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.

F5 Networks Acquires Volterra for $500M

F5 x Volterra

Today F5 Networks has announced its intent to acquire Volterra for $500M to enable application security, networking and delivery as an easy-to-use, enterprise-grade SaaS service for DevOps and NetOps teams, cloud architects and line-of-business app owners across organizations globally.

I have known Ankur Singla, co-founder and CEO of Volterra, for the better part of this decade.  We first met in 2012 while he was raising his Series A for Contrail Systems, his prior company.  While we did not invest in that company, we stayed in touch as both of us really enjoyed the intellectual interaction.  Contrail built a unique software-defined networking product, and was acquired later that year by Juniper Networks.  Our relationship deepened over the years, facilitated by Juniper founder Pradeep Sindhu, where we serve as the founding investor in his new company Fungible.  Ankur and Harshad Nakil, Volterra co-founder and CTO, identified a big problem area facing large enterprise customers and decided to leave Juniper to found another company.  We brainstormed on the journey of how to get from idea to company and led the Series A as founding investor in Volterra in November 2017.  Investing at this early stage was fueled by our belief in the founding team and our philosophy of being a people-first investor who has experience working alongside many enterprise founders to help define their trajectory, including Jake at Brighter/Cigna; Guru at CloudSimple/Google; Kumar and his team at CloudGenix/Palo Alto Networks; Murli and his team at Portworx/Pure Storage; and Sheng and his team at Rancher/SUSE.

Over the last three years, Ankur and his team have built Volterra into a category-defining company.  Just in the last year since it launched from stealth mode, Volterra has grown its revenue 300% year-on-year and built a set of top-tier, well known customers around the world, including a Fortune 25 global enterprise, 3 of the world’s top 10 telecom service providers, and several multi-billion dollar enterprises across the US, Asia and Europe.  Having enjoyed a front row seat on the Volterra journey, here are some lessons that might serve to guide other entrepreneurs.

Be bold & think big

Over the years, Ankur and his team saw many large enterprise customers struggling with the networking, security and operations of complex infrastructure as they evolved and innovated their apps — especially as they migrated to the cloud or implemented modern container- and microservices-based workloads. Seeing that this trend was going to accelerate, Volterra was founded with the vision to allow customers to focus on what they know best — business logic and building great apps — by providing them a comprehensive and SaaS-based stack to manage the networking, security and operations of apps running in any location — one or more clouds, hybrid or at the edge. This required building a full-stack solution, a monumental undertaking for a start-up, but one Ankur believed was the only way to go.

The result was an industry first — a 100% SaaS-based fully-integrated distributed cloud services platform that could be deployed anywhere to manage the networking, security and operations of apps:

Chart of Volterra's Distributed Cloud Services Platform

Build scaling into your founding DNA

One of the learnings Ankur brought from Contrail was that it becomes dramatically easier to scale the business if the product is easy for customers to operationalize — most infrastructure solutions are complex as they require integration of many services.  Another was that distribution strategy (sales partnerships, open source communities, freemium) should be part of the initial product development strategy. Many technical entrepreneurs make the mistake of underestimating the importance of incorporating distribution and sales scalability in the design + engineering of the product itself. Ankur had learned hands-on that the earlier you start thinking about it and ensuring that the engineering team understands and is aware of the tradeoffs, the easier it will be to scale your business in the future. This has become especially important with the increase in bottoms-up decision making in enterprise technology, as changes to distribution strategy can have a significant impact on product + engineering.

A culture of transparency is key to team building

Ankur realized that when you decide to tackle a really complex problem, your culture requires some of the best brains to come together and work as a family with complete transparency of information. While Ankur hired from his longtime team of senior innovators, he also had to find best-in-class specialists (experts in building + operating a global network and SRE engineers for operating a distributed cloud) to address immediate customer needs.  This culture of transparency and collaboration enabled Volterra to expand its workforce in different time zones across Europe, Asia and the US early in their trajectory.  With the onset of Covid-19, they were able to pivot to a remote-first model quickly, further increasing productivity and serving customers 24×7.



