Opportunities At The Cusps: FireEye CEO Ashar Aziz (Part 2)

SM: How did you finally gain that confidence you were talking about to launch your startup?

AA: It is completely fortuitous how I finally got off the ground. One of my VPs at Sun became a venture capitalist. I had a meeting with him in 1998. At that time I felt the computing infrastructure was very inefficient; it was manual, labor-intensive and not optimized. I wanted to create a virtualized infrastructure. Terraspring was started over a conversation with him, as I explained my concerns. I did not have a business plan. He called me over afterwards and told me he enjoyed our conversation and that if I wanted to build a business around it he would fund it.

SM: That was your seed capital?

AA: That is what I used for the seed capital. I recruited two engineers from Sun who were working with me at the time and we started off to build the vision, still without a business plan.

SM: How much money did he give you?

AA: He gave us $500,000. In addition to that we were EIRs (entrepreneurs-in-residence) at Mohr Davidow Ventures. We worked there for four months, refining the technology, business idea, and go-to-market strategy. The trend at the time was services, so we started out building a next generation Exodus. We were planning on building intelligent datacenters, not just the technology to power them.

SM: All of the virtualization you were planning on doing would have been executed in your own datacenters?

AA: Correct. We were not going to provide existing datacenters with the technology. We were overly ambitious because that is how people thought at that time. Now we know, but in 1999 if you didn’t do that you were silly.

The technology was really awesome. Along the way not only did I raise about $70 million in further investments with folks like Hewlett-Packard, EMC, Accel Partners, and nearly IBM, but we were at the executive level of all of those companies because we were building the virtualized platform that seemed to be recognized as the platform of the future.

The vision was right, we just did it too early. This technology is just starting to get used in 2008. As luck would have it, the market crashed in 2001 and we had to salvage what we could. We decided to make it a software company, but even there we had problems making the transition from datacenter into a software company. It was painful and we had to let go of people.

We had a very large acquisition offer from one of my investors. We turned it down, and that was a mistake. It was more of the hubris of 2000. They gave me a $30 million software deal our first year, which was just awesome. The technology was hard to build, so now we had $30 million in revenue. Add that to the investments received, and we went through $100 million in my first startup. That is my $100 million education.

This segment is part 2 in the series : Opportunities At The Cusps: FireEye CEO Ashar Aziz
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