Category Archives: Entrepreneurs

Raise Now & Get Back to Work

There’s a lot of hand-wringing these days about late-stage private venture valuations, crossover investor frenzy hangover and the downstream impact on the Tech IPO market.

As well as the effect still further down the river: on mid-stage follow-on valuations.
You’ve read the data.

More than 40% of 2015 Tech IPOs priced at or below the valuation of their most recent private round.

As of last month, less than 14% of the year’s IPOs involved Tech companies.

Over the last several weeks, we’ve discussed this at each BoD meeting I’ve been part of.

Things are going well…should we raise a follow-on now, given what’s going on, or should we wait until later when our metrics will be even better?

Should we risk the slim IPO window in a vibrating market…or wait until the coast is clear?

At least in private venture markets, the answer — if not the coast — is usually crystal clear.

Raise now.

Valuation compression has already started for Series B & C rounds.  Deal supply is way up.

Just as the bar for Series  A business progress looks like the Series B bar from two years ago, the yardstick for follow-on rounds is getting longer.

More deals in the market empower new investors to be more demanding.

And require that BoDs and management be more pragmatic.

By anyone’s measure, the macro climate of the world we live & work can be viewed as unstable — put mildly.

If there is capital on the table for an emerging company — a private company — it should be taken off the table.

We all love steep, up-and-to-the-right charts.

At the same time, the Defense would like to introduce Exhibit A.

The widely-quoted example in the book The Hard Thing About Hard Things is a putt worth following.

LoudCloud had few financing options at the time of their IPO.  They were in the middle of a pivot of their business towards an encouraging vision, but had less-than-definitive proof points to assure the world that they would be successful.

Like Pure Storage a few months ago & Square this week, they went public in 2002 to much hand-wringing, lower-than-expected valuation and initial market reception.  As a matter of fact, less than 50% of what they had hoped for. The Smart Guys dubbed it “The IPO from Hell”.

But management & their BoD believed in their strategy, they needed capital, and they got the IPO completed.

They got the capital needed for growth and set the table for an eventual 4x multiple from that valuation, upon its acquisition by HP 4 1/2 years later.

Critics and competitors called the raise an act of desperation.

They spread doubt on the street that public investors would ever see a return.

But sometimes a raise just needs to be put away.

When you need to grow your company to get to the next milestone, to get to planing speed & to scale it to prominence — you need capital.

Cash is oxygen.


Everybody Wants to Go to Heaven, But Nobody Wants to Die.

I’m talking to both management & existing investors.

If the company has real chops — if it is worth fighting for — then get on the road to get to Heaven.

If management believes in their business, take the money & get back to work. Take the “W” and get on the bus. Live for the bigger goal.


A company’s long-term valuation trajectory has everything to do with results. It has little to do with short-term market perception.

A financing is not an exit.  It’s a point along the road in a journey as partners.

Why We Partnered with ClearSky Data

We’re stoked to announce our new investment partnership with ClearSky Data.

ClearSky Data

We’re leading an investment round of  $27M, joined by strategic investment partner Akamai Technologies, alongside existing investors General Catalyst and Highland Capital.

I spend most of my time partnering with and looking at companies focused on the Cloud.  SaaS applications, Cloud Infrastructure and Data Science.

So, I can tell you that we’ve entered Generation 2 of the Cloud.  And with it, the next generation of enterprise infrastructure.

Hybrid Cloud architectures enable previously hard-to-solve challenges to be solvable.

They enable leverage of the economy, scalability  and agility of public clouds with opportunities to address performance, resiliency and security limitations.  Limitations which have held back The Public Cloud as true Enterprise-grade foundational infrastructure.

ClearSky Data is a company that exploits Hybrid Cloud possibilities to solve a huge customer problem.

That big problem has resulted in a huge addressable market.

A front-burner challenge for enterprises large and small: reducing the costs & increasing the agility of primary storage.

  1. The Solution:

ClearSky is building a global storage network.  It’s a managed service delivery model for enterprise storage, combining the performance and availability of primary storage with the economics and scalability of the cloud.

Their’s is an innovative approach to primary storage which to help enterprises become more agile and take full advantage of hybrid cloud adoption.

To the point, ClearSky’s cloud-based global network frees customers from legacy storage systems that are expensive, complex to manage, and rigid.

ClearSky solves three major problems for IT of enterprises large and small::

  • Data footprints are huge & keep growing.
  • Businesses crave agility but today’s storage can’t deliver it.
  • The cloud is an incredible storage resource, but latency gets in the way.

These problems cause enterprise IT to spend a ton of time & money to manage their data.

They over-provision storage to play it safe.  They pay for excess capacity and performance that never gets fully utilized. They incur hard-to-plan-for people costs to manage complex, heterogeneous data storage pools that have to be continually upgraded and expanded.

“Hot” data is mission-critical data that a business runs on in real-time and accesses on a daily basis  — which represents only about 5-10% of typical workloads. It needs to be kept close at hand for ready use.

