Archive

Tag Archives: founders

When I started at Hotmail in 1996, we were thirteen people, and frankly, we didn’t know what we were doing… The company had recently launched the first Software as a Service (SaaS) application to the world, and we were struggling to keep it up and running.

Everything about it was just so different than the traditional software we were used to:

  • We had one version of the software that was being used 24/7, as opposed to 5-10 versions.
  • We rolled out new versions every few weeks, versus months or years.
  • The end users were part of the quality assurance process and we were in a constant state of rolling new bug fixes, as opposed to a huge QA staff and a long process.
  • The software engineers had to learn to collaborate across functions with the data center techs, who rolled out the code, and the customer service group that was getting the customer QA data — compared to before, when those organizations were siloed.
  • We could see exactly how the end users used the software — real time — which dramatically increased the innovation cycle. This was very different from past approaches, where you had to do focus groups to figure out how an end user was using the software.

These were major shifts, and we weren’t sure how to organize for success … but somehow, we muddled through it.

As it turns out, though, we weren’t the only ones — just about everyone involved in the early internet era who had come from traditional, waterfall-centric programming environments started inventing new ways of doing things that were more in keeping with the always-on, fast-release iterative cycle that especially suited the world of the nascent SaaS and web-based software environments.

In 2001, a group of developers met to debate and discuss a new set of “lightweight” methods for software development, and the Agile Manifesto was born. While the manifesto wasn’t necessarily a direct outcome of the new web/SaaS/cloud organizational meanderings, it struck a nerve by stressing the need for cross-functional collaboration, communications, and short release cycles. Essentially, it helped to codify the hodgepodge of learnings we independently discovered about what worked at Hotmail, Yahoo, and other first-generation internet companies. These learnings ultimately became the underpinnings for what we now call “DevOps” [adapted from Wikipedia]:

DevOps (a portmanteau of “development” and “operations”) is a software development method that stresses communication, collaboration, and integration between software developers and information technology (IT) professionals. A response to the interdependence of software development and IT operations, DevOps aims to help organizations rapidly produce software products and services — and to improve operations performance.

But DevOps is more than just a methodology. It’s a must-have skill set for the modern programmer — and is increasingly becoming its own department as well (the subject of much debate). The rise of the hyperscale cloud datacenter has made this job much harder as developers have had to hack together tools and complex scripts for pushing code to thousands of pancake servers.

The growth of the DevOps movement coupled with this complex cloud infrastructure has opened up an opportunity for a company to own the entire process and help developers and managers manage it.

It is with this backdrop that I am pleased to announce Andreessen Horowitz is leading a $2.8M Series A in Distelli, an infrastructure automation company that I like to think of as the “DevOps dashboard.” Here’s why we’re so excited about the company:

  • It was founded by Rahul Singh, one of the early engineers on the Amazon Web Services team. Rahul is the epitome of one of our most important criteria — founder/market fit. He has essentially solved a set of problems he encountered during his nine years working on Amazon’s cloud.
  • Rahul has a grand vision for Distelli to become the DevOps platform. Application, database, and middleware deployment are just the first tasks that Distelli automates, and they’ve got a rich roadmap to automate the other things DevOps does.
  • Shortly after the first beta, the product was of such high quality that every proof of concept resulted in a paying customer. The customer references raved about how it was simple, scalable, and consistent across multiple cloud and on-premise installations.
  • When it seems like every smart entrepreneur we meet seems to adopt the same new technology at once — indirectly demonstrating it as part of their pitch — we pay attention. A few of the companies in our portfolio that hold this important distinction include Good Data, Mixpanel, Okta, Optimizely, and Zenefits; and now, Distelli.

Rahul is one of those “10x founders” (as we like to call it) that just get shit done at an astounding rate. (These are the founders to whom you’re about to share feedback you’ve heard or suggest a new feature and they’re like, yeah, we already did it.) Every month I check in with Rahul, it feels like he’s progressed ten times more…

I’m so pumped to be joining the board to help Rahul grow into a powerhouse, and am pleased that Distelli is joining the a16z family. Onward!