Learn how to leverage your founding investor

As a repeat and successful entrepreneur, Ankur was very clear about the most important criteria in choosing his Series A investor. He knew it had to be someone who was a critical thinker and company builder, who could spend the quality time needed to understand his business, and who practiced radical candor while being loyal to a fault.  One example of our collaboration was around Volterra’s decision on whether to build or buy a global infrastructure network.  We had many whiteboard sessions and finally decided to acquire a team in France, and put together the financing needed to complete the acquisition.  His team was also able to tap into our CXO network to get early feedback on their product which guided critical product decisions. And because we had established a zone of trust early, he felt comfortable making the first call to us at key inflection points, including when he evaluated the M&A path.

Picking the right partner can accelerate your mission

F5 Networks allows Volterra to quickly scale their reach with a sales force that is trained in application security, networking and services.  In addition, Volterra can add more capabilities to its SaaS service with F5’s products.  Unlike traditional IT infrastructure vendors that are trying to modernize and cloudify their legacy offerings, and newer service providers who choose time-to-market with “maybe good enough” services, Volterra + F5 will provide both best-in-class capabilities and cloud-native agility via a SaaS platform and global network for deploying, connecting, securing, and scaling modern + existing business apps across multi-cloud and edge environments. Through the companies’ combined and broadly expanded joint service portfolio, enterprises around the world will be able to accelerate their applications’ time-to-service, decrease total cost of ownership by consolidating vendors/services and simplifying operations via SaaS, and delight end users with extraordinary digital experiences.

Please join me in congratulating Ankur, Harshad and the Volterra team on this milestone.

How A Mid-Career Bet On Entrepreneurship Turned Into Industry Defining Success

As a mid-career executive when he arrived at the start-up game, Kumar Ramachandran had plenty to lose when he left Cisco Systems in 2013 to start CloudGenix.

Ramachandran was walking away from job security at one of America’s largest infrastructure companies and the relative comfort of leading a proven product development team. In exchange, he’d face prolonged uncertainty, the grind of startup life, and a level of personal sacrifice that could exact a toll on fatherhood.

“I didn’t want to become an absent parent for a number of years,” says Ramachandran, whose daughter, Ananya, was seven at the time. “That was my biggest fear.”

Thanks to a gritty, no-excuses style – both as CEO and a parent – Ramachandran’s decision to embrace entrepreneurship and its challenges has more than paid off. After pioneering a new category of networking technology called SD-WAN, CloudGenix was purchased by security giant Palo Alto Networks in March for $420 million in one of the first big deals of the Covid era. And by deciding early on to bring Ananya along for the bumpy ride, he imparted important life lessons about the value of hard work, courage and character to his daughter, who is now 14.

“I made the decision that if I was going to do this, I was going to expose her from the start to all the ups and downs,” he says. Whether he was disappointed after a day of rejections on Sand Hill Road or ecstatic over a big sale, he explained it to her as directly as possible. He also created a summer “internship” program for employees’ young kids, in part because many of his colleagues were in a similar life-stage to his own. As part of it, Ananya tried her hand at cold calling alongside the inside sales team, because dad wanted her to get a taste of what it feels like to be rejected.

“I think we do a disservice to kids when we pretend that the world is all rosy,” he says. “What’s important is the character you display in the face of adversity. Whether it’s losing a few consecutive points in volleyball or having the big bad incumbent introduce a product that seems to attack what you’re doing, do you let your shoulders droop or do you say, ‘Come at me!’ and promise to hit back 10x harder?”

Inventing the future

Ramachandran and the CloudGenix team had plenty of opportunities to prove their own character in building the company. The first was co-founder Venkataraman Anand deciding to not allow architectural short-cuts that could only win in the short-run but instead build transformative and long lasting value to customers. Leading technical architecture through the exit, co-founder Mani Ramasamy built capabilities in networking that had never existed in the decades before – building a network that understood the details of applications and how best to deliver exceptional user experiences. Driving such big innovations required not only exceptional engineering, but great diverse teams that brought cross-functional disciplines together and then a great sales organization that could deliver this transformation to the largest global companies on the planet.

