Secrets to success in a complex market


When Ursheet and Guru started their venture, c, in the summer of 2009, it wasn't always so obvious that they would be the winners in Cloud Storage market. In fact, it wasn't entirely clear that there was a market for cloud-integrated enterprise storage.

Certainly, the segment was hyped.  With the advent of Amazon S3 and the prospect of other entries into the cloud storage provider business, it seemed like it was a terrific idea to leverage the scale of these clouds for the enterprise market.  But, there were many roadblocks ahead: everything from realizing a credible technical solution to overcoming a plethora of competitors.

Yet, StorSimple was able to build a product and create a go-to-market strategy that brought them to today’s successful milestone.  Embedded in that success story are some important lessons that many enterprise entrepreneurs can learn from.  Here’s my list of the most important:

(1) Tech team with the right architecture and ability to execute

At 30,000 feet, StorSimple’s vision was not enormously different than a number of their competitors that emerged at about the same time.  They would create an on-premise storage device, which would offer an integrated solution with SSDs, disk controllers and cloud storage connectivity.  Where they stood out was in the core architecture that allowed them to have the performance and price point needed to make the product a compelling choice for customers – to whom cloud storage was an important part of the roadmap.  Ursheet and Guru assembled a diverse team with a range of disciplines from classical storage and storage networking to wide area application optimization.  This unique set of people could look at the problem from both the storage angle as well as the networking angle, so that their end product made the cloud stores look just like local disk to the applications and server.  This interdisciplinary experience and skills were huge for the company.  They also struck a perfect balance between technical risk-taking and delivering a reliable product on time.  In creating most infrastructure products, you don’t get rewarded by your customers unless your innovation is packaged with enterprise-grade reliability.  It takes a delicate touch to steer the development organization across these two goals.

(2) Focus

The storage market is huge and multifaceted.  Billions of dollars are spent every year –but, in many different storage solutions and use cases – everything from primary storage, to backup, to snapshot, to fileservers, etc.  In theory, Cloud-integrated Storage could serve many of the segments in the overall storage universe.  Form the early days, StorSimple was very clear about attacking specific “beachhead” applications where their solution could be deployed successfully.  These were solutions like cloud back-up or cloud disaster recovery.  These were robust but accessible market segments.  It was very tempting to go after the bigger mainstream markets where companies like EMC and NetApp competed.  But, by initially staying focused in growing niches, StorSimple was able to accumulate critical wins in reference-able brand-name accounts.  One win lead to another and soon they had a credible base to build from.

(3) Partnerships

In the enterprise market, you’re swimming with big fish.  Whether it’s the traditional storage vendors, systems vendors, or Microsoft, big companies are powerful forces that can make or break the future of start-ups.  Partnering with these established companies can provide credibility and access to distribution.  At the same time, partnerships are hard to come by and often prove ephemeral if they aren't done right.  One of the classic start-up mistakes is the “logo-collection” approach to partnership – essentially, the more the better.  While lots of nice logos look good on a PowerPoint presentation, in reality, they rarely yield the desired results.  They are often just paper documents without substantive and tangible efforts between the companies.  Most start-ups don’t have the resources to materially partner with too many other companies – especially with big ones.  A true partnership requires a win-win for both parties and a range of resources deployed to make that partnership work on a day-to-day basis.  We strongly recommend that start-ups focus on a smaller number of meaningful partnerships.  StorSimple did exactly that – and focused on Microsoft and VMware.  They dedicated engineering, marketing, and sales resources to the success of the partnership – not to mention a big chunk of the CEO’s time.  Ursheet and Guru knew the strategic objectives of Microsoft and VMware and made sure that StorSimple’s products and strategy genuinely aligned with those.  The results were clear – they won awards, the sales teams from the bigger companies embraced them and ultimately, they built a deep and strong relationship with Microsoft.

(4) Sales Force Alignment

In the “Lewis & Clark” journey that so many start-ups go through, it’s often hard to maintain discipline and alignment within the sales team.  Account managers need to make their numbers, and often, they figure out the best way to do that regardless of the direction from “corporate.” But, to create a winning trajectory on both point (2) and (3) above, it was critical that StorSimple’s sales team had great alignment with both the company and the key partners.  Steve Querner and his team did a terrific job doing exactly that.  They focused on the solutions that fit the products sweet spot and the market needs.  They also won over Microsoft’s sales organization region by region, account by account.  The word spread across Microsoft, and their support for StorSimple continued to build.  Of course, Steve also exceeded his sales targets quarter over quarter.  He struck the perfect balance between the tactical needs of revenue and growth and the strategic objectives of the company.  It was terrific sales execution all around.

It is hard to boil down any start-up’s success to a handful of factors.  Beyond the major ones discussed above, there were many decisions, a lot of late nights, and much luck involved in StorSimple’s story.  But, in an ever-more competitive enterprise market, StorSimple’s team played their hand incredibly well and we can learn some good lessons from their success.

StorSimple was the first company I served on the board of as a venture capitalist.  Bernard built the original relationship with the company and I was fortunate to serve on their board over the last three years.  Today they are announcing that Microsoft is acquiring the company.  This is Microsoft’s first entrée into enterprise cloud storage.  As a company synonymous with software, it’s not what you’d naturally expect from them, but it is a testament to the quality of the product and business that Guru Pangal, Ursheet Parikh and the team at StorSimple have built.  Bernard and I are incredibly proud of what StorSimple has created, and are ecstatic for the team that has dedicated themselves for the last three years to transforming enterprise cloud storage.  Through Microsoft’s global reach and distribution channels, a much larger customer base will now have access to the great technology StorSimple has developed.  For Microsoft, StorSimple provides another arrow in the quiver for the Azure offering – giving their customers an easy onramp to their cloud offering while accelerating this new storage paradigm.

We want to congratulate the StorSimple team on this milestone.  We’ll miss working with them day-to-day, but we’re delighted for the opportunity to have supported them.  We wish them all the best for the next chapter and are confident they will do great things at Microsoft.

* The Index Team