Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio (Part 6)

Sramana: What did you position Actifio to be when it emerged as a company?

Ash Ashutosh: There is a lot of data storage sold because people love to protect, share and analyze their data. People spend more data making copies of data and managing data than they do producing data. They spend 5 to 13 times more just making copies of their data. It used to be the same way in the server world. If you wanted email then you bought 2 active directory servers. If you wanted SharePoint then you bought two more. Along came VMware and now you only needed a single server that ran a bunch of virtual machines.

Storage data is really divided into two kinds of data. There is production data, the golden copy, and copy data which is copies of the production data. The entire market was focused on production data. We went out and created a company that came out with a new class of storage system designed to manage copy data. We are the time machine that allows copies to be efficiently stored and allows people to access information from the past. We not only make it more efficient to manage copy data, we also make it more efficient to use that data. You can tell Actifio to run the data for the past three months and it will only take a few seconds to pull off. That is something that could never be done before.

Sramana: You said you had 46 interviews to help validate the problem. How many of those 46 became customers?

Ash Ashutosh: There are about 25 of them who are customers now. Some are very large companies who are not ready to make a switch yet, but they are still happy to work with us. My goal was not to have everyone as a customer, it was to figure out the market issue. In the enterprise market the old model used to be “find something cool” and then run to the New York Financial district to sell it. Today they are the last people who adopt. The IT guy in the data center used to dictate the technology, today the consumer dictates the technology needed.

Just because you are talking to 46 guys that does not mean that you need to focus only on selling to those 46 guys. What you build may be completely different. You are leveraging them to get input for your concept but the end product may not be relevant to all of them.

Sramana: It depends. In our incubator we encourage people to get segmented. We are operating in mature technology markets. It is not like the virgin days when people do not have anything. You need to understand problems and segmentation at a granular level in order to sell.

Ash Ashutosh: Absolutely. This is a $44 billion market. It is bigger than anything I have ever dealt with. You could buy 7 aircraft carriers with this budget. This is big. Our problem is to rapidly get to every one of my customers who is going to buy now.

Sramana: I understand where you are coming from but I do believe that you are operating from a slightly different point of view than most entrepreneurs. You are walking into a situation where Greylock is incubating a company with a lot of capital. Most early stage entrepreneurs do not have that luxury. They have to focus on getting sales rapidly and getting real validation. They need a granular TAM analysis for the opportunity that is realistic.

Ash Ashutosh: I agree. Since 1997 to 2009 I have had several luxuries that allows me to experience this situation.

Sramana: One of those luxuries is that you bootstrapped your first company, sold it, and had capital of your own. That was well earned and has given you the luxury.

Ash Ashutosh: Success is also a big factor in confidence. The ability to drive your next company in a manner that is free of financial constrains is a huge luxury. You don’t go off and do anything you want, but you can operate with plenty of sanity.

This segment is part 6 in the series : Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio
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