CloudGenix also adopted the “go big or go home” adage. While mid-career entrepreneurs often look for a product niche they can fill in hopes of a quick acquisition, CloudGenix opted for the much harder job of creating a new technology category: “software-defined wide area networks” to support IT departments’ rapid adoption of the cloud and SaaS. “We knew the existing technologies were archaic, and nowhere near what was required for a multi-cloud world,” Ramachandran says. “We knew we could help redefine the next 25 years of networking.”

The entrepreneurial hustle

Given their wealth of experience, defining CloudGenix’s technical vision – essentially, doing with software what incumbent vendors had not been able to do even with hardware – was the easy part. Getting investors and others to believe they could succeed against competitors like Cisco was a huge hurdle.

To prove they were onto something big, they had to chase every last lead and find inventive ways to stand out from the crowd. “When you’re trying to build a new category as a startup, you have to make every hustle,” Ramachandran says.



Their embrace of the hustle started boldly. Before seeking a Series A financing round, the team decided to do something very few infrastructure startups try: to nail down potential customers willing to get on the phone to profess their support for CloudGenix’s plan. Not two or three customers, but twenty.

Ramachandran started cold-calling prospects he researched on LinkedIn. He’d never done sales and knew from his own reactions to cold-calls how difficult it might be. “Many of us can be rather abrupt when we are interrupted in the middle of the day by a tele-marketer,” he says. Sure enough, the repeated rejection was “brutal.” But after four weeks, the team had drummed up the 20 advocates, who were willing to not only talk with VCs but also to commit to at least doing a pilot project with CloudGenix.

With the testimonial at the ready, Ramachandran reached out to Ursheet Parikh in early 2013, who had co-founded StorSimple, which was later sold to Microsoft. Parikh had close ties to Mayfield who were investors in StorSimple – and would later become a partner there in September 2013– and he encouraged managing director Navin Chaddha to take a meeting with the CloudGenix founders. It’s a good thing they had these testimonials, because their lack of experience with pitching to investors was clear in the first meeting. Long before the end of the hour-long encounter, it was clear Chaddha was intrigued but not convinced. “We were very inarticulate in our early pitches,” Ramachandran says.

Fortunately Chaddha called back a few days later and invited Ramachandran to meet at Hobee’s, a favorite diner of the Silicon Valley set, to try again. For two hours, they talked more about the customer problems and the business value that made SD-WAN necessary than about the technology itself. This time, Ramachandran left with a handshake commitment and introductions to other investors and potential partners and customers to call. Shortly thereafter, Mayfield co-led the $9 million round along with Charles River Ventures, and Chaddha joined the Board of Directors. Parikh took the independent BOD seat and later transitioned into a board observer after joining Mayfield.

“Navin is truly a founder’s friend,” says Ramachandran. “He sees plenty of deals every day, and could have easily have said ‘nice to have met you’” after that first meeting. But he knew we had the domain knowledge and the right backgrounds to pull this off, so he gave us the benefit of the doubt until something clicked.”

Over their seven year journey together, the team at Mayfield worked closely with Kumar and the founding team at CloudGenix, with Ursheet spending time outside the board meetings, serving as an advisor at critical inflection points for the company.

Validating the vision and refining the product

CloudGenix was built with customers from day one. Even with the financing in hand, Ramachandran insisted that the earliest customers either pay for the prototypes or take the time to test it in their environments. It seemed like the only real way to ensure CloudGenix was developing exactly what customers would buy rather than what they wanted to build. “We wanted customers to have serious skin in the game,” he says. “Having a customer spend time in testing tells you way more than verbal feedback. People can sometimes be kind with verbal feedback – but that kindness backfires in product development – you want the unvarnished truth.”