One of the rookie mistakes first-time entrepreneurs often make is to be too guarded about their idea – in fact, many will actually spend their first $25,000 on patent lawyers without ever fully vetting their product. In order to gain credibility and attract investor attention, it’s critical to aggressively seek out the most relevant people in the world and get their feedback. I believe most young entrepreneurs massively overestimate the chances of someone stealing their idea versus the benefits associated with sharing it.

When my co-founder and I first had the idea for IronPort, an email security company, we triangulated a list of the 20 most relevant people in email – former CEOs, open source technologists, investors and thought leaders. After we had the target list, we got resourceful in getting to them – friends of friends, cold emails and FedExed letters. One of the tactics we used was trying to get a diagram of our technology into their hands — subject matter experts just couldn’t resist correcting our analysis. Here are the huge benefits with taking the “sharing” risk:

Fix your compass. The experts can immediately get into the weeds and help steer you around the potholes they went through and make sure you’re not headed for a cul-de-sac. The input we received proved essential to refining our idea and setting our order of battle. We gave a number of these experts equity grants to become formal advisors to the company.

First employees. Two of the people on our list became employees after we went through the idea with them. One had built PayPal’s email infrastructure and the other had built Newman, the massively scalable eGroups email engine. The experts typically know where the other best-in-the-world talents are currently working and can help you recruit them in with a credible intro.

Investors. Our friends and family seed round became a who’s who of people who had done interesting things in email. The PayPal founders, the eGroups founders and the Hotmail founders all ended up investing. You can imagine the warm VC intros we received from a massively credible angel investor right in their subject area strike zone. In fact, on more than one occasion, a VC would say, “I’d like for you to meet with so-and-so to better understand the technology.” I would reply, “Oh, so-and-so? They are already an advisor/investor…”

It’s really hard to break through the clutter and get the attention of the top investors as they typically only look at deals that come in from a warm, credible referral. There’s absolutely nothing more credible than getting an endorsement from a well-known subject matter expert who has already put their own money into your company.

This post originally appeared in the Wall Street Journal.

At the tip of the innovation spear, behemoths like Facebook, Google, and Yahoo! have to invent technologies that deal with the hard problems they encounter internally as they grow. Out of these efforts, a number of projects like MapReduce Cassandra, BigTable, and Borg have been commercialized into products, companies, or open-source projects like Hadoop.

The founding of Optimizely follows a similar vein. The founders—Dan Siroker and Pete Koomen—met as product managers at Google, where testing and optimization (such as A/B testing) are deeply ingrained in the product development process. So much so that it was widely reported that Marissa Mayer once tested 41 different shades of blue for the Google homepage!

But it was during this time at Google that it became obvious to Dan and Pete that every company —big or small—should be able to use testing the same way. They set out to build Optimizely, and in a short four years, the company is now the hands-down leader in the new software category of website optimization.

As we move from on-premise to cloud computing, our firm is betting that a completely new set of enterprise software franchises will emerge. Optimizely is clearly one of them, which is why I am pleased to announce that Andreessen Horowitz is leading a $57M Series B round in Optimizely.

We invested in the company for many reasons, including:

Strong founder/market fit. The founders have taken a core Google competency and are making it their life’s work to extend it to the rest of the world, big or small.

Classic disruption. The company converted a complex process that requires engineering resources into a simple tool that almost anyone can use, which dramatically broadens adoption.

Solved a hairy technical problem. Before Optimizely, it was really hard to create drag-and-drop tests via a web-based editor while avoiding slowing down the page.

This investment also represents a few larger trends we care about, including:

Mobile. Optimizely just launched its iOS product and is already seeing tremendous demand from new and existing customers. We see huge upside potential here.

SaaS and especially the “departmentalization of IT”. Marketers, product managers, and other operators throughout a company can buy and use the product on their own—instead of having to go through only a central IT organization.

Democratization of tech. Optimizely also belongs to a larger category of tools that takes what was previously only possible for people with technical training, and makes them accessible to people who don’t (or don’t want to) code but want to apply their expertise on the web.

Optimizely is the clear leader in a huge and new must-have SaaS category. I’m thrilled to be joining the board and look forward to working with Dan and Pete to grow the company into the next category-killing franchise!