From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth (Part 5)

Sramana Mitra: Can you backtrack for me for a second and answer a couple of questions before we get to this point? I have a bit of a gap in the process here. You said you were running a bunch of experiments and one of them turned into this situation. How many such experiments around different product hypothesis did you run?

Joe Kinsella: It wasn’t product hypothesis. I knew the business I was starting was management of cloud infrastructure in some way, shape, or form. It was taking different hypotheses where the market could go in different directions in trying to understand how people were thinking about this problem. I ran, at least, six experiments.

Sramana Mitra: You were going to do something in cloud infrastructure management and you were just trying to find the angle through which to get in.

Joe Kinsella: Exactly. It was all about infrastructure management.

Sramana Mitra: You were looking for where to apply the domain expertise.

Joe Kinsella: That’s exactly right.

Sramana Mitra: This company that you stumbled into that had deep pain and turned out to be an early evangelist, how did you find them?

Joe Kinsella: The introduction came from my former CEO. I’m just going to confess that it was dumb luck to land on the early evangelists. I did give my CEO a set of criteria. I wanted to pick a company that had been building on Amazon either from the beginning or had been doing it for a few years. I had a few criteria, but it was more luck than my targeting.

Sramana Mitra: In 2012, you got your first customer that was willing to pay. You were still not set up as a separate company?

Joe Kinsella: Yes. When he said to send over the order form, I didn’t have any incorporated business. I scrambled. I put in place the basic working business. I then decided that I would go off and repeat the same experiment. This one time, I had one customer. I was working with them from the get go in terms of just adding more features to support them.

I ran the same experiment again targeting the same type of company with the same price point. I closed the second customer through that second process. I think it was two calls this time before I closed it. The VP Engineering of this company was the buyer. He just said, “Set it all up this weekend.” That was customer number two. At that point in time, I realized that I had crossed over a point where there clearly was sufficient pain. I probably had found my business opportunity. It was a question of what was next.

Sramana Mitra: Describe to me, based on these early customer experiences, how you position your company.

Joe Kinsella: About 15 years ago, for managing infrastructure and applications pre-cloud, more often than not, enterprises had single monolithic products. For years, they had these monolithic products that managed all aspects of their infrastructure. That hypothesis that I had been testing out and triangulating was that every time I met a company that was managing a cloud at scale, they had 10 to 12 disparate point products.

The point products each brought with them a console and they each had data that was critical to what it is that they were doing. Nobody was bringing it all together into a single pane of glass where someone could get the insight and the recommendations and drive action across all those products. The hypothesis was it’s a next generation of management where you actually complement and extend the point product investments and make them all work better together for the purpose of driving down cost, increasing security, improving your performance, governing your infrastructure, and driving change where your infrastructure deviates from policy.

This segment is part 5 in the series : From an EIR Experiment to a Fast Growth SaaS Company: Joe Kinsella, Founder and CTO of CloudHealth
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