The results were a mix of good and bad news. The upside was that CloudGenix had the right product strategy and architecture. The challenge was that customers wanted a more radical form of SD-WAN that would work farther into the cloud-based future. That would require another 12-months or so of engineering work, creating the risk that others can jump into the market, and they did – in-part through the acquisition of CloudGenix rivals. This is where having investors that are aligned to the company’s ambition is critical – Mayfield was clear that there was a large category to be built and supported going long.

Chips all in

Through rapid product development and bold marketing, CloudGenix was able to succeed going toe to toe with large public companies. But in a market so competitive, Ramachandran was always reminded to never let his guard down. At a board meeting in 2017, he proudly announced that CloudGenix had beaten its own forecasts for the fourth consecutive quarter. “I thought I was going to get a bottle of wine and chocolate,” Ramachandran says. Instead, Chaddha and the board urged him to push a lot harder to truly seize the moment. Recognizing when to go big on GTM can be tricky, and sometimes companies burn cash by firing the sales cylinders too early – but when you have product-market fit and sales-model fit – it is time! Having incredible sales leadership with leaders such as Matt Hickey and Robert Sexton gave the board confidence in pulling out all stops knowing that this team would deliver every single time.

Matt Hickey and Ramachandran seized the opportunity, immediately okaying investments to double the size of its sales staff, and taking on Cisco and others with ever more gutsy gambles. At Cisco’s massive user conference in 2019, CloudGenix set up a Coke-versus-Pepsi-style challenge outside of a Cisco customer appreciation dinner where attendees could try the companies’ offerings, no manuals allowed. “Some founders think you should slide under the radar,” says Ramachandran. “We took the exact opposite approach. We challenged the status quo.”

CloudGenix went on to beat its numbers for 13 straight quarters, and by late 2019, it was growing 300% a year. Along the way, it had turned down a number of acquisition possibilities. But after running into executives from Palo Alto Networks in the lobbies of various potential customers, the two companies began serious talks on how they could serve customers even better. The value proposition of a merger was clear: as companies have to connect public cloud and data centers to more endpoints outside of the traditional enterprise networks, security and networking needed to be addressed together.

Then the pandemic hit, forcing in person engagements to now be remote. Any acquirer would have had to consider the fact that CloudGenix is in the business of serving branch offices at a time when the future of branch offices was in doubt. This is where having a clear long term vision overcomes any short term market shifts. Both sides remained committed, and the acquisition became one of the first post-pandemic M&A deals. It was consummated over Zoom.

Post the acquisition, Palo Alto Networks is recognized as having the best and most complete SD-WAN and Secure Access Service Edge (SASE) solutions. The acquisition, of course, had an impact in Ramachandran’s own home, where Ananya saw herself as an integral part of the company. At first, she was saddened that CloudGenix would no longer exist on its own, Ramachandran says. But rather than feel bad, the girl who once made him a birthday card that encouraged her father to hit back 10x at competition got busy on a project of her own: a video highlighting the seven year CloudGenix journey that was truly intertwined with her own growth.

India’s Largest Matrimony Marketplace Shows How Company Building is a Marathon

Murugavel Janakiraman was working as a consultant in New Jersey in 1997, when he built a portal for Tamils, the community he hails from, as a hobby project.   One of the services on the site was matrimony listings, and when he listed himself and heard from his future father-in-law which resulted in a successful match, he was fired up.  He realized that the Internet could solve a big societal problem – that of helping young Indians meet their life partners – as they moved out of their joint families and into cities far from home. He returned to his native Chennai and founded Bharatmatrimony.com as India’s first pure play online marketplace.  He visualized the service like IAC, and grew it into a network of sites.  Today, its flagship brand Bharatmatrimony.com is India’s #1 and most trusted matrimony service with over 45 million registered members. 

We had experience guiding consumer Internet brands in India through makemytrip.com, so brought a prepared mind and led a round of funding in 2008.  

