Platfora | Interview with its Founder & Executive Chairman – Ben Werther
In San Mateo (CA), we meet Founder & Executive Chairman of Platfora, Ben Werther. Ben talks about his story how he came up with the idea and founded Platfora, how the current business model works, as well as he provides some advice for young entrepreneurs.
Martin: Hi, today we are in San Mateo in the Platfora office. Hi Ben, who are you and what do you do?
Ben: Well, thank you. So I’m the founder and executive chairman of Platfora. We are a big data analytics, big data discovery company which means we let regular people inside companies that generate a lot of data, we give them the tools to be able to visually analyze, understand, make sense of all that data, so that they aren’t just waiting for the IT organization. They can sit down in front of a beautiful experience, in front of a web browser, and potentially make sense of tera bytes or peta bytes of transactions, customer interaction data, machine data, and do really interesting actionable things from that data.
Martin: How did you come up with the idea, and what did you do before?
Ben: I was running product at a company called Greenplum, that was a database company doing analytics type things here in the Bay area. And it was bought by EMC and so I didn’t stick around very long at EMC. And post that, I was thinking about some of the changes happening in the industry and we saw the early signs of this new technology called Hadoop, and some of you know what Hadoop is, it’s an open source technology that lets you store large amounts of data and process it very efficiently in an open source way. But also saw that that wasn’t going to be enough. That could be the data lake to land to land all this data, but how do you enable the business to make sense of it, to enable the new workflows, to unlock value through the business. We saw a lot of people just trying to do the old practices in this new world and we said there’s a much better way, much better architecture.
So I was sitting at a café in San Mateo, just around the corner, in June of 2011 with a couple of other guys and literally drew on a napkin the idea of this new approach, this new architecture. And just had this idea that maybe everyone is thinking of it wrong, that if you change the way that you think about the role of Hadoop, if you think about building this new type of stack on top of it, you could create this whole different level of experience. We thought about the iPhone as having changed the way you think about phones. If you talk to somebody who, before the iPhone, and tried to explain to them, they would have no idea was different between that and a normal phone, but when you see it, they understand. In the same way, can we create an experience that delights and makes working with these massive amounts of data easy for regular people and totally transforms the metaphor? And we saw a way to do that and that was the beginning.
Martin: And did you just sit down with your co-founders, or just some people for getting feedback, or just some investors?
Ben: A couple of folks who could be potentially part of the company. One of them was briefly involved and he went on to start another company of his own and is doing fine. The other guy has been very involved and was a long time employee with the company and now is taking some time off. But it was great to see this kind of early group, and from there we started to quickly build this team of fantastic technologists, engineers, designers, product people, to start to bring this to life.
Martin: What was the next step? So after the meeting?
Martin: What actions did you take to really start a company?
Ben: It was very clear to me that doing this was going to be a really big idea. It was a really big idea that I had very high confidence that we were going to be able to change the world in a meaningful way with this. But it wasn’t something that you could just do on the cheap. We needed to get a great team together, we needed to really build something, an organization to go execute on this. So, the very first thing I did was think about a few tracks. One was, “How do we write this down and write about what we’re doing to make sure we know what we’re talking about?” So we started writing up very quickly a provisional patent that sketched out the idea, and started to demo a prototype a little bit. In parallel, I started thinking about fundraising, because this wasn’t an idea where we could go build it all the way and then go raise money. If this was going to work, we had to go raise a significant amount of capital from the get-go. Fortunately, I had a pretty good reputation and experience and good access to investors and so I quickly assembled a pitch deck, went out to some early angel investors with the idea. Within a couple months going out and raising a larger round I got a few of them on social proof, these guys who really believed in the concept. And then I went out and talked to the big players, the series A investors, folks like Andreessen Horowitz, Sequoia, and many others and talked to those guys. I was very fortunate that within only two or three months of founding the company, had been able to close collectively about 7.2 million dollars led by Andreessen Horowitz, with Sutter Hill Ventures, with a collection of really great other angel investors and suddenly had this opportunity to really go and do it right.
