I recently had the pleasure of interviewing serial entrepreneur David Friend, current CEO of Wasabi, a cloud storage company. David is most well known as the co-founder of Carbonite, a NASDAQ-listed company, recently sold for $1.42 billion. With many years of experience, Friend knows what it takes to compete against industry players, take on new challenges, and build a team that is positioned for success.
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Mary Juetten: What problem are you solving?
David Friend: The world seems to have an insatiable appetite for cheap, fast, reliable data storage. Everywhere you look, things are generating more and more data. The camera in your phone has gone from 1 megapixel to 12 megapixels, and now 4K video. Speaking of video, there are 700 million surveillance cameras in use worldwide, going to 1 billion in the next 12-18 months. There are hundreds of satellites constantly taking high resolution pictures. Genomic data is expected to use more storage than anything else – it’s currently doubling every 7 months. 5G is offering to move 1000x the amount of data and applications will spring up to utilize all that bandwidth.
Where to store all that data? That’s the problem.
We are the Walmart of data storage – our commitment is to offer the lowest price and consistently high quality.
Mary Juetten: Who are your customers and how do you find them?
Friend: We have about 14,000 customers today representing every conceivable kind of organization. We have educational and research institutions like Yale and Cornell, medical research labs like the Dana Farber Cancer Institute, Ambra Health, and Battelle, TV and movie companies like CBS, consumer photo websites, video surveillance companies, historical archives like the Saturday Evening Post, and on and on.
How do we find them? First, we advertise and promote Wasabi to the IT community at large. People come to our website, sign up for a free trial, and if they like what they see, they start storing data. The second way we find customers is through our network of 1,400 resellers and technology partners. These range from small companies (think “Joe’s IT”) that provide IT support to organizations in their local community to large international players like NTT in Japan who can sell Wasabi to their thousands of customers. So we find them, and they in turn find the customers.
Mary Juetten: How did past projects and/or experience help with this new project?
David Friend: My last company, Carbonite, was recently acquired and is one of the largest companies in the computer backup industry. By the time I left the company five years ago, they were backing up over a half billion new files every day. So, we learned a lot about how to store data cheaply and efficiently. That gave us the technical chops to do Wasabi. And having five successful startups under my belt has made it easier to raise money and recruit top talent.
Juetten: Did you raise money?
Friend: Yes, we have raised about $80M, mostly from insiders and family offices that made money in our previous ventures. Other than a small investment from NTT, we don’t really have institutional investors.
Juetten: How do you measure success and what is your favorite success story?
Friend: Simple is better. Forget the elevator pitch – can you explain what you do on a billboard that someone will see for maybe 10 or 15 seconds? Wasabi’s pitch is “Just like Amazon but 1/5th the price.” Our tag is “Hot Cloud Storage.”
My favorite success story is the steel company Nucor. When I was growing up, US Steel was the largest corporation in the world. What VC would have backed a company who thought they could take on US Steel? With disruptive technology, Nucor is now the biggest steel company in the country and US Steel was delisted from the S&P 500 a few years ago.
My second favorite story is MCI who figured out that they could carry long distance telephone calls using microwave repeaters along train tracks. At the time, AT&T had 90% of the long-distance market. I still remember MCI’s TV ads: the left side of the screen showed a woman making an AT&T call for 21 cents/minute. Right side of the screen showed the same woman making an MCI call for 11 cents/minute. It took AT&T eleven years before they finally threw in the towel and dropped their prices to compete. Meanwhile their market share shrank from 90% to 40%.
Juetten: Any tips to add for early-stage founders?
Friend: My advice below focuses on the first years but many carry over to running a business:
Have a Vision From the Start. An entrepreneur has a clear vision of the future, how his product or service fits into the world, and how it will change the way things are done. And just because other people don´t share that vision doesn´t mean you´re wrong. In fact, if everybody said, “Wow that’s obviously right!” somebody else will probably already be doing it. So, you have to expect to struggle. If you´re raising money, VCs will tell you you´re wrong. If you´re recruiting a management team, candidates will sometimes go against your initial purpose. Sometimes it will feel like you’re the only one who believes. But, in the end, the only person that counts is the customer, and even then you only need a few. What keeps you going is that conviction that your vision will come to pass and time will see it through. You just have to knock down the obstacles one at a time.
Be Particular When It Comes to Hiring. If the first baseman repeatedly drops the ball, nobody will throw it to him. Team morale will sink. Hire people who know how to play their positions.
Hiring your team at a startup is tricky. By definition, you’re starting with nothing in the hopes of building a great company – and it takes extraordinary people willing to work extraordinarily hard. It’s almost like you’re recruiting a family. You can’t waste one minute on politics or infighting, and everyone has to play their position perfectly to have total confidence and pride in every other member of the team. Hiring is much more of a consensus decision among the senior team than it needs to be later on. Ideally, you’d like every member of the senior team to have worked together in the past so that have a pre-existing trust and knowledge of each other.
Try to Find the Perfect Match. Part of the secret to success is having a good match between the kind of people you hire and the kind of company you are. Different folks are going to find different environments to their liking. As a CEO, it’s important to personally interview everyone that’s hired at the start, even if it’s for entry level candidates because, sooner or later, those core employees will soon lay the foundation of the company later on.
Focus on selling. In a startup, everyone has to sell, especially the founders. The sale is the only thing that counts. As the founder, you’d better have a very clear picture of why someone will or will not buy your product and be prepared to make necessary changes quickly. How can you hire someone to sell your product if you can’t sell it yourself?
Something to Do, Someone to Love, and Something to Look Forward To. It’s important in work – and in life – to look forward to getting to the office and building something new and amazing each day. Enjoy the people you work with each day – you share hopes and dreams, disappointments, and anxieties. Lean on each other when pulling each other’s weight. Nobody gets a free ride, and nobody is should take all the credit.
Be Humble On the Path To Success. Nobody wants to work for a braggart. There’s nothing to be gained from making people envious. A great orchestra conductor is nothing without a great orchestra. When starting a company, don’t think about the monetary benefits down the line. Think about making an impact – create something that people would use and love. Try to create something out of nothing, succeed when everyone is betting against you, and prove all the doubters wrong. Rather than thinking of wealth in terms of things you can own, think of it more in terms of things you can accomplish. What’s fun about wealth is that you can create an environment that suits you, you can help people who need and deserve help, you can start companies that create products that help millions of people and help the economy. You can finance orchestras, museums, schools, or whatever else you believe in.
Juetten: What’s the long-term vision for your company?
Friend: We want to do one simple job better than anyone: storing all the world’s data. We won’t get it all any more than Walmart or Amazon will get all retail sales, but by having the lowest price and the best performance and reliability, we’ll get a big share.
David certainly knows the ins and outs of starting and successfully running a company. Founders and leaders alike should pay particular attention to ensuring that credit is given where credit is due and his sage advice on humility. Look forward to reading more about Wasabi. #onwards.