From Y Combinator to Customer Traction and $50 Million in Financing: MemSQL CEO Eric Frenkiel (Part 6)

Sramana Mitra: When you raised the $35 million, how many customers did you have?

Eric Frenkiel: I don’t recall the exact numbers, but it was around a dozen customers at that point.

Sramana Mitra: Were these large companies? What kind of customers are we talking?

Eric Frenkiel: They were all logos that anyone would recognize. One of the things that we also did was not to focus on selling to startups or early stage companies. We really wanted to prove that the technology had legs by delivering value to companies like Comcast and Samsung.

Sramana Mitra: You went after the regular enterprise customers and not the Lady Gaga kind of customers?

Eric Frenkiel: Exactly. We started off with use cases that can quickly prove value wherever it might be. But since the software now had a lot of utility for large enterprises, we were able to bag a number of those enterprise accounts very quickly.

Sramana Mitra: In 2014 you have more than $40 million of funding, right?

Eric Frenkiel: We’ve raised about $50 million so far.

Sramana Mitra: What else is strategically significant in terms of the moves that you’ve made that are worth discussing in this interview?

Eric Frenkiel: We started doubling the size of the company at the beginning of 2013. At the end of 2012, I believe we had 12 people and by the end of 2013, we had 25 or so. At the end of 2014, we had 50. We were able to grow quickly since we launched the product. 2014 was a big year. We built out our executive team. We were able to recruit a phenomenal CMO and Executive Chairman to fill out the board and we recruited an amazing VP of Sales. 2014 was a big building era.

Sramana Mitra: What is the pricing on your product?

Eric Frenkiel: One of the things that we do as an innovator in this database market is to focus on delivering innovative technology. We’re doing this by providing a database that can distribute on commodity hardware, which saves our customers a lot of money. We also wanted to innovate on the pricing model itself. A lot of the larger players will price by core. You upgrade your servers every few years and you double the core count even though your business may not have changed.

Other vendors price based on the number of machines. We wanted to price on capacity. Our licensing model is about licensed memory that you use for your data. It’s a much more favorable model for our customers because when their data volumes double, it makes sense that their businesses would have probably doubled as well. It’s a better conversation to have when you say, “Your data volumes are growing. How can we help by giving you more license to sustain the SLA as well as the amount of data you want to store and analyze.”

Sramana Mitra: What are the average deal sizes?

Eric Frenkiel: We see anything from five to seven figures.

Sramana Mitra: What is an entry point into your product?

Eric Frenkiel: The entry point is actually zero to start because of our ability to provide that software for free download on the website. Customers can actually validate the technology before they start using the product. We have a number of companies that can engage at very low price points. I will say that generally when you are an enterprise startup, you don’t waltz into an account with seven-figure price tags. You start off with proving value with a focused application that you want to deliver on.

Sramana Mitra: Where do you grow from here? What are the key goals for 2015?

Eric Frenkiel: 2015 is a year for us to accelerate growth. We’ve seen a number of use cases across a variety of verticals. Now it’s time to build out sales teams. From that perspective, the $35 million Series B is there to enable additional growth and product build-up.

Sramana Mitra: Primarily on the sales and channel side?

Eric Frenkiel: Yes.

Sramana Mitra: Great! Thank you for your time.

This segment is part 6 in the series : From Y Combinator to Customer Traction and $50 Million in Financing: MemSQL CEO Eric Frenkiel
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