Martin: So, normally, when you have a seed round, then you go to the next step – proving something and then raising the series A. In your case it was very very fast, maybe only two or three months in between.
Ben: Less than that. Maybe a month and a half.
Martin: Or even less. What did you prove? Because if you would have known – “Okay, actually I’m totally fine right now. I can already raise series A, also based on a napkin.”
Ben: So, I made a calculation and I think this is a very situational thing which was – if I would have just walked into series A, people would have said, “We’ll give you a seed round. Get started. Show us something.” And if I would have just raised the seed round, people would have said, “Well, are you raising enough money to really prove anything?” So, what I did was, I literally scheduled them both in parallel, told the seed guys that I’d be going to the series A guys within a few weeks and told the series A guys that I was raising the seed and I’d be seeing them immediately with the seed money in my pocket already. And it’s a gamble because if I would have not raised seed money I would have showed up series A guys without anything raised, they would have looked me like, “What are you doing?” But I think it worked out very well.
The seed guys, the angel investors, they loved the idea but they also believed we were going to be raising a series A with high confidence and so they get a slight discount they get to be champions and excited and be part of a round they wouldn’t otherwise be a part of. Then the series A guys would walk in the doorway and we had really raised a seed round and we really had that social proof and validation. In fact, we had somebody try to preempt the series A from that population of seed people the day before we started the real series A conversation, which put it on a great footing because then we already had a competitive dynamic before we even got going.
Martin: And, Ben, did you know that seed investors before or the series A investors or both?
Ben: I knew some of the seed investors, a few of them. What I found was really interesting. In Silicon Valley, in particular, there is a great community of angels and seed investors and for any particular area there’re people who really specialize in it. It’s a unique thing about this area. And so once I found a few people that said, “Look, I’m interested. Let me introduce you to three friends.” And quickly this network opened up and I was able to reach, basically, everyone I needed to reach within a couple of weeks.
And on the series A side I had built relationships, to some degree, with a lot of these larger VC funds but only as much as you can on the outside. When they heard I was doing something that could be interesting, you get a shot to go show them and prove to them that it’s interesting. It’s not a license to go waste their time, but I had enough credibility that they wanted to hear what we were up to.
Martin: So the key take away here would be that you need to get some social proof, so to speak, for going to the bigger fishes.
Ben: Yes, and I think it’s changed a little bit today. The size of some of these angel rounds has increased and sometimes people are jumping straight to series A and raising these bigger rounds. And some of this is going to settle down again. It’s sort of cyclic. I do think that you need to decide what your aspirations are. If your goal is to build something that is a moderate sized company, you may not want to take a large round and so taking a smaller round you can show early traction. And if you can do that, and you can actually get to really using metrics, that’s a fabulous thing. If you know you have to raise more, then finding a way to avoid that trap where you raise maybe a million, and now you just don’t have enough time to show anything significant enough and you’re back to fundraising again. That’s a real trap. If you know you have to raise more, you have to gut check, “Is it realistic?” But if you can’t how do you get the social proof enough on the elements so you don’t have to spend all your time fundraising. Because fundraising is great to celebrate, but it’s not the job of the entrepreneur at the end of the day. It’s how do you go put that money to work and actually build a company and hire great people. If you’re spending all your time fundraising, you’re not doing the other things you should be doing.
Martin: When you started out what happens typically with the seed rounds, series A rounds and how do they compare to nowadays?
Ben: Yes. I think when we were going in mid-2011, seed rounds might be 250K to a million and a series A might be 3-5 million. I think we’ve seen that increased up to maybe by 2x sometimes even 3x. Some of this is a little bit of frothiness that’s shaking out. But I think now things are settling down a little bit. I think it’s evolving. There are a lot more people trying to get into early stage investing. But I think that when you get to series A at the real VC firms they are probably just as selective as ever, if you want the top tier investors at the table with you.
BUSINESS MODEL OF PLATFORA
Martin: Ben, let’s talk about the business model.
