A Product Market Fit Show | Startup Podcast for Founders
00:11:19 · Poojan Kumar
[00:11:19] S0: It takes time. I think in both cases, I was always in the back of my head. I was thinking, okay, what is the next thing? What could be the next thing? Again, you have to go predict the future. You go start a company today. If you’re lucky, you’re going to get a 10-year journey, if you’re lucky. You would basically almost see that, okay, is this idea going to be relevant for the next 5 to 10 years? Bottom line is that stuff you have to go do some deep thinking around in terms of what’s happening in the market. What are the discontinuities in the sector? For example, it’s very simple. Going from hard desk to flash was a discontinuity in the storage sector 10, 15 years ago. It already happened in the consumer devices like iPhone, but it was beginning to happen in the data center. There was a big discontinuity. That discontinuity, if you see, created a set of companies. Some became really big, like Pure Storage, Nutanix. Some, like ours and others, got acquired. The point is that discontinuity created that. Similarly, the discontinuity from data center computing to cloud computing started by Amazon and followed by Azure. Google Cloud has created a new set of very large companies like Snowflake and Datadog, focusing on these discontinuities, which you’re lucky if they happen, but they happen. If you’re looking closely every 5, 10 years, you see some of this. Now, there’s discontinuities. AI is happening as we speak. Anytime these discontinuities happen as an opportunity, now you have to go double-click and say, okay, with this discontinuity that’s happening, what’s an opportunity? This is where the knowledge of the space does matter, again B2B. B2C is different. But in the B2B world, it matters. Where are the legacy architectures will not be able to adapt, whom you can go and disrupt where technology cannot adapt to this new thing? That double-clicking and triple-clicking and thinking deeply gives you a bunch of ideas. Then you got to go and validate it, and think about, and find the right set of co-founders, how you can build it, and get validation with customers if you really want to raise a Series A and so on and so forth. But bottom line is it starts with a discontinuity, and you go from there.
00:13:22 · Pablo Srugo
[00:13:22] S1: I love that because what it clearly shows is the power of being an expert, a deep industry expert, and how that helps you find unique insights. I’m curious if you can go a step further. Specifically with Clumio, you’re talking about the discontinuity that you saw jumping to cloud computing, AWS cloud, Google, et cetera. What was the next step there? What was your process to go from there to the idea like – and you mentioned, the legacy players that you thought, okay, this legacy player, this legacy solution’s not going to be able to translate. What was it in this specific case?
00:13:54 · Poojan Kumar
[00:13:54] S0: In fact, if you think about it, all of those things really went – if you look at a Series A deck, all of that basically went into the deck. That’s how you convince somebody to give you a non-trivial check. Because what you’ve done is you’ve basically shown them, talked about the discontinuity, talked about the market, talked about why the existing players will not be able to go and capture it, and how you can. You’ve not built anything, obviously, because building is going to require a significant capital, at least in the examples I’ve been involved. That is what you’re basically convincing folks on. Double-clicking on this thing, the cloud computing environment is very different. People were consuming services in the cloud. People were going and running their software across multiple regions, or that required a very different architecture in the cloud. In my case, we already had companies that were beginning to do that, but in different spaces. The example is Snowflake was doing that in data warehousing. Datadog was doing that in cloud monitoring. Now, it was about, okay, what are the white spaces now that are not already being done? Because I think obviously, you can be a Number 2, Number 3 player and try to copy an existing idea. That also happens, when somebody becomes successful. But we are trying to find a brand-new white space, which is a market that’s actually not being tapped. I always believe, companies doing something with data can become the largest companies over time. We wanted to basically be in the data space. One of the things we are looking at is a backup. Backup is a large market, and as people move into the cloud, they’re going to need backup in the cloud also. Then we try double-clicking. It’s like, okay, what’s the solution available in the cloud today? How are people doing it today? Can I take an on-prem architecture, data center architecture and really retrofit it to the cloud? Not really. Why not? Then that’s a double-click, triple-click. That is how you convince yourself first. If you are convinced, of course, because you’re from the broader space – never in the backup space per se.
00:15:51 · Poojan Kumar, Pablo Srugo
But bottom line is once you’re convinced when understanding what’s happening, then you create the framework of a deck that I talk about, which is you talk about the idea, you talk about the competition, you talk about their architecture, you talk about what your architecture can be, you talk about the market. You get some customer validation. You talk to customers and said, okay, if we did this, would you buy it? Is this a pain point? Then you have the entire package and then you're ready to go fundraise. [00:16:19] S1: Tell me a bit more about the customer part, because there’s so many ways to do that from a high-level conversation. Like, hey, we’re trying to build this. Do you think it’s a good idea? A lot of people are just nice. They’ll just tell you what you want to hear. That’s a waste of time especially for the founder, frankly. But how do you structure those conversations to get actual information, real insight, real feedback, and get a real sense that, yeah, okay, you know what, if I built this, they will buy? [00:16:41] S0: In both cases, I would say both at Pernix and Clumio, I think it was all about first finding these folks. In some cases, your past relationships, your past background helps. In some cases, you just have to go spend the cycles, your LinkedIn, your network and everything that you can, and really get in front of a few of these folks. I pretty much hustled and did everything possible to get in front of these folks.
00:16:41 · Poojan Kumar, Pablo Srugo
[00:16:41] S0: In both cases, I would say both at Pernix and Clumio, I think it was all about first finding these folks. In some cases, your past relationships, your past background helps. In some cases, you just have to go spend the cycles, your LinkedIn, your network and everything that you can, and really get in front of a few of these folks. I pretty much hustled and did everything possible to get in front of these folks. [00:17:09] S1: What were some of the things – do you remember, especially at Pernix, now, I think I’m sure it was easier at Clumio. But at Pernix, do you remember some of the strategies that really worked to get you in front of the right people? Because like you say, that alone is a hard step for a first time founder just to even have the conversation.
00:17:09 · Pablo Srugo, Poojan Kumar
[00:17:09] S1: What were some of the things – do you remember, especially at Pernix, now, I think I’m sure it was easier at Clumio. But at Pernix, do you remember some of the strategies that really worked to get you in front of the right people? Because like you say, that alone is a hard step for a first time founder just to even have the conversation. [00:17:23] S0: Yeah. Pernix was much harder, as I said. Obviously, in the case of Pernix, we had some relationships that I had in the past that I leveraged. Then basically use them to get them introducing me to their other peers, so to speak. That’s how I created the set of folks. Over time, I really went into conferences. Literally, I’ll tell you a story where I went to no conference and then stood beside a booth of a storage company, which will basically go and not eliminate, but essentially take budget from and stuff like that. I stood beside for a few minutes and a couple of folks I saw asking really deep questions about the technology and this thing. Once the guy left that, I basically followed him, and I essentially told him, oh, I’m the startup founder, this and that. This guy is like, [unclear] following me, and then asking me this thing. One thing led to another in that journey, and that guy whom I actually caught at the booth became our first customer, first paying customer at Pernix, $15,000 deal. He bought it for two servers, first paying customer. Not only that, he actually went ahead and joined the company also as our first systems engineer.