Building a Big Data Venture: Hiro Yoshikawa, CEO of Treasure Data (Part 5)

Sramana Mitra: Did you raise money in 2012 and how much?

Hiro Yoshikawa: We raised an additional $1.8 million of seed extension round in 2012 led by Jerry Yang and Dan Scheinman. We ended up raising the very first venture capital round in July of 2013 led by Tim Guleri of Sierra Ventures.

Sramana Mitra: Yes, I know him.

Hiro Yoshikawa: Tim is an awesome venture capitalist.

Sramana Mitra: How much did you say you raised from Sierra?

Hiro Yoshikawa: The Series A round was for $5.3 million. Sierra took 90%.

Sramana Mitra: In terms of growing the business, what were your key strategic moves at that point, primarily on customer acquisition? It’s a little bit precarious to only go for startup clients.

Hiro Yoshikawa: That’s true. Unlike in traditional enterprise industries, the engineers really matter. They might not have the biggest budget but getting the Treasure Data experience right is very important.

Sramana Mitra: They are the technical decision makers in the buying process.

Hiro Yoshikawa: We initially focused on the CTOs or technical founders of technology companies, mainly in Silicon Valley or in the big cities. Their budgets might not be the biggest, but giving the right experience to these people is very important. At the same time, we have invested a lot of resources in our open source software.

We open-source almost all our data collection technologies. Fluentd,, one of the early projects, was a very big success. There are many companies like Uber who are using Fluentd as the data collection engine. Before getting into the mainstream market, which is sometimes called enterprise market, we decided to invest more on the engineer’s experience. I’m very proud that we had early success in that.

Sramana Mitra: You open-sourced part of your technology?

Hiro Yoshikawa: Yes.

Sramana Mitra: What kind of adoption did you have in that open source mode? Who were adopting the technology? How many users did you have of the open source technology?

Hiro Yoshikawa: It’s very hard to say how many. When we counted the numbers of downloads, we can comfortably say that there are, at least, thousands. Many of them are very big companies. For example, Pokemon Go’s back-end data collection is our open source software. Many of the data disruptors like Facebook, Uber, Yahoo!, and Netflix are also using our open-source technology.

Sramana Mitra: Let’s talk a little bit about the monetization of this open source. Are you using the traditional open source model where you have some portion of it for free?

Hiro Yoshikawa: Yes. First of all, open source commercialization is not our core business. Our core business is the data pipeline management service. As we open-sourced some components, especially in the data collection space, it’s natural for big companies wanting to be commercially supported by Treasure Data. We are providing the commercial support with some enterprise enhancements.

Sramana Mitra: What percentage of your thousand plus open-source users converted to paid customers?

Hiro Yoshikawa: We don’t actively market the commercialization version of Fluentd yet. Our core business remains the cloud-based data management service. Open-source commercialization is one of the pillars of the revenue generation for us.

This segment is part 5 in the series : Building a Big Data Venture: Hiro Yoshikawa, CEO of Treasure Data
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