Martin: So, basically, who are your target customers, not only by industry, but also by function? And how did you approach them when you were very early on and how did this model might have changed?
Ben: So we’re building software for global 2000, for companies that have large amounts of data. Things like transactional data, of course, and it’s a digital world so you might have web click stream data, ad data, loyalty, machine data, IoT, etc. So, all this data. And so we’re selling to large companies that do those buying processes in a lot of cases. And so the model for us was to recognize that. Recognize that in the first few sales you do in any company, it’s basically the founder or the founding team are going out and finding those early champions, validating, testing the idea, getting people to sign up for some sort of beta so they can engage with the software, and then trying to convert those into the first one, two, three customers.
So we did that. But then, very quickly, you start thinking about, “How do I start to hire real sales people and people who have sold to enterprises, sold to this kind of customers?” And so we hired someone who had a background in EMC. We hired someone who had a background at Cloudera. People who had experience with the big banks and others. Those early sales are exhausting but they’re critically important because it’s the first time the reality check of a real customer and the demands, testing to make sure your product can live up to that. And then there are various stages of growing up your organization and we’re still growing. And as you scale there are phases that different sales organizations go through, even post going public. It’s an ever changing dynamic.
Martin: And how did you find the first beta customers and how did you foremost convince them to take part in your beta program, so to speak?
Ben: Funnily enough, when we were just getting going, we happened to be going to a conference called a summit and I think within a month of starting the company. We hadn’t raised any money even at that point. And I didn’t want to go out and announce anything, but I wanted to be, at least, visible a little bit. And so being kind of a scrappy entrepreneur, I quickly went and rented a very small space on University Avenue in Palo Alto to be our first office. I just wrote a check. Three desks. And we threw a website up over the course of a couple of days, printed some business cards, and then turned up at the conference, and just chatted to people. And, you know, people asked questions, “Oh, who did found your company?” you know, ‘How many people are you now?’ And we didn’t say anything at that point. And there was a journalist who I knew pretty well who had written about us at Greenplum a lot, who was very curious about what we were doing and, in fact, he wrote this profile speculating on what we might be working on. And out of that we literally had a major entertainment company call us up the next day, wanting to know if they could try the software. We hadn’t built very much at that point. But it began one thread of conversation that then played out over the next 6-12 months as we developed the software to the point where we could start to give them something that they could really work with.
And, in parallel, we worked our network. We reached out to people who we thought might be interested in various companies. One of the things that I think is very important in the beginning is you ask for feedback. You ask people to test. You not trying to say, “Hey, I want money from you,” But, “Here’s the value this could bring to you. We’d love to understand feedback on how this might matter to your organization.” And finding those key people who might be interested in being in a circle of providing that helpful feedback. Some of those will maybe be just friends of the company, but some of them could be the spark that will lead to a purchase down the road. And so, the first few were working through those relationships and also reaching out to people who, inbound, found us and landed a few early customers that way.
Martin: Most entrepreneurs have a very big vision and they say, “Okay, this is where I want to go in 10 years, 20 years.” But still you need to somehow prioritize and make some kind of plan, a step-by-step approach, how you want to move forward, prioritize, do some trade-off things. How did you go about that in the beginning? Just shipping something that’s really good enough, but it’s fast, and still it’s not awesome but maybe it’s 2x-5x better than everything else.
Ben: So I’m a big believer, in general, in a lot of the lean, MVP type of approaches. The minimum viable product is great as long as you know what your vision is – so what’s the right thing to get you to that place. If you just build incrementally, that’s not enough. The tricky thing, in this case, was we did have a really big vision. We have a really big vision about transforming the whole way that business intelligence and data discovery happens. And to do this right, the analogy of the iPhone where you’re changing the whole stackmeans that we’re really innovating in three layers:
- the low level driving Hadoop technology,
- the in-memory acceleration, and building engineer, and then
- the visual, the front end and the way you work with data.
