Plug-and-Play Cloud Storage At Home: Cloud Engines CEO Daniel Putterman (Part 4)

Sramana: In which year did you leave Macrovision?

Daniel Putterman: The sale was the first of January 2007. I was on my way by the middle of that year. The bulk of the core team also came along around that time. We had a small core team.

Sramana: When you are doing a startup, you don’t want a huge team.

Daniel Putterman: No, especially when you are building a device. We had a good solid team. What I have been doing over the past couple of years is surrounding these technologist with squirts. We have an Israeli team of 15 which is led by my brother, who moved back to Israel. We are finding talent that can keep the entrepreneurial spirit. We are going to be in more than 10,000 retail stores this year.

Sramana: What was the vision that you started Cloud Engines with?

Daniel Putterman: To me, it was very obvious. Everything keeps getting smaller and smarter. The only thing we give up in these form factors is storage. The industry loves to operate by using technology to change user behavior. They have spun this ethereal notion of the cloud and told consumers not to worry because the GDrive is coming and online storage will be free.

Let’s fast forward three and a half years. Amazon has launched Cloud Drive, which is the lowest cost retail cloud storage platform on the market. That is a dollar per gigabyte per year, which is one thousand dollars per terabyte per year. Consumers can buy a terabyte from Best Buy for under $100.

Consumers are used to buying storage and bringing it home. Consumers are comfortable bringing things home, culturally, so we decided to run a service where instead of hosting the data center we give consumers the data center. It is a friendly, happy-looking box to illustrate how easy it is to use. We took all the lessons learned at Mediabolic, where we licensed our technology to manufacturers around network-attached storage (NAS). Now people are trying to figure out how to do consumer NAS.

When people ask us how we compare against an NAS [device], I tell them we compare terribly. If you want NAS you should go buy NAS. If you want to deal with port forwarding, then use NAS. If what you want to do is punch in your e-mail address and have a terabyte accessible on your iPhone free, then you should consider coming over to our product.

Sramana: Did you start off funding the company yourself?

Daniel Putterman: Across all the founders we put in a couple hundred thousand dollars. We used people around the Valley who were willing to bet on us with seed capital. We had $1.5 million in seed financing. From an Internet startup perspective that is a good amount, but that amount is absurd for a service company. We took that money and spent the entire next year on software development. We called in every last favor that we earned at Mediabolic. We called on chip companies, including executives, and Marvell. We got our first 10,000 units of the product built.

Sramana: Are those 10,000 units the Pogoplug?

Daniel Putterman: Yes, that is the name of the product. We took the last bit of cash that we had and bought a booth and launched that product at CES. We were a very small fish in a big pond, but the press went crazy. Nobody had seen a networking product that was easy to use.

This segment is part 4 in the series : Plug-and-Play Cloud Storage At Home: Cloud Engines CEO Daniel Putterman
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