But enterprises  keep lots of “cold” data in traditional storage arrays, in order to play it safe and esure against performance and latency issues. Very expensive. Very inefficient.

ClearSky alleviates storage cost &  complexities — reducing the data center footprint required for traditional storage.

The company has the potential to completely transform the storage market dynamic.

People and budgets previously focused on buying and managing primary storage now have the ability to leverage the cloud for an agile, on-demand,  secure storage model.

  1. The Significance:

The major technology challenge of the last generation of enterprise infrastructure was how to deliver content on demand.

In the first generation of the web, our portfolio company Akamai, solved the content delivery bottleneck problem,

In this 2nd Generation of the Cloud, and the current generation of the enterprise, storage is the current bottleneck.

Storage is the bottleneck for the contemporary enterprise. The basic model for storing data hasn’t changed in decades. In today’s business environment, the costs, complexity and rigidity of this legacy approach (and the need to update storage capacity every 18 to 36 months) are intolerable.

In today’s enterprise, workloads can be hosted anywhere –- on-premise, in public and private clouds or in software-as-a-service (SaaS) environments.  And data needs the ability to move quickly between locations.

Storage needs to evolve to meet this need.

Cloud gateways can’t address the performance, latency, security & availability requirements of enterprise production workloads. They deliver a front-end cache that connects to the cloud over the internet.  Their architectures make it impossible to achieve the high level of requirements that enterprises demand.

ClearSky provides this needed level of performance through its use of PoPs, its global high-speed network, and its Smart Tiered CachingTM technology.

ClearSky is the only company offering an enterprise-grade alternative to legacy storage.

It can be the answer to the enterprise data mobility problem.  A managed service for storage.

  1. The Timing:

Now is the right time for a solution like this to enter the enterprise storage landscape. The service’s delivery model, particularly its metro-based PoPs, gives ClearSky the opportunity to alleviate chronic storage headaches in a more immediate way than any other company has attempted to this point.

Great idea.  Why hasn’t someone else done this before, you might ask?

It’s really hard to do.  There’s a ton of storage chops, hybrid cloud architectural chops and algorithm magic working to make this happen.

Traditional, legacy storage vendor are not likely to be interested in anything near this approach anytime soon.

It’s an anathema to their hardware-based technology and core business models.

This is a unique time in the storage industry where the large players are merging, going private, shutting down business units and struggling to respond to the huge market forces. It’s a great time for a startup like ClearSky to offer a breakthrough solution to a long-standing set of infrastructure challenges.

  1. The Technology:

ClearSky software helps to cache data into hot, warm and cold layers. It’s algorithms  manage each piece of data with information about it, including the performance it demands.

It puts cold data in the public cloud.  Hot data on premise. Warm data in metro PoPs which enable on-prem performance & resiliency without the costs.

It provides customers with more management and storage for less money. It acts like a local storage array in terms of performance and availability, but leverages  the scalability and economics of the cloud.

This is web-delivered software.  No hardware or software installs or updates needed. A dashboard enables views of capacity, availability, performance & latency.  Account, customer service & billing information are also viewed.  SLAs guarantee high performance, end-to-end security and high availability.

Security is enterprise-grade.  Encryption, key management technologies and policies ensure compliance with industry and government standards.  Multiple mechanisms and layers ensure integrity and separations of customer data in transit an at rest. It closely monitors and protects three distinct data domains — customer data, metadata (indexing and describing that customer data) configuration/management data.

An on-demand network.  Think SaaS for storage.

  1. The People:

CEO and Co-founder Ellen Rubin is one of those people I’ve wanted to work with for years.  I’ve followed her career from her Netezza days, where she created market acceptance of a new technology category; the data warehouse appliance. She led market strategy, product marketing, complementary technology relationships and marketing communications through their IPO, which led to their eventual acquisition by IBM for $1.8B. She then co-founded and did much the same for cloud enablement company Cloudswitch, through their acquisition by Verizon, where she was responsible for strategy & roadmap for all cloud offerings. A great track record in leading strategy, market positioning and go-to-market for companies in hyper-growth mode.

CTO & Co-founder Lazarus Vekiarides is another one of those people. I’ve heard my good friend Don Bulens rave about Laz’ contributions to Equallogic, which  was acquired by Dell for $1.4B.  He’s spent 20 years in technical and leadership roles — also with companies like 3Com & Bayan Systems — delivering transcendent technologies to market.  After Equallogic’s acquisition,  he was executive director of software engineering for Dell’s Storage Engineering group.

Behind them is a team full of rock star architects, developers and company-builders.  Supported by a Board which includes Jit Saxena (Founder of Netezza), Paula Long (co-Founder of Equallogic), as well as David Orfao (General Catalyst) anSean Dalton (Highland capital.

Having Akamai (Andy Champagne – VP Product & Technology for their Enterprise Cloud Group) will be great help as well, as they share our collective belief that ClearSky’s has the right model to disrupt the enterprise storage industry, and will partner with us to meet global customer needs.