And this is a lot for a start up to bite off. But we didn’t see a way to slice, just doing a piece of it, without really compromising the vision. And so what we did was we tried to build just enough up and down the stack. Recognizing that those early customers were going to be – we wanted them to see value but they had to believe in the road map because there were going to be pieces that weren’t going to be there for a while. And that meant really selling a vision in a pretty significant way and then just progressively building it out.
My background is in product management, but I’ve done engineering, marketing, and other things. Product management is core to my experience. And also I hired a fantastic VP of products – a guy named Peter Schlampp who helped prioritize and think about the trade-offs. So we made very hard trade-off decisions along the way – trying to blend design and technology and get the right experience. But it’s hard. People need something that is transformative. There’s often no super quick, low risk, let me do a little bit and test it. You have to kind of go far enough along so it’s enough that people really get the vision. And so that’s something that we’ve gambled on, we’ve raised enough money to push forward and get those proof points. And, I think, now we’re on version five of the product. We’re mature enough that the whole thing hangs together very nicely, but it is not an easy part. Sometimes I’m envious of people who can get proof and traction with 3-6 months of work, not 3-4 years of work.
Martin: Ben, how are you currently managing and nurturing your customer relationships?
Ben: We’re now at a scale where it goes from managing those first ten big customers, and, you know, big customers, global banks and others, and entertainment companies, and retailers, they take a lot of focus and customer success effort. You can’t just give them the technology and hope, but when you’re at ten you can sort of muscle though it by just checking in and being engaged and trying to do it in a very ad-hoc fashion. We’re now well past that. So now it’s very much about how do you build this reputable organization that is scaling and can scale with the growth. As part of this, I had actually been CEO of the company for about four and a half years. About three months ago I made the decision to promote Jason Zyntac, our president and COO, and did this in conjunction with the board, to CEO and I moved to the executive chairman slot. Partly because Jason’s this fantastic go-to-market focus leader, executive who understands intimately the whole, from sales and inquiring customers and building those executive relationships. He actually built a few services companies in the past. How do you go build the frameworks of success and the repeatability of that go-to-market machine?
So we’re now running at a scale where, it’s still maturing, but we’re handling, adding numerous new companies each quarter and how do you unramp them and how do you make sure you have the right metrics to detect whther you are on the right track or not. And it’s an entirely different activity then how do you get the first five or ten going.
Martin: And when you’re still continue looking at the customer relationships. So what type of measures are you using for measurement, like conferences, CRM, or email marketing, or having calls, or walking ins? And how often you do them?
Ben: For customer success or for new acquisitions?
Martin: For customer success.
Ben: For customer success, here at Platfora, we look at a number of different things. For those customers that will let us, we look at telemetry from their systems so we see how they’re using the software. That is valuable. Not every customer lets us see that, but those who do, it tells us, not only are they using it but how are they using it and what are they doing.
For us the biggest test is are we engaged on new use cases? Are they expanding and increasing the number of users using the software, the types of problems their solving? Are they engaged with us around things they want us to see, in terms of the road map, or where we’re going as a company. And so we have a team that’s really looking at those kinds of conversations, measuring what they’re seeing back, and also try to drive new projects and new usage, pretty proactively. And when we see customers that may have plateaued, often it’s because they lost somebody who was passionate and driving. We want to make sure that we reignite that viralality, reengage and try to get in there quickly to keep them really successful.
ADVICE TO ENTREPRENEURS FROM BEN WERTHER
Martin: And let’s talk about your learnings over the last years. This is not the first company that you’ve tried to start. Over the years, what have been the patterns or learnings that you have seen that you can share with other people, interested in becoming an entrepreneur?
Ben: Yes. I think for me there are a few big ones. One of the biggest is the idea of culture and people. It sounds obvious, but when you’re five or ten people at the beginning, everybody is pretty excited, you kind of know where you want to go. It’s pretty simple. The people you have at that point. It’s new and it’s exciting and everybody knows where they want to go and things aren’t that complicated at the people level, at some level. What you discover as you start to grow, is that the people you hire, the cultural decisions that you value, start to manifest in ways that you were either were deliberate about or you weren’t deliberate about, but start to create an environment that often reflects the founder and the early team. But it is something that becomes woven in the DNA of the company. So if you don’t take it seriously, some companies say, “We don’t care about culture.” And culture doesn’t mean you have ping pong tables and food. It’s like, “What do you value? What matters?” When someone is making a decision, is it they’re leaning towards the customer, making the customer delighted, is it about being fierce and winning at all costs? There’s lots of different choices you make in what you value.
