A Product Market Fit Show | Startup Podcast for Founders
00:05:53 · Poojan Kumar
[00:05:53] S0: It wasn’t easy. I would say that was always a desire. At any point in time, just take a step back, you raise a round of financing. It’s meant to take you from Point A to Point B. The goal was for us to go raise that $7 million of Series A. We had made a plan saying that if we are able to raise that, then I can go and build a shippable product, and then I’m ready for Series B. Basically, get me through the Product Market Fit, and really go raise a Series B to really go scale. I knew that that’s not going to be easy. If I’m not able to do that, I had a backup plan, and the backup plan was go raise a million, million and a half, which I thought was definitely doable just based on the background. Because remember, I had enough close to 15 years of enterprise experience, and it was enterprise idea. I had credibility in the space. You have to be clear in your head and what you want.
00:06:46 · Pablo Srugo
[00:06:46] S1: I think that’s smart, having these two plans, but not necessarily disclosing it. Sometimes founders almost disclose too much, and it then appears a little bit soft. It’s like, I’m going to try raise seven, and they say this, I’m going to raise a seven. But if I can only raise two, here’s what I’m going to do. It’s like, okay, you got to go all in at least in the way you talk about it. That makes sense. My question though is, ultimately, Plan A worked. You did raise 7 million, and I’m curious what you attribute that to. How much of that was your credibility, as you said, having been in the enterprise space? How much of it was the deck and the presentation? Maybe how much of it was just meeting the right investor who just got it?
00:07:21 · Poojan Kumar, Pablo Srugo
[00:07:21] S0: I would say, I think that it’s a combination of everything at the end of the day, but the third factor you pointed out is very important. This is where meeting the right folks is very important. You have to go to folks who understand the stuff. The VCs that have gone both in my previous company, as well as at Clumio right now, are folks who get the space, who understand enterprise B2B very deeply, and are not afraid to make a Series A bet on the right idea and the right team. You really have to go and get to these folks, and you get one shot. I tell the folks, you get one shot. If you’re lucky, you get the second meeting, but you should expect that if you don’t nail the first one and there’s no second meeting. Again, and going to the right set of folks after having honed the pitch, which is again I tell folks, don’t go to your perfect target in the first listing. It’s okay. You’ve got to burn a little, burn a couple folks to perfect it. While I was doing it for the second time at Clumio, it’s a little known secret that, no, I still had to go through a couple of VCs to perfect my pitch and stuff like that before I decided to go to the folks. I was really interested and I knew that these folks, if I can convince them, they have the ability to give me that check. [00:08:37] S1: At Pernix, do you remember how many of those meetings did you do? Did you do 10, 20, 50?
00:08:37 · Pablo Srugo, Poojan Kumar
[00:08:37] S1: At Pernix, do you remember how many of those meetings did you do? Did you do 10, 20, 50? [00:08:41] S0: No. I would say it was still very laser-targeted. It is very important to be very laser-targeted in some of these things. I think I would say if my goal was to raise a million, million and a half seed, I think there’s definitely more options I had, and I could go and optimize. You can optimize for the person. You can optimize for the valuation. You can optimize for a bunch of things, as you know. But this one was more laser-targeted. There was very few of those folks, and I actually went methodically after them. I would say it was definitely less than 10. [00:09:10] S1: Maybe fast-forwarding a little bit. You go through Pernix. You end up raising it a Series A, Series B, Series C, about $60 million in total. You end up exiting. The company gets acquired in 2016 or so, I believe. Correct me if I’m wrong. Then a year later, you start Clumio. What drives you to do that? Did you not think about, okay, I’m going to go take a break for <laugh> a few years sabbatical, some people call it? Or did you know right away, I’m going in for a second one?
00:09:35 · Poojan Kumar
[00:09:35] S0: I think it’s one of those things. I joke about it as though there’s a wiring issue. Doing it again and again is not easy. I say some things become easier. Maybe fundraising becomes easier. Overall, the startup experience doesn’t become easy. It’s as hard every single time, and it’s fun every single time. If you enjoy that journey, it’s as hard every single time because nobody cares. Every person whom you’re working with, employee, anybody, or investor, it doesn’t matter what happened in the past. It’s what’s happening today in this particular thing. It’s never easy. You have to fundamentally like the journey. I think that ultimately drove me to, going back to your question, is to basically do this. Nutanix was a fantastic company. I was, again, doing two or three new things there, but then the whole thing about going out and the thrill of the journey of starting something with a brand new idea. The other thing that was a big driving force for me personally in this case was my entire career was in the data center, building software, hardware, things for the data center. Public cloud was a new big thing that was happening, and I was vicariously living it all along. My goal was to really go and be part of building something in the public cloud, a SaaS service. I’d never built a service in the cloud and things like that. That was another driving force, really reinventing myself into the cloud SaaS space was another big driving force, which comes with learning and all of that.
00:11:03 · Pablo Srugo
[00:11:03] S1: The way that you think about coming up with startup ideas, and you are alluding it to there, you have this. You’re seeing what’s happening in public cloud. You want to play a role there. You want to do something at SaaS. How do you go from that to a specific idea? What was the process by which you came up with the idea for Clumio?