Some key milestones during the company’s 20 year journey include:

  • Launching 15 language-based regional services including BengaliMatrimony, MarathiMatrimony, TamilMatrimony, TeluguMatrimony and KeralaMatrimony;
  • Launching over 300 community-based portals;
  • Pioneering the MatrimonyMeet concept for offline-online integration and opening 140 retail venues;
  • Launching personalized services such as an Assisted service for busy professionals, EliteMatrimony, an exclusive service for the affluent, and Doctorsmatrimony for medical professionals;
  • Pushing the envelope on technology by embracing IVR, data analytics, AI and machine learning;
  • Expanding into wedding services with WeddingBazaar, offering access to catering, clothing and beyond from more than 40,000 service providers in 73 cities across India; and Mandap, a venue discovery service listing 10,000 wedding halls in 23 cities; 
  • An industry-first security feature aimed at women, called SecureConnect, enabling women to receive calls from male members, without revealing their contact details.

It took a long time for the company to realize its financial value, going public on the Indian stock exchange in September 2017. Murugavel is a great example of one of my core beliefs, that company building is a marathon, not a sprint.

The HashiCorp Journey: The Rise of a Cloud Powerhouse

You can trace the origins of HashiCorp, maybe the most important multi-cloud infrastructure company of its generation, to a day in 2008 when Armon Dadgar decided to find “some other student” to do his drudgework for him.

Armon, who at the time was a computer science student at the University of Washington, was stuck with an impossible and inconsequential task in an otherwise fascinating research project to make the groundbreaking public cloud technologies being developed by Amazon, Microsoft, and other Seattle-based companies available to scientists. To get out of it, Armon followed up on the bulk email sent by his advisor to interview scores of fellow CS undergrads in the hopes of finding someone to take the bait. Rather than set the hook on the first taker, he asked each student who responded why they wanted the job. While most talked about school credits or possible recommendations, fellow freshman Mitchell Hashimoto said, “Because it looked fun.”

It wasn’t fun, and within a few months Mitchell had given up as well and quit. But Armon was intrigued, and kept tabs on the frosh. Soon, they were having the occasional lunch, geeking out about open source development and the future of software while becoming fast friends.

They’ve worked together ever since. After brainstorming startup ideas with other friends and moving to San Francisco to join a mobile ad company, they founded HashiCorp two years later. The startup has since morphed into a high growth, 1,000-person company with a bold mission they recognized back in college: to provide a consistent, reliable set of tools so major companies can deploy their software to any combination of cloud infrastructure platforms.

Although less than a decade old, HashiCorp has assembled one of the leading collections of cloud-computing expertise anywhere, and developed a reputation for professionalism and reliability that’s made it a trusted partner for many of the world’s leading enterprises from stock exchanges to Fortune 100 companies. In March, it raised $175 million at a valuation of more than $5 billion, up from $1.9 billion when it last raised in late 2018.

The journey from idea to iconic company is definitely a marathon, not a sprint.

“The journey from idea to iconic company is definitely a marathon, not a sprint,” said Navin Chaddha, Mayfield managing director and board member of HashiCorp. “The team at HashiCorp did so many things right – stayed true to their open source community, built a remote-centric culture, leveraged their product-led Go-To-Market motion to deliver a digital-first customer experience. But the main reason for their breakout success has been the focus on their mission of elevating developers and practitioners to innovate in infrastructure.”

Engineers, including employees of companies like GitHub, Stripe, and Slack, began using their tools. “That’s when we realized the problems we’d been trying to solve were real problems for a lot of people,” says Hashimoto.

An Entrepreneurial Vision Turns to Reality

Armon and Mitchell developed rudimentary versions of what became two of HashiCorp’s main products for deploying software, including Vagrant, while still working for the mobile ad company. They chose an open source model because both had learned computer science through open source tools and tutorials. In 2012, the pair took the plunge and started HashiCorp, working from an Ikea desk in Armon’s apartment. They would joke that they were bound to fail and end up working at Google. The truth was that they’d seen enough to know that sooner or later the entire software world would need to adopt new ways to deploy and run cloud applications.

There were plenty of skeptics, including many venture capitalists. In these pre-Docker, pre-containerization days, software infrastructure was seen as a complex, nichey business that couldn’t scale. And while open source was taking over huge swaths of enterprise computing, large, profitable open source companies were few and far between.



