(Inspired

by Bruce Nelsons CMU CS Immigra;on Course talk)

What They Dont Teach You in College - Becoming a Successful Tech Entrepreneur

Sco$ Dietzen, CMU CS Ph.D. CEO, Pure Storage

sco$@dietzen.com dietz@purestorage.com

Original content herein available under the Creative Commons Attribution 3.0 License

This talk dedicated to the memory of Bruce Nelson, CMU CS 82

Dietzen - Tech Entrepreneurship

Preamble
Why Dietz for this talk? (i.e., why I felt suciently presumptuous to volunteer)

While I cant ll Bruces shoes Bruce helped inspire my entrepreneurship Ive had some modest success as an entrepreneur Transarc IBM WebLogic BEA Systems Zimbra Yahoo! VMware Pure Storage? I plagiarized from Bruces original talk John Dunham (Bruces Auspex coworker & friend) shared pictures

Acknowledgements

Source of my photos:

h@p://rob3rt.com/bruce/1.html h@p://rob3rt.com/bruce/2.html h@p://rob3rt.com/bruce/3.html h@p://rob3rt.com/bruce/4.html h@p://rob3rt.com/bruce/5.html h@p://rob3rt.com/bruce/6.html

Dietzen - Tech Entrepreneurship

Blog post wri@en by John aCer Bruces death h@p://rob3rt.com/bruce/BZM_Days/BZM_19990923/BZM_Archive199909234.html

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Why Im a Failed Researcher

Wanted to put tech to work at changing the world Ques^oned evalua^on criteria for research
(Non-CMU) Academia seemed poli^cal Money less arbitrary way to keep score?

Father was an entrepreneur Im not smart enough Financial rewards were (and should be) secondary
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Products are Harder than Technology

The intellectual level needed for system design is in general grossly underestimated. I am convinced more than ever that this type of work is very difficult and that every effort to do it with other than the best people is doomed to either failure or moderate success at enormous expense. Edsger Dijkstra

Geang a tech. product right is very hard

Reliability/quality assurance Ease of use/design Consumer-ica^on of IT Security & manageability Maintenance & packaging (SaaS, on-prem?) For success, eat your own dogfood

Building something new from scratch is much harder than enhancing something thats already successful Top talent gravitates to startups because
They receive commensurate reward for their unique impact They get to set aside legacy constraints (Dietzs best recrui^ng line: Do you really want to spend your next year turning 10 year-old sokware into 11 year old sokware?)
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 Geang Your Product Adopted

Is oken harder s^ll
For all markets (consumer & business), enduser ^me and money are scarce! For success, focus on specic endusers to deeply understand their pain and/or aspira^ons Most typical downfall: Interes^ng technology, but insucient value to command enduser a$en^on Why do I care right now? For selling to enterprise, top 3 painkillers ma$er most; vitamins can generally wait Do you have a product or a feature? Are you 10X be$er than the incumbent? Geang the product right takes ^me and enduser feedback
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Why Non-Technical Issues Ma$er

Since technology is generally the means, not the end To get technology adopted in the real world, you need to make the business case to the technology end-user
Dene compelling value proposi^on Framed in terms the customer and partners nd compelling Get your message to the buyer/adopter

There is a very high hurdle for doing this

Think receiving solicita?ons at your home!

This is why product mgmt., marke^ng, and sales are highly-valued

Corollary: Why Do Technologists Feel (Rela^vely) Underpaid?