Nobody else has created an architecture that approaches ClearSky’s global storage network.

The team’s competition is the status quo.  Expensive, complex, multi-vendor, multi-architectured  storage pools with legacy hardware-based architectures which have to be constantly maintained, upgraded and expanded.

Incredibly-expensive TCO solutions.  Solutions  of from traditional storage arrays .  From companies like Dell/EMC, NetApp and Hitachi.

This market is being completely transformed by the cloud and by new service models.

We’re now in the 2nd Generation of the Cloud.

The next generation of enterprise infrastructure.

And perhaps the next generation of data management and storage.

Moving Fast. Keeping Things Together.

move fast
      …The M.O. in driving towards extreme growth. But it comes back to haunt as a company shifts through the growth gearbox.
      Common discussion threads with CEOs, founders & teams I partner with every day dig on several basic challenges:
  • The Need for Speed. Balancing Innovation, Ideation & Agility with Process.
  • Scaling. Evolving teams beyond the start-up phase through the multiple “Acts” of company-scaling & maturation.
  • Hiring Discipline & Peer Review. Adopting manical focus for making certain that every hire is an “A” hire. Establishing ownership of team members for selecting each other. Having the team hold itself to the highest standard of performance.
  • Communications & Leadership.  Developing managers into leaders.
  • Establishing and Developing a dynamic Company Culture.  Building Core Principles as a team, enforced as a team.
  • Holding it Together. Keeping The Vision front of mind for every employee.  Having every employee focused on their individual role & their part in achieving team success.
      Yep, every company, situation and environment is different.  But, like most people, I draw on past experiences to problem-solve my way through challenge. I find myself going back to lessons learned at the outset of my career as a manager, then entrepreneur, and then later again as a manager and executive.
      One super-formative set of experiences was at Lotus Development Corp.
      Many today might not even recognize the name, but Lotus at one time was one of the two largest software companies in the world. Well over $1 billion in revenue and over 14K employees. It rose from a standing start to $53M in revenue its first year, through IPO a year later, through the then-largest exit in industry history — a now-paltry-sized :) $3.6 billion acquisition by IBM in 1995.
      Extreme growth. Lotus, in its day, was an incredible place. A super-diverse aggregation of super-smart, sub-30 year-olds from the best technical and business schools, fresh off the campus or their first roles from the best tech vendors of the day.  All looking to learn, to take risks, to create a new industry. To get somewhere fast and to get big fast.
      At an early sr. management offsite, Founder Mitch Kapor and CEO Jim Manzi led a group of discussions about what kind of company we really wanted to be when we grew up. How would we build our foundation?  How would we treat our customers? How would we treat each other? How do we get shit done with thought and speed?
      From that first meeting came our Magna Carta. Our “operating system” as a team. The doctrine guiding how we’d compete externally, how we’d work together, and how we might protect ourselves — from ourselves. Through explosive growth & the daily roller coaster of getting things done.
Lotus Operating Principles
      Brilliant, sensical, thoughtful stuff I end up paraphrasing every day.  The process to develop them as important as the ideals themselves.


It’s one of those things that make you cringe when you hear it in a meeting.

Each time.

You consider yourself a coach and want to pull the exec aside right
there and then when she/he does it more and more.

You want to explain how bad it sounds.  How it can inadvertently impugn perception and
reputation.  And ability to lead.

But the meeting goes on, business gets conducted, and it somehow gets
dropped into the “next time” conversation bucket.

But it’s a pretty big thing.

Sometimes it’s a nervous tic, like saying “like” or “you know”.

But it can do damage far worse than those words.

It’s when a CEO, CFO or other team leader talks about “I’ve
restructured…” or ” I’ve sold…” right in front of the team.

Or when a CFO talks about “my receivables” or “my expenses” in front
of the Board.

I can’t stand it.  It makes me crazy.

It sends a message that a leader really doesn’t want to convey.

head up ass

But it’s an easy trap to fall into.

When I’m getting to know a team while evaluating investment — and partnership — it sends an alarm.

It makes me want to keep probing and exploring in order to confirm or disprove my concerns about leadership style, partnering potential, ego. Maybe even character.

When mentoring a CEO, it can be one of the fundamental building blocks of professional development.

Most great entrepreneurs are, at their core, great and talented individual contributors.

Innovators, artists, and really smart people.

Then they become Founders, executives and managers with teams around them.

Teams they recruit and want to inspire, guide and retain.

It becomes time to “make the turn” and become leaders.

To not feel compelled to be the smartest and most valuable person in every room.

It’s not about themselves.  It’s about the team.  It’s about what they can build through collective success.

It’s about leading by example.  About creating an environment where team members feel
they play a big part in team success. And feel they are recognized.

Great teams are composed of special people.

People who look for the vision and passion of leaders who can pull them towards a beacon.

People who look to leadership that demonstrates public appreciation and support for their contributions.


It’s not hard to say.

And the alternatives are not what you want.