Fortunately, the team at Mayfield was ready to buck convention. One of the partners emailed Mitchell after noticing rising downloads of HashiCorp’s tools. The firm had a rich history of partnering with founders at the idea stage and guiding them to become iconic companies. Soon the duo was meeting with the entire partnership for a Series A fundraising round. “Mayfield was different,” recalls Armon. “A lot of the partners are deeply technical. We were blown away when they started asking questions even about the details of the algorithms we were using.”

Evolving from Open Source Darling to Commercial Software Company

Mayfield became the lead investor in the company’s $10.2 million Series A in 2014. The founders were methodical and somewhat controversial about their evolution from an open source company with thousands of downloads to a commercial software provider. Their goal was to grow into a full-blown enterprise software company, with product breadth, sales sophistication, and robust customer service. To get started along that path, they would need two years focused entirely on developing what eventually became a six-tool portfolio of open source products.

At a time when the VC industry was enamored with founder-CEOs, Armon and Mitchell decided to hire a professional manager to lead the company. They both knew their strengths were as technologists and visionaries, and neither liked the typical responsibilities of a CEO. For months, they would throw jobs like monthly management reviews, organizational planning, and prep for board meetings back and forth to each other. “It was really ridiculous. We’d literally alternate between one-on-ones with the employees,” says Mitchell. “Hah, I’d forgotten that,” says Armon.

With minimal revenues in a challenging market, the odds of landing a proven CEO were low. But a worthy candidate soon emerged. David McJannet had never been a CEO, but had helped build a series of iconic enterprise companies through his talent for scaling sales, marketing and customer service operations. McJannet had cut his teeth at Microsoft, where he’d learned the importance of strong developer communities, and applied the lesson at VMware and then at open source vendors Hortonworks and GitHub. “It’s a really difficult decision to hand over the keys to your company and say ‘don’t wreck it,’ especially since we had a very clear sense of the kind of culture we wanted,” says Armon. But over multiple dinners over four months, says Mitchell, “it became clear he was not someone who wanted to take over and put his name on everything. He just wanted the company to succeed.”

In particular, the trio saw eye-to-eye on three ideas that, if executed simultaneously, could be extremely powerful.

The world would be multi-cloud – At the time, AWS was running away with the new cloud infrastructure market, and fast-followers like Microsoft and Google seemed equally focused on developing their own walled gardens. At least, that was their public positioning. But as students of tech history and given how fast the world’s developers and IT departments were moving to the cloud, it was becoming clear that no one infrastructure provider would be able to serve every need. “If you squinted, it was clear that multi-cloud was the new platform opportunity,” says McJannet.

The practitioner is kingmaker – In the old enterprise software market, the winners were vendors who had the money for splashy marketing campaigns and costly salespeople to convince corporate technology buyers to buy their products. But given the massive scale and real-time requirements of competing in the cloud, power had shifted to the software experts who knew what they needed.

Professionalism is key – Many start-ups boast of their easy-going, perk-filled lifestyles, while internally, oversized egos lead to internal strife. The massive companies that run the world’s financial systems, energy grids, and other systems care for neither. They need vendors they can trust, who can deliver their software and services reliably, with no excuses. “At too many companies, half the job seems to be about getting internal factions aligned,” says Mitchell. “That’s just not the culture we wanted… We want an environment where people show up because they want to deliver the right technical solution.”

Growing Into a Trusted Partner

HashiCorp’s culture has been shaped in part by the humility of its founders. To this day, the two have rarely talked about themselves in public, preferring that results and successful customers be the story. And while HashiCorp may sound like a “vanity” corporate name, they adopted it because Mitchell had registered it years before as a placeholder and never bothered to come up with something else.

