Achieving Product-Market Fit That Allows You to Build Billion Dollar Unicorns: Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 2)

Sramana Mitra: Prior to Informatica, your work experience was with Unisys?

Gaurav Dhillon: That’s correct.

Sramana Mitra: Did you come up with the concept for Informatica while you were at Unisys?

Gaurav Dhillon: We wanted to break up into our own along this whole point server downsizing process. Believe it or not, the co-founders applied to the NIH for a grant of $75,000 to do research into how we could use object databases to do medical imaging. There is this program called Small Business Innovation Research (SBIR) coordinated by Small Business Administration. I certainly feel that the SBIR program is an enlightened program because it’s meant to create young businesses. You have to apply as permanent residents. It’s sort of the granddaddy of incubators in some way. If you are able to go out and pursue that project, it’s yours. The thinking is you will possibly create a company and you will, possibly, create a job. We did.

With that $75,000, we started what is Informatica today. I was the CEO. I quit on November of 1992, which was the second shock to my family. First, I drop out of graduate school. Then, I gave up this phenomenal job at a large company following my internal education to go do something and make a difference. We started Informatica with a $75,000 grant.

Sramana Mitra: What year was that?

Gaurav Dhillon: November 1992.

Sramana Mitra: Right before Internet became mainstream?

Gaurav Dhillon: Yes. I don’t know how every incubator operates but I talked to some of the bright people we have. It’s like mom and dad giving you money for making a down payment for the house. You can always make the payment by working hard. For a lot of people, that upliftment—getting that first house—makes a difference.

Sramana Mitra: I actually have a bias against the money part. Very briefly, the education part is really what’s key. That’s the misunderstanding of what the role of the incubator or accelerator is. Let’s take that off the table for now.

Gaurav Dhillon: Let’s have the conversation over a meal. I think there’s so much excitement in this area. That gave us the guts to start this company.

Sramana Mitra: With the $75,000 as SBIR grant, what were you able to identify as the opportunity? The reason I’m drilling into this is sometimes, often actually, in companies that achieve serious scale, that is one of the pivotal point of a company’s genesis. If you can hit upon a real problem that a lot of people want to solve, that is really the secret of the whole thing. The question is what is your process of getting there? How did you get there? What was involved?

Gaurav Dhillon: We read in the newspaper about mobile development. In the same way, I could see the demise of my former employer. They couldn’t keep up with the transition. Perhaps the most important point to share with anybody is what is that product market fit. We now actually have language to describe these things. At that time, there was really no world wide web. You had to figure that out on your own. Now I see some of the articles in Quora and I slam my forehead and go, “Why wasn’t that around 20 years ago?” We now have a vernacular set of terms to describe this very critical stage of any startup’s success. That is the jugular question for anything that becomes scalable. Not just in valuation but in terms of creating a durable business.

This segment is part 2 in the series : Achieving Product-Market Fit That Allows You to Build Billion Dollar Unicorns: Gaurav Dhillon, Founder of Informatica and SnapLogic
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