Bootstrapping All The Way: Infinitely Virtual CEO Adam Stern (Part 6)

Sramana Mitra: In terms of the competition, when you started tinkering with virtualization in 2005, it was lesser known and everything was immature. Today, it’s mainstream and well-penetrated. What is your experience of the evolution of the competitive landscape in the market?

Adam Stern: It’s mainstream in that people know what cloud means. Quite often, I have conversations with decision makers and I tell them what we do. They’re dumbstruck. When people think of cloud, they think of what their iPad or their iPhone does. They think Box.com or Dropbox, but the concept of running their business applications from machines that are hosted on a virtualized infrastructure is still very foreign to a lot of people. The reason is that the push in the industry right now is very consumer-oriented.

Unless you’re working for a large company that has exposure to this technology, the average small to medium businesses are under the impression that these technologies are not for them, or they’re trying to make Dropbox do things that it can’t do. For instance, I talk to accountants all the time trying to use Dropbox to share QuickBooks. It’s just not designed to do something like that. That’s what they think the cloud is. Cloud is where put your files. That’s a very common misconception. There’s still a lot of education that we need to do to make people understand what can be done with this technology.

Sramana Mitra: In terms of your long-term game plan, is this a company that you want to sell, take public, or keep running it the way you’re running it? When you look at your future, how do you think about it?

Adam Stern: Right now, we’re considering the possibility of acquiring some companies. There are a number of cloud companies out there that would add to our capabilities and be very strategic in terms of the types of customers they would bring. We have a very unique management style that keeps head count very low. It’s possible for us to take over some cloud companies that might have great technology but are not necessarily run by great management and we could get more out of them using our style of management. Right now, that’s high on my list.

Sramana Mitra: How do you plan to finance these acquisitions? Are you going to raise money or do that organically?

Adam Stern: I think it would be a split between raising money externally and self-financing. I have some people involved who have some experience in dealing with these types of deals.

Sramana Mitra: Does that mean that you are not looking at the traditional venture capital, private equity route? Are you looking for a different kind of financing? Is that what you’re saying?

Adam Stern: We’re definitely not looking for venture capital. That type of financing tends to come with a lot of strings. We’re looking for financing that’s not going to require equity in the business.

Sramana Mitra: So you’re looking at debt financing primarily?

Adam Stern: It will be debt financing primarily.

Sramana Mitra: Interesting. Thank you for sharing your story.

This segment is part 6 in the series : Bootstrapping All The Way: Infinitely Virtual CEO Adam Stern
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