Building a Big Data Venture: Hiro Yoshikawa, CEO of Treasure Data (Part 4)

Sramana Mitra: Give me an example of your first customer who understood your vision and signed up. What was the process of getting to your first customer?

Hiro Yoshikawa: We started the company operations in December 2011. We launched the initial product in September of 2012.

Sramana Mitra: You raised venture capital before all this?

Hiro Yoshikawa: Bill and Morio led the first million dollar round in late 2011. We started developing our initial beta product focusing on the open source data collection technologies and also the back-end database and the data warehouse to enable the collective data to get stored and analyzed. We started working with several customers. One of the early customers is Wish.com. Do you know Wish?

Sramana Mitra: I know of the company, but I don’t use them.

Hiro Yoshikawa: Wish is probably the fastest growing e-commerce company with a mobile focus. They’re probably the number one contender to Amazon right now. I met the two founders, Peter and Danny. Peter came from Google and Danny came from Yahoo!. They’re both very technical and very sharp. They knew everything about Big Data and analytics. They also knew how hard it is to manage data infrastructure.

Like I said, they understood the vision. They also didn’t want to have their engineers to build the stack; rather, they wanted to focus on developing their algorithms like recommendation engines or A/B testing frameworks to run their business. Lucky for us, they bought the vision, and we started working together. We helped the founders repurpose their engineers and focus more on driving the business.

Sramana Mitra: How many customers did you have like Wish as you were building your technology?

Hiro Yoshikawa: We had only 10.

Sramana Mitra: What kinds of companies were these?

Hiro Yoshikawa: Mostly Internet startups. Our initial buyers were the CTO. We also got some early customers in Tokyo. All of them were very technical.

Sramana Mitra: You built the first version of the product in collaboration with these customers after getting their inputs. It was a deeply customer-immersive experience.

Hiro Yoshikawa: Correct. They basically didn’t know the importance of data analytics. Data is the source of value for many of those companies, but with very limited resources, they wanted to prioritize their focus on algorithms and data applications.

Sramana Mitra: I assume that all these first 10 customers turned into paying customers for you once you had the product ready.

Hiro Yoshikawa: It was a 100% conversion.

Sramana Mitra: How do you charge?

Hiro Yoshikawa: We charge the customer based on data ingestion volume. We are also charging based on resource allocations, which can be translated into the number of CPU cores. Now pricing is getting a little bit complicated.

Sramana Mitra: You said you launched this in September of 2012?

Hiro Yoshikawa: Yes.

Sramana Mitra: Revenue-wise, where were you at the end of 2012 based on the fact that all 10 of your beta customers converted?

Hiro Yoshikawa: Still small – definitely less than $1 million. The key here is that we really wanted to learn things from customers. In that year, the revenue didn’t really matter for me.

Sramana Mitra: It did matter because you had customers who were willing to pay. Whether they’re paying at the maximum value or not, you had customers who were willing to pay and who were willing to work with you through this complex process of understanding. That is immensely valuable.

Hiro Yoshikawa: I agree.

This segment is part 4 in the series : Building a Big Data Venture: Hiro Yoshikawa, CEO of Treasure Data
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