Because they don t understand the game Technologists can feel sales & marke^ng are trivial But in most companies, R&D is <10%; in high-tech R&D it is generally <25% (startups much higher, but by the ^me you go to market its generally <50%) If this were not an op^mal model, then the free market would correct it Convincing endusers to spend their ;me and money with you is very hard work!
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Go to Market (GTM) Innova^on

Your GTM strategy (the how, why, who of selling) should evolve along with your product Consumer websites, open source, other freebies allow you to separate adop^on from mone^za^on PR and viral promo^on far more eec^ve & cheaper than ads/telemarke^ng Goal is the repeatable sell an enduser adop^on cycle in which customer is iden^ed, receives the pitch, and you win oken enough to jus^fy acquisi^on cost Dont scale your GTM (step on the gas) un^l you have your product and your repeatable sell (think Mythical Man Month)
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Evolu^on in GTM
Old School Top/Down ($) Sales ini^ates & controls engagement Cold call Sales call Sales makes business case; qualies customer Charge for value Customer pays up front SE installs product Company controls product New School BoJom/Up () Customer ini^ates & controls engagement PR Website Customer visits website & self-qualies, buys Give value away, mone^ze elsewhere (think razor & blades) Pay only aker value is proven Customer tries free/trail version of product that can be upgraded later Company fosters community (open source dev, public forums, open defect tracking) Sta sales as produc^vity grows
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Sta sales to hit revenue target

Dietzen - Tech Entrepreneurship

Why Tech Start-ups Fail when the Opportunity is Real

Lack of Focus - Saying no Lack of compelling product (especially simplicity and quality) Lack of winning GTM matched to product Weak execu^on
Missing skills Team comes apart or doesnt come together Insuciently responsive to change Overly responsive to change

Ferocious compe^^on Miss technology sea changes

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Entrepreneurs Ally: The Dislocator

Opportunity: ~Ten years ago
Google hadnt made its rst dollar from search adver^sing Apple had been wri$en o; Facebook didnt exist Virtualiza^on and VMware?

No WebLogic without
Tech GTM

The Web (led to crea^on of new category---The Web App. Server) Java & standard Web programming APIs (J2EE) The Internet free trial download

No Zimbra without
Tech GTM

Richly interac^ve Web UI via Ajax (Web 2.0) Mash-ups (Web 2.0) Open Source The Open Core business model

Pure Storage?
Tech

Flash memory
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Dietzen - Tech Entrepreneurship

Technology Adop^on Curve

*Thanks Geoffrey Moore

This is the best case scenario All tech aspires to be legacy Shape of the tail can be very at (Ethernet & IP, Intel architecture) Or very steep as old wave superseded by new one
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Dietzs 2011 Top Ten Tech Dislocators

1. Mobile Web HTML5-capable phones/tablets will trump PCs as the primary Internet interface (Bonus: Majority of humanity on-line) 2. Mobile content & commerce Mobile device + apps trump tradi^onal media formats & security/credit cards 3. Flash memory Storage media losing ground to CPU for decades; virtualiza^on & cloud driving up random I/O (disk 95%+ inecient) See Jim Grays Tape is dead, Disk is tape, Flash is disk, RAM locality is king 4. Cloud & DevOps Elas^c compu^ng (public & private clouds) via commodity hardware and updated opera^ons infrastructure (Bonus: converge public/private?) 5. SaaS Those who write the applica^on sokware should maintain, secure, and manage it (Bonus: Solve app. integra^on once at scale?)
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Dietzs 2011 Top Ten Tech Dislocators (Cont.)

6. Social Not only changing the way we communicate, but also changing the way we deal with informa^on (as search did before it) 7. Blended Reali;es Gaming is geang more real (e.g., social) & good-old reality is geang augmented with virtual worlds 8. Big Data How to best leverage the data were drowning in; How can we eec^vely mine the smarts therein? Sciences like astronomy and par^cle physics have been recast as big data problems 9. Func^onal Programming and NoSQL How can we simplify programming for massively-parallel, massively-distributed, high- performance systems? 10. Collabora^on in the Large Content and sokware authored across organiza^onal, geographic, and language boundaries via open source & be$er tooling 11. ???
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Tech Dislocators
Do give your product leverage vs. the incumbents and hence the opportunity to change the world Dont change the fundamentals: You s^ll need A market opportunity A great product A stellar team GTM plan that enables you to reach that market (This combo is pre$y much all I look for)
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Premier venture capital

Why?

