Category Archives: Polaris 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.

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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.

Burning Bridges

A bit of a warning here.  A rant follows.

I had an experience the other day with a young investor from another firm and it got me thinking.

More directly, it got me recalling time spent on the other side of the table, raising capital from Silicon Valley VCs during the height of the bubble in 1998.

It got me remembering why I had a dim view of most venture capitalists at the time.

You might have heard that things then were, well, comparatively pretty easy.  And they were.

Easy for teams like the ones I led to raise capital at outrageous valuations. With important technology, good market timing, a real business model, a great team and business traction, the sky was the limit.

It was easy for VCs to select opportunities to invest in from a deep inventory of disruptive opportunities.

It was easy for VCs to be self-absorbed in their success.

And to forget about their real purpose as VCs.

The real purpose of a VC is to help special people build special companies. To help create value for all shareholders.  To help teams to delight their customers. To help develop talent. To build effective, long-lasting partnerships which help entrepreneurs and the venture firm alike.   And to generate strong investment returns to Limited Partners.

Forgetting their real purpose made it easy for investors back then to confuse their part in a start-up’s success.

It was easy to demand teams to “get big quick” (I still hate that term) without thoughtful business guidance.  And it was easy to be super-arrogant.

Push, slash, burn, move up, move on.

bridges

This was true of some of the veteran investors who made their bones when the going was good.  Certainly not all.  But enough. They were not shy about telling and directing management — as opposed to coaching and partnering.

But it was also agonizingly true of many of the junior investors.  The ones who might have sat in the back of the board room.  The ones who hadn’t yet experienced success as an entrepreneur, operator nor investor.  Certainly not enough to substantiate the inflated sense of self  that was displayed.

Neither personal success nor failure gave their advice context. But they barked out opinions and directives in support of their agendas, nonetheless.

That was then.

As a board member years later, one thing that I pride myself is being grounded in the knowledge of how hard it is to do what the folks we invest in and partner with do for a living.

Creating, building, leading and developing is incredibly fun.

But it’s seldom “up and to the right”.

It’s hard to solve problems, to lead the way and build both exceptional value and team culture.

Lots of peaks and valleys to the journey. Lots of amplitude in the trend line of growth.

It’s hard to be an entrepreneur and a company’s leader.

I appreciate the fact that, more often than not, the people sitting across the table are simply smarter and more talented than I am. In fact, given my modest intellect, it’s a pretty easy grok for me.

The people across the table are visionaries, creators, artists and executors.

Investor partners who do our job correctly are coaches & mentors.  We impart street wisdom and a guiding voice to help others avoid the roadblocks we experienced.

We help them to replicate the principles & practices that enabled us to experience the successes we enjoyed. Whether as operators, board members and/or investors.

That shared philosophy is why I selected my Polaris partners years ago — first as an independent director — then as an investor.

Until that point, the thought of doing what I now do for a living as a second career was less than appealing to me.

Good investor partners are not on the playing field.  We don’t need to originate that many ideas nor dedicate years of blood, sweat and tears executing them. We don’t live every moment of the company’s life. We don’t need to be the smartest people in the room. The people we choose to invest in — many of them several times over — fill that role.

Over the years, I found that the most effective investors rarely are the smartest people in the room.  If they are, they’re likely in the wrong room.

Like the best operating leaders, their key competencies reside in helping to build teams, to catalyze goal-setting, to orchestrate the ideas and talents of others. But really good investor partners  “clear the brush” and create an environment which enables the success of the management team.  And they stay off the playing field unless invited on.

So…back to my recent experience.  This is not then — but now.

An inexperienced investor, one who’s experienced little success, who confused all of this.  He thought HE was the company.  HE was the reason why the company is on a roll. HE was calling the shots for the founder, CEO, management team and company.

Pretty big job. He obfuscates a level of insecurity with arrogance. And he’s lost the trust and confidence of his management team in the process.

He brought it all back to me. Kind of a good reminder, all in all. And just as repugnant an experience this time around.

Sometimes, when really special, incredibly-intelligent people consistently come to an investor asking for money, and then experience great progress, it’s easy to confuse one’s role.  It’s possible to feel more important than you really are.

Unless you have real purpose clear in your own mind.  And work with people who share those beliefs.

Otherwise, it’s hard to be an effective partner to folks — after you give them that money.

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Lily Pads

Several times over the past several days I’ve been speaking with both entrepreneurs with whom I’m working, as well as those with whom I’m exploring.

Again and again, the subject of balancing opportunity and focus comes up:

  • How to establish a strong first market beachhead. And then to select and execute crisply on a second. And then a third.
  • How to prioritize introductions of products on a roadmap.
  • How to think about planned company acquisitions and the value of a target company’s product as it applies to our company’s core business, assets and values.
  • How to get started on the journey of ideation behind founding a company.

When my thoughts are asked about how to approach these decisions, the conversations — while about completely different subjects relating to companies at very different stages of development — invariably come back to a simple strategic principle I’ve followed for many years.

The Principle of Lily Pads.

lily

What the what?

It’s a concept I’ve incorporated into my personal thinking and advice I’ve offered as an entrepreneur, operator, company leader and investor.

It’s a checkpoint I’ve used on myself in building my career and in building my company partnership portfolio.  And also in helping to build our firm’s technology investment team strategies.

It’s input I give again & again to talented founders, managers and investors:

  1. Aim to be truly competent — and be known for that competence.
  2. Realize real, measurable success in that area of competence.
  3. Weigh the value of adjacencies.
  4. Assess the value of leverage.
  5. Then — and only then — consider expansion to other areas of target focus.

Brilliant Old Schoolers like Geoffrey Moore and his market entry philosophy of “Bowling Pins”  touch upon my principle. Target one market, then the next adjacent one.  Rinse & repeat.

But the Principle of “Lily Pads” — maybe someone can quote me and call it a Law — that would be awesome 🙂 — can be applied to company formation, career development, corporate development, growth hacking, striving for K-factor or Seeking Alpha.

Get established as the best in an area.  But critically — pick the next areas by virtue of not just opportunity — but also the adjacency of  skills, assets, success and reputation.  And the potential leverage of each.

  • Company founding: Is the founding vision broad enough to enable the balance of laser focus and future expansion?
  • M&A: Can the to-be acquired product(s) be sold to the same customers?  Economic Buyers? Through the same selling effort?
  • Product Roadmap prioritization: Beyond business plan benefits, does it leverage existing dev skills & resources? Go-to-Market readiness? Customer support inferences?
  • Career Development: Has one’s experience, body of work, reputation and advisory network yet enabled expansion to broader focus?

On & On.

A pretty simple Principle.  So, OK, maybe not on par with Bernoulli.  And, as potential Laws go, certainly below the pay grade of Metcalfe.

But one that cross-checks for me in my simple mind again & again.

Get really good.  Then think about the merits of the next leap.  Ensure probability of execution by making the leap short.  Drive long-term success by testing, sampling, measuring,  Attain repeatability.  And increase the speed of every leap that follows.

Simple is as simple does.

frog lily