And yet, HashiCorp has delivered on its promises – and then some. By 2015, HashiCorp had developed the six products that make up the core of its lineup. The bet on the importance of a multi-cloud approach was already panning out, and the company had built a vaunted developer relations effort to attract and keep the loyalty of the growing armies of cloud application developers. The 25-person team now includes well-known evangelists from AWS, VMware, and other cloud powerhouses. “Our investment in engaging practitioners is outsized relative to most companies our size,” says McJannet.

Despite the heavy investment, the company has been able to scale its “go-to-market” (the operations that touch customers, primarily sales, marketing and customer-service) extremely efficiently. Rather than invest heavily in real-world salespeople and conferences, it’s focused on nailing the digital experience, from providing free educational content and simple tools to explaining the ROI of moving to paid products. That way, it takes advantage of the fact that millions of software professionals are already moving to multi-cloud, DevOps-based infrastructure, and would much rather buy the right tools than be sold to.

I look around the room and I see a salesperson that understands how this game is played, and field engineers and customer support people who understand what it means to partner with an organization like us

By winning over practitioners, HashiCorp began winning the people who control the corporate pursestrings as well. McJannet remembers when the account team was asked to fly to the East Coast to sign the company’s first million-dollar deal. The customer explained that while he liked HashiCorp’s products, strategy, and leadership, that’s not why he was doing such a large deal with a 40-person company. “I look around the room and I see a salesperson that understands how this game is played, and field engineers and customer support people who understand what it means to partner with an organization like us,” McJannet recalls him saying.

Opportunity

Now, the company is taking the next step to fulfill its goal to be a part of every large company’s software infrastructure. In June, it announced that customers could now run its tools as a managed cloud service, rather than as downloaded applications. “We’ve learned over the years that infrastructure is the last category of software big companies want to turn over to someone else to run, because if it fails, you’re on CNN,” says McJannet. While it may take years for the majority of companies to embrace the idea, HashiCorp is ideally positioned to become an essential player in this transition, which in turn will lead to a new set of opportunities. “We’re starting to invest heavily in field efforts to get ahead of the market,” he says.

Perhaps by serendipity, some of HashiCorp’s founding principles have put it farther ahead on some key trends than its leaders would have dared to guess. In many ways, it’s been operating like a post-COVID company for years. Since before McJannet arrived, the company has done what it takes to hire those “10x” talents and enable them to work remotely, such as one engineering lead who refused to move from his home in the British countryside.

But prospering with a remote culture requires far more than a change in recruiting strategy. Being geographically distributed means many processes need to be more intentional and carefully documented. “You don’t get anything for free when you’re remote,” says McJannet. Even notes from brainstorming sessions are captured, and flow into design proposals that often get blasted to the entire company for comment. As a result, decision-making is based less on what happens behind conference room doors and more via written documents. “We write things down,” says McJannet. “It’s not for everyone, but it’s working really well for us.”

The Rancher Journey

Rancher, the computing everywhere platform leader, today joined forces with SUSE, the global open source, software-defined infrastructure company, making this a landmark cloud native transaction. Today Rancher is the most widely-adopted enterprise Kubernetes platform, with 100M downloads, and 30K active deployments across 300 global enterprise customers from Disney to Fidelity Investments to Verizon and beyond. Rancher has been an exceptionally well run and capital efficient while remaining one of the fastest growing mid-stage software companies. The company consistently beat revenue targets for sixteen quarters in a row. Developers and ITOps professionals love the product for its ability to elevate them from individual contributors to strategic leaders. The founding team has worked together for a decade and were united in delivering on their mission of giving customers the freedom to compute everywhere – from the data center, to the cloud, to the edge, and beyond. As I reflect on our 5+year journey with Sheng, Shannon and the rest of the Rancher team, here are some learnings that come
to mind.

