Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio (Part 5)

Sramana: The financing market has gone away from fat startups. Everybody wants deals with traction. If you have a company that requires significant amounts of money to prove validation, how do you get that to market?

Ash Ashutosh: This is a pivotal issue to this day. It is the core of culture. I am a VC and I would try to figure out what the next investment I should focus on is. I did not go and talk to Gartner. I did not jump on the next big trend because if someone has figured it out then it is already past. The key is to listen to data points, not opinions.

Over a seven-month period we developed a thesis about what the conclusions should be and what the next investment should be. I was an investor in Actifio and by the time we walked in we had 46 people who had told us that this was what they wanted. Ultimately the question is “what do you want to build?” and “what is someone willing to pay?”

This has been the best executing company that I have ever been a part of. Several people at this company who have been very successful before also feel the same way. We kept it very clear. In the first 9 months, when we incubated that, we needed to get the product out and focus on selling within 50 miles of Boston. If we could not sell to 20 customers within 50 miles of our office then we were probably doing something wrong.

After we had achieved our first customers in the Boston area we extended our reach into the North East, then we covered the entire East Coast. Once we got to that point, we jumped straight to Europe which is easier to support than it is to support the West Coast.

Sramana: You spent 9 months incubating Actifio, when was that?

Ash Ashutosh: Late 2008 through early 2009.

Sramana: What did the 46 customers you interviewed ask for?

Ash Ashutosh: There was a private high school and we met with the president of the IT budget. He felt they had done an incredible job of accelerating how quickly he could bring up teacher requests for new applications by using VMware. That also brought him disaster recovery. I asked him why he cared about disaster recovery and he said because he could afford it, it was only $1,500. Even in a small configuration he was willing to virtualize.

Fidelity is also a large organization in Boston. They adopted virtualization across the entire company. Virtualization changed everything, not just the economics. It was agility and flexibility. That became very revealing to them.

At Greylock we had invested in several companies that were building cloud applications. We started seeing enterprise software, as we packaged and sold it, coming to an end. People were frustrated paying enormous amounts of money for it. I looked at the cloud, virtualization and bandwidth availability, and I decided to go back into a domain I knew well, which was storage.

This segment is part 5 in the series : Incubating a Fat Startup at Greylock: Ash Ashutosh, CEO of Actifio
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