan, CEO of Cadence and managing partner at WRVI, and Mayfield, where our 51 year venture capital track record includes breakout silicon leaders such as Cypress, Inphi, LSI Logic, MIPS, S3, and Sandisk, along with Fungible more recently.

Vision and culture are key to a winning DNA

The team at NUVIA is united behind the vision of creating the world’s best ARM-based processor.  NUVIA’s approach is unique, allowing them to focus on delivering industry-leading performance with best-in-class energy efficiency. In fact, their processor will lead the industry in all five primary metrics used in this space, namely performance, energy efficiency, scalability, compute density, and total cost of ownership.

NUVIA’s success has a lot to do with the work environment and company culture. The culture emphasizes performance, innovation, ownership, and transparency. They knew that their task was ambitious and audacious for a team of their size. Therefore, they made sure individuals have a lot of responsibility, autonomy and know-how to get their jobs done. The result was a work environment that engineers love – one where they have unique technical challenges to solve, while working with an incredible set of peers to lean on as needed.

In our experience, embedding vision and culture into the founding DNA, vs. bolting it on as a company evolves, is key as it serves to unite the team and helps start-ups remain focused on the outcome, while making the necessary changes and tradeoffs along the way.

Build your core team with a sense of purpose

It is easy to succumb to the pressure of hiring talent to meet your milestones, without the right screening.  Most people who joined NUVIA in the first few months came from the immediate circle of contacts and acquaintances of the founders, to ensure that they had the right chemistry for the nucleus of their team. The result was that in a short time, they were able to assemble a world-class leadership team. Most of these people were hand-picked for their depth of expertise and experience in the core areas the company needed. With strong leadership in place, and a clear understanding of what they wanted to accomplish, they were able to scale the team and cast a wider net.

While these were unusual first-time founders with an established reputation and network, the general lesson of being intentional with key early hires holds for all founders, as moving quickly can result in costly mistakes.

Stay hungry, stay foolish

The NUVIA founders are silicon legends who have collectively driven silicon design and engineering on over 20 chips, including those that power the iPhone, with over 100 patents granted to date, and have held a diverse array of leadership engineering roles at Google, Apple, ARM, Broadcom, AMD and ATI Technologies. As we entered 2020, they had raised a $53 million Series A round in August 2019 from us, WRVI Capital, Dell Technologies Capital and Capricorn Investment Group, expanded beyond the founding team with blue-chip talent, and were well on their way to proving out their proof-of-concept.

However, they too, were impacted by the pause resulting from the COVID pandemic, in the midst of raising their Series B.  The tech industry fell into a position of temporary paralysis. In an instant, conversations and resulting decisions were put on hold as everyone tried to anticipate the impact and gravity of the situation. Nonetheless, the team persevered and kept exploring every avenue, along with the support of their existing investors, whose experience and deal-making prowess coupled with the team’s continued and diligent efforts resulted in the successful closing of a $240 million Series B from additional investors including Mithril Capital, Sehat Sutardja and Weili Dai (founders of Marvell Technology Group), funds and accounts managed by BlackRock, Fidelity Management & Research Company, Temasek, Redline Capital and Atlantic Bridge.

There are many such unexpected developments in the lives of young start-ups, which test the resilience of the team. By following Steve Jobs’ advice in his famous 2005 commencement speech to *stay hungry, stay foolish*, the entrepreneurs who thrive never lose their drive or their ability to dream.

It’s always about people

It was not easy for a silicon company with employees in five locations – the Bay Area, Austin, Canada, UK and India – to pivot into a remote mode overnight. NUVIA was also still at the design stage, which required intense collaboration. In addition, there was the distraction of the fundraise. However, being guided by the founders’ unwavering vision that they were building the next generation of processors; surrounding themselves with a culture of mutual respect; and building a zone of trust with their investors and advisors, helped them navigate to a successful outcome.

Congratulations again to NUVIA and Qualcomm on joining forces – we’re honored to have partnered with Gerard, Manu, John and the entire team, and look forward to watching them deliver on their vision in the journey ahead. We are delighted to see our vision of the renaissance of silicon coming to fruition.