It’s always about the people

I have known Rancher CEO Sheng Liang since 2009.  He was the founder of Cloud.com, a peer company of the one I led, StorSimple, both of which went on to become successful first-generation cloud infrastructure companies.  After StorSimple was acquired by Microsoft to become a key part of the Azure offering, I joined Mayfield, which had been one of my investors, in 2013. In the fall of 2014, Sheng came by to share the vision for his new company, then called Granite Systems. I pulled out a concept deck on the future of computing everywhere that I had been working on, and we came to a complete mind meld on what the industry needed.  We believed this would be a nextgen computing platform which would allow users to deploy applications on public and private clouds, on the edge and on iOT devices. He had already assembled the founding team with the key leaders from Cloud.com – Shannon Williams, Darren Shepherd and Will Chan – and we were honored to co-lead their Series A.

Culture has to be built into the founding DNA of companies

Sheng is one of the smartest but also the most humble person I know and that was the culture he built at Rancher. He is also a very transparent, intellectually honest leader which allowed us to have drama-free conversations in and out of the boardroom.  Their culture of listening extended to their community, even leading Rancher to make the tough decision to kill their darling – a beloved but closed product – in favor of embracing Kubernetes, the open source standard. The company was able to attract amazing talent at all levels and had one of the lowest attrition rates in the industry.



It takes products, not hype, to build companies

As containers replaced VMs for the cloud age, there were many players claiming to solve customer problems. Rancher quietly focused on building delightful products, developing a community-first, bottoms-up adoption strategy, a sustainable and scalable business model focused initially on usage over revenue; and worked with an ecosystem of partners to build key components. They also stayed true to the open source model, rather than adopting a hybrid open source/closed product model.  All this served them well, and they soon found their go to market motion.

Pivots take the courage of conviction

While early stage companies have to always be nimble and adaptable, Rancher definitely had its share of challenges. They switched from Docker to Kubernetes, from a services to a SaaS recurring revenue model, and from Kubernetes distribution to Kubernetes management.  Despite all these changes, by staying close to the pulse of the community, they built a strong fan following and user retention. Their product-led GTM delivered capital efficiency and allowed them to beat and exceed their forecasts for sixteen quarters in a row.

Success is never accidental

This is one of my core beliefs and the journey with Rancher has proved that.  They built a culture of  intellectual honesty as well as continuous learning, prioritized teamwork, developed a collaborative dynamic with all their partners and investors, and always kept their customer needs front and center. They innovated beyond the feature sheet to ensure that their technology solved customer problems. They took their learnings from leading a company during the 2008 downturn to stay focused on their true north.  Along the way, they took advantage of all the ways investors can amplify the impact of companies – getting early feedback on their value proposition from our CXO network, joining a CEO coach cohort of our companies, participating in our storytelling workshops, and working with me on many strategy sessions outside of the board meetings.   One of the most rewarding phases was to work closely with them as they went from start-up to scale-up, and to help them evaluate their options to join forces with a larger company. With the acquisition by SUSE, a global open source leader, Rancher now provides customers an accelerated path to digital transformation and a way to seamlessly innovate across their business from the edge to the core to the cloud.

As people first investors, we look forward to watching them continue to elevate the community of developers and ITOps professionals worldwide. Please join me in congratulating Sheng, Shannon and the entire team on the next phase of their journey.

Originally published on LinkedIn.

How Tejas Networks Built Local and Thought Global

We partnered with the founding team at Tejas Networks in 2006 because we were inspired by their mission to build the first India-based global optical networking provider. Below are some highlights from their 20 year journey.

Resilience Spotlights: Fireside Chat with Phil Fernandez

This week for our Resilience Spotlights series, we heard from Phil Fernandez, Co-founder and former CEO of Marketo, a Mayfield company. As a veteran entrepreneur who has led both in good times and challenging ones – Marketo was founded in 2006 – Phil has a lot of leadership and company building insights to share. Here are a few of his key takeaways as well as a recording of our fireside chat.

  1. Take care of your people – you need to lead with a heart.
  2. Values are what get you through tough times, so make sure your team is completely in alignment.
  3. Three metrics to be laser-focused on right now are churn rates, net dollar retention, and revenue per employee.
  4. It’s crucial for leaders to know when they have to make a decision – be aggressive and agile, not panicked.
  5. Resilient companies are those that focus on empathy and find the opportunities in challenges.

Originally published on LinkedIn