Innovating Web 2.0 Storage: Fabrik CEO Mike Cordano (Part 3)

SM: What role did you hold at Maxtor when all of the product innovation was occurring?

MC: I was the EVP of Sales and Marketing. The Branded Products division reported up through me.

SM: After Maxtor went public again, you stayed on board for several more years, correct?

MC: I stayed through early 2005. My decision to leave was about wanting to more things around growth. We were looking at strategic alternatives for the company. When it became clear that growth was no longer part of the strategic plan, particularly in areas such as the Branded Products Group, which I thought had great opportunities, I made a decision to pursue those strategies outside. That led to my departure in early 2005. Shortly after that I founded Fabrik.

SM: What were your initial plans for Fabrik? What leverage were you able to take with you into that project?

MC: The real strategic underpinning of the company is that we recognized a tremendous opportunity to take commodity storage and network storage and layer different kinds of data services on top of that. I specifically wanted to go with an appliance type model. One of the things we experienced at Maxtor was that enterprise class concepts like networked attached storage do not translate very well to the consumer. It is a complex IT concept. Very powerful but unusable to the consumer; 90% of the consumer based is intimidated by it.

Our view has been to take very simple concepts like backup and apply an appliance concept to that. That enables a simple marketing message, and everything is self-configuring when bought and installed. We love the way Apple does things with services and devices connected. Our concept around storage and data services is very similar.

Inside an industrial commodity company like Maxtor, one of our biggest problems was attracting great software talent. Even though we had the budget and the company had a profile in the Valley, we found that successful software people wanted to go work for web companies. Despite our budget we had a very difficult time bringing in software developers or project management folks because they were just not interested. We had a structural impediment to pursuing these great value added services on top of the commodity. Another thing that happened in Maxtor was that it was an engineering driven company. The budget flows and investment flows were focused primarily on those elements. When you are thinking about a consumer product line, there is a very important need to focus on branding. You have to commit to ongoing marketing activity to manage that brand.

When you are in cyclical commodity marketing the first thing the CFO will look at when you are in a downturn is variable expenses. Non-core expenses such as marketing are the first to get cut. As I sat and thought about building a company, this influenced the culture aspirations of Fabrik. We wanted differentiation around software applications and we needed to fundamentally commit to managing the brand over time. It was almost an inverted model compared to Maxtor, and that was out of necessity.

Based on my experience to date, I knew the channel worldwide. However, I knew that we needed to focus here in the US. Our view was to found the company as a software company with a separate strategic initiative to identify a route to market that would bring the devices to bear in a channel and access to customers in a very direct way. We spent the first 15 months developing a prototype system, which was myFabrik.com. It never became a prime time product, although we learned an awful lot in the process.

This segment is part 3 in the series : Innovating Web 2.0 Storage: Fabrik CEO Mike Cordano
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