But those decisions really shape an organization and they shape who you’re going to be when you’re a thousand people, or ten thousand people. And those decisions get made early, and much earlier than you think, and so it’s not indulgent to think about that when you have three people in a room and take a half hour. We literally took half an hour when were three people, and wrote down on a piece of paper, “What do we value?” And it really is still very core, in many ways, to what we’re all about.
Martin: Can you elaborate a little bit about these values and how you derived them?
Ben: Yes. I think there are a few things about values that matter. One is they’ve got to be authentic to the company. You can’t enforce values that you’re not living. If someone writes down a value and you’re not prepared to go live that way. If you’re not already living that way as a company, it doesn’t really mean very much. So, it has to be authentic. Usually it’s great if it comes from the team, or the team has a role in it and it doesn’t feel like it’s been handed down from on high.
And I think one of the biggest things is particularly the leader. Everybody looks at the leader and the leadership team, but the CEO in particular. And the other founders and say, “Do they live by these rules?” I’ve seen companies where there are founders that believe they are somehow above this. They can operate on their own rules and everybody else just says, “If it doesn’t apply to them, it doesn’t apply to me.” So you either internalize it and make it who you are, or it’s pretty meaningless.
I think the other side of this is as you grow, as the number of people grow, you realize that people are complicated. Everybody has things going on. In good ways and bad ways, people have their lives outside of work. And as you add more people you add more of that richness of just the complexity of people. Part of being a great leader is, one, that you have to be passionate about engaging in that. It’s sometimes a messy business. It’s not just you hire an HR leader and they handle people. You’ve got to be passionate you have to care about understanding what people care about. How are they internalizing the vision and lead them with confidence. And I think that’s something that has been really interesting and exciting to me and I think I enjoy that whole thing side of it that goes far beyond the technology of the product.
Martin: Is there any other advice you think, “Wow, this would be so awesome if I would had known that before I started the company?”
Ben: I think there’s something which, I did know, but I think is important is that – I know a lot of entrepreneurs are anxious to start a company, “I want to go find an idea because I want to start a company.” And that itch is to go want to create something, build something like I get it, I’ve had it. If you have it, it’s great to act on it, not to just wait years and suppress it. But, at the same time, if you’re staring a company, there’s an opportunity cost that comes with that. I’ve seen people in a rush to start a company pick an idea that they’re not really passionate about. They just say, “I want to start a company and I’m going to go just do this thing and see how it goes.” Or they pick something and they haven’t really tested the size of the market, etc. And I think that you realize you’re spending three, four, five, ten years of your life doing something that maybe isn’t that interesting a market.
You never really know, the world is changing, but maybe you want to think about, “Is it a big market? Are you catching? Is it some rift in the world that’s changing that is going to make this thing more important?” The world is not static, but there are many pieces of the world don’t change that quickly, so if you want to go and do something in places of the world that are changing that quickly, it’s very hard to make things happen. The more you’re able to align with the forces of change in the world and the rifts that are opening up, the more you can be part of the grounds well of change and make that time really worthwhile. In anything I do I think about this – as much as I want to start something, whatever I choose is at the expense of whatever else I could have thought of three months from now, six months from now, a year from now. That’s not an excuse to just put it off. But, you’ve got to gut check, “Is this the thing I really want to go do?”
Martin: Ben, thank you so much for your time and sharing your insights.
Ben: Absolutely. Thank you very much.
Martin: If you are running a company, and you really want to understand what is happening there building some knowledge and based on this knowledge building some really awesome insight for your products, maybe Platfora will help you get some insights.
Ben: Thank you.
Martin: Thanks. Bye bye.