Category: Entrepreneur Journey

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.

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.

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.

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.”

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.

Most startup founders bang their heads over the challenge of product-market fit. How can they convince investors and potential customers that what they’ve built satisfies strong demand?

Guru Pangal didn’t have that problem. But as the founder of the three-year-old CloudSimple, which provides dedicated clouds for enterprise applications, and which Google Cloud acquired this past November, he had plenty of other challenges. And none were small.

A few years ago, Pangal was working at Microsoft’s Azure cloud computing service. The tech giant had bought his prior startup, StorSimple, which provides cloud-integrated storage.

“We were trying to bring all these traditional enterprises to the cloud,” says Pangal. “We would have these CIOs come in and say, ‘In the next two years I’m moving all my digital workloads out of my data center to the cloud.’” They all wanted the flexibility and innovation the public cloud offers.

“But then two years would pass,” he says, “and less than 20 percent of their workloads moved.”

Pangal knew that enabling clouds to provide the right platform to enterprises to move their traditional applications could be a game changer. So he “poked at the problem” and two things were evident.

First, traditional enterprise applications were built for the legacy stacks in data centers and not suited for the scaled-out architectures of cloud computing. Second, moving to the cloud meant re-architecting those apps and that meant disrupting a company’s operations.

“CIOs are thinking, ‘If everything’s working and there’s nothing dramatic to fix, why should I do this?’” says Pangal.

Given this, he worked with Mayfield’s Navin Chaddha and Ursheet Parikh, to come up with some possible solutions to this problem.

In 2016, with Series A funding led by Mayfield, Pangal launched CloudSimple. As its name implies, it provides a platform and a service to provide companies a seamless way to move their enterprise workloads out of private data centers to the public cloud, where they can take advantage of the cloud’s elasticity, lower costs, scalability, geo-availability and rich set of features and functionality.

It wasn’t a tough sell. “We would go talk to customers and they would just love it,” says Pangal of his earliest pitch meetings. “They were like, ‘Yeah this is awesome. When can we have this?’”

And that’s where things get tricky. Pangal found himself, as he says, “dancing with giants.”

Friend or foe?

CloudSimple provides its service by partnering with VMWare, the cloud computing and virtualization software and services giant, which is the chosen platform for enterprise applications, accounting for up to 80 percent of all private data center workloads. Because of VMWare’s size and position in the market, CloudSimple chose to provide “VMware-as-a-Service” to customers.

However, VMware had its own priorities. And naturally, moving enterprise applications to their platform was a key strategy. So it shouldn’t have been too surprising for Pangal to find out, six months into his startup, that VMware and Amazon Web Services were working on a similar cloud service.

“It turned out that they had been working on it for the past two years,” says Pangal. “We were debating internally, ‘Do we need to pivot?’”

When the two tech giants released their service six months later, it was exclusive to AWS. That meant Pangal still had plenty of market share to gain by going after Azure, Google Cloud and others. “That was an interesting inflection point because we could have lost everything,” he says.

But that early uncertainty would continue to dog CloudSimple. “It was always the case that we didn’t know when we’d be killed,” says Pangal.

Tuning out the noise

In addition to VMWare, Pangal’s small startup was dependent on two other big tech players: It was dependent on Google and Microsoft to provide the bare metal infrastructure (the physical servers), to overlay their control panel on top of GCP and Azure and provide “VMware-as-a-Service” to enterprise customers.

Unfortunately, GCP and Azure plans didn’t always match with CloudSimple, says Pangal.

Microsoft for example, had tangled a decade earlier with VMWare as the virtualization market heated up. Both companies tried to best the other in pricing, licensing, and services.

“So, these guys had a history and here was this startup trying to make them play ball,” says Pangal. “And that was kind of rough.”

What Pangal learned was to block out the noise, keep his engineering team focused, and to continue to execute on his product development no matter what. “Every other day we would have the possibility that these guys may break up or these guys may not work together,” says Pangal.

There was also anxiety on the other side. “These companies were super nervous that they were relying on this small startup for a massive market,” says Pangal. As a result, each was trying to hedge their bets with a similar internal project or with other large partners. “Just in case CloudSimple doesn’t come along,” says Pangal, echoing the sentiment he knew the major providers were feeling. “As a result, we would always have a sword hanging over our heads.”

But it turns out that being small has advantages. While the big players were “analyzing and analyzing and analyzing and not creating a product,” says Pangal, his team was focused and nimble. “The best part about a startup,” he says, “is that you can execute and get the product done.”

That focus, however, doesn’t come by itself. It requires a strong management rudder. “From a management team’s perspective we made sure the team was not distracted on these competition issues,” says Pangal. “That was a key thing. Have confidence in your execution, have confidence in your product and the IP you’re creating. Just believe in that and keep executing. And then even when there are giants you can still survive.”

Juggling investor interests

There were other dependencies that needed Pangal’s attention. During Series A fundraising, CloudSimple had secured backing from Microsoft’s venture fund, M12. The software giant also kicked in a substantial amount in the next fundraising round, eight months later, helping Pangal make strategic early hires, among other things. “It was a very strong partnership,” he says.

The downside came when Pangal needed to raise a Series C round. “Then we ran into some issues,” he says. Because CloudSimple was dependent on its Microsoft partnership for this strategic service, and because Pangal’s work with Google had just begun, other investors were spooked.

“The VCs all looked at it and said, ‘Hey this is great, we know you guys will land a lot of customers, but we don’t see how Microsoft is not going to acquire you.’”

The right relationships

Having the right relationships at this moment helped. Pangal had worked with Navin on StorSimple, and the pair had a relationship going back a decade. Navin’s guidance was now crucial.

“One of the things that I got out of this moment was how critical it is to have somebody like Navin on the board,” says Pangal. “Because he’s one of those veteran VCs who doesn’t get flustered by these kinds of issues, he would tell me, ‘At the end of the day you guys have a great product, you have a great service. We’ll find the money.’”

The lesson Pangal took from that was that experience counts when picking an investment partner. “You want someone who has that confidence, but isn’t a micromanager,” says Pangal. “What I love about Navin is he lets you run your business and doesn’t interfere, but will always be there when you need help. As an entrepreneur I couldn’t be happier with that attitude.”

Finding a shared vision

When your startup is acquired by a large company, a hundred percent vision alignment is not always the case. Fortunately, says Pangal, Google and the people he works with there share his company’s vision. And Google has the investment power to see it through.

“They really want to get after the traditional workloads and bring those to the cloud,” says Pangal. “So, there is a vision match plus the investment we needed to achieve this vision. They were the right partner.” In the end, CloudSimple’s partnerships with multiple providers did give it leverage to get the best value for the company, its shareholders and employees.

With so many big tech players in the public cloud space, any startup wanting to work there will likely have to partner and work with one or more of them. “You need to be aware that a lot of enterprise infrastructure is moving there,” says Pangal. “So, if you can find products that can help the public cloud infrastructures, that go after new workloads, you can have a winner.”

However, he says, building out enterprise infrastructure is a matter of “getting out your shovels and digging,” says Pangal. “It’s hard work. But it pays.”