Team + Idea, Then Money

Defacto seal of approval for company/product Trade share of ownership for resources Let the pro s take the risk (entrepreneur's risk is chiey opportunity cost) Get plugged into the network Early warning about compe^^on Help with recrui^ng Easier to get money down the road Smarter than strategic industry money

Why Not?
Dilu^on Interference/loss of control You need a good t (Think thesis advisor)

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What VCs Want (Mostly the Same Things that Entrepreneurs Want)
Huge market opportunity (Stretch goal) Safety net on downside (More modest goals) - Keep in mind VCs only need some of their bets to hit Awesome founding/early-stage team Deep knowledge of the target customer Unfair advantage - High technical hurdles for compe^tors surmountable for you Faith that team will nd a compelling GTM strategy (Tech only part of the business plan) But all at a low valua;on Note: Silicon valley VCs generally dont need to see a business plan!
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What VCs Want - Funding to Milestones

Idea is Feasible Beta or FCS (customer validation) Repeatable sale identified and proven

Valuation

Risk () Capital
Seed R&D Ship Expansion
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A Brilliant Moment in Java History?

Excerpts from a commi$ee mee^ng regarding the forma^on of the Java Community Process (JCP):
Dietz: <Blah, blah, blah > Sun exec: And why would you possibly think that thats going to be acceptable? Dietz: Well, I guess Im just a blind, stupid op^mist. Another exec (laughing): Sco$, I sure hope you dont lose your op^mism, cause then youre just going to be blind and stupid!

If you aspire to lead, op^mism is essen^al just try not to be blind and stupid
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Recommenda^ons for The Would-Be Entrepreneurs

Blind, stupid op^mism required Learn how to write and speak well Be a team player (theres no i in team) But also be a leader Take responsibility Touch customers Work on intersec^on of tech/business (product mgmt., product marke^ng, technical sales) Learn to be comfortable making decisions from incomplete informa^on Prac^ce work/life balance Its a marathon, not a sprint
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Geang Started
If youre not quite ready for your own start-up, join someone elses!
Start-up experience is vastly be$er than big company experience And its more fun Great team Compelling market opportunity, product & GTM vision Well connected May learn more at a loser, But far be$er to try to nd a winner

Evalua^ng start-ups is hard

Finding start-ups is also hard

In Silicon Valley, there are too many to keep track of One trick Check out the rosters of the top VCs, e.g.
Greylock & Su$er Hill (Pure) Benchmark, Redpoint, & Accel (Zimbra) Andreessen Horowitz, Sequoia

Most will accept you resume directly Or try to nd a recruiter

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Dr. Bruces Final Exam

Purely technical issues are of ter^ary importance. Predic^ng technology evolu^on and delivering high-added value to the business are rst and second CS educa^on oken blissfully ignores this Start-up companies have the best wealth poten^al, but require the highest eort, discipline, commitment, and risk The greatest technical inuence comes out of connec^ng technology to the business (CTO, technical marke^ng/sales, product management, etc.) Compensa^on is commensurate with responsibility and ability to assimilate incomplete informa^on and act decisively upon it Many CS grads with maturity become great technical managers. Far fewer become great marketeers or execu^ves
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The Charge
Greatest thing about our industry is what a small group of passionate people can accomplish Mobile phones, open source, and clouds have drama^cally reduced the hurdles to your success You just need the spark for an amazing product! Four golden rules for conver^ng that spark to success

Cash is your life supply, manage it ruthlessly (for most of you, that means not over stang, in numbers or in seniority) Get the rst version out the door quickly & iterate ... don't wait for the perfect product Focus on innova^on in both product & GTM Make decisions fast. Some will be wrong. Make sure you have enough feedback in the system to course correct
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Dietzen - Tech Entrepreneurship

Best Quote on Entrepreneurship?

You must never confuse faith that you will prevail in the end---which you can never aord to lose, with the discipline to confront the most brutal facts of your current reality, whatever they may be. Admiral Jim Stockdale

Thanks you! Comments most welcome. scott@dietzen.com

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