Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris (Part 2)

Sramana Mitra: Where were you based while you were doing all this?

Luke Norris: I was still in Denver. At that time, I was working a lot in New York. I didn’t have a permanent place out there, but I was there several weeks a month.

Sramana Mitra: What happens next and what year are we going to go to next?

Luke Norris: Now, we’re at about 2004 to 2005. A very interesting thing happened. The regional data center company that we had used at Factual was being purchased by the data center company called Sungard Availability that Marsh was using.

Sungard purchased Inflow. I had come to know both management teams. The Senior Manager at Sungard effectively gave me the job of integrating Sungard’s operations center and moving out to Denver and evacuate Denver out to Philadelphia.

It was a great opportunity for me to go back into large-scale data centers and networking, which I liked a lot more than security. It gave me significant management chops. At this point, I’m managing a team of roughly 200 people and really getting down into the decision-based level of profit and loss.

Sramana Mitra: Then what year does that bring us up to?

Luke Norris: That brings us up to 2006. At this time, I was growing disillusioned working for a large company. There were about 9,000 employees at this point. At this time, virtualization, or the ability to combine multiple physical servers into one physical server, was coming up. I had proposed to the senior leadership team at Sungard. For a lack of better terms, they weren’t interested. I was encouraged by one of the senior executives to just go and start my own company. I jumped in full-time. I bootstrapped the company to roughly $2 million in revenue.

Sramana Mitra: We are talking about the company that you’re running now?

Luke Norris: Correct. The company, at this point, is called PeakColo. 

Sramana Mitra: You started that while you were at Sungard?

Luke Norris: No. The executive had given me a push to leave. I started this company in 2006.

Sramana Mitra: What is the mission of PeakColo?

Luke Norris: At this point, I was building out large-scale networking equipment and data centers that are called interconnection facilities. They’re also known as the  carrier hotel. This is where the internet in a major city comes together. One internet provider to another gets a cross connect.

These facilities, though, are very expensive. Medium-sized businesses can’t enter that market. It’s too expensive to buy the base equipment. I’m buying equipment and sharing it between multiple companies. It becomes a really good source of business for us.

I’m able to grow the company pretty rapidly to a million. Soon I’m able to bring it to $2 million by adding on the ability to share large networking and large storage systems between organizations. This was early cloud technology for lack of better terms.

In 2009, that executive at Sungard moved on. He joined me as a Board Advisor and helped me steer the larger scenarios of growth. I attribute a lot of my success to having that mentor very early in my organization.

Oddly enough, I’m able to attract early financing through the form of an angel. They’re the largest lamb producers. They’re a very large customer of mine. They invested roughly $3 million in the company. That helped accelerate us to the $3 million mark and to expand out of Denver. We expanded to Phoenix and kept expanding from there.

That enabled the next step. I’m able now to attract the interest of a large company called NetApp. We’re utilizing their storage technology. We’re utilizing it now with some patents that we had filed that allow us to segment out each of our customers from a network perspective. Their storage, on top of our networking, allows us to deliver a very unique cloud-attached storage service.

NetApp thinks it’s so unique that they let me demo it at VMWorld 2011. The founder of NetApp was demoing PeakColo. We won best demo and best in show. The next thing you know, my phone is ringing off the hook from venture capitalists and other people who want to invest in the company.

This segment is part 2 in the series : Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris
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