Building Fat Startups: Delphix CEO Jedidiah Yueh (Part 4)

Sramana Mitra: What was the competitive landscape like?

Jedidiah Yueh: Two years after we started the company and we started marketing the product and the space, we had a competitor enter the market called Data Domain. In the end, both companies were sold to EMC. They were sold for over $2 billion. There’s another lesson there. When we were acquired by EMC, Data Domain and Avamar were similar in scale. EMC was looking at Data Domain as well.

We thought we had won when we were acquired by EMC. We celebrated the acquisition. Then the market took off around that time. Avamar sales increased quickly and so did the sales of Data Domain. They were able to capitalize on that and they went public. They were able to be acquired at a much larger amount. In hindsight, our acquisition was premature. EMC has done over $4 billion in sales on the product, so they’ve really profited on the product.

Sramana Mitra: What happened after the acquisition? Did you have to stay at EMC?

Jedidiah Yueh: I stayed at EMC for a year and a half as VP of Product Management.

Sramana Mitra: That brings us to 2009?

Jedidiah Yueh: 2008.

Sramana Mitra: What happens after that?

Jedidiah Yueh: What was interesting was that the world was really changing. Enterprises were expanding rapidly. Companies needed data for development, testing, QA, analytics, legal, and compliance. There was a demand system forming around data for enterprises. A lot of customers of Avamar came and said to me, “You’ve de-duplicated all my backup data, but we still have to restore this data to all of these different locations.”

I realized that we had architected the solution incorrectly and so had all of our competitors. We had optimized for storage efficiency. We were very efficient at packing data onto disk, but you still had to restore it to another location to make it valuable or useful. I realized there was a big opportunity emerging in the market because the demands for data were changing. So I left EMC to start my second software company.

Sramana Mitra: What was the premise of that?

Jedidiah Yueh: Delphix collects data from enterprise app. Instead of having to create multiple copies for development, test, QA, and staging, we collect a single version of the data and then shared that data across all downstream environments. We just use the same data from the same location. It’s really about data virtualization. It’s about delivering data very quickly, very securely, and very cost effectively.

Sramana Mitra: I have a question for you, which is more about how you operate. You don’t have a background in any of the things that you’re doing. Did you hitch up with a co-founder who has a technology background? How did you navigate the technology side of all this fairly complex stuff?

Jedidiah Yueh: I’m technical now. I have over 30 patents in data management. I’m a product inventor. I learned technology well enough to understand architecture and the real functional components of products. Once I understood how other products worked in the industry, I could invent the products, write up the requirements, and hire teams to help build them out. There were certainly a lot of technical counterparts who helped us build out the products.

This segment is part 4 in the series : Building Fat Startups: Delphix CEO Jedidiah Yueh
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